The Big Boom in Ultraluxury

First Up 05/10/18

Trump's Trade Threats Are Hurting Growth
Economic uncertainty and prosperity are sworn enemies—when uncertainty reigns, prosperity fades, write Phil Gramm and Mike Solon in an opinion piece for The Wall Street Journal. The second-highest level of economic uncertainty since 1900 occurred during the 2008 subprime crisis and the subsequent failed recovery. When the recession ended in mid-2009, the Obama administration predicted six years of 3.9 percent average real growth—a reasonable expectation, since strong recoveries had followed every previous significant postwar recession. But as President Obama expanded government control over the American economy, a tidal wave of red tape spread across health care, financial services, energy, manufacturing, and even the internet. In America’s most dramatic deregulatory effort, the Trump administration and Congress have repealed, revised or stopped more than 1,000 regulations, reversing much of the political uncertainty produced by Mr. Obama’s onslaught. But today the administration’s trade policy is beginning to create a level of uncertainty that could imperil the recovery. Read more here

House Votes to Overturn the CFPB's 2013 Auto-Lending Guidance
On Tuesday, May 8th, the United States House of Representatives’ voted to repeal the 2013 Consumer Financial Protection Bureau(CFPB) guidelines originally intended to combat discrimination by auto dealers that facilitate car loans for their buyers, reports CBT News. The industry’s argument has been that the guidelines limited auto dealer’s ability to offer their consumers better opportunities and more competitive finance options. A total of 223 Republicans and 11 Democrats joined efforts to over-turn the guidance. This house vote follows the U.S. Senate vote that took place in April resulting in a 51-47 to repeal and now will make its way to the White House where President Trump is expected to sign it. “Today’s vote by the House is a reminder that our government can still stand up for the little guy,” said Cody Lusk, American International Automobile Dealer Association President, and CEO, after hearing the outcome of yesterday’s vote. He goes on to say, “Auto dealerships are primarily small family businesses, and never should have been targeted by the CFPB, which has strayed from its mission of regulating massive Wall Street financial institutions. Today’s vote allows dealers to return to offering their customers more competitive financing choices and opportunities.” Read more here

The Big Boom in Ultraluxury
Ultraluxury car companies project an image of perfection, but their cash flow used to be as unreliable as the cars they built, reports Automotive News. Aston Martin went bankrupt seven times in its first 100 years. Lamborghini went through multiple owners before ending up at Volkswagen. Bentley almost disappeared under a lackluster Rolls-Royce ownership. That's no longer the case. The iconic European marques are in a better state now than probably they've ever been. The big reason? "Richer people are getting richer and there are more of them," Andy Palmer, CEO of Aston Martin, told Automotive News. "And the area which is growing quickest and represents their biggest spend is luxury and ultraluxury cars." The sales growth is staggering. In 2002, the combined global car sales of Aston Martin, Bentley, McLaren, Rolls-Royce, Ferrari and Lamborghini was 6,475, according to JATO Dynamics. Last year, that figure was 29,554. The 2002 figures lack data from China, which had yet to make its mark on ultraluxury sales. Read more here

Parts Shortage Closing Ford Dearborn Truck Plant
Ford Motor Co. is shutting down the Dearborn Truck Plant at the end of the second shift Wednesday, halting F-150 production in all its plants after a major fire at a parts supplier, reports The Detroit News. The automaker shuttered its Kansas City plant that produces the F-150 pickup earlier this week due to parts shortages. Fiat Chrysler Automobiles NV, General Motors Co., BMW, and Mercedes-Benz also have halted or adjusted production on some vehicles in the U.S. and Canada as a result of the May 2 explosion and fire at Meridian Magnesium Products in Eaton Rapids. “I think it’s safe to say we’re going to see an impact for several days, but we can’t say beyond that,” Joe Hinrichs, Ford’s executive vice president and president of global operations, said in a Wednesday evening conference call. “We do not see the situation impacting sales at all.” So far, only Ford’s F-150 and Super Duty are affected. The company said Wednesday it has 84 days’ supply of the trucks, which should keep sales up amid lost production. Read more here

AutoNation Offers Update on Standalone Used-Car Stores
AutoNation chief executive officer Mike Jackson recently joined other company executives to expound on the significance of reaching its fifth standalone used-car store and service center this year, reports Auto Remarketing. Along with discussing the March opening of the retailer's respective fourth and fifth AutoNation USA stores in Las Vegas and Katy, Texas, during the company's latest quarterly call, Jackson shared rewarding sales results from the four-month-old Phoenix store. ”The Phoenix store has ramped up relatively quickly. In April, its fourth month open, it has turned profitable and sold approximately 140 units,” he said. “We believe our brand and One Price strategy, single associate digital selling process and strong customer care capabilities will continue to position us for success at our AutoNation USA stores.” One Price is a foundational attribute of AutoNation USA. The total five USA stores that AutoNation now has open represents a milestone, Jackson explained. “We always said that once we had five up and running, we would have a pause period where we define the ramp to profitability to decide which additional stores to open when,” he said. Read more here

Around the Web

2020 Mercedes-Benz GLS Spy Shots and Video [MotorAuthority]

VW Golf GTI TCR Concept Revealed [Autoblog]

First Look: Rolls-Royce Cullinan [Forbes]

BMW Says This 617-HP M5 is the Most Powerful Ever [USA Today]