The Pandemic Has Pushed Car Buying Online. It's Expected to Stick.

First Up 06/22/20

The Pandemic Has Pushed Car Buying Online. It's Expected to Stick.

The auto industry rushed to embrace the internet as a way to sell more vehicles during the coronavirus-related lockdowns. Auto makers expanded at-home delivery programs, and dealers built out their websites to help customers tour showrooms virtually and complete more of the car-buying process online. After some sales success, many in the industry expect the online push to continue, reports The Wall Street Journal. As dealerships reopen across the country, many are rethinking how they staff locations, including cutting traditional sales roles and shifting more employees into digital operations, managers and owners say. Despite the recent burst in online car-buying activity, some dealers and analysts are skeptical about its staying power. Many car shoppers still prefer to browse the car lot, take test drives in person and pick up their new vehicles at the dealership, retailers and analysts say. Read more here.  

Mitsubishi Signals It May Pull Back in U.S.

Mitsubishi Motors Corp. may be preparing to scale back its efforts in the U.S., reports Automotive News. CEO Takao Kato says the Japanese carmaker's new strategy will focus less on huge global markets where the brand is merely an also-ran. Addressing investors during Mitsubishi's annual shareholders meeting last week, Kato said the automaker will dial down business in megamarkets such as Europe and China. He didn't mention North America or the U.S. by name. But the company later confirmed that it indeed considers the U.S. a megamarket. The company's new plan is called Selection and Concentration. Under Mitsubishi's previous business plan, Drive for Growth, the carmaker had specifically flagged North America and China as two regions of focus. "Even though we increased sales volume in the megamarkets, we have not yet achieved the level of profit we expected," Kato said. "We aim to increase sales in the regions where we can offer our core products. We will gradually reduce our commitment to megamarkets." Read more here.  

In Dealer Ads, to Wear a Mask or Not to Wear a Mask?

The COVID-19 pandemic is steadily reshaping how the dealership environment is presented to the masses, and showing masks is a key piece in some stores' efforts to convey a dedication to safety and cleanliness. Masks are increasingly showing up in dealerships' Facebook ads and informational YouTube videos, reports Automotive News. Some agencies say they don't see any drawbacks to dealerships telling consumers that their employees don masks. Health experts encourage wearing them, and certain states require them for anyone who works or shops in an indoor space such as a showroom or service department. But plenty of people don't wear them, and masks have taken on political implications many dealers would rather avoid. Some dealers fear alienating consumers or making them less eager to buy a vehicle if an ad reminds them of the pandemic. Read more here. 

Toyota Says Japan Factories Returning to 90% of Target Output

Toyota Motor Corp. expects to ramp up production further in Japan during July as it restarts factories following a shutdown due to the coronavirus pandemic, reaching 90% of its targeted output level, reports Bloomberg. Six production lines will see suspensions during July for a total of 16 days, compared with 25 closed lines and 133 days of stoppage in June, the Japanese automaker said in a statement Monday. The pandemic has forced carmakers around the world to shutter showrooms and factories, weighing on earnings. Although Toyota has halted some domestic factories from April through June, it won’t change its plan to produce at least 3 million cars annually in the country, Mitsuru Kawai, Toyota’s chief human resources officer, told shareholders earlier this month. Read more here. 

BMW to Drop 6,000 Jobs Through Turnover, Early Retirement

Automaker BMW says it will drop 6,000 jobs through early retirements and turnover, as the auto industry adjusts to a sharp drop in demand due to the coronavirus outbreak, reports The Detroit News. The Munich-based maker of the X5 SUV and 3-Series sedan said Friday that it had agreed on the measures with employee representatives. Ways of reducing positions could include settlements with employees who are already near retirement, while younger people could get financial support for further full-time higher education with a guarantee of a job when they are done. The job reductions represent just under 5% of BMW’s global workforce of 126,000. Demand for new cars has slumped in Europe and other global markets amid a sharp economic slowdown due to the virus outbreak. Read more here.

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