Though Improved, Pandemic Conditions Prevail in Auto Finance
Automotive News reports that the auto finance industry seems to be holding steady amid the worsening coronavirus pandemic after a strong third quarter boosted many auto lender portfolios. Still, credit bureau TransUnion warns that millions of auto accounts remain in some form of financial hardship status, and ongoing economic pressures will further strain peoples' wallets. Consumers are continuing to take advantage of lender accommodations, a sign that the ongoing crisis may be impacting different groups in waves, said Matt Komos, vice president of research and consulting at TransUnion. Early on in the pandemic, consumers who opted for accommodation programs as a precaution may not have renewed their status once that period of assistance ended. Those consumers were replaced by other groups, who because of government support in the form of stimulus checks and unemployment provisions may not have required lender help until later as different areas of the country underwent lockdowns and mass layoffs. Read more here (Source: Automotive News).
GM to offer Auto Insurance That Uses Data from Connected Vehicles to Price Rates
General Motors is relaunching an auto insurance division as a way to generate new revenue using data from its growing numbers of connected vehicles in the U.S., reports CNBC. The new business unit will be under the automaker’s OnStar connectivity brand. Starting Wednesday, coverage will be offered to about 1,000 GM employees in Arizona before rolling out to its 85,100 U.S. employees and the general public by the end of next year. GM previously offered its own auto insurance from 1925 to 2008. The operations generated billions in annual revenue and contributed $400 million to $1.1 billion to GM’s bottom line during their final years of operation. Non-GM owners will be allowed on OnStar Insurance, but the automaker will offer additional discounts for those who are GM owners or subscribe to their services, Rose said. Read more here (Source: CNBC).
Carmaker Notes Attract Investors Seeking Short-Term Yield
Among the hottest offerings from some carmakers lately: relatively chunky yields. The Wall Street Journal reports that investors are flocking to Toyota seeking something other than a sleek ride. Short-term notes from Toyota Motor Credit Corp., a financing arm of the Japanese car manufacturer, have paid monthly coupons at an annual rate of 2% for much of this year. Purchases of these “Toyota Income Driver Notes” nearly tripled from March to September, the company says. The number of accounts managed by financial advisers has also grown, suggesting professionals are considering them for their clients as well. Toyota isn’t the only auto maker borrowing directly from individual investors. Mercedes-Benz, Ford and General Motors ’ units all offer similar programs, with different restrictions, which they say helps diversify their financing base. Others companies that have tapped the market include Ally Financial Inc. and heavy-equipment maker Caterpillar Inc. Read more here (Source: The Wall Street Journal).
Kia Motors Workers in S. Korea to Stage Partial Strike Over Wages, EV Plans
Unionized workers at Kia Motors Corp in South Korea will launch a partial strike on Nov. 24 over wages and worries about job security as the automaker pursues plans to produce electric vehicles (EV), Kia's union said on Thursday. The union at South Korea’s No.2 automaker has decided to suspend work for a part of the day over Nov. 24-27, an union official said, adding Kia’s plan to introduce EV production is one of the thorny issues in the annual wage deal negotiations. Kia has laid out plans to produce an EV model comparable to its K7 sedan at one of the factories in its Hwaseong plant in South Korea starting July next year, the union official said. “Building electric cars requires about 30% less labor than building internal combustion cars, because they require fewer parts, resulting in job losses,” a union member at Kia said. “If the shift to electric cars is inevitable, we are asking the management to ensure longer-term job security by having EV module production lines at our factories,” the member added. Read more here (Source: Reuters).
Study Highlights Dangers of 'Automation Complacency'
Human motorists can be lulled into a false sense of security by new technology that's meant to assist — but never replace — them behind the wheel. Automotive News reports that this "automation complacency" has been cited as a contributing factor to several fatal crashes involving advanced driver-assist systems, and now the findings from a study conducted by the Insurance Institute for Highway Safety further spotlight the unintended pitfalls associated with the influx of these new technologies. Researchers with IIHS and the Massachusetts Institute of Technology's AgeLab found that as drivers grew more comfortable with adaptive cruise control and lane-keeping features, they were more likely to show signs of inattention to the driving task. Sometimes significantly so. After a month of driving a Volvo S90 sedan equipped with both adaptive cruise and lane keeping, part of the automaker's Pilot Assist package, the researchers found motorists were 12 times more likely to remove both hands from the wheel at the end of the months than they were at the beginning. Read more here (Source: Automotive News).
Webinar: Maximizing 2021 Profit Through Aggressive Expense Control
Join the next AutoTalk webinar on Tuesday, December 8th at 2 p.m. EST, when Doug Austin, President of StrategicSource, a leader in spend management services for auto dealerships, will share his expertise in expense categories that can have long-term financial impact.
He will review in detail:
-
Best expense planning strategies
-
Identify categories to reduce costs in 2021
-
Several new revenue generating opportunities
-
Strategies to achieve “Sustainable cost reductions”
Around the Web
Watch the Mercedes-Benz AMG GT Series Lap the Nürburgring in Record Time [Automobile Magazine]
Adventure is Calling and Honda Has the Answer [Car and Driver]
Lamborghini Launches Track-Focused Huracan STO [MotorAuthority]
