Honda Wants to Embrace its Low Inventories
Prior to the pandemic-induced vehicle shortages that have become the norm in the auto industry, dealership lots were full of cars and trucks in nearly every color and trim, waiting for consumers to choose one like a loaf of bread at the supermarket. Automotive News reports that while retailers may be pining for the good old days, American Honda Motor Co.'s Dave Gardner says not so fast. Current inventory levels are certainly not ideal, but it's also worth pondering where to draw the line when supply conditions improve, said Gardner, executive vice president of national operations. He believes there are positive lessons from the current crisis. Automakers and dealers have been too focused on jamming lots full of new-car inventory and less on an efficient retail model that addresses the cost of millions of vehicles sitting around, waiting for a buyer. "If you're able to take a significant part of that overhead out of the equation, I think you make this a much more efficient and profitable business for all concerned," Gardner said. For what that might look like, click here.
To hear more from Honda's Dave Gardner, be sure to register for AIADA's 52nd Annual Meeting and Luncheon here.
Car Advertising Finally Goes Electric
If you watched NBC’s Sunday Night Football in the fall, you might have seen a Hyundai ad called “Gas Card.” Click here to watch. It goes like this: a dad gives his daughter a gas station gift card; she never uses it because she drives a plug-in hybrid Tucson from Hyundai; she gives the card back to him on his birthday. Bloomberg reports that the Hyundai campaign was part of a watershed year for electric vehicle advertising. Many of the major automakers, for the first time, began giving plug-ins the kind of nationwide push typically reserved for their best-selling combustion engine models. Car brands collectively ran four times as many national television ads for EVs in 2021 as they did in either of the previous two years. Audi made the most dramatic shift. Over the past three years, its ad allocation has flipped from majority combustion engine to majority EV. In 2019, the German brand spent an estimated $22 million on nationwide EV ads and $56 million for traditional models. In 2021, it spent $54 million on EVs and $13 million on the remainder. For more on what this means for brands, click here.
Toyota Expects to Miss Annual Output Goal on Chip Disruptions
Toyota said it is unlikely to reach its goal of manufacturing 9 million cars this fiscal year through March due to persistent chip shortages. The world's No. 1 automaker is paring back production to 700,000 units in February, around 150,000 units lower than its original goal for the month, according to a statement Tuesday, which cited a semiconductor crunch due to continued demand across industries. The Detroit News reports that Toyota didn't set a new annual target, saying only that final output is expected to be lower than previously forecast. Toyota's disclosure suggests that other Japanese automakers may face production stoppages in the weeks ahead. Toyota will suspend output at eight plants in Japan, including the Tahara facility in Aichi Prefecture, where it produces Lexus models, from two to 13 days in February. For the full story, click here.
Survey: Consumers More Satisfied with Vehicle Shopping Experience than Pre-Pandemic
Vehicle buyers' satisfaction with the shopping experience dimmed last year as they encountered a shortage of new models and higher sticker prices on dealership lots, but they remain happier with the process overall than before the onset of the pandemic. That's among the findings of a Cox Automotive consumer survey out this week. Automotive News reports that buyers' satisfaction with the shopping experience from the research stage through delivery dipped to 66 percent in 2021, down from a peak of 72 percent in 2020 but an improvement from 60 percent in 2019. Consumers who did more of their purchase digitally tended to be happier with their experience than those who did more work in person, Cox found. And buyers' satisfaction with their experience while at a dealership also stayed above pre-pandemic levels — 75 percent last year, which is essentially unchanged from 77 percent in 2020 but better than 70 percent in 2019, according to the survey. For more survey results from Cox, click here.
Opinion: OEMs Must Drive Effort to Educate EV Buyers
In its embrace of electric vehicles, the world has entered the on-ramp – but highway speed is still a ways off. So writes Desmond Wheatley, president and CEO of Beam Global, a clean-technology company providing renewable charging infrastructure solutions for electric vehicles, in Wards. EV adoption increased 80 percent this past year; yet worldwide, EVs accounted for only 7.2 percent of car sales in the first half of 2021 – and in North America, only 3 percent of cars sold over the same period were electric. People have concerns about EVs, and in many cases, it’s the automakers that are best positioned to dispel them. At the top of the list of myths to overcome is the question of range. Potential owners wonder whether EVs have the range to make it from one charging station to another. Another concern focuses on battery reliability. But perhaps the most nagging question is charging infrastructure. OEMs have the means, as well as the obligation, to debunk EV myths and, in so doing, help accelerate our planet’s transition to an electric future. For more, click here.
Around the Web
2023 Toyota Sequoia Will Arrive Soon [Car & Driver]
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Can Audi’s New Matte Paint Option Improve Flat TT Sales? [Car Scoops]
