Toyota Says Consumer Choice Dictates Pace of Electrification
Toyota Motor Corp pushed back against critics who say it has been slow to embrace battery electric vehicles (BEV), arguing it needed to offer a variety of car choices to suit different markets and customers. At its annual general meeting on Wednesday, the world's largest automaker by sales doubled down on its position that it would stick with technologies including fuel cell vehicles and hybrids that have for the past two decades made it a leader in cleaner cars. Apart from concerns about its electrification strategy, Toyota executives tackled a range of questions on CEO succession plans to the ongoing chip shortage. Reuters reports once a favorite with environmentalists for its popular hybrid Prius model, Toyota has come under fire for not phasing out gasoline-powered cars and its lobbying on climate policy. "The goal is carbon neutrality," Toyota's Chief Technology Officer Masahiko Maeda told the meeting, responding to questions submitted by Danish pension fund AkademikerPension, which also asked Toyota to refrain from lobbying to undermine the transition to BEVs. Click here for the full story.
Chief Economist Jonathan Smoke Breaks Down Findings from Cox Automotive’s Q2 Dealer Sentiment Index
Cox Automotive recently released its Q2 Dealer Sentiment Index, which provides a current view of dealer sentiment and looks ahead to the next 90 days. The study reveals that COVID-19 concerns are mostly in the past, but inflation, high costs, and low inventory continue to challenge dealers. Today on CBT News’ Inside Automotive Jonathan Smoke, Chief Economist at Cox Automotive, joins to further discuss the Q2 Dealer Sentiment Index. We all know there has been a lot of disruption in the auto market over the past several quarters. The overall sentiment of U.S. auto dealers in Q2 was good but declining, especially among independent dealers. The decline from the first to the second quarter was slightly more significant than usual for the season. There is seasonality to sentiment, and dealers are often the most positive at the beginning of the year and spring. However, the scores overall remained above the critical 50 thresholds, meaning more dealers than not consider the market to be strong. Click here to learn more about Cox Automotive’s Q2 Dealer Sentiment Index.
Rare Car Colors Retain More Value
Vehicles in rarer colors such as yellow, orange and purple retain their value at a better rate than cars in traditionally dominant colors such as silver, black and white, auto research website iSeeCars.com said in a study. Karl Brauer, executive analyst at iSeeCars.com, said he hopes the study will persuade people to purchase vehicles in the colors they really want. "I know so many people buy black, white and silver cars to be safe. But then we end up with a whole lot of cars that maybe not very many people actually wanted," Brauer said. "Our study now proves this: People should get, first and foremost, the colors they really want." Brauer said gray scale colors have the lowest impact on a vehicle's value, neither helping nor hurting it over three years. Automotive News reports Joe Brenner, general manager at Porsche Colorado Springs in Colorado, said he believes people are beginning to stray from Porsche's typical colors. "I think people are slightly deviating a little bit from the classic colors into more color than before," Brenner said. Click here for the full story.
Pre-Qualification Can Win Skittish, Subprime Buyers
News reports of rising interest rates and an approaching recession could spook some auto buyers, but dealers who lead them toward pre-qualification can quell their concerns, Satyan Merchant, senior vice president and automotive business leader- TransUnion, tells Wards. Consumers’ finances were safeguarded and supplemented by stimulus funds, forbearance and accommodation programs during COVID-19. Although many of those programs have ended and prices have increased across the board, lenders are willing to extend credit to buyers. That’s especially true of used car shoppers in the subprime category. “Relevant to the dealer is the source of the loan, not the loan type,” says Merchant. “We see that credit unions, and especially independent finance companies, are getting larger and larger shares of used-vehicle financing.” That is especially pertinent to subprime buyers. Although the subprime consumers in 2020 and parts of 2021 could not purchase vehicles because of low income or other adverse financial factors, dealers now see more independent lending institutions, banks and credit unions taking higher shares of the subprime market, from about 15 percent in 2017 to about 20 percent today. Click here for the full story.
Dealerships ‘Farm' for Service Technicians
When Shawn Vaughan took the reins at Mike Calvert Toyota in Houston, one of his first orders of business was to implement a hiring model he had developed previously that works contrary to the usual practice of luring technicians from competing dealerships with higher pay. "In order to recruit technicians, the industry subscribes to a mercenary concept," Vaughan said. "We steal each other's technicians and pay up to move them from one dealer to another." Vaughan, who is now CEO of Vaughan Automotive in Boerne, Texas, developed a recruiting method he says is more akin to farming. Automotive News reports he brings in candidates from local high schools, trade schools or associate degree schools and puts them through a rigorous 100-hour internship program that, if completed successfully, results in a full scholarship to Toyota's Technician Training and Education Network, or T-TEN. "We take the long-term approach to growing technicians that will grow into parts counter associates, service advisers or middle management," he said. "When you get into stealing other dealers' technicians, it creates a super negative environment in the market that does have a ripple effect." Click here to learn more about farming technicians.
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