Jan. 2, 2019
Auto Dealers Have Lots to Deal With
Most auto dealers are consummate entrepreneurs. They have an expert grasp of complex sale dynamics and keep their fingers on the pulse of emerging industry trends. As it relates to real estate, however, their expertise is understandably more limited. According to Jodi V. Meade, writing for Wards, when it comes time for dealers to relocate, expand or open a new franchise or capitalize on a market opportunity, there are specific market dynamics and location-specific considerations that need evaluating. That’s when understanding the real estate component of the business becomes essential. This isn’t a topic that gets discussed often, but it’s important. Successful auto dealers are nimble, responsive and solution-driven. They are typically well-connected and tend to dive into real-estate opportunities. The consequences of hasty or poorly researched decisions can be sobering. Real estate is one of the largest and most expensive components to most businesses, and seemingly small missteps can carry disproportionately large bottom-line implications. For more on what could go wrong, click here.
Trump’s Trade Agenda for 2019 Is Packed. Here Are Some Key Dates
If you think President Donald Trump’s trade agenda was busy in 2018, get ready for much more to come in the new year. According to Bloomberg, the first quarter of 2019 will be pivotal, as the U.S. and China are trying to deescalate a trade war and Trump will have to decide whether to hit car imports with tariffs. On Jan. 1 America’s updated free-trade agreement with South Korea, which the nations’ two leaders signed in September, was due to enter into force. During the week of Jan. 7 a U.S. government delegation travels to Beijing for trade talks with Chinese officials, the first face-to-face encounter since Trump and Chinese President Xi Jinping agreed to a temporary truce on Dec. 1. If the two sides can’t reach a deal by March 1, Trump has pledged to boost tariffs on $200 billion of Chinese goods to 25 percent from 10 percent. Also this week, European Union Trade Commissioner Cecilia Malmstrom and U.S. Trade Representative Robert Lighthizer are scheduled to meet as part of ongoing negotiations. For the complete list of important upcoming trade dates, click here.
Hyundai Flags Tough 2019 as U.S., China Demand Stays Slow
South Korea’s Hyundai Motor Group flagged another year of tepid car sales growth on the back of a slow 2018, saying trade protectionism adds uncertainty and major markets such as the United States and China remained sluggish. Reuters reports that in his first New Year address to employees, group heir apparent Euisun Chung said Hyundai Motor Co and Kia Motors Corp would complete a restructuring of South Korea’s second-biggest conglomerate, which is widely expected to pave the way for him to formally succeed his octogenarian father as head of the group. The complicated succession plans come as Hyundai contends with a bunch of problems that have cost it market share in China and the United States. It missed a boom in SUV), faces potential U.S. tariffs and a U.S. investigation over how it handled a vehicle recall, and lost ground in technological advances such as self-driving cars. Hyundai and Kia - together the world’s fifth-biggest automaker - set what they called a “conservative target” of 7.6 million vehicle sales in 2019, a 3 percent increase from the 7.399 million vehicles sold last year. For the full story, click here.
Jury to Dealership in Used-Car Fraud Suit: Pay $5.8 Million
After a jury's fraud judgment — and an eye-popping $5.8 million award — over the sale of a used Ferrari, an Arkansas dealership is arguing that the punishment does not fit the alleged misdeed — or the law. According to Automotive News, when Virginia resident Hamid Adeli sued Mercedes-Benz of Northwest Arkansas for fraud over his purchase of a used Ferrari, a jury awarded him $6,835 in compensatory damages, $13,366 in incidentals and the $5.8 million in punitive damages. The Bentonville, Ark., dealership, part of Superior Automotive Group, is appealing that September verdict as out of touch with precedent and constitutional law. Saying the verdict "shocks the conscience," Superior is seeking to reduce the punitive damages award from $5.8 million to $27,340, or about four times the compensatory award of $6,835. "It was fueled by passion and prejudice," the defense wrote in an October filing. For details on the suit, and why the jury was so incensed, click here.
Troubles Ahead Predicted Following Surprisingly Strong U.S. Auto Sales Year
New Year’s Eve revelers will barely have time to sleep off their good times when they wake up to the understanding the U.S. vehicle surprise sales party of 2018 is over. According to Forbes, industry analysts predict the combination of higher interest rates, ballooning transaction prices and new federal tax rules is likely to put a new vehicle out of reach for many consumers. First, the anomaly of 2018. Through the summer and into the early fall, analysts continued to predict a sharp sales drop in the last half of the year. It didn’t happen. While retail sales are actually down, not so for fleet. “We think tax reform directly contributed to more fleet activity from rental companies adding probably 100-thousand units to what they might have done otherwise,” said Cox Automotive Senior Economist Charlie Chesbrough. Fear of new tariffs and rising interest rates may also have sparked some consumers to pull ahead their purchases to avoid any added costs, according to a Cox Automotive report released today. For more on what happened in sales in 2018, and what we can expect from 2019, click here.
Around the Web
The Cars We're Excited to Finally See in 2019 [Jalopnik]
The World's Most Ridiculous Car Names [MSN]
