U.S. Auto Industry Calls for Government Help as it Warns of Impact of Chip Shortage
A U.S. auto industry group on Monday urged the government to help as it warned the global semiconductor shortage could result in 1.28 million fewer vehicles built this year and disrupt production for another six months. Reuters reports that the U.S. Commerce Department should dedicate a portion of funding in a proposed bill to expand U.S. semiconductor production to auto sector needs, the Alliance for Auto Innovation said in written responses to a government-initiated review. Some funding should “be used to build new capacity that will support the auto industry and mitigate the risks to the automotive supply chain evidenced by the current chip shortage,” the group’s chief executive, John Bozzella, wrote. The group said the U.S. government could specify “a particular percentage – that is reasonably based on the projected needs of the auto industry – be allocated for facilities that will support the production of auto grade chips in some manner.” Read more here (Source: Reuters).
Dealer Bernie Moreno Launches Bid for U.S. Senate in Ohio
Dealership owner Bernie Moreno is entering the race for one of Ohio's seats in the U.S. Senate, the Cleveland-area businessman said Tuesday. According to Automotive News, Moreno, 54, is vying for the GOP nomination to succeed Sen. Rob Portman, a Republican who announced in January that he will not seek reelection. Portman's term expires in 2022. "For me, it's about being a public servant and doing things in a positive way for the people of Ohio," Moreno told Automotive News Publisher Jason Stein during a recording of the "Daily Drive" podcast series. Moreno owns a 50 percent interest in the Cleveland Motorsports dealership in North Olmsted, Ohio, which sells new Aston Martin, Bentley and Rolls-Royce vehicles. He said he plans to purchase 100 percent of the interest this month. He also owns a 60 percent interest in Infiniti of Coral Gables in Florida but is expecting his partner who operates the store to buy the majority stake this summer. Read more here (Source: Automotive News).
Jeep Sales Climbing in Japan as Younger People Warm to the Brand
While American-branded cars have historically struggled in Japan, Jeep, the rugged-looking sports utility vehicle, looks to be gaining popularity, particularly among younger buyers, reports Bloomberg. Jeep sales in the Asian nation are expected to increase 5% this year to more than 15,000 units, Hitoshi Ushikubo, the head of sales at Fiat Chrysler Japan, said in an interview Monday. Fiat Chrysler Japan is yet to be officially merged with the Japan office of Peugeot SA and come under the new Stellantis NV umbrella. Shoppers in Japan have typically opted for smaller cars with high fuel efficiency, one reason why Ford Motor Co. ended up quitting the country in 2016. But Jeep has managed to retain a loyal customer base. Now, amid the coronavirus pandemic, more young people are taking an interest in the cars, drawn by their ability to handle all sorts of outdoor terrain, which helps with avoiding public transport. Read more here (Source: Bloomberg).
It's Official: Nissan Stair-Step Scheme is Dead
Nissan is killing a retail sales program that has been a thorn in the sides of dealers for a decade — not to mention failing in its primary goal of driving market share – reports Automotive News. The automaker told Automotive News last week that it will officially abandon its controversial "stair-step" dealer volume bonus program, which has used cash awards to incentivize retailers to hit aggressive monthly, quarterly or year-end sales goals. That strategy, a tool in former Chairman Carlos Ghosn's dogged campaign to grow U.S. market share, has long irked Nissan's retailers, many of whom argue the automaker pushed unrealistic sales targets that fostered a culture of price discounting, diminished resale values, and damaged brand reputation. But Nissan management has gotten the message, U.S. sales chief Judy Wheeler said. "We have been hearing loudly and clearly from our national dealer advisory board, from our NADA survey results," Wheeler said. "It's very clear that it was time for us to change." Read more here (Source: Automotive News).
Risky Borrowers Are Falling Behind on Car Payments
A greater share of people with low credit scores has been falling behind on their car payments in recent months, a sign of stress among consumers whose finances have been hit hard by the pandemic, reports The Wall Street Journal. Some 10.9% of subprime borrowers with outstanding auto loans or leases were more than 60 days past due in February, up from 10.7% in January and 8.7% a year prior, according to credit-reporting firm TransUnion. It marked the sixth consecutive month-over-month increase and the highest level in monthly data going back to January 2019. More than 9% of subprime auto borrowers were more than 60 days past due in the fourth quarter, the highest quarterly figure in data going back to 2005. The missed payments are increasing in what has otherwise been a period of relatively low consumer delinquencies, with stimulus payments, unemployment benefits, and other measures keeping many borrowers afloat. Read more here (Source: The Wall Street Journal).
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