U.S. Sales Edge Up; SAAR Hits Highest Level of Year

First Up 11/02/18

Strong's Opinions: In Uncertain Times, You Can Count on AIADA
The greatest threat facing International nameplate dealers today isn’t trade, taxes, regulatory costs, or succession planning. It’s uncertainty, writes AIADA Chairman Brad Strong. For dealers, it puts the brakes on expansions, remodels, hiring, and floor planning. The uncertainty we face today is being triggered by a volatile stock market, tariffs, ambiguous trade policies, and rising interest rates. These issues can have a big impact on vehicle costs and sales, and that matters to dealers, who are, after all, the manufacturer’s first customer. Fortunately, when it seems like the world is shifting beneath your feet, there’s one organization a dealer can always count on: AIADA. We are a fixed and reliable constant that always has your back. AIADA’s greatest asset, and the secret behind our strength, is our active and engaged membership. One of the most valuable things you can do as a member of AIADA is to attend our annual events in-person, and add your voice to the chorus of dealers engaging with legislators, the public, and the media. Visit AIADA.org/events today to register for our 49th Annual Meeting and Luncheon on Sunday January 27th in San Francisco – held during NADA’s annual convention. You can also register for our Washington, D.C., Fly-in, on April 9th and 10th. Read more of Chairman Brad Strong’s latest blog post here. 

U.S. Sales Edge Up; SAAR Hits Highest Level of Year
U.S. light-vehicle sales, behind strong light-truck demand and elevated incentives, edged up 0.4 percent in October, signaling the second-half slowdown that began in July is moderating, reports Automotive News. The seasonally adjusted, annualized sales rate for October came in at 17.59 million, the highest of the year, and well above forecasts for 17.3 million, but down from 17.9 million in October 2017, when demand soared following Hurricanes Harvey and Irma. October marked the eighth month in 2018 the annualized pace of sales has topped 17 million. U.S. auto sales in 2018 have now risen 0.5 percent through October but analysts still expect the second-half slowdown to continue. Volume skidded three straight months beginning in July, with the September decline – 5.5 percent – the largest of the year. "Many signs in the economy would suggest that vehicle demand should be moderating – higher interest rates, import tariffs, weak housing market, stock market volatility, elevated gas prices – yet vehicle buying remains strong," said Charlie Chesbrough, senior economist for Cox Automotive. Read more here. 

Why Buying a Car is Getting Pricier
Rising interest rates and higher prices are beginning to throttle U.S. auto sales, reports The Detroit Free Press. While the industry remains solidly profitable amid a strong economy, shoppers bought fewer vehicles in October than they did a year ago, according to analyst estimates. One big reason: New-vehicle interest rates neared a 10-year high, according to Edmunds analysts. Interest rates on new vehicles averaged 6.2 percent in October, up 1.3 points from a year earlier and marking the highest rate since January 2009, according to Edmunds. Only 3.8 percent of buyers got 0 percent interest loans in October, down from 7.5 percent a year earlier, Edmunds reported. The Federal Reserve's interest rate increases, which are aimed at preventing the economy from overheating, have led to higher borrowing costs for shoppers. “It’s getting harder and harder for shoppers to afford a new car, and if the economy starts to slip, we’re at a point now where we really could start to see some significant impacts in the auto market," Jeremy Acevedo, Edmunds’ manager of industry analysis, said in a statement. Read more here.  

Foreign Carmakers Turn Alabama Into an Automotive Force to be Reckoned With
As a center of automotive-manufacturing expansion, few places are humming like Alabama. When schoolkids in Montgomery, Alabama, celebrated National Manufacturing Month in October by visiting local plants operated by Hyundai Motor Manufacturing and others, they took a field trip through what has become the car-making capital of the American South. Forbes reports that over the last 20 years, Alabama's auto sector has risen from a smudge to the fifth-largest state for auto manufacturing, now employing more than 40,000 residents, and it's expected to continue to rise. Hyundai has led a bevy of foreign automakers in betting big on the state, a list that also includes Honda and Mercedes-Benz, and will also include the construction of a new plant by Toyota and Mazda. And it isn't just the big boys of automotive assembly that are choosing Alabama; there's a burgeoning supplier community there, too. And there are lesser-known vehicle brands such as Autocar, a maker of heavy trucks with a facility in Indiana that decided to put up a new assembly line in Birmingham, Alabama. Read more here. 

Toyota Plans to Debut 2020 Supra Sports Car in Detroit
While many European automakers have bailed out of the Detroit auto show, there will be at least one major global debut from a foreign automaker: Toyota's 2020 Supra. According to Automotive News, Toyota this week confirmed Detroit will be the venue for the debut of the fifth generation of the Supra sports car. The low-slung coupe, developed with BMW, shares its underpinnings and some mechanical components with the BMW Z4. The Z4 roadster had its global debut in August at the Pebble Beach Concours d'Elegance. Spy photos show the new Supra as a sleek, rakish hardtop, but it's unclear if the roof panels can be removed – an optional feature of the last generation Supra. Toyota has given styling hints of the new car in the FT-1 concept coupe. Toyota plans to auction the first production unit off the assembly line and donate the money to charity. Read more here. 

Webinar: Tax Reform – What You Need to Know Before the Year Closes
Join AIADA's Auto Talk webinar on Tuesday, November 13 at 2 p.m. to find out what you need to know about tax reform before the year closes out. Topics covered include: 

  • Tax Reform – Quick overview of what is new for dealers.

  • Regulations published during 2018 and what they mean

  • Actions you should take before the year closes to best position yourself for savings

Happening Tuesday, November 13th at 2:00 p.m. ET. Click here to register.  

Around the Web

Want a Safe Car for Your Teen? Here's What to Look For [CBS MoneyWatch]

Hyundai and Kia Will Outfit Their Cars with Solar Panels [Engadget]

The 20 Best Hatchbacks Under $25K [Popular Mechanics]

How 5G Will Change Tomorrow's Cars [Road Show]