Aug. 6, 2020
Toyota Expects to Make $7 Billion Even in a Pandemic Year
Toyota Motor Corp. sees sales rebounding from the coronavirus pandemic faster than it initially expected, leading the company to bolster its sales projections and forecast a nearly $7 billion profit for the full year. The Wall Street Journal reports that Toyota said today that it sold around 200,000 more vehicles than anticipated in the April-to-June quarter. It now expects to sell 7.2 million vehicles in the financial year ending in March, up from a May forecast of seven million but still well below the previous financial year’s total of nearly nine million. In the U.S., one of Toyota’s biggest problems is getting enough cars to dealers. There was a 41-day supply of Toyotas in July, compared with 115 days in April, according to Jefferies. A healthy level is generally thought to be around 60 days, showing that the company has quickly gone from a glut to a shortage. Toyota now says its U.S. sales recovery rests on whether it can manufacture enough vehicles. For more on Toyota’s outlook, click here.
Used Car Prices Spiking as COVID-19 Pandemic Shakes up the Market for New Cars
If you were hoping to find some savings during the COVID-19 pandemic, you won't find them in the used-car market, unfortunately. According to USA Today, used prices are up because buyers are flooding the used-car market, looking for deals amid high prices for new vehicles, low interest rates and a shortage of new-vehicle inventory. The average listing price of used vehicles was $21,558 in July, up $708 from June. Click here for average July used car list prices, by vehicle segment. "This is an unprecedented historical shift in the used vehicle market, where listing prices typically decrease during this time period due to depreciation," Edmunds said Wednesday. “It’s a seller’s market right now," said Ivan Drury, Edmunds’ senior manager of insight. "Although used vehicles continue to offer significant discounts compared to new, used-car shoppers will find themselves in the unusual position where they might not have as much negotiation power because demand is so high and dealers will be less inclined to be flexible." For the full story, click here.
Audi Cuts Price of e-tron by $8,800, Improves Range
Audi has cut the entry price of its first battery-electric crossover, the e-tron, by $8,800 for the 2021 model year as the Germany luxury brand begins expanding its EV lineup. According to Automotive News, Audi said it would lower the price of the e-tron compact crossover to $66,995 including shipping, from $75,795 for the 2021 model year. The brand lowered the base price by $8,900, but increased the delivery charge year-over-year from $995 to $1,095. In addition, Audi said it has increased the e-tron's EPA-estimated range from 204 to 222 miles, "through optimized drive system hardware and software adjustments." Audi dealers have complained that the e-tron's expensive price point and original range made it a tough sell against Tesla and EVs coming from other luxury automakers. Through the first six months of 2020, Audi sold 2,872 e-trons in the U.S., which was up 57 percent from compared with 2019, the model's initial year in the U.S. market. For more on Audi’s plans, click here.
‘Distressed’ Auto Supplier Numbers Increase
Automotive supplier bankruptcies and sell-offs are on the horizon, says analyst Dietmar Ostermann, PricewaterhouseCoopers’ U.S. Automotive Advisory Leader. Most suppliers had averted dire measures in the face of COVID-19’s economic effects. But, reports Wards, that’s changing. “The number of suppliers moving into the danger zone is doubling,” Ostermann says, citing increased debt leverage and decreased profits in recent months. In North America, at least 30 suppliers are “likely distressed,” he says. The supplier situation is even worse elsewhere, says Ostermann. By consultancy PwC’s reckoning, distressed suppliers number 150 in Asia and 40 in Europe. The most distressed of the lot are body and chassis makers, but powertrain, interior, electronics and other suppliers also are on shaky ground. Ostermann predicts some suppliers will declare bankruptcy while others will sell themselves or separate operating units. PwC foresees more than 200 supplier merger-and-acquisition deals this year, 250 next. For the full story, click here.
Pickup Trucks Ranked by Resale Value after Three Years
It's no secret that your brand-new vehicle is no longer brand-new and therefore loses a big chunk of its value right when you drive it off the lot. And, of course, that car will continue to depreciate with every passing year. While that's an unfortunate byproduct of purchasing a new vehicle, it means that the used market is full of cars and trucks that are relatively new and fairly affordable. It's also no secret that cars and trucks depreciate at different rates, with a wide range of criteria separating the good from the bad. Using data provided by iSeeCars.com, Auto Blog has assembled a list of all the trucks that were on the market three years ago and remain so today, and listed them in order from worst to best. Some of the results are just what you'd expect – like the Toyota Tacoma topping the list – but there may be a few surprises, too. For the full list of trucks by resale value, click here.
Next Week's Webinars Feature Economic Update & How to Handle COVID-19 at Your Dealership
Don’t miss out on AIADA’s back-to-back AutoTalk webinars next week. Together, they’ll help you understand where our industry stands, and what you can do to handle COVID-19 at your own dealership.
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Tuesday, August 11: An Update on COVID-19’s Impact on U.S. Auto Sales
Join Cox Automotive Senior Economist Charlie Chesbrough for a review of our industry’s most recent economic data. -
Thursday, August 13: What If My Employee Tests Positive for COVID-19?
Learn critical steps you can take to protect your employees, steps to take if an employee contracts COVID-19, and how to return employees to work after they recover.
Register for both sessions by clicking here.
