Volvo Sells More Cars but Makes Less Profit

First Up 02/08/19

Feb. 8, 2019

2019 Chicago Auto Show: Chevy, Mazda and Subaru Headline the Windy City Debuts

The Chicago Auto Show opens its doors to the public in just a few days. Happening Feb. 9 to 18, CNet reports that the event has historically racked up more attendees than any other auto show in the US. There won’t be any monumental debuts -- but that doesn't mean we won't have a number of things to talk about this week. Check out the full roundup of what's in store here. Alfa Romeo is using this year's Chicago Auto Show to debut a new variant of its 4C Spider. This special edition of Alfa's two-seater was first seen at the 2018 Geneva Motor Show, but its US-specific information remains a mystery. Kia, meanwhile, will mostly use the Chicago show to bring its 2020 Telluride to another city, the big SUV having just debuted in Detroit. But we'll also see a couple of updates to mainstay Kia cars, including the Forte and Sportage. Lexus is bringing another Inspiration Series model into the world -- this time, in the form of the seductive LC 500 coupe. Lexus is also debuting the 2019 NX F Sport Black Line Special Edition in Chicago. For the full list of headliners, click here.

Congress Eyes Curb on Trump's Trade Authority as Auto Tariffs Loom

Interest in checking the president's authority to use national security as a justification for trade restrictions continues to grow in Congress amid concern the White House will soon impose punitive tariffs on finished vehicles and auto parts. Automotive News reports that on Wednesday, Sen. Robert Portman, R-Ohio, introduced bipartisan legislation to reform the process for determining national security threats from imports. Section 232 in the Trade Expansion Act of 1962 was intended to give the president power to adjust imports during a crisis, such as war, and there is widespread criticism that using the rule violates global trade laws, encourages retaliation against U.S. products and is an abuse of power. The U.S. Chamber of Commerce, Business Roundtable and dozens of other trade associations have stepped up efforts to derail Trump's attempts to impose duties on light vehicles and other goods. The American International Automobile Dealers Association, a trade group that represents 9,600 international automobile-brand franchised stores, is also pressing state and U.S. lawmakers to help mobilize opposition to the administration's proposed tariffs on light vehicles. For the full story, click here.

Car Dealership Service Departments’ Big Shift

The auto industry is rapidly evolving as dealers grapple with increasing competition, margin compression and higher customer expectations. In the face of these challenges, fixed operations provide great potential. Wards reports that fixed ops accounted for 49 percent of dealership gross profits in 2017. Yet the Cox Automotive Service Industry Study revealed dealerships received only 33 percent of all service visits in the U.S., demonstrating a huge opportunity for growth. Many dealerships, however, have been historically transaction-centric in their service departments, carrying over the focus from the sales department on maximizing a single transaction. To thrive in fixed operations, dealers must adopt a different and more customer-centric approach by implementing strategies that create trust and long-term loyalty. So, how can dealers build a customer-centric service department? They need a new operating model – one where all aspects of the business are focused on customer needs. For more on this strategy, and what it means to create a customer-focused culture, click here.

Volvo Sells More Cars but Makes Less Profit

Volvo Cars of Sweden, owned by China’s Zhejiang Geely Holding, sold more cars and SUVs last year but saw its profit margin slide because of tariff wars and increasing competition. According to Forbes,  President and CEO Hakan Samuelsson said this wasn’t good enough and promised to do better. Volvo sold 642,253 cars and SUVs in 2018, an increase of 12.4 percent over the previous year but the profit margin fell to 5.6 percent from 6.7 percent. Volvo has said it will sell 800,000 cars and SUVs a year in 2020 with a profit margin goal of 8 percent. In a report published a couple days before Volvo’s annual results, Moody’s Investors Service said Volvo has a well-known brand and an increasingly global sales footprint. Volvo has a growing presence in China and recently opened a new factory in the U.S. Volvo has impressed with the successful launch of several new products, including the recently renewed S60 and V60 sedans and station-wagons as well as the all-new XC40 compact SUV. That’s the good news, for the bad news, click here.

John Dingell, Dean of U.S. House and Staunch Auto Industry Ally, Dies at 92

John Dingell, the longest-serving member of Congress in U.S. history and a staunch ally of the U.S. auto industry, died Thursday at the age of 92. CNN and Detroit's two main newspapers earlier reported he had cancer and had entered hospice care. According to Automotive News, Dingell worked alongside 11 presidents for nearly six decades in the House of Representatives representing Michigan's 12th District, which includes Ford Motor Co.'s home base in Dearborn. His wife, former General Motors executive Debbie Dingell, holds his former seat. Dingell, who bounced back from a heart attack in September 2018, was an influential power player on energy and health care legislation. He championed U.S. automakers and manufacturing jobs, civil rights, environmental regulation and national health insurance — helping to create the Affordable Care Act under President Barack Obama and Medicare 45 years ago. For more, click here.

Yes, Odometer Fraud is Still a Thing

Most people believe that odometer fraud no longer exists, but new data suggests that’s simply not true. In fact, it’s growing. New research from Carfax suggests there are over 1.6 million vehicles on the road with a potential odometer rollback, a six percent increase from last year. Carfax recently teamed up with news stations around the country to demonstrate how easy rolling back odometers is for criminals to do and why consumers and dealers lose thousands to this scam. While digital odometers haven’t curbed criminals from duping consumers and local dealerships, Carfax information makes it easier to spot this fraud. As an AIADA member and Carfax Advantage Dealer, you can run as many Carfax Reports as you need to help avoid odometer fraud wherever and whenever you purchase vehicles. Plus, Carfax Used Car Listings with ‘Great-‘, ‘Good-‘ and ‘Fair Value’ badges help reassure people that they won’t be another victim of this scam and are paying the right price. Protect your business and your customers – become a Carfax Advantage Dealer and get your inventory up on Carfax Used Car Listings today by calling 888-788-7715.

Around the Web

The Latest Car To Get Recalled Over Unintended Acceleration Is, Uh, The Barbie Dream Camper [Jalopnik]

The European Volkswagen Passat Is Still a Lot Cooler Than the American One [Car & Driver]

What If Today’s Cars Were Designed Decades Ago? [Automobile Mag]

Toyota TRD Pro Family Adds Sequoia [Auto Blog]