Volvo Wants to Sell American-Made Sedans to Americans

First Up 09/14/20

Volvo Wants to Sell American-Made Sedans to Americans

Volvo Cars is a poster child for how globally interconnected the auto industry became in an era of increasing free trade, reports Bloomberg. When Volvo opened its factory in Charleston, S.C., in 2018 with ambitious plans to export cars to China, it was the pinnacle of a push to showcase its reemergence as a global brand with a manufacturing presence on three continents. Then the U.S.-China trade war forced Volvo to abandon its export plans. And this spring, as the coronavirus spread around the globe, the factory was plagued by a shortage of components and had to halt production three times. While sales of the S60 sedan that Volvo’s 1,500 workers produce in Charleston have been underwhelming, the factory has helped the automaker raise its profile and almost double overall sales in the U.S. from 2014 to 2019. The company is now preparing for the introduction of the next generation of its largest SUV, the XC90, which it wants to manufacture in Charleston. Read more here (Source: Bloomberg). 

Inventory at Lowest Since 2011

Low inventory levels in the U.S. continue to be a struggle for franchised auto dealers, as they fell again in August to 2.26 million vehicles — down another 70,000 vehicles from July and 870,000 from a year earlier, according to figures compiled by Cox Automotive, reports Automotive News. It is the tightest industry level since Octob,er 2011, according to the Automotive News Data Center. Cox estimates that sales in August fell 19 percent — in part because the month had two fewer sales days than August 2019 — meaning the industry had a 56-day supply of vehicles. Most automakers no longer report monthly sales or inventory levels. However, among those that do, Subaru reported just a 16-day supply of vehicles, while Toyota, Hyundai-Kia, Honda, Mazda, and Volvo all had at least a 40-day supply. Cox estimates that luxury-brand inventories saw the sharpest declines in August, dropping to a 56-day supply from 65 days in July. Read more here (Source: Automotive News). 

As Auto Industry Roars Back, Worker Shortages Throw Up Roadblocks 

Orbital Insight CEO Jimmy Crawford has, quite literally, a birds-eye view of the U.S. auto industry. Using satellite images, as well as anonymous cell phone location data, Orbital Insight tracks a wide range of human behavior — including key economic indicators like how many people report to work at auto plants. This spring, reports NPR, when the industry entered its unprecedented shutdown because of the coronavirus pandemic, "there was just nobody there," Crawford said. "Just really skeleton crews." Wards Intelligence  found that vehicle production in North America has returned nearly to pre-virus levels — a remarkable recovery. But staffing levels within most plants, according to Orbital Insight's data, have not fully recovered. Like some other automakers, Toyota Mississippi is sending a few white-collar salaried workers to help with production. Read more here (Source: NPR). 

Nissan Set to Raise $10.4B in Two-Day Global Funding Rush

Nissan Motor Co. is set to price its debut public euro bond sale, capping a $10.4 billion global fundraising drive by the loss-making automaker, reports The Detroit News. The company will sell a 2 billion-euro ($2.4 billion) trio of bonds, after drawing orders more than six times the deal size, according to a person familiar with the matter. Pricing tumbled on all three tranches during the sale, led by a 60 basis-point plunge for a three-year note. Investors flocked to an $8 billion bond sale on Thursday as well, as the Japanese carmaker offered comparatively high yields versus similarly rated borrowers, according to Australia & New Zealand Banking Group Ltd. The company has also received a loan from state-controlled Development Bank of Japan Inc., based on media reports, which is helping it pursue a turnaround amid a coronavirus-fueled slump in auto demand, a costly industrywide shift to electric vehicles and the continued fall-out from the arrest of its former head. Read more here (Source: The Detroit News). 

VW's Goal: Clean Break From a Dirty Past

After five long years, the scars of the largest, most expensive scandal in automotive history are finally starting to fade, reports Automotive News. As a brand, Volkswagen's U.S. market share is back to where it was in the days before its $33.3 billion diesel emissions scandal exploded in public on Sept. 18, 2015. Its dealer network is once again selling more cars than it is buying back. And the last of 36 massive parking lots across the U.S., which once were filled with hundreds of thousands of illicit turbodiesels, finally emptied and closed just last month near the harbor in Baltimore. Next week, the automaker will turn another page on its felonious past as it introduces the ID4, a battery-electric compact crossover that will go on sale in the U.S. by the end of this year with an expected range of more than 300 miles and a starting price of just more than $30,000, after tax credits and incentives. It will be the brand's first deep foray into EVs in the U.S. and follows entries from VW Group stablemates Audi and Porsche — which also were involved in the emissions ordeal. Read more here (Source: Automotive News). 

Webinar: Maintaining Your Sales Momentum

The last few months have seen some respectable new and used car sales results. Join former dealer and Google Automotive Team Member Lane Fortinberry on Tuesday, September 29 at 2:00pm ET for some modern online tips on maintaining the sales momentum:

  • Driving Digital sales through effective Online Retailing practices

  • A look at other "brick and mortar" industries that have leaned in to eCommerce, what can we learn?

  • New and cutting edge digital opportunities to increase sales

To register, click here.

Around the Web

Used Cars Are Having a Moment, Creating Opportunity for Sellers [Car and Driver]

The 7 Most Fun-to-Drive, Most Fuel-Efficient Gasoline-Only Cars on Sale Today [Automobile

These 1990s Vehicles Are Hot on the Collectible Car Market [USA Today]

Walser Auto Group a Pioneer of Digital Retailing [WardsAuto]