Chairman's Blog: In Hard Times, Dealers Turn to Advocacy
No question about it, auto retailing today, amidst a pandemic, is more complicated, challenging, and potentially rewarding than ever before, writes AIADA Chairman Steve Gates. In times like these, when our businesses require every ounce of our focus, it’s easy to turn inward. As the chairman of AIADA, I’m especially heartened to see so many of our members reaching out to Washington, D.C., this spring. The public perception of Congress couldn’t be lower, and the challenges of meeting with a legislator at the moment are many, so it’s gratifying to see so many dealers overcoming those hurdles to get to know their representative, and more importantly, help them get to know their employees and store. AIADA is, by its very nature, an organization populated by members who turn outward in hard times. We’re the dealers who have never been satisfied by the status quo and have always had to fight to get a fair shake for our stores and brands. A pandemic won’t stop us, and the growing numbers of Dealer Visit reports coming across my desk are just more proof of that. Read more of the latest Out of the Gates blog post here.
VW Eyes Global EV Lead by 2025 in Platform Push
Volkswagen Group plans to widen cost-cutting efforts by standardizing key technologies as the German manufacturer seeks to accelerate a seismic shift toward electric cars to combat Tesla and keep traditional rivals such as Daimler at bay, reports Automotive News. VW targets 1 million electric-vehicle sales this year and aims to become the global EV market leader by 2025 at the latest, the company said. By 2030, the share of fully electric vehicles in Europe is set to rise to as much as 60 percent of group deliveries. VW is overhauling its sprawling operations to free up funds for new technologies as it plans to build the industry’s largest fleet of electric vehicles. The company has unveiled Europe’s boldest battery-production push and struck a deal with unions to cut more jobs in Germany. VW said it seeks to use a platform approach to raise the efficiencies when deploying technologies including software, batteries and charging infrastructure. It reiterated a plan to lower fix costs by 5 percent, or 2 billion euros ($2.4 billion), by 2023 and material expenses by 7 percent. Read more here (Source: Automotive News).
Sunny 2021 Auto Sales Forecast Contains Black Clouds: High Prices, Low Supplies
Borrowers with good credit, which is to say around three-quarters of new-vehicle buyers, appear to be shrugging off the effects of the COVID recession, but the auto sales forecast for 2021 isn’t as simple as that, reports Forbes. On the positive side, tailwinds for auto sales in 2021 include low interest rates, government stimulus checks, and billions of dollars in “pent-up cash” for households with stable, well-paying jobs. Those prime-rated households haven’t been able to splurge on items like vacations, eating out, and air travel, said Charlie Chesbrough, Cox Automotive senior economist. “Eventually, this is going to get unleashed into the economy. This money is going to spur a lot of economic activity in the second half of this year,” he said, in a recent webinar hosted by AIADA. But affordability issues are posing a serious problem to the other one-quarter of the new-car buying public — those with subprime credit, or no established credit. Read more here (Source: Forbes).
Automakers Embrace Electric Vehicles. But What About Buyers?
The world’s major automakers have made something abundantly clear: They believe electric vehicles will dominate their industry in the years ahead. Yet for that to happen, they’ll need to sell the idea to people like Steve Bock, reports The Detroit News. When Bock recently replaced his family’s 2013 Honda Pilot SUV, he considered – and then dismissed – the idea of buying an electric vehicle. Instead, Bock, of suburban Raleigh, North Carolina, settled on a Subaru Outback. Opinion polls show that a substantial majority of Americans are aligned with Bock. An EV might be on their shopping list if it cost less, if more charging stations existed and if a wider variety of models were available. In other words, the time isn’t right. It all adds up to a significant risk for the largest automakers. Most of them are staking their futures on the notion that consumers will soon be ready to buy vehicles that run not on the internal combustion engines that have powered cars and trucks for more than a century but on electricity stored in a battery pack. Read more here (Source: The Detroit News).
Volkswagen CEO: 100,000 Cars Lost Due to Chip Shortage
Volkswagen was unable to build 100,000 cars due to an ongoing chip shortage that has hit the automotive sector this year, Chief Executive Herbert Diess said, adding the group would not be able to make up for the shortfall in 2021. Reuters reports that Diess, speaking at Volkswagen’s annual press conference, said that the carmaker would secure future chip supply via direct agreements with semiconductor suppliers, marking a strategic departure outlined earlier this year. Read more here (Source: Reuters).
Webinar Today: Kerrigan Advisors' Outlook on 2021's Buy/Sell Market and Franchise Valuations
Erin Kerrigan of Kerrigan Advisors will join AIADA's AutoTalk today, March 16 at 2:00 p.m. EDT to review the following in detail:
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Highlights from Kerrigan Advisors’ 2020 Full Year Blue Sky Report®
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Key drivers of the white-hot buy/sell market, including what is bringing both buyers and sellers to market
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Regions that are in the highest demand are achieving higher than average multiples
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Dealership valuations in a post-COVID world
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Blue sky multiples by franchise, including multiple outlooks for 2021
Around the Web
Hottest Future Collectible Cars [Forbes]
6 Trailblazing Women in the Automotive Hall of Fame [Autoblog]
NHTSA Investigating 'Violent' Tesla Crash, Autopilot Not Ruled Out Yet [CNBC]
BMW Rolls Out New iDrive 8 Digital Interface [The Detroit Bureau]
