CBT automotive newscast: October 22, 2020

Today’s Featured Interview:

5 of the biggest issues facing the F&I office today and how to cope with them – Audrey McKinley
F&I departments are facing a unique set of challenges in today’s marketplace. With experts forecasting the pandemic going well into 2021, what will that mean for the industry? On today’s show, we’re pleased to welcome Audrey McKinley, CEO of Auto Network Consulting and a sales and F&I expert, to discuss some of these challenges and we’re also going to get her take on what’s next to come. Watch the full segment here.

Top Headlines:

Last night marked the return of an icon. General Motors’ GMC Hummer made its return during game one of the World Series and ABC’s The Voice. However, the newest hummer won’t be guzzling gas like its older models. The new hummer was introduced as, “the world’s first all-electric super truck” with an estimated 350-mile range on a single charge. The truck is set to go into production in late 2021, which would put it ahead of Tesla’s Cybertruck.

AutoNation posted all-time record highs when it released results from its third-quarter earnings. America’s largest automotive retailer posted a net income from continuing operations of $183 million, or $2.05 earnings per share for the quarter. The company also posted an adjusted EPS from continuing operations of $2.38 which was an all-time record for AutoNation. The EPS marked an incredible 102% increase from the third quarter of 2019. Other notable results from the company’s report included same-store new vehicle gross profits per vehicle, which was up 56% to $2,535, and same-store used vehicle gross profit per vehicle which was up 43% to $1,994.

NADA made several leadership announcements this week. Mike Stanton was named the organization’s next president and CEO. Stanton will succeed Peter Welch, who has held the position with NADA since 2013. Stanton has worked on NADA’s staff as the organization’s Chief Operating Officer since 2018. Additionally, the organization also announced that Paul Walser has been elected as NADA’s 2021 chairman and Michael Alford will serve as Vice Chairman.

Ford Motor Company plans to launch its self-driving commercial business in the next two years. The company intends to utilize vehicles based on the Ford Escape hybrid crossover for the self-driving service. Ford is in its fourth-generation of self-driving test vehicles in its partnership with Argo ai, an autonomous vehicle startup. Ford said it plans to start testing the vehicles this month. The automaker originally had planned to launch its self-driving vehicle business in 2021. However, due to the ongoing pandemic, the project was delayed until 2022.

News Stories & Opinion:

The Market Remains Uncertain but Your Margins Don’t Have to Be
Henry Ford famously said, “Don’t find fault, find a remedy.” This is exactly what dealerships have been doing since post-World War II when they first encountered margin compression. It was around this time that the U.S. auto market experienced an inundation of foreign-made vehicles and tightening governmental regulations. The result was fiercer competition between OEMs and ultimately their dealers, leading to new-vehicle pricing policies that cut into dealerships’ gross profit per vehicle. Despite the hit to their margins, dealerships found new and innovative ways to make money by reimagining outdated practices. Read More

How auto brands fared in Interbrand’s Top 100 ratings
Interbrand has released its list of winners for the Best Global Brands in 2020. The consultancy firm bases its ratings on financial forecast, the role of the brand, and brand strength. More specifically, the components of valuations include “an analysis of the financial performance of the branded products or services, of the role the brand plays in purchase decisions, and of the brand’s competitive strength.” Interbrand states that branding is crucial to growth since “strong brands influence customer choice and create loyalty; attract, retain, and motivate talent; and lower the cost of financing.” Read More

What dealers can expect from an all-virtual NADA Show
The National Auto Dealers Association (NADA) had originally scheduled for its 2021 NADA Show to take place in New Orleans in January. However, the ongoing COVID-19 pandemic has changed the course of the show, moving one of the industry’s biggest events to an online experience. The all-virtual experience will now take place Tuesday, February 9th through Thursday, February 11th. The question now becomes, what will the new virtual experience look like for dealers who attend the show. Read More