CBT automotive newscast: November 25, 2020

Today’s Featured Interview:

Are customers shifting entirely to online car buying? TX dealer Ben Keating weighs in
It may be difficult to find a dealer as unique as Ben Keating. Not only does he operate a successful dealership group, Keating Auto Group, in Texas, but he has also found success on the race track. Keating joins CBT News to discuss his unique journey as a dealer and racecar driver as well as digital retailing and EVs. Watch the full segment here.

Top Headlines:

General Motors is changing its stance and will no longer support the Trump Administration’s legal battle to prohibit California from setting its own emissions standards. In a letter to environmental groups, GM CEO Mary Barra said the company is, “immediately withdrawing from the preemption litigation” and they are inviting other automakers to join them. The shift comes as the automaker looks to pivot its strategy to put the majority focus on the development of EVs. In a tweet, Ford CEO Jim Farley praised the move saying, “I applaud GM for reversing course on this critical issue.”

Car shoppers typically find great deals on Black Friday as dealers look to clear out older inventory. However, with automakers struggling to resupply dealers with new inventory, discounts could be scarce. Edmunds estimates the average discount on a new vehicle in October was down 23% from last year. The trend is expected to continue through November as dealers continue to report record profits on new vehicles due to tighter inventory levels. According to Cox Automotive, there are 650,000 fewer 2020 model-year vehicles than what was expected prior to the pandemic. This has led to an estimated $800 decline in discounts per vehicle.

As several automakers took a hit in sales during 2020, one Ford executive believes that 2021 will be a significant year for the entire industry. Mark Laneve, Ford’s vice president of U.S. marketing, sales, and service said in an online dealer meeting that he expects Ford to grow tremendously in 2021. Laneve says the automaker has been working towards a big bounce-back year in 2021 ever since the beginning of the pandemic. Ford is betting heavily on the success of new products such as the Bronco, Bronco Sport, and Mustang Mach-E.

Elon Musk continues to climb the ladder of success. The Tesla CEO most recently passed Bill Gates to become the second wealthiest person in the world. Musk’s net worth soared from $7.2 billion to $127.9 billion as Tesla’s share prices continue to surge. Tesla’s market value is on pace to surpass $500 billion this week.

News Stories & Opinion:

How the As-a-Service Revolution empowers dealerships to be more efficient
While disruptive technology sounds intimidating, it’s critical to support the changing way we do business. The “as-a-service” revolution is gaining more momentum now than ever before as a growing number of companies integrate their processes with cloud-based, data-driven platforms to better manage and improve operations. These technologies are paving the way for businesses to leverage once advanced tools like big data, AI, and predictive analytics, ultimately empowering brands to do more with less and increase their efficiencies. Read More

Lower volume, higher profits the name of the game for dealers on Black Friday
In yet another twist on a topsy-turvy year, Black Friday car deals are expected to be less aggressive than they have been in previous years. The prediction comes from industry experts who see an ongoing new car inventory shortage, particularly on the most in-demand models, helping manufacturers and dealers hold profits. Through October, Edmunds has estimated that new car discounts dropped to $2,046 on average, down from $2,657 the same time last year. All indications so far point to November’s discounts maintaining a similar level, even though the ever-popular Black Friday weekend sales. Read more