CBT automotive newscast: December 2, 2020

Today’s Featured Interview:

4 elements of hope to inspire your dealership team – Dr. Randy Ross
In a year that has been devastating for so many, people are looking for hope and encouragement. This longing for hope inspired Dr. Randy Ross, CEO of Remarkable! to write his latest book Hope Rises. He joined us today, to talk about his new book and what he would like readers to take away from it.  Through his research, Ross extracted the most helpful points and put them into language that everybody could comfortably grasp. Watch the full segment here.

Top Headlines:

Ford Motor Company is urging other automakers to get behind the California emissions plans. Recently, the automaker sent a letter to other automakers in the alliance of automotive innovation, encouraging them to support the state’s effort to set a tough emissions standard. Last week, General Motors switched its stance, backing California in its ongoing legal battle with the Trump administration. Toyota is also currently reviewing its position on the matter, deciding whether or not to join Ford, Honda, Volkswagen, and several others who have clearly stated their backing of the golden state.

Hyundai Motor Company posted a loss in the month of November as American retail sales fell 11%. While deliveries and crossover volume was up, the automaker was primarily hurt by a 31% drop in car sales. Hyundai and many other automakers were hurt primarily by a fluke in the calendar. This year, November had only 23 selling days, the lowest number possible in a month. This quirk in the calendar only happens once in a five-year span and dropped November from 26 selling days a year ago.

General Motors is preparing for the arrival of COVID-19 vaccines that it will likely unveil to workers this month. GM has been talking with local health departments and government leaders about the logistics of vaccine distribution according to a GM spokesperson. GM has not yet purchased freezers or special equipment to house the vaccine and won’t do so until it analysis its capacity for storage. Last week, Ford announced that it had ordered a dozen ultra-cold freezers to store vaccines when they become available.

Despite the pandemic, many auto dealers expect the value of their franchises to rise in the next 12 months. According to a dealer survey from Kerrigan Advisors, dealers remain largely optimistic about the valuations of their dealerships, with 33% of 680 dealer respondents expecting the value of their dealership to increase. This is up from 26% in the survey a year ago. Another 53% of respondents expect their dealerships to remain the same in value, while only 14% expect a decrease in valuations. Erin Kerrigan, founder and managing director of Kerrigan Advisors said that the leading brands dealers expect to gain value in the new year are Subaru, Toyota, Porsche, Honda, and Mercedes.

News and Opinion:

Average transaction prices down slightly from October but industry going strong
According to Kelley Blue Book analysts, the average transaction price for new vehicle sales in November 2020 is expected to decrease marginally from last month’s high. Estimating an ATP of $39,259 for retail sales, it’s down from 1.2% from October’s $39,739 but remains 1.3% higher than the $38,760 recorded in November 2019. Kayla Reynolds, industry intelligence analyst at Cox Automotive, said, “Consumer confidence has been faltering and unemployment remains stubbornly high. Still, consumers in the market for new vehicles are demonstrating an ability to pay premium prices. Read more

Badger pickup eliminated from updated GM and Nikola MOU
Nikola Corporation has had a volatile 2020 with both ups and downs, but this week’s news has caused Nikola shares to plunge yet again. Just two months after Nikola’s founder, Trevor Milton, stepped down due to fraud allegations, GM has now backed out of its previous agreement to receive an 11 percent equity stake in Nikola and produce the hydrogen-electric Badger pickup truck. According to the updated Memorandum of Understanding (MoU), GM will only be supplying Nikola with its hydrogen fuel cell technology and its Ultium EV batteries for future endeavors. Read more