CBT automotive newscast: March 30, 2021

Featured Interview:

Is 2021 setting car dealers up for even more success than 2020? – Vince Sheehy, Sheehy Auto Stores
Sheehy Auto Stores has a history dating back to 1966 when it was a small car dealership in D.C. and now they have grown to become a household name for many. So how is business doing today, especially in light of the coronavirus pandemic? On today’s show, we’re pleased to welcome Vince Sheehy, President of Sheehy Auto Stores. Watch the full segment here.

Top Headlines:

California car dealer, Adam Simms, is proposing a $279 million mega project to combine a dealership with luxury housing in Silicon alley. If the proposal is pushed through, Toyota of Walnut Creek will become a 165,000-square-foot full-service dealership by 2026. Atop the two-story dealership are planned to be 400-plus units of rental housing, green space, swimming pools, and recreational areas. The project would become one of the most expensive auto dealership developments in the U.S.

Last week, Illinois Governor J.B. Pritzker signed the Predatory Loan Prevention Act into law. The law places a 36% interest rate cap on all loans below $40,000. It includes guaranteed asset protection products sold on auto purchases as part of the interest rate calculation. Some experts believe the new legislation limits credit access for consumers who fail to qualify for lower interest rate terms. Several groups, including the American Financial Services Association and the Illinois Automobile Dealers Association, urged Governor Pritzker to veto it.

The global auto industry supply chain is facing numerous challenges that are threatening U.S. inventory levels. Last week, a massive container ship became stuck in the Suez Canal. The incident caused major congestion at the port causing significant delays for key shipments. This incident along with a global chip shortage and a fire at a semiconductor factory in Japan is causing automakers to halt operations at multiple U.S. manufacturing plants. Despite supply chain woes, German automakers BMW and Mercedes have kept their plants running at full speed. The German luxury makers say they are getting all the supplies they need to keep operations running. Both automakers claim to be monitoring the situation and will make adjustments as needed.

U.S. Transportation Secretary Pete Buttigieg says that he is unaware of any plans to set a date for the end of gas-powered vehicle sales. Many reports have linked senators and representatives to letters sent to the Biden administration, asking for an end date to be set. President Biden campaigned on an aggressively EV-friendly platform, calling for the installation of 500,000 new EV chargers and one million new jobs in the automotive industry to help roll out more zero-emission vehicles.

News & Opinion:

Dealer associations sue Illinois Secretary of State over direct-to-consumer sales
On Friday, two auto dealer associations filed suit in Illinois against the Secretary of State and two carmakers, formally requesting that the legal system enforce state laws regarding automotive sales regulations. The suit has been filed by the Illinois Automobile Dealers Association (IADA) and the Chicago Automobile Trade Association (CATA) in Cook County. They believe the Secretary of State has willingly neglected to enforce Illinois law that requires new cars to be sold through licensed franchised car dealers rather than direct from the manufacturers. The lawsuit takes direct aim at two specific carmakers: Rivian Automotive Inc. and Lucid USA Inc. Read more

It is time to stop debating & hire a digital marketing manager for your dealership
A few years ago, I published an article about the need for a full time marketing manager in every automotive dealership. This view was met with resistance from those in leadership positions inside dealerships. Some comments were based around the cost of having an additional full time employee. Other comments focused on what this person could possibly do each day to justify the cost. Lastly, some said they, as a general manager, could handle the responsibility. Read more