CBT automotive newscast: June 15, 2021

Featured Interview:

What is driving buyers and sellers to the automotive M&A market?
The automotive buy-sell market is on a hot streak with continuous record-breaking activity. From public companies like Lithia Motors to private dealer groups like Zeigler Automotive, M&A activity is thriving and shows no signs of slowing down, according to this month’s Kerrigan Advisors Market Update. Here to discuss what exactly is driving buyers and sellers to the market is Erin Kerrigan, Founder and Managing Director of Kerrigan Advisors. Watch the complete segment here.

Top Headlines:

On Monday, electric vehicle maker Lordstown Motors Corp., announced the resignations of CEO Steve Burns and CFO Julio Rodriguez. Lead Independent Director, Angela Strand was appointed Executive Chairwoman until a permanent CEO is chosen. The EV startup also named Becky Roof as interim CFO. These resignations come on the heels of a Securities and Exchange Commission probe launched in March of this year.

Volkswagen’s U.S. Division says that a data breach, which occurred at one of its vendor partners, has impacted more than 3.3. million customers and prospective car buyers in the country. An unauthorized third party, gathered limited personal information from 2014 to 2019, due to an electronic file that was unsecure. While most consumers only had phone numbers and email addresses leaked, sensitive credit data for approximately 90,000 customers was compromised.

Two more accomplices in the Carlos Ghosn case have pleaded guilty to helping the former Nissan CEO escape a Japanese jail and evade punishment. Michael Taylor and his son Peter Taylor, are said to have received at least 1.3 million dollars for smuggling Ghosn out of Japan using the Kansai airport. Ghosn continues to deny any wrongdoing and is currently exiled in Lebanon.

According to the research firm IHS Markit, the average age of U.S. cars and light-duty trucks has reached a new high of 12.1 years. IHS analysts say that this increase in average age might be short-lived as pandemic concerns ease and Americans start traveling more. Researchers also note that record-high used car prices and limited new car production are also contributing factors.

News & Opinion:

The case for trying preloaded appearance ancillaries
F&I has always been tasked with handling all the aftermarket sales over the years. VSC, GAP, tire & wheel, and many other smaller products and protections. They are trained in the fine art of presenting everything all at once and hoping that something sticks. It’s not easy and with more products, it can be overwhelming for the buyer, too. Could there be a better way to get a higher close rate on these smaller appearance ancillaries? Most dealers cannot say they have a penetration rate much above 10-15%. Read more

Average vehicle age blows past 12 years due to pandemic
In the past year, the average age of vehicles in operation in the United States has crossed the 12-year threshold. According to IHS Market data, the current average age of vehicles in the country now stands at 12.1 years, almost two months older than in early 2020. The cause of the average age increase, of course, was the pandemic. New vehicle registrations plummeted not just in the US but worldwide during 2020. Here at home, the drastic reduction in sales combined with an increase in the number of vehicles being taken off the road to push the average higher. Read more