CBT automotive newscast: November 10, 2021

Inside Automotive:

Hoffman Auto Group celebrates 100 years in the business: Co-Chairman Bradley Hoffman explains how
Hoffman Auto Group, based in Connecticut, is celebrating 100 years in the business this year. From a single Ford store in 1921, the family-owned business has grown to consist of ten dealerships and nine brands. But after 100 years, you have to ask..what’s next and what’s the secret? On today’s edition of Inside Automotive, we’re pleased to welcome Bradley Hoffman, Co-Chairman of Hoffman Auto Group, to discuss what business looks like for Hoffman Auto Group today. Watch the complete segment here.

Headlines:

AutoNation closed on its deal with Priority 1 Automotive and added nine Maryland dealerships from the purchase. This acquisition will add $420 million in annual revenue. This transaction is AutoNation’s second-largest dealership purchase of the year. Sonic Automotive has also expanded its franchise dealership portfolio with the purchase of Cook Volkswagen in Fallston, Maryland. This marks the company’s 89th franchised location and its fourth Volkswagen dealership.

Nissan reported a quarterly operating profit of $560 million. The automaker lowered its global sales to 3.8 million vehicles from a previous forecast of 4.4 million. Vehicle sales dropped each month in the July to September quarter from a year earlier, but volume is up 4.1% this fiscal year through September. Global production is up 3% from a year prior. Revenue is expected to be $78 billion for the fiscal year.

Last week, Congress passed a $1.2 trillion infrastructure package. $65 billion will be used for upgrades to the nation’s electric grid and will fund new transmission lines and clean energy technologies. Also included is $11 billion for transportation safety and $110 billion will be used for repairing the nation’s highways, bridges, and major infrastructure projects.

Illinois legislature passed house bill 1769, which includes state income tax credits for EV makers and suppliers, 75% to 100% of payroll taxes for new employees they hire for up to 15 years. It also includes tax credits for hiring construction workers and training employees. The lawmakers hope this will turn the state into an EV assembly hub.

Every major semiconductor company has agreed to comply with a U.S. request for information pertaining to the ongoing chip crisis. Commerce Secretary Gina Raimondo stated the U.S. won’t need to use the Defense Production Act, which would force manufacturers to comply. Raimondo’s team has been searching for information on how companies allocate their semiconductor supply. U.S. officials have stated the private sector must step up and provide transparency if the government is to successfully address the shortage.

News & Opinion:

Use preloaded ancillary bundles to give F&I more time, more profit
In the dealership, time is everything. Your staff needs time to sell the car, appraise the trade, and work the deal. Time truly is money. When F&I managers have a huge menu of products to present, customers get frustrated and both PVR and CSI suffer. Pitch too much and nothing gets bought. But find a way to pare it down to a few high margin products and suddenly the numbers start increasing. How can you sell more when you have little time to present and as a dealer still maintain a solid Line 1 profit? Preloaded ancillaries. Read more

Carvana shows growth but takes a financial loss on Q3 2021 results
Growing sales and great profit margins weren’t enough to push Carvana into the black through the third quarter of 2021. In the shareholder letter issued on November 4 from founder and CEO of Carvana, Ernie Garcia, this calendar year has been one that demonstrated car buyers’ affinity for simplified car buying. But despite a significant pattern of growth over the past two years, the net loss continues to grow. Read more