CBT automotive newscast: February 28, 2022

Inside Automotive:

Letting your customers be in control of the car buying experience
On the latest episode of Straight Talk, host David Lewis, President of David Lewis & Associates, discusses why customers should have more control of their car buying experience. Selling vehicles on a commission basis allows dealership employees to earn a good living, but it often leads to a mindset of trying to control the customer during the sales process. This philosophy has been taught and practiced in the car business for a long time, and it has created a perception that all salespeople care about is closing a deal. Watch the complete segment here.

Headlines:

Tesla CEO Elon Musk’s battle with the Securities and Exchange Commission is expanding further, with the commission now launching an investigation into share sales made by him and his brother last year. According to the Wall Street Journal, Kimbal Musk sold almost 90,000 shares of Tesla the day before Elon Musk asked Twitter followers if he should sell 10% of his stake in the automaker. Insider trading rules indicate that company directors can’t make decisions to trade or sell shares based upon information that has not been disclosed to the public. The SEC Is investigating whether or not Kimbal knew that Elon was going to publish the Twitter poll before he sold his shares.

Toyota announced last week, that it had come to an agreement with union representatives to meet their demands and increase wages. While the union has always pushed for higher compensation, the pay raises come after Japan’s Prime Minister called on corporations to increase wages as part of the country’s COVID-19 recovery plan. Toyota did not disclose specific financial terms of the agreement, but a Japanese newspaper reported initial demands were bonuses equal to seven months of work and wage increases of between $14 and $43 per hour.

Last week, Rivian CEO RJ Scaringe said Rivian is hoping to own a 10% share of the electric vehicle market by 2030. At the 2022 Wolfe Research Conference, Scaringe said the automaker is taking measures to ramp up production at its plant in Illinois despite supply shortages, and added that it is working diligently on its portfolio that will allow it to reach its goal. Due to supply chain disruptions, Rivian has been forced to push back the delivery of some vehicles to 2023, but Scaringe remained optimistic and thanked buyers for their patience. More details on Rivian’s plans will likely be shared on its next earnings call, which is scheduled for May 10.

Carvana acquires ADESA’s U.S. auctions for #$2.2 billion to boost used car sales. ADESA, a wholly-owned subsidiary of KAR Global will accelerate Caravana’s growth and enhance its customer offerings with a larger selection of cars. President of ADESA, John Hammer, says “We look forward to bringing our innovative teams together and combining the power of our physical auction and retail capabilities to better serve buyers, sellers and consumers across the automotive industry.”

Celebrating Black History Month:

This February, in honor of Black History Month, we want to celebrate and recognize the achievements of black retail automotive professionals past, present, and future. Today, we’d like to highlight Damon Lester, President of the National Association of Minority Auto Dealers (NAMAD) and owner of Nissan of Bowie in Bowie, Maryland.

A trained CPA, Lester started his career as an accountant and auditor for several large firms in the northeast. Over time, he specialized in creating non-profits organizations through the World Bank and audited offices of USAID non-profits.

He joined NAMAD as Vice President of Operations in 2002 and became President in 2006. During his tenure, Lester has been instrumental in forming strategic relationships with automakers to address racial inequities in finance, entrepreneurship, and the economy.
Lester also assisted in negotiations between former President Barack Obama and the Auto Task Force to revitalize the auto industry in 2008.

News & Opinion:

Data analytics in F&I – Remember, humans are behind the numbers
When dealerships use data to take a more granular look at how the different departments are performing, it can uncover a lot – positive and negative. How much of a margin is held in sales? What is the average RO in service? Are parts personnel pricing for proper margins vs. local suppliers? Data is critical to getting a snapshot of what’s working and what’s not. But there is one department where you must temper the objective and cold effect of data with the real-world expectations of human behavior…F&I. Read More

How often should you mystery shop your car dealership?
Mystery shopping is one of the most effective ways to identify areas where your team and processes are succeeding, and where they’re falling short. If you want your dealership to succeed in a quickly changing industry, you should conduct one. You can’t fix what you don’t know is broken. A mystery shop of your store reveals exactly what your customers experience when they call, email, or text. It can unveil training needs, areas of inefficiency, and opportunities for growth. Read more