CBT automotive newscast: March 3, 2022

Featured Show:

How customer budget restraints affect your car dealership’s inventory and lead management
Welcome to this week’s episode of Used Cars Weekly, the original CBT News show dedicated to bringing car dealers best practices and tips for the used car department, in-depth dealer interviews, hands-on dealership strategies, as well as vendor analysis. Today, host Jasen Rice discusses managing inventory and leads as consumers become even more budget-conscious. Watch the complete segment here.

Headlines:

In his State of the Union address this week, President Biden praised automakers for continuing the shift to electric vehicles and allocating billions of dollars to building EV assembly and battery plants throughout the country. He added that manufacturing cars in the U.S. will alleviate inflation and lower costs for consumers. He also mentioned that building cars and parts at home will reduce the dependence on foreign supply chains. He also specifically mentioned his proposed bill that would provide $52 billion to manufacture the much-needed semiconductor chips.

Hyundai said this week that it will be investing almost $80 billion throughout the rest of the decade, which includes over $16 billion allocated to electric vehicle technology. The automaker said it hopes to make up 7% of the EV market and have an operating profit margin of at least 10% in eight years from now. Hyundai CEO Jayhoon Chong said the automaker wants to be one of the most prominent EV makers despite the ongoing supply chain disruptions.

Ford will be making a significant change to its electric vehicle business procedures, announcing this week it will be running its EV operations through a separate unit, which it has named “Ford model e.” The new unit will separate Ford’s EV business from “Ford Blue,” which is the automaker’s unit for internal-combustion engine research and development. According to Reuters, Ford CEO Jim Farley will serve as the president of the “Ford Model e” unit, while Doug Field will lead product development for it.

Federal Reserve Chairman Jerome Powell said Wednesday that interest rates are likely to be raised as previously announced but added that the Russian invasion of Ukraine is creating “tremendous hardship.” He said the overseas tension is causing uncertainty regarding the impact it will have on the U.S. economy and that the central banking system will need to monitor the situation closely. He further stated that the Fed does still plan on increasing interest rates as part of its effort to reduce inflation and high costs for consumers while also improving the job market.

News & Opinion:

Ford to split EV and ICE businesses, aims to be a leader in electrification
On Wednesday, Ford announced plans to split their business into two units, separating the traditional internal combustion engine segment from the rising EV market. The ICE division is known as Ford Blue and the electrified side is Ford Model e. By doing so, the carmaker hopes to “compete and win against both new EV competitors and established automakers. It’s all part of the Ford+ plan that CEO Jim Farley unveiled in May 2021, where a commitment of more than $30 billion in spending on EVs by 2025 and a separate commercial division known as Ford Pro were made. It’s largely about scaling the business effectively and increasing value. Read More

Embracing your dealership’s electric future starts with a customer-first approach
Once a niche segment among drivers, electric vehicles (EVs) have become top of mind for OEMs. Charged by commitments and incentives from the federal government and a growing sense of environmental consciousness and climate change awareness among consumers, the number of EVs on American roads is expected to rise from 1.5 million units in 2020 to almost 10 million in 2026, according to IHS Markit. Read more

Commercial/Fleet sales – A missed opportunity
As anyone in dealership management, from dealer principal to GM, will tell you, they’re always on the lookout for additional profit opportunities. However, many of these same people haven’t seriously considered commercial (or fleet/B2B) sales. Why? It might be that commercial vehicle sales are outside the normal retail background for many dealer principals and GMs; if so, that’s understandable. Or perhaps it has more to do with the traditional challenge of accessing commercial vehicle data; after all, there are many vendors on the retail side of the house that help with websites, marketing, CRM, and so on. Read more