Inside Automotive
LAcarGuy owner Mike Sullivan on the EV market: ‘EVs are an easy business for us here in California’
When we last met with LAcarGuy Mike Sullivan, his operations had expanded as a result of the launch of his 13th dealership, a Genesis store. We’re following up on today’s Inside Automotive episode to see how things are moving along and if there’s any more acquisitions in the future. Watch full segment here.
Top Stories
The Federal Reserve is raising interest rates once again, this time by a quarter of a percent. However, Fed officials have backtracked previous forecasts by bank chair Jerome Powell, who suggested that increases could continue throughout the remainder of 2023. The Federal Open Market Committee, the group responsible for making rate adjustments, now says that future decisions will be based on incoming data, which they will “closely monitor…to assess the implications for monetary policy.” While it continued to warn that further dis-inflationary measures may be necessary, the board also suggested that such revisions could come in the form of “policy firming” rather than additional rate hikes. Read More
Ford has informed investors it expects to lose $3 billion on its EV business in 2023 alone. This will bring the automaker’s total three-year loss on electric products to $6 billion before 2024. However, the brand assured shareholders that it remains on track to achieving an 8% EV profit margin by 2026. This estimate was provided ahead of a meeting to explain the automaker’s new global sales reporting system. Rather than accounting for separate regions, Ford will now split the data by product type. In 2022, the company made the majority of its revenue in the U.S., finishing the year with an EBIT of $9.2 billion. Read More
Consumer spending on new vehicles hit an all time high in the first quarter, according to a new report from J.D. Power. Buyers have spent over $132 billion on new cars since the start of the year, breaking records for any single quarter in automotive history. For March, spending is on track to reach $50 billion, the second highest for the month and 5.5% more than the same period in 2022. This month’s dealer profits are also positioned to reach $4.1 billion, finishing slightly lower than last year but still well above pre-pandemic levels. Read More
Tesla has told employees it expects the base Model 3 will lose its $7,500 EV tax incentive after March. The vehicle is the brand’s cheapest entry, and, until now, customers have been able to claim the credits with their purchases since they became available in January. However, previously delayed sourcing requirements for EV battery components are expected to take effect in the coming weeks. Since the cells used in the standard Model 3 are made in China, it is likely to lose its incentive qualifying status. The revised guidelines are expected to arrive before next month, and could have a widespread effect on the market. Read More
For Dealers
Four strategies for creating lifetime customers at the dealership
Of new car buyers, it remains true that roughly 70% defect within the first three years of ownership. For used car buyers, it’s even more difficult to keep them as loyal service customers and repeat buyers, especially if it’s an off-brand they’ve purchased. What’s also indisputable is that it costs far less to retain a customer than to attract a new one, which Cox Automotive says is by a factor of ten. Read More
6 strategies to build a better DEI program in your F&I department
Every dealership in the new post-lockdown COVID world has had to deal with staff turnover and the fallout from what most economists have dubbed The Great Resignation. Millions have left the job market in the last couple of years, and dealerships have not been immune. Add to that the already challenging headwinds of low inventory and rising interest rates, and you have a pretty turbulent time for most dealers. Read More
