Bloomberg’s Kevin Tynan discusses key auto industry insights from Q2

Second-quarter numbers are officially in. On today’s show, we’re pleased to welcome back Kevin Tynan, Bloomberg Intelligence’s Senior Automotive Analyst, to discuss earnings for the quarter and how the market is shaping up. Tynan begins the conversation, by explaining where the market stands based on the second-quarter numbers. Tynan says, inventory is the constraint and the month of June took a dip.

Tynan says there are some beneficial outcomes that both OEMs and car dealers are experiencing due to the current supply constraints. For example, in comparison to the first quarter of 2020, Ford Motor Company’s pretax margin grew 8% in the first quarter of 2021. When you take stock of the number of units on the ground, account for lost revenue, and weigh in greater margins, it turns out to be net positive for a lot of companies.

Tynan adds that as far as the shift from trucks to cars, manufacturers don’t have those low margin, low revenue, vehicles they need to hit their goals. What’s replaced them are hybrid and electric vehicles. Tynan says you’re going to see more trucks on the lots and higher average transaction prices.

As far as the chip shortage is concerns, Tynan believes that things seem will loosen up in the third quarter. Some people are saying things won’t return ‘normal’ until 2023, possibly 2024. Tynan believes that a bulk of the recovery is up to the manufacturers.

Tynan wraps up the conversation by sharing his thoughts on what we can expect for the rest of the year. He says we’re going to see a better pre-owned process at the retail level. He believes the whole industry is innovating and changing in a way that’s going to be beneficial when all this is over and beyond.

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