Have strong Q1 auto sales set the stage for the rest of 2021? – Charlie Chesbrough, Cox Automotive
Today on CBT News, host Jim Fitzpatrick is joined by Charlie Chesbrough, Senior Economist and Senior Director of Industry Insights at Cox Automotive. Chesbrough joins the show to recap results from the first quarter of 2021, and provide insight on what car dealers can expect for the rest of the year. To gain a true understanding of the automotive market’s performance in the first quarter of 2021, one would have to compare results from 2019. Due to lockdowns caused by the COVID-19 pandemic, Q1 from 2020 is an inaccurate representation of the normal state of the market. Watch the full segment here.
AutoNation is preparing to make its first franchised dealership acquisition since 2018. The retailer announced that it has signed an agreement to acquire 11 stores from Peacock Automotive Group of Hardeeville, South Carolina. The purchase will provide AutoNation with new locations in Hilton Head and Columbia South Carolina and Savannah, Georgia. Peacock’s dealerships represent a variety of brands including Hyundai, Genesis, Jaguar, Land Rover, Audi, Porsche, Subaru, Chrysler, Dodge, Jeep, Ram, and Volkswagen. The deal is expected to close June 1.
During the month of March, used-vehicle inventory fell to its lowest level since last summer. According to Cox Automotive, the days’ supply of used vehicles fell to 33 at the end of March. The days’ supply of used vehicles has remained relatively stable since last October. However, strong spring sales, due to tax refunds and stimulus checks, have depleted supply. Used-vehicle sales are currently running 22% ahead of the same period in 2020.
Snags in new-vehicle supply chains are slowing banks’ loans to auto dealers, but surging used-car prices are the driving force for auto lenders. Last week, major auto lender Ally Financial said it expects to see yields on retail auto originations in the 7% range for the rest of 2021. Ally’s auto leasing average yields have surged to 8.6% in the first quarter of 2021 after sitting at 5.2% at the start of 2020.
Braman dealerships in Florida are experiencing system outages that are possibly linked to a ransomware attack. The Miami dealership group is currently investigating the outages and has declined to comment on affected stores or if customer data was compromised. Braman is ranked number 29 on automotive news’ list of the top 150 dealership groups in the u.S., with 10 dealerships and 24,839 new vehicles sold in 2020.
News & Opinion:
Are credit constraints a precursor to another financial bubble?
If a recent MSNBC story and reports of what is happening at Barclay Bank are any guide, a blind hairpin turn could be ahead. Is the lending industry able to make the turn? No one will disagree that it’s been a challenging time to sell cars. From a slowdown in 2019 to the pandemic that started in 2020, dealers and manufacturers have had hurdles to clear. As the New York Times reported, these disruptions have changed the automotive market forever, but most dealers have pivoted and are on the road to recovery. Read more
Navigating the service department through the chip shortage
By now, automobile manufacturers around the world have been affected by the semiconductor chip shortage that originated during the pandemic. Assembly lines have ground to a halt or have been slowed as certain components are in extremely short supply, as is the case with the Ford F-150 plants in Chicago, Ill. and Flat Rock, Mich. And although the sales of pickup trucks, SUVs, and cars are threatened by the shortage, the service department is likely to be affected as well. Read more
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