CBT automotive newscast: April 22, 2022

Inside Automotive:

Why ‘your mindset determines your trajectory’ – David Meltzer | Sports 1 Marketing
Show me the money! If you’re familiar with this line, chances are you’ve seen the 90’s blockbuster film, Jerry Maguire. The inspiration for the film was David Meltzer’s agency at the time, Leigh Steinberg Sports & Entertainment agency. David is now the Co-Founder of Sports 1 Marketing, a three-Time international best-selling author, a Top 100 business coach, keynote speaker, executive producer of the #1 digital business show, Elevator Pitch, and the host of the top entrepreneur podcast, The Playbook. Watch the complete segment here.

Headlines:

Tesla reported this week it brought in revenue of almost $19 billion in the first quarter, outdoing expectations and exceeding last year’s revenue by 81%. Earnings-per-share were almost a full dollar higher than analysts were expecting, and the results mean Tesla CEO Elon Musk will get payouts worth $23 billion. Tesla has recently raised prices globally in response to the conflict in Ukraine and parts shortages, and the automaker is expecting production to lower in the second quarter due to the temporary closure of its shanghai facility.

Carvana also released its first-quarter results on Wednesday, which showed a drop in sales for the first time ever, as well as a significant spike in net loss year-over-year. The used car retailer reported sales of just over 105,000 vehicles and that its gross profit per unit had dropped to under $2,900. Carvana said it has been impacted by inflation, labor shortages, increasing interest rates, and supply chain disruptions. Shares recovered after dropping almost 25% when the Q1 results were announced.

Hyundai and quantum computing company IonQ are furthering their partnership with plans to develop technology that will be able to detect 3D objects and conduct image classification. The companies said the machine learning with IonQ’s quantum computers is faster and more reliable than older technologies, and it will be used to expand autonomous driving tools such as pedestrian detection. Hyundai and IonQ have previously worked together on electric vehicle battery technology and other object detection tools.

AutoNation, the nation’s largest automotive retailer, announced record first-quarter earnings per share yesterday. Revenue for the first quarter of 2022 was $6.8 billion, up 14% from the same time a year ago. There was also a 47% gain in used car revenue, which more than offset a 6% reduction in new vehicle revenue. AutoNation Chief Executive Officer Mike Manley stated that consumer demand for personal vehicle ownership remains strong and our self-sustaining used vehicle business continues to meet this demand through our sourcing capabilities, selection of vehicles, footprint, digital tools, and core efficiencies.”

News & Opinion:

5 ways to make your online ads stand out
In a recent Google “Think at a Glance” that may have popped into your inbox, they discussed five key strategies to better car ads. You may want to check it out when you have time since it has good info. While Google likes to focus on display ads, YouTube videos, and pre-rolls because it makes them money, TikTok and Instagram are other viable options dealerships can use. Regardless of the medium you choose, classic advertising strategies are still essential. And with so much competition for sales, producing an ad that reaches your specific customer can be challenging. But if you use these following strategies as a starting point, you’re on the road to providing what your customer needs to purchase from your dealership. Read More

Revisit missed sales opportunities for a future revenue boost
Through the first quarter of 2022 and the second half of 2021, new vehicles have been selling with transaction prices higher than MSRP in most instances. For car shoppers expecting a deal, it’s a turn-off that has the potential to sideline them indefinitely or seek out a retailer willing to lower their price. It’s too early to identify an abandonment rate due to over-MSRP pricing, but there’s a good chance it’s higher than dealerships expect. While the inventory that arrives is selling for around a thousand dollars over the sticker price, and prices aren’t expected to fall by any meaningful degree in the coming months, there will eventually be an influx of vehicles and fewer customers able to afford new cars due to the financial market. Read More