5 auto retail trends that could impact long-term dealership growth
As the first quarter of the year comes to a close, how are car dealers balancing consumer demands, recruitment, and their overall daily operations? Today on Inside Automotive, we’re pleased to welcome back Adam Arens, President of Patriot Automotive Group to get his perspective on how business is faring today. Watch the complete segment here.
U.S. automakers have released their first-quarter results, which showed that overall domestic sales dropped 12% compared to Q1 of 2021. Nissan saw the largest decrease of 30%, while Honda followed with a 23% decrease. Most of the automakers blamed ongoing semiconductor chip shortages and drastically low inventory for the sales drop. Some analysts say the conflict in Ukraine will likely further these issues. Other drops in sales included 20% for General Motors, 15% for Toyota, 14% for Stellantis, and 4% for Hyundai.
On Friday, the National Highway Safety Administration confirmed that all new vehicles will have to offer at least 40 miles per gallon starting in 2026. The current standard is set at 28 miles per gallon, but the automakers will be required to gradually increase gas mileage percentage for model years 2024 through 2026. The new regulations aim to reduce carbon dioxide emissions and make the U.S. less dependent on other countries for gas. Many auto dealers are opposed to the new standard and say it will raise the price of new vehicles, which are already at record highs.
Illinois-based Ed Napleton Automotive has been ordered to pay a record-high $10 million settlement to the Illinois Attorney General’s Office and the Federal Trade Commission after a three-year investigation into the group’s business practices. The investigation concluded that the group added on fees without customers’ consent, charged black customers more than others for add-ons and interest fees, and illegally offered $3,000 gift cards to customers through a direct mail advertisement. A spokesperson for the group said it denies the allegations and that no intentional wrongdoing was found.
Rivian said in a Securities and Exchange Commission filing last week that the ongoing situation in Ukraine is causing even more supply chain issues and production delays for the automaker. The filing also noted a significant increase in costs, which includes prices of critical metals Rivian needs such as lithium and aluminum. The SEC filing also cited COVID-19 variants as contributors to the automaker’s strained operations. Rivian warned that these issues could impact the company’s financial condition as well as its existing and prospective business.
News & Opinion:
Hertz to buy 65,000 vehicles from Polestar over next five years
On Monday, Swedish electric vehicle manufacturer Polestar and Hertz Corporation announced a deal that sees the carmaker sell 65,000 EVs to the rental company. The agreement is intended to spark interest in Polestar’s EVs and help diversify Hertz’s fleet. It’s expected that the first deliveries to Hertz will begin in spring this year for European locations, and rental agencies in North America and Australia could see units arrive in fall or winter 2022. The initial order is for the Polestar 2, a fastback-styled vehicle somewhere between a sedan and an SUV. As a premium model, the deal is expected to be worth about $3 billion. Read more
What auto dealerships can do for Distracted Driving Awareness Month
Distracted Driving Awareness Month has arrived. For the twelfth year, April has been designated as the month to promote distracted driving awareness, and the focus couldn’t be more important. The National Safety Council is committed to ensuring there are fewer distractions on the road, considering there were more than 46,000 on-road deaths in 2021 that could have been prevented. This staggering statistic is up 9% over the previous year. Read More
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