Used car market slump, battery plant subsidies, Rivian changes plans

Inside Automotive

3 biggest mistakes salespeople make when closing- Sean Gardner
Sales teams are vital to every dealership so you want to make sure they are set up for success and avoiding three big mistakes. Today on Inside Automotive we’re joined by Sean Gardner, Instructor and Sales Trainer for the Joe Verde Group, to share what these three  mistakes are and how your teams can avoid them. Watch full segment here.

Headlines

According to a new Cox Automotive report, the used-car market is still declining since breaking records at the beginning of the year. The study found that wholesale prices have now fallen by 15.6% and that retail sales have declined by 10% since the start of 2022. Despite the slump, used-car dealers have kept prices steady, around $27,564, hoping to hold on long enough for the market to recover naturally without cuts. Stabilizing supply chains have helped automakers resolve inventory scarcity, allowing new-car retailers to draw in customers with lower costs and monthly payments, at the expense of pre-owned sellers. However, Cox Automotive noted that dealers in all markets remain anxious over how the market could change heading into 2023. Read More

Battery plants from General Motors and LG Energy Solutions have received a new source of funding, courtesy of the federal government. The two companies are partnering to build three new EV-focused battery facilities in Ohio, Tennessee and Michigan for a total of $7 billion, with talks of a fourth factory in Indiana. Yesterday, the U.S. Energy department announced it would be giving the joint venture an additional $2.5 billion in loans to help finance construction. This coincides with revitalized interest in domestic production from automakers who are looking to take advantage of the Biden administration’s new EV incentives. GM plans on using the new facilities to achieve its goal of becoming an electric-only producer within the next two decades. Read More

EV manufacturer Rivian has abandoned plans it made three months ago with Mercedes Benz to build vehicles in Europe. The deal was organized in September, and would have funded a new joint venture plant in the EU to build commercial electric vans. However, rather than constructing the new factory, Rivian CEO RJ Scaringe said the company would instead focus on its current consumer and commercial bases in the U.S. While neither company has provided further reasoning for the cancellation, the decision matches a growing trend among European automakers to shift domestic production overseas. Honda, Hyundai, Vinfast and others are already building new factories in the U.S., although Mercedes Benz has yet to follow suit. Read More

Kia is telling its U.S. dealers that improvements are needed across the board. According to a mass market sales satisfaction study conducted by J.D. Power, consumers ranked Kia dealerships behind all others in terms of buyer experience. Earlier this year, Kia of America’s chief operating officer Steve Center seemingly attributed the performance to poor digital literacy among franchise owners, telling retailers that the brand was in danger of going the way of other companies who failed to adapt with technology. However, the J.D. Power study placed minimal weight on internet accessibility, instead asking consumers to rate the buying process, salesmanship and staff quality at their dealers. The company has yet to offer an official game plan for its dealership body. Read More

News & Opinions

Demand slows in November as plunging vehicle affordability impacts the market
While October brought strong performance and demand, things might be slightly cooling off for November. While the forecasts still show a strong showing for the month, there are a few indications that things are slowing down a bit due to various factors, namely a growing lack of affordable vehicles. Read More

5 focused strategies to bring a wayward service advisor back in line
In the automotive realm, the salespeople are superstars, capable of selling big-ticket items. In most dealerships, however, the service advisor is responsible for generating more gross profit every month than a salesperson while serving more customers. Anyone who’s spent time in the service drive with these crucial team members can understand what a grind it can be. Read More

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