CBT automotive newscast: December 9, 2020

Today’s Featured Interview:

What auto dealers can expect from the buy-sell market in 2021 – Alan Haig
Automotive M&A activity rebounded strongly after the beginning of the pandemic and has carried robust momentum into the end of 2020. Today, we speak with Alan Haig, founder and president of Haig Partners, one of the country’s leading automotive dealership brokerage firms. Haig Partners recently released the Q3 Haig Report which tracks trends in auto retail and the estimated impact they will on dealership values. Haig discusses current movements in the buy-sell market and what dealers can expect going into the new year. Watch the full segment here.

Top Headlines:

Toyota is launching a large variety of new vehicles in the near future. In a virtual meeting with journalists, Toyota EVP Bob Carter said that the automaker is planning to launch 25 new models in the U.S. market over the next 16 months. Many of these new models are expected to be hybrids or battery-powered. Toyota is currently getting ready to begin production next year at its newest plant in Huntsville, Alabama. Without revealing any details on the new models, Carter did emphasize that half of the new vehicles will be cars instead of SUVs or trucks. Toyota believes the car market is shrinking slower than competitors realize, and it plans to take full advantage of this underappreciated segment of the market.

Market analysts believe that Asbury Automotive Group is the best pick among all auto dealers. This week, analysts at Morgan Stanley upgraded their rating on shares of Asbury to their equivalent to buy from hold. The auto retailer’s jump is strongly accredited to the recent strides they’ve made in their online car-buying platform. The retailer was swift to upgrade their online experience, taking a page out of the success of other car-buying online retailers. Shares of Asbury have gained 29% this year, compared with gains of 14% for the S&P 500 index.

November fleet sales dropped slightly from October and remain down 29% from levels a year ago. According to Cox Automotive, 132,145 total fleet units were sold in the month of November, down slightly from 132,560 in October. As we near the end of the year, Cox Automotive estimates that fleet sales are down 38% in 2020 through November, while retail sales are down 12% and the overall new-vehicle market is down 17% so far this year.

Kia is recalling 295,000 U.S. vehicles due to fire risks. The automaker made the announcement over the weekend, saying that the recall covers the 2012 and 2013 model year Sorento, 2012 through 2015 Forte and Forte Koup, 2011 through 2013 Optima Hybrid, 2014 and 2015 Soul and the 2012 Sportage vehicles. Dealers will inspect the engine compartment for fuel or oil leaks, perform an engine test and make any repairs including engine replacement, as necessary.

News & Opinion:

Online auto loans are on the rise. What does this mean for dealers?
The pandemic has changed the way consumers purchase cars, which extends beyond online research and requesting test drives. Today, customers are conducting a variety of processes online, and this includes obtaining an auto loan. According to research by J.D. Power, “a growing percentage of buyers are securing direct financing prior to their purchase.” Digital auto loan origination is on the rise, and this development has far-reaching effects for dealers and customers. Some impacts are beneficial. However, there could be some unforeseen issues that dealers may have to contend with due to the rise in online auto loans. Read More

‘Tis the season of giving back – How can cause marketing help your business?
This Thanksgiving, I reflected on all the things for which I’m thankful, as well as the people: family, friends, and the wonderful automotive professionals I’ve met over the years. This industry is filled with some of the most genuine, caring folks around. While this time of year is known as the season for giving, so many people are in need year-round, and admirably, the automotive industry understands the importance of charitable giving and does great things every season. Read More