CBT automotive newscast: February 10, 2022

Inside Automotive:

Powerful ways to pick yourself up when hardships knock you down
Many of us experience setbacks and get knocked down from time to time, whether it be rejection in business or a global pandemic. As life and the pandemic continue it’s important to understand that you can get back up and succeed in today’s environment. On today’s show, we’re pleased to welcome back ‘The Master of Disaster’ aka Dr. Randall Bell, socio-economist, CEO of Landmark Research Group, and author of many books including his latest titled Post-Traumatic Thriving: The Art, Science and Stories of Resilience. Watch the complete segment here.

Headlines:

The semiconductor chip shortage continued to impact Honda throughout the third quarter, with the automaker announcing a 17% drop in its operating profit. While the profit dropped to $1.98 billion, Honda said it did sell 4.5 million vehicles throughout the business year, which exceeded its initial plan to sell 4.2 million vehicles. The automaker also increased its expected operating profit to $6.93 billion this week, likely due to the ongoing absence of dealer incentives as well as a weaker yen and other cost-cutting measures.

On Tuesday, Toyota sales executive Bob Carter told reporters that the automaker is unsure if it can keep its recently-earned title of the best automaker in America. Toyota outdid General Motors last year for the first time in nine decades, possibly because it was more successful in managing the supply chain shortages. Carter said while Toyota may lose the title back to GM this year, Toyota is optimistic it will have a great year for sales and profit. He added that while full-battery electric vehicles will take time to be designed and produced, Toyota is excited about hybrids and expects them to make up 30% of its sales this year.

Penske Automotive Group released its earnings this week, showing that the company exceeded expectations and broke quarterly and annual records. Compared to Q4 of 2020, Penske reported an 8.3% revenue hike for the fourth quarter of 2021. For the full year of 2021, retail automotive sales were up almost 12% from 2020, and overall revenue was up 25%. CEO Roger Penske said the transportation company has greatly reduced its debt throughout the past two years and indicated the positive results were also due to strong margins, new retail stores, and strong earnings from its Penske Transportation Solutions division.

There is increasing speculation that dealers who are marking up vehicle prices to make up for low inventory may end up being hurt by the process. Earlier this week, Drive-it-away CEO John Possumato said that while consumers are buying vehicles at these high prices, they may also be resentful about their final costs, meaning they may not return next time they are looking to buy a vehicle. He added that the direct-to-consumer sales model may also drastically cut dealership visits as more automakers and auto retailers build out ways to use it. OEMs are also dissatisfied with the ongoing markups, as both General Motors and Ford recently issued warnings to dealerships regarding these practices.

Celebrating Black History Month:

This February, in honor of Black History Month, we want to celebrate and recognize the achievements of black retail automotive professionals past, present, and future. Today, we’d like to highlight Edward Davis, the first black car dealer to be inducted into the Automotive Hall of Fame.

The oldest of 10, Davis loved cars from an early age. After training to be an accountant and struggling to find employment, Davis opened and operated his own service garage. He then worked for Dodge in one of their assembly plants, and transitioned to car sales for a Dodge dealership owned by the plant supervisor’s son.

He ventured off on his own in 1938 and founded Davis Motor Sales which landed a contract with Studebaker. After Studebaker filed for bankruptcy, Davis looked for contracts from the Big 3 but was denied due to his skin color. After seven hard-fought years, Davis was awarded a Chrysler-Plymouth dealership in Detroit. He was inducted into the automotive hall of fame in 1996.

News & Opinion:

First steps to fewer restrictions: Mask mandates are being lifted in several states
On Wednesday, New York State Governor Kathy Hochul announced that mask mandates will not be renewed as they expire on Thursday. The news comes just two weeks after a court battle for the state to uphold its decision to enforce the use of masks. The number of cases in the state has dropped significantly in recent weeks, however, medical professionals including the CDC remain hesitant to support lifting mask mandates at this juncture. On Tuesday, New York reported its lowest case count for the previous week since November 30. Lower case numbers are a strong indicator that the Omicron wave is beginning to subside. Read More

Auto technician shortages continue to cause problems for the industry
Last year, we discussed the state of the technician shortage and none of the information looked promising. It was clear to us then that something major needed to shift in order to head off serious consequences in the coming years. So, how is the auto technician shortage progressing nearly a year after our initial report? We look at the state of the shortage these days. This article also outlines some of the issues we will see as the condition continues to get worse. Read more