CBT automotive newscast: February 22, 2021

Featured Segment:

6 automotive customer types and the lifetime value they bring to car dealers
Today on CBT News, host Jim Fitzpatrick is joined by Pete MacInnis, Founder and CEO of eLend Solutions. The pandemic has brought forth many challenges and dealers are weighing in with eLEND Solutions’ latest dealer survey. The report titled, “The Pandemic Drove a Great Leap Forward in Digital Retailing Adoption,” showcases the thoughts and concerns dealers faced during the pandemic and how it will impact the industry moving into 2021. Watch the full segment here.

Top Headlines:

Ford Motor Company is mobilizing its dealers in Texas to provide support to communities affected by the widespread power outages during the severe winter weather. Last week, the automaker sent a letter to its dealer network in the state, asking them to loan out 2021 F-150 hybrid pickups equipped with generators. According to Ford, there are currently about 415 generator-equipped pickups on dealers’ lots across the state that can be utilized to aid residents without power. CNBC reported that several F-150 owners throughout the state have already been using the generator-equipped truck to keep their lights on and appliances running during the historic winter storm.

As states across the South and Midwest continue to struggle with the impact of last week’s snowstorms, automotive analysts believe that vehicle sales shouldn’t take too big of a hit. Cox Automotive Chief Economist Jonathan Smoke said, “storms are short-term events, and these occurred mid-month, not the all-important last week of the month.” Smoke went on to say that dealers should have time to make up sales lost last week in the remainder of February.

Vehicle dependability hit record highs on the latest J.D. Power study. The report found that automakers made significant strides in all categories of reliability. Among all automakers, Lexus ranked number one in overall reliability. The 2021 U.S. Vehicle Dependability Study by J.D. Power looked into 33 different auto brands and about 150 different models including cars, trucks, and SUVs.

Retail sales performed above expectations for the start of 2021 as consumers received a second stimulus check of $600. Overall retail sales jumped 5.3% to start the year, beating economists’ expectation of a 1.2% increase. Online shopping saw the biggest gain in the industry, up 28.7% from January of 2020.

News & Opinion:

How can service departments prepare for an EV-focused industry?
According to the International Energy Agency, electric car sales surpassed 2 million globally in 2019. These numbers only continue to grow higher, leaving dealerships wondering how their service department will need to change. While EVs require less service work due to having fewer moving parts, simpler propulsion systems, and fewer parts to replace, there will still be a need for maintenance and repairs. As a car dealership, some upgrades must be performed to succeed. Here are a few to consider. You will not use the same equipment to repair EVs as you did gas- or diesel-powered vehicles. You will need to invest in some new tools, many of which will cost a pretty penny. Read more

J.D. Power U.S. Vehicle Dependability Study shows marked improvement in quality
Details of the 2021 J.D. Power U.S. Vehicle Dependability Study were released on Thursday, and the results are largely positive. Overall, the customer survey shows that fewer issues are being experienced during the third year of ownership, leading to a more positive ownership lifecycle. From nearly 34,000 survey respondents, the vehicle issues reported declined by 10% year over year. The 2020 rate of problems per 100 vehicles (PP100) was 134 PP100 industry-wide, dropping to just 121 PP100 in the 2021 study. The study also draws a direct correlation to results in the 2018 U.S. Initial Quality Study which, at the time, demonstrated the highest level of quality reported. Read more