CBT automotive newscast: January 24, 2022

Featured Show:

How video messaging can help your car dealership earn more customers
On the latest episode of Straight Talk, host David Lewis, President of David Lewis & Associates, discusses how car dealers can re-engage with customers who left the dealership without making a purchase. Some consumers feel the pressure to shop around for price, and if you simply wait for them to come back, you might be waiting a long time. However, being proactive with video presentations can motivate guests to return for a second look and earn your dealership more business. Watch the complete segment here.

Headlines:

Last week, Intel released plans to make an investment of $20 billion to build two factories in Ohio dedicated to manufacturing semiconductor chips. Intel executives wrote in a letter that they want to create the largest chip manufacturing site in the world, and may end up building a total of eight factories and investing $100 billion to the project overall. Intel CEO Pat Gelsinger told reporters that the company is excited about the new plant, citing that intel has not built a new manufacturing facility in four decades. Intel plans to start construction on the first two factories this year.

Toyota has changed its projections for January production, reducing it by 47,000 vehicles due to chip shortages and an increasing number of COVID-19 infections affecting the company’s facilities in Japan. In addition to other closures throughout the pandemic, operations at eleven plants in Japan shut down on Friday, leading Toyota to apologize to its customers. Toyota previously announced last week that it would likely miss its annual goal of producing 9 million vehicles.

Recently, Mercedes-Benz announced it will be implementing Luminar’s lidar technology in its upcoming vehicles, which will enhance its cars’ ability to sense surrounding objects and provide clearer images. Luminar stock increased over 11% Thursday, and its CEO Austin Russell indicated production of vehicles with its technology will begin soon. The automaker will also receive 1.5 million shares of Luminar as a stipulation of their recent deal. Mercedes-Benz is the second automaker to form a partnership with Luminar after Volvo announced a deal with the company last summer.

General Motors executive Steve Carlisle has issued a warning to its dealerships, citing reports of some dealerships that have allegedly been marking up their vehicle prices significantly. Carlisle also indicated some dealerships are being accused of utilizing third-party brokers to sell their vehicles to customers at a major cost increase. The letter indicated these practices violate the company’s dealer sales and service agreement and said they reflect poorly on gm as a whole. In addition to GM’s recent warning, Ford also issued a similar warning to dealers earlier this year.

News & Opinion:

Navigating vehicle pricing in 2022. Why some dealers are listing above MSRP
These days, it feels like any notion of “normal” went out the window a long time ago. Dealers used to compete by delivering exceptional customer service, quality products, and fair market pricing. But competing in 2022 comes with a whole new set of challenges. Offering world-class customer service and quality vehicles is no longer enough, especially since inventory remains low. Dealers have to balance the realities of the market with asking prices that won’t immediately torpedo their chances of closing deals—a tough tightrope to walk for any sales team. No customer wants to pay more than they believe a car is worth, but at the same time demand for cars is fairly inelastic – people need them, even if that means paying over MSRP. Read More

What type of car shoppers prefer an online only buying experience?
During the pandemic, the topic of digital retailing became front and center as dealerships scrambled to keep providing cars for the customers who wanted them. Those tools and processes allow car shoppers to choose how they prefer to interact with the dealership – fully online, fully face to face, or a blend of the two means. Fully online retail adoption appears to be slow, although many of the applications within digital retailing are streamlining the customer’s visit including seamless transitions with data between the two and time-saving abilities for research and F&I options. Still, the fully online method doesn’t seem to be gaining traction as expected across the industry. Read more