CBT automotive newscast: July 29, 2022

Inside Automotive:

Supply chain problems still hindering auto sales—Is there an end in sight?
We know that successful dealership operations largely rely on strong vehicle sales, but manufacturers cannot produce enough cars to satisfy consumer demand. Today on Inside Automotive, Jessica Caldwell, Edmunds Executive Director of Industry Insights, provides an update on the current automotive market and shares her outlook on the rest of the year. Watch the complete segment here.

Headlines:

The U.S GDP, or gross domestic product, shrank by 0.9% in the second quarter, according to recent reports. To tackle inflation and decrease the chances of a recession, the Federal Reserve increased its interest rate again by 0.75%. There have been two consecutive quarters now with a decrease in GDP, which is the ‘technical’ definition of a recession. However, June saw the addition of 372,000 jobs, a sign of the economy’s resilience. Read More

Despite trouble with the global supply chain, Ford‘s adjusted earnings has tripled in one year to $3.7 billion as it increases deliveries. After the news was released, company shares were up 6%. Ford is still suffering from high prices due to inflation. After accounting for a $2.4 billion fall in the value of its stake in electric vehicle startup Rivian Automotive, Ford’s net income was only $667 million. Ford’s U.S. sales increased by 1.8% in the second quarter compared to the same period last year, thanks in large part to an 8% increase in sales of SUVs and crossovers. Read More

Sonic Automotive has reported its second quarterly earnings. According to a press release, Sonic Automotive had an all-time record quarterly revenue of $3.7 billion, up 9% year-over-year. Sonic also record a quarterly gross profit of $588.8 million, an increase of 15%. Earnings, adjusted for non-recurring costs, came to $2.45 per share. EchoPark also had record quarterly revenues of $665.6 million, up 12% from a year ago. Read More

Amy Mast, a spokesperson for Rivian Automotive, has confirmed in an email that at least 6% or 800 out of 14,000 of its employees will be laid off to speed up the development of upcoming electric vehicles. In recent months, a number of automotive companies have laid off significant portions of their workforces. Ford is apparently thinking about letting go of 8,000 employees, and EV maker Tesla has declared plans to reduce its employment by 10%. Read More

News & Opinion:

Minority franchise dealers increased by almost 9% in 2021, NAMAD data shows
According to the National Association of Minority Automobile Dealers (NAMAD), the number of minority franchised dealerships rose by almost 9% from 2020 to 2021. There were a little over 1,250 minority franchise dealers in 2020, and that number slightly increased to 1,366. African Americans and Hispanic-Americans saw slight upticks (10% and approximately 3%, respectively). Native American dealer owners also saw an almost 3% jump. On the other hand, Asian American franchised dealers saw the most significant rise, from 299 to 361, resulting in a nearly 21% increase. 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. Suppose a service manager, fixed ops director, or GM comes across a service advisor consistently underperforming. Their CSI scores might be slipping, or their RO metrics might be consistently lower than their peers. One month might be an anomaly, but a downward performance trend usually indicates a deeper problem. Read More

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