Today’s Featured Interview:
Dealers Focus on Efficiency as COVID-19 Exposes Areas for Improvement
COVID-19 has created a new standard of efficiency required for dealerships. Dealers have had to adjust their staffing strategies, increase their focus on digital sales, and meet a steep rise in demand in the midst of a new vehicle inventory shortage. Lance Schafer, general manager of product and technology at LotLinx joined us to give valuable insight into new efficiencies in the auto retail world. Watch the full interview here.
Q2 felt the brunt of COVID-19’s impact on business. Wall Street forecasted bleak numbers for automakers like General Motors. However, GM was pleasantly surprised when they outperformed their predictions. GM lost a total of 758 million dollars for the quarter with a loss of 50 cents a share, but Zack’s Investment Research predicted a deficit as high as one dollar and 72 cents a share for the automaker. GM says it will now turn its focus to rebuilding inventories and paying down debt.
Source: The Detroit Bureau
On the retailer side, Penske Automotive Group was also stung by shutdowns caused by the virus. Penske reported that its second-quarter net income plunged 62 percent to 44.8 million dollars and revenue dropped 37 percent to 3.65 billion.
Source: Automotive News
Tesla CEO, Elon Musk has openly criticized government stimulus efforts making his voice heard about the topic on twitter. Despite this, Tesla has disclosed that it received government payroll benefits that helped it stay profitable during the second quarter. Tesla was a major exception among automakers in Q2 posting a 104 million dollar net income for the quarter.
News Stories & Opinion:
CarGurus Report: 70 Percent of Consumers Are Actively Searching for Vehicles
According to the Wall Street Journal, most automakers reported declines in sales during this year’s second quarter. The numbers may look bleak, and these sales decreases may be the norm for the rest of 2020. Nevertheless, these numbers don’t tell the whole story about what is happening with potential car buyers. While some may not be in the position to purchase vehicles—especially new ones— that doesn’t mean consumer sentiment has waned. In April, CarGurus surveyed a little under 800 potential car buyers about how they felt about purchasing cars this year amid COVID-19. Unlike 2008 and 2009, when much of the decline in sales had as much to do with distrust toward automakers as financial limitations, things are different this time around. Read More
Used Vehicle Demand in the US is Shaking Up Inventories
Inventory of new cars is becoming an issue for dealers now, seeing as manufacturing plants were shuttered for several weeks earlier in the year and production still has not caught up yet. The backlog is making the used lot look more attractive and sending business that way instead. Mike Colias of The Wall Street Journal reported that June’s used vehicle sales were 17% higher than pre-pandemic forecasting predicted. Cox Automotive reported that sales of used vehicles in July were down only 5% compared to July of 2019, which is in stark contrast to sales of new cars, which were down a hefty 26% from last year. Read More
Did you enjoy today’s automotive newscast? Please share your thoughts, comments, or questions regarding this topic with host Jim Fitzpatrick at email@example.com.