CBT automotive newscast: June 14, 2022

Inside Automotive:

CNCDA Pres. Brian Maas on protecting the future of the dealer franchise system
Welcome to another edition of Inside Automotive with anchor Jim Fitzpatrick. Today, we’re pleased to welcome back Brian Maas, President of the California New Car Dealers Association (CNCDA). In this segment, Jim and Brian discuss updates on California’s Private Attorneys General Act, Ford Motor Company’s direct sales ambitions, and safeguarding the franchised dealer network. Watch the complete segment here.

Headlines:

Electric Last Mile Solutions, Inc., a U.S. commercial EV manufacturer, announced its intention to file for chapter 7 bankruptcy following a review of its products and commercialization plans. According to ELMS, SEC investigations into past filings have made it extremely difficult to “secure a new auditor and attract additional funding.” Following an examination of their stock transactions, former Chief Executive Officer Jim Taylor and Chairman and Founder Jason Luo resigned in February.

According to Cox Automotive analysts, sales of certified pre-owned vehicles fell to 208,423 units in May, decreasing 7% from April’s 223,999 units and falling over 22% year-over-year. The CPO sales figures for May are the lowest since February, marking the end of a four-month streak of increases. Chris Frey, Cox Automotive’s Senior Manager of Economic and Industry Insights, stated quote, “Currently, CPO sales are on track to finish near 2.3 million in 2022, down nearly 18% from last year’s 2.7 million.”

On Monday, tens of thousands of South Korean truckers went on strike for the seventh day, protesting about pay as gasoline prices soared. The strike disrupted manufacturing, slowed port operations, and added new hazards to an already strained global supply chain. As of Sunday, the South Korean industry ministry estimated about 5,400 autos in lost production, worth about 257 billion Won. So far, the strike has cost Hyundai more than 3,800 vehicles, worth around 120 billion Won.

Cadillac has unveiled more details about the upcoming 2023 Escalade-V, the most luxurious Escalade to date. The V is equipped with a 6.2-liter supercharged V8 engine that generates 682 horsepower and is supplied with advanced driver safety, an intelligent driver-assist suite, and other premium features. Starting price for the Escalade-V is a whopping $114,990, and the first deliveries are expected to start later this summer.

News & Opinion:

4 ways car dealers can win against aftermarket service providers
According to the J.D. Power 2022 U.S. Aftermarket Service Index Study, customers increasingly prefer aftermarket service providers to new-vehicle dealers. J.D. Power surveyed almost 10,000 vehicle owners who owned their cars between four and ten years. The data showed that aftermarket service providers capture 70% of the service market, while franchised dealers only acquired 30%. While it seems like vehicle owners prefer to take their service needs to independent servicers; fortunately, franchised dealers can do some things to close that gap — particularly in offering convenience. Here are some takeaways from this study and a few things your dealership can do to attract more consumers for service appointments. Read More

Commercial EV startup Electric Last Mile Solutions faces new financial challenges
After a grueling start to the year, commercial electric vehicle company Electric Last Mile Solutions will cut its losses. On June 12, interim CEO and president Shauna McIntyre announced that the company would file for Chapter 7 bankruptcy. The news comes amid a tumultuous few months that includes the resignation of the ELMS founder and former Executive Chairman, Jason Luo, as well as the former CEO, Jim Taylor. The company shed roughly half its stock price overnight in February after announcing the leadership transition and updating the company’s financial status. Since the beginning of the year, the stock price has vaporized from $6.93 per share to just $0.20 per share as of Monday, more than 97% down. Read More