CBT automotive newscast: March 17, 2021

Featured Interview:

Cox Automotive Chief Economist Jonathan Smoke shares insight from the latest Dealer Sentiment Index
The Cox Automotive Dealer Sentiment Index for the first quarter of 2021 was recently published, showcasing how dealers feel about the current state of the automotive market. Today on CBT News, host Jim Fitzpatrick is joined by Jonathan Smoke, Chief Economist for Cox Automotive. Smoke joins the show to break down key findings from the index and provide some clarity on the future of the market. Watch the full segment here.

Top Headlines:

Rivian Motors has signed a lease in Brooklyn for its first New York City retail store. The EV startup announced this week that the lease is at 360 Wythe Avenue in the Williamsburg neighborhood. The 12,000 square feet facility will serve as a showroom for Rivian’s electric vehicles.

Volkswagen is setting its sights on becoming the global leader in the EV market by 2025. The German automaker is currently reconfiguring operations to free up funds for new technologies as it plans to build the industry’s largest fleet of electric vehicles. Volkswagen is undergoing this transformation while dealing with shortcomings associated with the global chip shortage. According to CEO Herbert Diess, the company was unable to build 100,000 cars due to the lack of semiconductors available.

Ohio-based startup Lordstown Motors is firing back at Hindenburg Research after the short-seller group accused the EV-truckmaker of faking sales numbers. Lordstown responded by saying it remains on track to start production of its all-electric pickup truck by September. Hindenburg is the same investment research firm that last year revealed false claims made by Nikola Motors.

Recent Cox Automotive research found that key aspects of the auto market are headed in the right direction. Sales of certified pre-owned vehicles were up 4% month-over-month. Last month, there were 209,744 CPO units sold. The biggest players in the CPO market included Toyota, Honda, and Chevrolet, as they collectively accounted for 32% of all CPO sales. Vehicle affordability also improved last month. Cox Automotive calculates affordability based on the median weeks of income needed to purchase a new vehicle. Last month, the affordability index declined to 31.7 weeks compared to 32.5 weeks in January. The index has been gradually improving since reaching its highest mark of 2020 at 35.3 weeks in October.

News & Opinion:

How to influence dealership customers to return for service appointments
Prior to the COVID-19 pandemic, only 30% of customers surveyed by Cox Automotive stated that they’ve serviced their vehicles at the dealership in the previous year. Keeping customers coming back for service is where the legacy revenue lies, and it’s been a statistic that’s been relatively unchanged for two decades. Yet, all dealers understand the value in retaining customers. What happens when a pandemic occurs – does it change how customers interact with vehicle servicing and repair? Read more

Consider more consumer-centered marketing plans as your car dealership reopens
As states begin to reopen officially, dealers should see more traffic on the floors and lots – in theory. It’s welcome news to businesses that have been hit with a drop in sales because of the lockdowns. Coronavirus restrictions may continue to be a challenge for the automotive industry, but there have also been positive benefits. One benefit is that consumers are generally getting better treatment with more consumer-centered marketing plans. Maybe you’ve tailored your plans accordingly and wonder if, now that restrictions are over, you should pivot to what it was like before. Let’s think about how to deal with your options during the reopening. Read more