CBT automotive newscast: May 31, 2022

Inside Automotive:

JT Taylor of Truist Securities shares his economic outlook for automotive retail
Welcome to another edition of Inside Automotive with Jim Fitzpatrick. Joining us on the show today is JT Taylor, Managing Director of Automotive for Truist Securities. JT discusses the M&A environment, how the car business will look over the next two to three years, and market trends including EVs, inventory, and inflation. Watch the complete segment here.

Headlines:

For the second time in a week, Toyota officially reduced its global production expectations for the month of June, indicating the semiconductor chip shortage and factory closures in China are having a significant impact on the automaker. Toyota has now reduced its June forecast by 150,000 vehicles and said it may also lower its full-year projection that currently stands at 9.7 million vehicles. The automaker said the most impacted models will be RAV4, Prius, 4Runner, and Corolla vehicles.

Neil Abrams of Abrams Consulting Group said last week that people planning to rent a car this summer should expect to pay significantly higher prices than they have in the past. After suffering massive losses at the beginning of the pandemic, rental agencies Hertz and Avis said they have risen their rates around 25% year-over-year due to their inability to secure enough vehicles to meet demand. Abrams said rental companies are also recognizing that charging customers just a few extra dollars per day is bringing in a lot of profitability.

Tesla has officially filed plans for a new Supercharger station in Los Angeles that will feature over 30 EV charging stalls. Tesla plans for the complex to span over half of an acre and will also feature a diner, restrooms, and a drive-in movie theater to keep EV owners busy while their vehicles charge. The specific location is subject to change and an exact timeline of when the complex will be completed was not provided in Tesla’s filings.

Haig Partners said last week that its latest dealer assessment showed buy-sell activity was strong for the first quarter while dealership blue sky values have reached record highs. The recent report also said that auto dealers brought in some of the highest profits ever despite unfortunate circumstances, including inflation and high gas prices and interest rates. The research firm’s President, Alan Haig, said he expects dealerships will see high profits for a few more years while consumer demand remains elevated.

News & Opinion:

5 powerful words to use when interacting with customers
In the automotive industry, it’s all about closing on a sale. Various factors contribute to closing ratios, including a person’s appearance, tone of voice, and body language. However, what you’ll also notice among excellent sellers is the language they use. Certain words carry more meaning and power than others, and working them into your vocabulary can be a component in boosting your conversion rates. These five words are some of the most powerful you can use in sales when you’re interacting with customers. Read More

How to stay competitive with online VSC companies
Since the pandemic hit, dealers are finding that the landscape of online aftermarket providers has increased, and they are targeting consumers that want to order everything online, including their Vehicle Service Contract. With that increase in online-only options, a set of players in the VSC space are popping up at a rapid rate. Companies are taking their VC cash infusion and creating slick websites to compete with dealerships that sell VSCs. How do you, as the dealership expert, compete with the new online retailers? Read More