CBT automotive newscast: May 5, 2022

Inside Automotive:

Florida dealer AJ Hiers on the future of the franchise dealership model
Is the franchised dealer structure coming under attack? Today on Inside Automotive, we’re pleased to welcome AJ Hiers, President of Boniface Hiers Automotive Group to give us his take on the issue and other concerns he sees coming in the future. Watch the complete segment here.

Headlines:

Volvo said yesterday that sales for the month of April were down nearly 25%, citing parts shortages and production losses due to the recent COVID-19 shutdowns in Shanghai. Sales were down almost 48% throughout China and dropped over 9% in the United States. Despite the overall sales drop, the automaker said electric vehicle performance slightly increased, accounting for 10% of sales overall. Volvo’s Chief Executive Officer Jim Rowan also said this week that Volvo is still planning on releasing an electric SUV similar to the XC90 at the end of this year.

Apple has reportedly hired a former director from Ford to help the tech firm develop a self-driving vehicle after the breakdown of the initial project management team throughout the last year. Sources told Bloomberg that Apple recruited Desi Ujkashevic, who previously held various leadership positions at Ford for over 30 years, including working on the development of electric vehicles. She also brings knowledge of regulatory matters that will unquestionably arise throughout Apple’s autonomous vehicle building process.

Luxury vehicle maker Aston Martin is going through another leadership shakeup, with current Chief Executive Officer Tobias Moers resigning from the company after speculation that his management style has caused a drop in morale throughout the past two years. Moers will be replaced by Amedeo Felisa, who previously led Ferrari from 2008 to 2016. Aston Martin is still looking to transition its entire lineup to all-electric vehicles by 2030 and plans to release its first hybrid model in 2024.

Shares of Lyft dropped 25% this week after the rideshare service released its first-quarter results and its second-quarter projections. Lyft cited the lingering need to spend money on incentives to retain current drivers and hire new ones while also stating its projections for Q2 are lower than wall street’s expectations. Lyft said ridership for Q1 dropped almost 5% from the previous quarter, possibly due to high prices and a fuel surcharge being added on to every ride.

News & Opinion:

8 strategies for winning over out-of-warranty service customers
J.D. Power estimates vehicle maintenance, repair, oil change and tire revenue in the U.S. currently exceeds $296 billion, with aftermarket providers capturing 70% compared to just 30% for franchised dealers. In fact, the competition doesn’t even perceive dealer service centers as a threat. Just a quarter of repair shops in a recent study named dealers as their number one competition. With a growing field of mobile mechanics, auto parts, and service and repair shops competing for customers, how can dealer service centers keep customers from straying? Read More

Fed raises interest rates by half a percentage point, aims to cool inflation
On Wednesday, May 4, the Federal Reserve announced another target interest rate hike intending to quell inflation wreaking havoc American economy. The Fed’s target rate range jumps from 0.75% to 1.0%, up 50 basis points, and consumers can expect that the cost of borrowing on many variable rate lending products and new credit applications will increase similarly. It’s the second rate hike this year. In the March 16 Fed announcement, the target rate rose from 0% to 0.25% by 25 basis points, breaking from the lowest possible target rate without entering negative territory. While only a quarter-percentage point, the move by the Fed signaled action to combat rising inflation that’s making everyday purchases less affordable nationally. Read More