CBT automotive newscast: May 6, 2022

Inside Automotive:

Adam Marburger shares valuable F&I tips and key ideas from his brand new book
Do you get in your own way? It can be a difficult reality to accept, but there are positive changes you can make to get back on track. Joining us today on Inside Automotive to discuss his brand new book, YOU’RE THE F*CKING PROBLEM: A guide to getting out of your own way, is Adam Marburger. Adam has been in the auto retail industry for over 20 years coaching and training F&I professionals. Today, he is the President and CEO of Ascent Dealer Services and the President of Marburger Investment Group. Watch the complete segment here.

Headlines:

Stellantis said yesterday that revenue had exceeded expectations as it rose 12% for the first quarter despite a 12% drop in vehicle shipments. Net revenues totaled slightly over $44 billion, and the company said it still expects a positive cash flow for 2022 even as supply chain issues drag on and inflation remains high. CFO Richard Palmer said Stellantis is still expecting the semiconductor chip shortage to continue into 2023.

Thousands of Vroom customers are lodging complaints about the auto retailer, claiming that it provided them with damaged cars, delayed sending documentation required for registration, and added on contract terms that were not agreed to prior. Vroom has an ”F” rating with the Better Business Bureau. Angry customers say they are unable to get in contact with anyone on Vroom’s management team and that the company continuously ignores their complaints.

This week, the U.S. Department of Energy said it will be allocating $45 million to developing electric vehicle batteries that will be more affordable and last longer. The DOE said the main focuses will be on developing faster-charging methods, increasing overall efficiency, and improving the resilience of the batteries.

A report from First Insight this week showed that a staggering 97% of 1,000 U.S. adults surveyed said they are shifting their financial decisions to accommodate high inflation. These reportedly included important decisions around groceries, gasoline, housing, and healthcare. 42% of respondents said they have reduced the amount of time they spend driving, and 42% also said they have cut back on dining out due to the high prices of groceries and gasoline.

News & Opinion:

Soaring commodity costs signal price increases for vehicle parts
Over the past two years, commodity costs have spiked between 200 and 300%, and parts suppliers are feeling the heat. Bosch announced during their annual news earnings conference on Wednesday that the pressure on parts suppliers necessitates price increases to offset the burden. Inevitably, those price increases will roll down to the manufacturer and the end consumer, especially those bringing vehicles in for customer-pay repairs and over-the-counter parts sales. During that conference, Robert Bosch GmbH Chairman Dr. Stefan Hartung mentioned that the company forecasted to achieve an EBIT (earnings before interest and taxes) of at least 4% through the year, matching results from 2021. Read More

Supply chain update: Not enough chips for chipmaking machines
Since the automotive industry continues its hunger for chips, this is causing another more significant problem – there aren’t chips to supply the machines that make the chips. So, in what seems to be a cruel comedy routine, the chip shortage is pressuring chipmakers to build more chips. However, more chipmaking machines require more chips. Companies like Microchip Technology Inc., a maker of microcontroller chips that process data in electronic devices, including chipmaking equipment, are changing priorities. Ganesh Moorthy, the CEO, said his company “is treating chip-equipment suppliers as priority customers, not unlike the way it treated medical-device manufacturers at the onset of the pandemic.” Read More