CBT automotive newscast: November 11, 2021

Featured Show:

How one dealer group continues to grow by building employee loyalty
On the latest episode of Kain and Co., host David Kain, president of Kain Automotive, sits down with the Platform Director of Jackie Cooper Imports in Tulsa, Oklahoma, Chris Martinez. Currently, Jackie Cooper has five franchise locations, and just completed their biggest month to date, selling 690 vehicles. Despite the inventory shortages and challenges they’ve experienced, Martinez says the group continues to break records and they’ve been blessed. Watch the complete segment here.

Headlines:

Toyota has pledged to invest $6 million over the next five years to expand vehicle testing at the American center for mobility in Ypsilanti. The Japanese automaker will fund $3.5 million in the construction and leasing of new vehicle labs and office spaces and $2.5 million in additional use of test trucks. Toyota will expand the center from 7,000 square feet to about 13,000 square feet, with construction to be completed by next summer.

Global automakers plan to spend over half a trillion dollars on EVs and batteries through 2030, to develop and build new battery-powered vehicles and shift away from combustion engines. Industry executives and forecasters remain concerned that consumer demand for EVs could fall short of certain targets without additional incentives and more spending on charging infrastructure and grid capacity.

CarGurus reports an earning of 18.75%, with revenue of $230 million for the quarter ending September 2021. This compares to last-year revenue of $147.47 million. The online auto shopping platform has topped consensus profit estimates four times over the last four quarters. For the quarter ending in December, the company expects per-share earnings to range from 28 cents to 30 cents. The company predicts revenue will be around $273 million to $285 million for fiscal Q4.

According to Experian, Tesla is ranked third in luxury-vehicle registrations this year through September, surpassing Mercedes-Benz. The EV maker registered a total of 230,855 vehicles in the first three quarters of the year, flowing past Mercedes with 213,708. Tesla’s sales were up 76% compared to last January to September, while Lexus was up 33% and BMW 36%.

U.S. prices are risings more than they have in 30 years. The Bureau of Labor Statistics reports that U.S. consumer price inflation surged higher again in October. Over the past year, prices rose 6.2%, the biggest increase since November 1990. The overall price index rose 0.9%, just in October. Last month’s price increase was in multiple categories, including energy, shelter, and cars.

News & Opinion:

What’s next for the auto industry after the subscription model?
The art of follow-up and upsell is best practice in the era of on-demand services. No longer is it enough for companies to merely sell you something and be done with it, especially if they make money selling you something you will buy again on a frequent or semi-frequent basis. The auto industry has long grappled with the issue of customer stickiness in this regard. Of course, diehard brand aficionados exist, and just like there are “Coke drinkers” and “Pepsi drinkers,” there are inevitably going to be “Ford” and “Holden” people (Ford vs. Chevy to my American friends) or BMW and Mercedes people, and vice versa. Read more

What the Biden infrastructure bill has in store for the auto industry
After months of vigorous debates within the House of Representatives, the majority voted last Friday to pass the long-awaited infrastructure bill that will allocate $550 billion to new infrastructure as well as the repair of existing infrastructure. Notably, it includes the creation of programs “to increase transportation energy efficiency” and “accelerate the use of alternative transportation fuels” for government vehicles, mass transit, and privately-owned vehicles. It also implements measures to improve safety and increase research and development of more environmentally friendly technologies. Read more