CBT automotive newscast: October 29, 2021

Inside Automotive:

Auto retail expert David Lewis on selling more customer pay revenue
For over 30 years, David Lewis and Associates has been taking dealership sales and service to the next level. On today’s show, we’re pleased to welcome David Lewis, President, and CEO of David Lewis and Associates, and the host of CBT’s show, Straight Talk, to guide us through selling more customer pay revenue. Watch the complete segment here.

Headlines:

Ford has reported a net income of $1.8 billion and adjusted earnings of $3 billion for Q3 of this year. The automaker maintained its expectations for the adjusted free cash flow of between $4 billion and $5 billion. Its automotive revenue decreased 5% during the quarter, compared with $34.7 billion in Q3 of 2020. John Lawler, Ford’s CFO, said the automaker expects commodity costs to be up $3 billion to $3.5 billion for 2021 and that could increase another $1.5 billion in 2022.

The world’s fourth-largest automaker, Stellantis, had a 14% drop in Q3 revenue after the chip crisis cut planned quarterly production by 30% or 600,000 vehicles. Revenue amounted to $37.8 billion in Q3 and vehicle shipments dwindled 27% to 1.13 million. CFO Richard Palmer said, “The full-year toll of lost production due to the chip crisis would top a previous forecast of 1.4 million units.” But added that they predict a moderate improvement in shipments in the final quarter.

Toyota’s global output fell by 39% in September from a year prior, due to supply chain disruptions amid COVID resurgence and ongoing chip shortage in Southeast Asia. Global sales in September declined 16.4%, falling for the first time in 13 months. The automaker has trimmed its output outlook through next march to nine million vehicles, down 300 thousand from its initial plan. Last month, domestic production plunged 55.3% to 136,750 units.

Lucid plans to deliver the first production versions of their Air Dream edition cars this weekend in California. The automaker plans to unseat tesla with the longest-range EV, and the first 500-mile EV. They plan to hand the keys of an undisclosed number of the $169,000 Dream editions in two variants. Reservation holders had been invited to a day of activities that includes a driving event, followed by the delivery event at its headquarters assembly plant.

The United Auto Workers union is backing President Biden’s proposed tougher vehicle fuel economy requirements but doesn’t support the more strict requirements that some environmental groups have sought. The union states its position in written comments to the NHTSA. The NHTSA has proposed increasing fuel efficiency by 8% per year for model years 2024 to 2026. The UAW supports NHTSA’s proposed “restoration of incentives for hybrid or overperforming pickups.” EPA spokesman Nick Conger stated the company intends to finalize the rule by December 31.

News & Opinion:

Service: It’s time to make status updates your friend, not your foe
According to Car Wars data gathered from thousands of dealerships across North America, only 26% of outbound calls made by service departments in 2021 were regarding vehicle status updates. Comparatively, in 2020, 30% of outbound calls referenced status updates. With the current shift in focus to service for many dealerships, agents are making a concerted effort to try to schedule more repair orders, but this shift should not come at the expense of customers requiring status updates. As status updates plummet, customer service follows suit. Read more

Rise in catalytic converter thefts prompt new city laws
In Minneapolis, MN, catalytic converter thefts have nearly doubled to around 1,000 stolen this year already. It’s nearly double the number compared to last year. Just a few miles away in St. Paul, almost 1,500 converters have been stolen from cars so far in 2021. Reno, NV is experiencing the same type of converter theft growth, almost double the number stolen from 2020 to 2021. Some weeks in mid-2021 have had as many as 22 catalytic converter thefts reported in a week. The story is the same in many areas of the United States right now. Read more