CBT automotive newscast: September 27, 2021

Featured Interview:

How the emotional state of consumers impacts their buying decisions
Think about your last purchase…was it an emotional one? On today’s show, we’re pleased to welcome Jeff Shore, founder of Shore Consulting, trainer, and author to discuss the emotional aspect of a purchase decision. Shore’s work has been featured by NBC News, Fox Small Business, Success Magazine, Inc., Entrepreneur, and a host of other leading publications. Watch the complete segment here.

Headlines:

Rivian plans to invest $4.6 million into its new customer service center in Plymouth, Michigan, creating 100 new high-wage jobs. The project is backed by a $750,000 performance-based grant from the Michigan Strategic Fund. The state outcompeted other states to land the investment and jobs promise. The service center began operations last week and will provide around-the-clock assistance to answering vehicle questions and service scheduling needs.

Commerce Secretary Gina Raimondo stated, that the Biden Administration is considering invoking a Cold-War era national security law that would alleviate bottlenecks that have idled U.S. car production and identify possible hoarding. The Commerce Department is asking companies to fill out questionnaires within 45 days providing supply chain information. Although the request is voluntary, Raimondo states that she might invoke the defense production act if they don’t respond. The Act gives the President broad authority to direct industrial production in crises. It isn’t clear how Raimondo might use the law to obtain information from semiconductor manufacturers or their customers, and she didn’t name any specific companies.

Tesla is urging the Biden Administration and a U.S. Appeals Court to move swiftly to hike civil penalties for automakers failing to meet fuel economy requirements. Tesla sells credits to other automakers to help them meet government vehicle emission requirements but says the credits are less valuable due to changes in rules made by former President Trump’s Administration. Automakers warned that hiking penalties could cost them at least $1 billion annually, both for failing to meet the rules and higher prices for credits used to meet the rules. The court rejected Tesla’s request in April for immediate action pending the NHTSA’s review. Under former President Obama, higher penalties were to start in the 2019 model year, but former President Trump set the effective date as the 2022 model year. The NHTSA is considering reinstating the Obama rule.

Speaking of Tesla, the San Francisco Transport Authorities has raised concerns about the safety record of the automaker’s advanced driver assistant system. The SFCTA also disputed the name of the system, “full self-driving” saying it is an advanced driver assistance program, not an autonomous vehicle system. A number of Tesla crashes, that are under federal investigation have heightened regulatory scrutiny this year. The California Department of Motor Vehicles reiterated that it was reviewing the company’s use of the term “full self-driving” for its technology.

Volvo is adding an eco-friendly feature to its new EVs, pledging to go completely “leather-free”. The first “leather-free” vehicle in the lineup is the new C40 recharge. Volvo is looking at other high-quality and sustainable sources to use in its vehicles. The decision isn’t just about sustainability but also about animal welfare. The automaker is keen to appeal to its customers’ concerns about the treatment of animals by the leather industry and the industry’s environmental impact. By 2025, Volvo aims to have at least 25% of material in new vehicles coming from recycled or bio-based and renewable sources.

News & Opinion:

Cost of chip shortage expected to double, but Musk sees an end in sight
In May 2021, AlixPartners predicted that the chip shortage plaguing the auto industry since the middle of the pandemic would end up costing the auto industry $110 billion US in lost revenue through the year, a figure that inflated from an initial $60.6 billion predicted in January. The global consulting firm has updated its estimated revenue loss for the auto industry to an astounding $210 billion US. Read more

Best strategies to develop your car dealership’s service business
In 2020, new car dealerships reported $111 billion in revenue through service and parts alone. If you are focused on growing the service side of the dealership, these statistics should encourage you. There’s a vast opportunity available if you are willing to implement the best strategies to develop the service business. If this past year has taught us anything, it’s that you can’t rely on new car sales to carry your dealership. Sure, the dealership makes more money at once on the new car sale, but there are times when repair orders need to carry the business. Read more