Trade News

AutoCanada Inc.’s net income fell in the final three months of 2022 as the company took a writedown on its used-vehicle inventory and saw floorplan financing costs climb with interest rates.

Canada’s only publicly traded dealership group last week reported (in Canadian dollars) net income of $14.8 million ($10.9 million USD) for the fourth quarter, down 79 percent from $69.4 million the year before.

Used-vehicle writedown provisions cost the company $12.4 million during the quarter, while added floorplan financing costs amounted to $13.3 million.

“These new hits to profitability impacted what was otherwise a historic quarter for AutoCanada,” said the company’s Executive Chairman Paul Antony on a conference call with financial analysts March 2.

Despite the lower net income, AutoCanada revenue hit a fourth quarter record of $1.4 billion, up from $1.2 billion in the same quarter of 2021. For the year, AutoCanada reported revenue of $6 billion for 202…

Q: The 2023 NADA Show is now solidly in the rearview mirror. What were some of your takeaways?

Alan Haig: At the NADA Show in Dallas, I had the pleasure of speaking with Bryan DeBoer, Chief Executive Officer, President and Director of Lithia Motors, for an hour onstage in Dallas during a conference Haig Partners helps organize.

I started by putting up a slide that showed that a $1,000 investment in Lithia on April 30, 2009, was worth $91,170 on January 26, the day of our discussion. This appreciation in value was far more than other auto retailers’ stocks and superior to the best-known tech stocks during that same period. The main reason? Lithia grew faster.

In 2008, Lithia generated $2.1 billion in revenue from 96 dealerships. By 2022 its revenue had jumped to more than $30 billion from 282 dealerships. Some of this revenue growth came from increases in same-store sales, due to improved operations. However, the large majority of it came from acquisiti…

A dealer acquired his second store, a daughter bought the majority share of a dealership from her parents and auto retailing groups acquired more stores to add to their holdings in third-quarter and fourth-quarter transactions last year.

Here's a look at the deals involving domestic and import brands and stores in Virginia, Colorado, Illinois and Minnesota.

Dealer Jamar Brinkley last year acquired his second dealership, formerly known as Discovery Ford-Chrysler-Dodge-Jeep-Ram in the small central Virginia market of Altavista. The dealership has a separate Ford showroom but shares a common service area.

The selling dealer was Kevin Geagan, said Gerrick Wilkins, vice president for Dealer Support Network, a buy-sell brokerage firm. The transaction closed Sept. 17.

Wilkins was the buyer's representative in the deal, he said in a phone interview. Dealer Support Network has offices in Winnsboro, Texas, and Leeds, Ala.

Brinkley renamed the deale…

Lordstown Motors Corp. on Monday posted a bigger loss for the fourth quarter, as the electric-vehicle maker struggled with production costs and missed its delivery target for the Endurance pickup truck in the period.

EV companies such as Lordstown that went public in the past few years have been battling surging costs and challenges in securing supply of parts to make enough vehicles to meet the sector's burgeoning demand.

The company said Monday that its net loss widened to $102.3 million from $81.2 million a year earlier. The results included an impairment charge of $36.5 million caused mainly by a decrease in its stock price.

At the start of commercial production in September, the company had set a target to deliver 50 vehicles in 2022 and more in 2023 out of the planned first batch of 500 units.

However, it suspended production last month due to performance and quality issues with some components and reported sales of only six vehicles. The su…

Tesla Inc. slashed prices of its Model S sedan and Model X crossover in the US late Sunday night by $5,000 and $10,000 respectively as the company seeks to goose demand in the final month of the quarter.

The Model S all-wheel drive is now $89,990, down 5.2 percent from $94,990, according to the company's website. The Model S Plaid is now $109,990, down 4.3 percent from $114,990. Te Model X all-wheel drive is now $99,990, down 9.1 percent from $109,990. The Model X Plaid is now $109,990, down 8.3 percent from $119,990.Tesla sells its cars direct to consumers and often tweaks its pricing. The latest moves come even though Tesla drastically cut prices in January in a broad bid to boost sales.

At the company's March 1 investor day, held at Tesla's factory in Austin, Texas, Chief Executive Officer Elon Musk and other leaders emphasized manufacturing efficiency and cost cutting.

"The desire for people to own a Tesla is extremely high," said Musk. "The limitin…

EVs are making this a very uncomfortable time

Anybody who thinks the transition to electric vehicles will be soft-n-easy had better read this week's issue closely.

We tell you about the change on a number of fronts this week.

It's fair to say that a few decades ago, the Detroit auto industry freaked out when it discovered what an amazing machine Toyota was in how is built cars, designed them to be built smoothly and worked constantly to bring down costs.

But we tell you on Page 1 that Toyota is now doing its own freak-out as it discovers what an amazing machine Tesla is in turning out EVs. Toyota is overhauling its organization to catch up with Tesla.

But turn the page and you'll read this news: Tesla itself is now rethinking how it builds EVs. Elon Musk told the audience for his March 1 Investor Day presentation that Tesla intends to launch a new vehicle platform that will cost half what Tesla's older platforms cost to build. (And by the…

Anybody who thinks the transition to electric vehicles will be soft-n-easy had better read this week's issue closely.

We tell you about the change on a number of fronts this week.

It's fair to say that a few decades ago, the Detroit auto industry freaked out when it discovered what an amazing machine Toyota was in how is built cars, designed them to be built smoothly and worked constantly to bring down costs.

But we tell you on Page 1 that Toyota is now doing its own freak-out as it discovers what an amazing machine Tesla is in turning out EVs. Toyota is overhauling its organization to catch up with Tesla.

But turn the page and you'll read this news: Tesla itself is now rethinking how it builds EVs. Elon Musk told the audience for his March 1 Investor Day presentation that Tesla intends to launch a new vehicle platform that will cost half what Tesla's older platforms cost to build. (And by the way, it's those older Tesla models that are freaking T…

Dalton Corp., a large Mexican company with businesses in several industries including auto retail, entered the U.S. dealership market in November with the purchase of two California stores after searching for years for the right fit. And it wants to add more north of the Mexican border.

Dalton, of Guadalajara in western Mexico, on Nov. 29 bought Frank Toyota and Frank Subaru, both in National City, near San Diego, from longtime owners Ron Fornaca and Gary Fenelli.

Entry into U.S. dealership ownership is rare for auto retailers based in Mexico, dealership buy-sell brokers say, as most cross-border transactions have involved Canadian buyers broadening their holdings in the U.S.

"It was a process for us," Juan Carlos Rodriguez-Villava, COO of Dalton Motors, a division of Dalton Corp., told Automotive News. "It took around seven to eight years. By the time we were ready, which was probably a little before last year, we decided to start exploring. And we did…

AutoNation's $190 million acquisition in January of mobile service firm RepairSmith has energized the small but growing mobile repair world and highlights how dealerships can remain relevant in a rapidly changing retail environment.

At the time of the purchase, AutoNation CEO Mike Manley said buying RepairSmith gives the nation's largest new-vehicle retailer the ability "to penetrate the extensive after-sales service market."

Mobile repair firms offer a variety of automotive services, such as replacing parts and fluids, washing and detailing vehicles and changing tires. The services are generally booked via a mobile phone app.

Their rise is part of the evolution of home-based services as consumers demand more convenience, said Karl Brauer, executive analyst at iSeeCars.com.

"Our society has become more expectant of flexibility [regarding] when you can get service," he said.

Brauer expects to see more acqu…

Dealership-to-dealership parts supply programs are now more important than ever to ensure parts departments get what they need to get their customers back on the road.

The pandemic-induced supply chain tangles and the microchip shortage resulted in a lack of auto parts to build new vehicles, repair damaged ones and maintain those brought into service departments. Despite signs of improvement, a shortage of some critical parts remains.

A team at Kia worked with software-as-a-service provider OEConnection to develop a system to keep parts flowing into service departments. Kia's D2D Express program locates and moves hard-to-find and sometimes back-ordered parts from one dealership to another that's in desperate need of it.

Kia launched the D2D program with OEConnection in July with 100 percent dealership enrollment. It won the automaker's Innovation Group Global Best Practice competition last year.

Greg Rivera, OEConnect…

In December 2021, a strange creature began running around Audi factories, helping them to prepare for the future.

Spot, a robotic dog developed by Audi and NavVis, a German startup, carries a 3D laser scanner that records images of every tool and square meter. The images will be fused to create a digital twin of the factory that can be used to plan production, change tooling, and realize a host of other efficiency gains and cost savings.

Because Spot can work weekends without complaint and doesn’t need breaks, he can scan an entire factory in 48 hours, a task that would take a team of people three weeks. 

"Merging all the planning data in our digital twin has given us a holistic look at our future production plans years ahead of time," said Andres Kohler, head of Audi’s virtual assembly planning team.

Spot, a test project, may be a few years ahead of his time -- most automakers are relying on other scanning methods to digitize their factorie…