Trade News

With 2021 just ended, many dealers are rubbing their hands in delight over their supersized operating profits while scratching their heads over what to do about last in, first out (LIFO) recapture as vehicles vanishing from their lots as quickly as they arrive are carrying out large chunks of LIFO reserves in their back seats.

With fewer vehicles in inventory, collapsing LIFO reserves pose an even greater tax dilemma this year. However, for many dealers, there could be a happy ending, a win-win result, and LIFO could become one of their best friends. But this hasn't happened, because the U.S. Treasury Department has failed to respond in a meaningful way to letters from the National Automobile Dealers Association and others asking for relief under Section 473.

Here's why: Dealerships facing significant LIFO reserve recapture have only four alternatives.

1. Terminate their LIFO elections. File Form 3115 to notify the IRS that LIFO …

U.S. fans of the Ranger Raptor no longer have to feel jealous of the rest of the world.

Ford Motor Co. CEO Jim Farley said on Twitter Monday that the midsize performance pickup would come to the U.S. in 2023. Enthusiasts have been clamoring for the vehicle since Ford re-introduced the Ranger to North America for the 2019 model year.

Ford on Tuesday plans to reveal its next-generation global Ranger Raptor, which it bills as the most powerful Ranger it has ever built. It's unclear how different the global Ranger Raptor revealed tomorrow will be from the U.S. version.

Ford also plans to introduce a next-generation base Ranger in the U.S. next year, Farley said.

The incoming Ranger will expand the Raptor line to three vehicles, including the recently-unveiled Bronco Raptor hitting showrooms later this year.

Kerrigan Advisors spoke to Lou Cohen, President, Marc Cohen, Vice President, and Alison Cohen, Vice President, on their recent sale of Priority 1 Automotive to AutoNation.

Q: Why did you decide to sell Priority 1 in 2021?

Lou Cohen: At the suggestion of my son and because I turned 80 years old.

Marc Cohen: We attempted to acquire two different stores in 2020 and realized, based on the final purchase price of those transactions, prices were much higher than what we were will-ing to pay. Following a wild ride in 2020 with the uncertainty of COVID and the impact – both positive and negative – that it had on the business, we began to evaluate the long-term succession planning for our family. As the business got extremely good at the end of 2020 and the beginning of 2021, we decided to test the market and sell if we could achieve the number that we wanted.  

Alison Cohen: Over the last few years, we grew our business quite a bit. It was great th…

LISBON -- A fire which swept through a cargo ship carrying thousands of Volkswagen Group vehicles and adrift off the coast of Portugal's Azores islands has lost its intensity, probably because there is little left to burn, a port official said.

The Felicity Ace, carrying about 4,000 vehicles including VWs, Porsches, Audis, Bentleys and Lamborghinis -- some electric with lithium ion batteries -- caught fire in the middle of the Atlantic Ocean on Wednesday.

The 22 crew members on board were evacuated the same day.

"The fire has subsided in recent hours," João Mendes Cabeças, captain of the nearest port in the Azorean island of Faial, told Lusa news agency, saying there was probably little combustible material left to burn.

Cabeças told Reuters over the weekend lithium ion batteries in the EVs were "keeping the fire alive," adding that specialist equipment was required to extinguish it. It was not clear whether the batteries sparked the fire.

…

Protesters, who have issues with vaccine and mask mandates, and others who want Prime Minister Justin Trudeau to step down, blocked access to the Ambassador Bridge for six days this month, costing the North American auto industry hundreds of millions of dollars in lost production and wages.

After weeks of sharp rises, the pace of global vehicle production cuts resulting from the microchip shortage slowed from the previous week, according to the latest estimate from AutoForecast Solutions.

AFS said about 577,900 vehicles have been removed from production plans at assembly plants worldwide so far this year, up from about 527,400 one week earlier. While that means an additional 50,500 vehicles have disappeared from factory production schedules, it represents a moderation from the 100,000 cuts that automakers made in each of the two previous weeks.

Last week’s losses were mostly driven by European factories, which saw year-to-date losses jump by roughly 37,900 units to 180,900 vehicles. Plants in Asia, outside of China, lost about 9,300 vehicles, while plants in North America cut 3,400 vehicles. 

For the second consecutive week, AFS reported no change in its year-to-date estimates in China, South America, the Middle East and Africa.

Manual transmissions are dying off, but they might survive into the electric vehicle era.

Toyota Motor Corp. filed eight patents this month for mechanisms that allow an EV to simulate stick-shifting. The system is designed to be comforting for drivers who are used to manual gearboxes or just enjoy the feel of one, according to The Drive.

The system uses "pseudo-clutch" and "pseudo-shifter" inputs to adjust the electric motor's torque and a third pedal that can push back on the driver's foot and vibrate to imitate the feel of a real clutch. The electric motor can even make the vehicle feel like it's stalling — without the potential danger of actually doing so.

Toyota is not the only automaker looking at ways to keep stick shifts alive as the industry evolves.

Ford Motor Co., in a 2018 filing published last November, has patented a manual transmission with an electric clutch, Ford Authority reported this month.

LeBron James — who first starred in an ad for the electric Hummer in a 2020 Super Bowl ad — is backing the brand again with an ad debuting during Sunday's NBA All-Star Game. But this time he is sharing the stage with dozens of crabs.

The spot from Leo Burnett Detroit begins by showing the ocean critters leaving the beach for the city as Missy Elliott’s “Get Ur Freak On” plays. After seeing some unfortunate crab and shrimp relatives being served for lunch at a cafe, and then riding on a pool raft, the crabs come to rest in a driveway where James is behind the wheel of a GMC Hummer EV Edition 1 pickup.

The ad promotes the General Motors-owned brand’s “CrabWalk” feature that allows all four wheels to turn at the same angle, allowing the vehicle to move diagonally like a crab.  

The vehicle recently went on sale for about $112,000. GMC is also producing an electric Hummer SUV and is touting the models together as “the world’s firs…

The University of Virginia professor and author of “Autonorama: The Illusory Promise Of High-Tech Driving” details a decades-long history of autonomous-driving promises and scrutinizes America's car-dependent transportation system.

How do I subscribe?

Apple Podcasts: “Shift: A podcast about mobility” is available on the iTunes Store and through the ‘Podcast’ app pre-installed on all iOS devices. Click here to subscribe.

Spotify: "Shift: A podcast about mobility" can be streamed through Spotify on your desktop, tablet or mobile device. Click here to subscribe.

Google Play: "Shift: A podcast about mobility" is available on Android devices through the Google Play store. Click here to subscribe.