News

Many dealership service departments across the country were off to a good start in 2020, then the pandemic hit. Here's how they reacted, adjusted and climbed their way back to profitability. 

Speakers:

Becca Kroeger, Service Manager, Universal NissanFrancisco Mora, Service Manager, Esserman International VWDanielle Rodriguez, Service Manager, Audi NashuaMark Williamson, Service Director, Love ChevroletDan Shine, Editor, Fixed Ops Journal

This conversation was originally broadcast on October 15, 2020, as the second of five conversations in the Fixed Ops Journal Forum series. The series runs through November 5. Learn more and register for future broadcasts here.

China's used-vehicle sales continued to grow for the third-straight month, rising 12 percent in September to some 1.46 million on demand for trucks and sedans. 

Because of major national government investment in infrastructure projects initiated in the wake of the coronavirus outbreak, used-truck deliveries remained robust, jumping 30 percent to some 140,000 last month, the China Automobile Dealers Association said this week. 

Used-sedan sales advanced 17 percent to exceed 884,400 last month.

Secondhand bus deliveries rose 8 percent to roughly 128,800, while used minibus sales gained 1 percent to around 32,600.

But aggregate sales of used SUVs and crossovers turned south in September, dropping 5.2 percent to about 134,700. 

Demand for secondhand multipurpose vehicles remained weak, dipping 1.3 percent to approximately 83,000. 

Despite the three-monthlong rebound, annual used-vehicle sales in China are likely to …

Robert T. Brockman, head of the largest private dealership management system company in the U.S., was charged with using a web of Caribbean entities to evade taxes in what may be the largest prosecution of its kind in U.S. history.

Brockman, 79, is accused of using a family charitable trust based in Bermuda and other offshore entities to hide assets from the Internal Revenue Service while failing to pay taxes, according to an indictment unsealed Thursday in federal court in San Francisco. Brockman was also charged with money laundering and other crimes.

Brockman is CEO of Reynolds and Reynolds Co. of Dayton, Ohio, a DMS provider to dealerships and manufacturers in the U.S., Canada and Europe. Brockman was due to appear Thursday before a judge in U.S. District Court in San Francisco.

“Mr. Brockman has pled not guilty and we look forward to defending him against these charges," Kathryn Keneally, a lawyer for Brockman and a partner in the Jones Day law fir…

Henry Ford Museum gets new historic vehicle: A driverless Navya shuttle

Some say that autonomous vehicles are making history. For at least one AV, that's actually the case.

A Navya Autonom Shuttle, used by Mcity – the research partnership for connected and automated vehicles at the University of Michigan in Ann Arbor – is joining a collection of notable automobiles at the Henry Ford Museum in Dearborn, Mich.

The addition of the shuttle to the museum – chock-full of exhibits dedicated to iconic vehicles – represents an intersection of past and present that outlines the evolution vehicles have gone through over the last century.

The Autonom was used as part of a driverless shuttle project focused on user behavior on the Michigan campus.

"Sitting alongside early automotive examples like Ford's Quadricycle from 1896, presidential limousines and iconic Americana like a 1950s-era Oscar Mayer Wienermobile – the Shuttle will be right at home…

TOKYO -- U.S. auto sales may take three years to recover to pre-coronavirus pandemic levels even as sales continue to rebound from an April low, the CEO of Japanese automaker Subaru Corp. said Thursday.

"The feeling of Subaru America is that a return to the 17 million vehicle level could take two to three years," Tomomi Nakamura said during a press roundtable in Tokyo.

In 2019 light vehicle sales in the U.S. totaled 17.1 million, according to the Automotive News Data Center. The U.S. market accounts for around two-thirds of Subaru's sales.

The maker of the Outback and Forester sport-utility vehicle crossovers will see likely see U.S. sales of around 600,000 this year compared to a forecast of 700,000 made before the coronavirus outbreak, Nakamura said.

That figure may grow to around 660,000 next year, he added.

Automotive News contributed to this report.

Asbury Automotive Group said Wednesday it expects to report a rise in adjusted net income of more than 70 percent on a per-share basis for the third quarter. The increase comes in the wake of Asbury's August purchase of Park Place Dealerships, the largest acquisition in company history.

Asbury, the seventh-largest U.S. dealership group as ranked by new-car sales, said it anticipates adjusted net income per diluted share will be between $4.00 and $4.08 for the third quarter. That's an increase of up to 75 percent compared with actual results of $2.33 per share in the third quarter of 2019.

If Asbury retains the 19.3 million outstanding shares it reported having at end of the second quarter, the expected results would translate to adjusted net income of up to $78.7 million for the quarter. That compares with adjusted net income of $48.7 million in this year's second quarter and net income of $45 million in the third quarter of 2019, a period that had no reported…

Dealerships have operated at varying capacities amid the coronavirus pandemic, with some locations restricting vehicle sales to online only and others opening showrooms for customers. Regardless, customers spent more time online to execute a car purchase and completed more of the finance and insurance process online than ever before.

Customer adoption of digital tools is contingent on what a dealership offers and also on how they promote those features, said Michelle Denogean, chief marketing officer of digital retailing platform Roadster.

Denogean said she was surprised results of a September study found elements of the vehicle finance transaction, such as F&I product selection and price negotiation, had higher adoption rates than virtual trade-in assessment tools, which have been around longer.

"It is a huge indicator of where we're moving," she said.

In the study that surveyed 320 franchised dealerships and 1,000 recent car buyers, Roadst…

Volkswagen Group's heavy-truck division set a deadline for Navistar International Corp. to accept its takeover bid, dousing hopes for a richer offer than the $3.6 billion dangled last month.

VW’s Traton unit said that its $43-a-share offer expires at 6 p.m. Central European Time Friday and will be withdrawn unless it’s notified of a willingness to proceed. Navistar signaled last month it would seek a higher bid than what Traton offered.

The price “represents our best and final offer,” Traton said in a letter to Navistar’s board of directors. Navistar shares plunged as much as 21 percent to $35, matching Traton’s initial offer made in January. A Navistar spokeswoman said the manufacturer is mulling a response and next steps.

Shares of Navistar closed Wednesday's trading down 19 percent to $36.

“A potential Navistar acquisition appears in jeopardy,” Christopher Ciolino, a Bloomberg Intelligence industrials analyst. “A strategic buyout of Navistar …

Unprecedented times brought on by the coronavirus pandemic called for unprecedented support. As the positive impacts of the stimulus fade, the automotive finance industry — among others — is calling for another round.

The swift actions taken at the onset of the pandemic through the passage of the CARES Act were impactful, if short-lived, in terms of the ongoing crisis. After significant government-facilitated stimulus in March and April, incomes rose for U.S. households even while unemployment levels peaked. Consumers had more money in their pockets; deposits and savings accounts at commercial banks surged $1.6 trillion from the end of February to mid-July, according to Cox Automotive.

Because of the extra cash and government unemployment benefits, auto loan performance has been positive. But without more assistance, auto lenders are concerned about the long-term impacts the virus will have on customers' ability to repay their auto loans.

Jonathan Smok…

Mercedes-Benz will introduce its new EQ subbrand in the U.S. with an electric variant of the S-Class sedan, Daimler CEO Ola Kallenius told Automotive News Wednesday.

Initially, the automaker had planned to launch with the EQC compact crossover.

"We will start and lead with the EQS, that's our strategy for the U.S.," Kallenius said. "We said that for positioning the EQ brand in the U.S., start from the top and then go from there."

It's a noteworthy strategy for the truck-obsessed U.S. market. Light trucks account for 75.5 percent of total vehicle sales in the U.S.

Still, the S-class draws some of the brand's most loyal customers, with 70 percent of owners staying with the nameplate or another Mercedes model, the company says.

The EQS sedan is Mercedes' full-electric rival to the Tesla Model S and is slated to arrive in the U.S. next summer. It will travel more than 700 km (435 miles) on a single charge, based on the WLTP testing cycle.

…

LOS ANGELES — Acura's fourth-generation MDX arrives in dealerships next year with upscale exterior styling, a modern interior and a performance Type-S variant that will mark a first use of that trim in its crossover lineup.

Acura, which presented a prototype of the redesigned MDX at a virtual event Wednesday, is billing the crossover as the pinnacle of its lineup. The top-end RLX sedan was dropped after the 2020 model year, leaving Acura with five nameplates: the ILX and TLX sedans, the RDX and MDX crossovers and the NSX supercar.

Sales of the three-row crossover have tallied more than 1 million over the last two decades, making it the brand's top-selling model.

"The new MDX marks a turning point for Acura as our new flagship and the most far-reaching effort yet to deliver on our Precision Crafted Performance brand promise," said Jon Ikeda, vice president and Acura brand officer. "We knew we needed to deliver something more emotio…

Volvo Cars has named Odgard Andersson CEO of its newly formed autonomous drive software development company, Zenseact, the automaker said Wednesday.

It is Andersson's second big promotion in the last 18 months. The previous one came in May 2019 when she succeeded Atif Rafiq as Volvo's chief digital officer.

Andersson, 48, joined Volvo in 2016 from Swedish telecommunications company Ericsson executive, where she spent 20 years and where her focus was on transforming the telecom industry from hardware to software-oriented development.

Starting next month she takes responsibility for a company formed from the pieces of Volvo and supplier Veoneer's former automotive software joint venture, Zenuity.

Under the terms of the breakup, Zenuity has become a holding company for the intellectual property that the partners co-developed. Zenseact and Veoneer have equal rights to use that technology.

As part of the agreement, Zenseact absorbed 600 of Zenuity'…