Key Mexican state for VW, Audi hits brakes on restart

MEXICO CITY -- The Mexican state of Puebla said on Friday that conditions "do not exist" yet to re-start activities in its automotive industry due to the coronavirus pandemic, putting the brakes on carmakers rebooting their operations there.

Volkswagen Group and its Audi unit have major plants in the state southeast of Mexico City, but they have idled production due to the pandemic.

In an official decree issued on Friday night, the Puebla state government said its decision, which also applies to the local construction industry, would remain in place until sanitary and safety conditions permitted a restart.

"The worst is still to come, the wave of infections and the health risk is everywhere," Puebla governor Miguel Barbosa said in the decree, after a week in which new coronavirus infections and death tallies hit record daily totals in Mexico.

Barbosa, an ally of President Andres Manuel Lopez Obrador, said he wanted to reopen the state's economy "b…

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Incentives shift seen as demand rebounds

After uncorking a flurry of discounts when the economy was cratering, automakers are going back to the drawing board on their incentive strategies as demand rebounds and some dealers' inventory shrinks to historic lows.

Arnaldo Bomnin's two Chevrolet stores in Miami were on track for a record May, but he worried that short supplies of some models could hamstring sales.

"I've been selling Chevys for 20 years, and I've never seen the levels of inventory that we have right now," Bomnin said.

As vehicle production ramps up after a two-month shutdown, automakers will reassess incentive programs that largely expire June 1. Analysts expect automakers, heading into the summer selling season, to shift their focus to cash rebates and discounts targeted to specific models and regions with sufficient inventory while backing off the wide-ranging financing deals that helped sell pickups and SUVs in April and May.

Bomnin's stock o…

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Electric pickups were a tough sell in the 1990s

Historically, electric motors have not been a good fit for the American work horse, the pickup.

Electric trucks were available at the dawn of the auto industry and more recently from General Motors and Ford Motor Co. in the late 1990s as the companies worked to comply with California's zero-emissions regulations.

Chevrolet's S-10 Electric and Ford's Ranger EV were limited in speed and range, and their cargo-hauling capabilities were diminished in part because they had to lug heavy battery packs. Today's advanced technology has greatly improved all facets of performance on the coming wave of electric pickups from Rivian, Tesla, Ford, GM and others.

But some issues remain: With the possible exception of the uniquely styled Tesla Cybertruck, pickups are aerodynamically inefficient, meaning it takes a lot of energy to move them. That affects driving range. A battery pack can and often does weigh more than a conventional internal-comb…

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Changes in auto retail, wholesale to stick around

For automotive retail, positive signs of recovery amid the coronavirus pandemic may have come quicker than expected, but uncertainty still abounds in the months ahead. In the meantime, the retail and wholesale channels are likely permanently changed.

That's the sentiment of leaders in the sector who spoke with Automotive News Publisher Jason Stein for the sixth installment of the weekly "Congress Conversations" video series.

"In the past several weeks, we've seen a ramp-up in sales volume," said Doug Ekizian, managing director at PwC Consumer Finance Group. Whether the pace of the rebound continues over the next several months is a key question, he added. The recovery will differ based on geography and likely will be "much different" from that seen in other economic downturns, Ekizian said.

Cox Automotive CEO Sandy Schwartz said retailers are seeing pent-up demand. Dealers he's spoken with report their sales are 70 to 80 percent …

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Hertz files for bankruptcy after rental-car demand vanishes

Hertz Global Holdings Inc. filed for bankruptcy in Delaware after sweeping travel restrictions and the global economic collapse destroyed demand for its rental cars.

The Chapter 11 filing allows Hertz to keep operating while it devises a plan to pay its creditors and turn around the business. The action includes the company’s U.S. and Canadian subsidiaries, but doesn’t cover Europe, Australia and New Zealand, according to a statement late Friday.

Hertz said it had $1 billion in cash to support its operations, which include Hertz, Dollar, Thrifty, Firefly, Hertz Car Sales, and Donlen. But it might need to raise more, perhaps through added borrowings while the bankruptcy process moves forward, Hertz said.

The court petition listed about $25.8 billion in assets and $24.4 billion of debts. Its biggest creditors include IBM Corp. and Lyft Inc., according to the document.

Hertz has traditionally been a leading buyer of fleet cars from the Detroit 3 and …

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Calif. store manager files COVID suit alleging he was fired for complaining

A former general sales manager at a Southern California Audi dealership claims he was wrongfully fired in April for, in part, complaining that the store was ignoring the COVID-19 threat and failing to adequately protect employees.

Attorneys for Aaron Miller, former general sales manager for Rusnak/Pasadena Audi, owned by Rusnak Auto Group, filed the wrongful termination suit Tuesday in Los Angeles County Superior Court, seeking compensation and damages in excess of $7.25 million. The suit was first reported by City News Service in Los Angeles.

Many of Miller's allegations against the dealership revolve around what the suit describes as a failure and delays in allowing him to take requested paternity and family medical leave to care for his spouse in the months after she gave birth to twins in November. But the complaint also alleges that as COVID-19 began to spread in the region, the dealership "encouraged [employees] to continue carrying on business as usual…

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Michigan floods continue to impact Northwood, Dow

Much of Northwood University's Midland, Mich., campus remains underwater after two dams failed in the area Tuesday.

Northwood University Automotive Marketing Department Chair Elgie Bright told Automotive News that half of the campus is impacted by the water.

"If you had papers or books near the floor, they are trash," he said.

Northwood announced a fundraising effort to help the campus rebuild once the water retreats.

"Facing rising waters, Northwood's greatest concern is to protect the health and safety of our community," the fundraising statement said. "We must also consider the financial implications of this event. By fall, Northwood will need to restore facilities that are flood damaged."

Bright said the NADA Hotel and Conference Center, where most automotive courses are held, was spared by the flood. Dorms and other academic classrooms also appear to have minimal to no water damage.

Kent MacDonald, the university's president, t…

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Automaker trade group opposes effort to freeze U.S. fuel efficiency standards

WASHINGTON -- A group representing many major automakers on Friday backed the Trump administration's decision to weaken Obama administration fuel efficiency standards, but said it opposed further reductions in requirements.

In March, the Trump administration issued final rules requiring 1.5 percent annual increases in efficiency through 2026 -- far weaker than the 5 percent increases in the discarded Obama-era rules -- but abandoned its August 2018 proposal to freeze requirements at 2020 levels through 2026.

The Alliance for Automotive Innovation, a trade group representing General Motors Co., Fiat Chrysler Automobiles, Toyota Motor Corp. and others -- on Friday intervened in a litigation on behalf of the Trump administration, saying it believed the EPA and National Highway Traffic Safety Administration "lawfully exercised their discretion in setting their standards in accordance with the applicable statutory requirements."

The group added the new standa…

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Automaker trade group oppose effort to freeze U.S. fuel efficiency

WASHINGTON -- A group representing many major automakers on Friday backed the Trump administration's decision to weaken Obama administration fuel efficiency standards, but said it opposed further reductions in requirements.

In March, the Trump administration issued final rules requiring 1.5 percent annual increases in efficiency through 2026 -- far weaker than the 5 percent increases in the discarded Obama-era rules -- but abandoned its August 2018 proposal to freeze requirements at 2020 levels through 2026.

The Alliance for Automotive Innovation, a trade group representing General Motors Co., Fiat Chrysler Automobiles, Toyota Motor Corp. and others -- on Friday intervened in a litigation on behalf of the Trump administration, saying it believed the EPA and National Highway Traffic Safety Administration "lawfully exercised their discretion in setting their standards in accordance with the applicable statutory requirements."

The group added the new standa…

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2020 New York auto show canceled amid crisis conditions

Organizers said Friday they were canceling the 2020 New York auto show that had previously been pushed back until August, citing the ongoing coronavirus pandemic and the venue's use as a field hospital.

The show, which was initially set for early April and is typically used to unveil many new vehicles, was previously postponed until August. The Javits Convention Center remains set-up as an active hospital and is in standby mode for the foreseeable future, organizers said.

The next New York show will take place April 2-11, 2021. A string of auto shows have been canceled this year and some automakers -- like Toyota Motor Corp. -- are opting to hold virtual unveilings of new vehicles.

Mark Schienberg, president of the Greater New York Automobile Dealers Association, the organization that owns and operates the 120-year-old New York show, noted that automakers and their exhibit partners needed "immense planning" to construct a show. "Because of the uncertai…

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Supplier trade group OESA elects board chair, industry adviser

DETROIT — The Original Equipment Suppliers Association has named Francoise Colpron as chair of the trade group's board of directors, effective immediately.

Colpron, 49, group president of French supplier Valeo's North American unit, was the association's vice chair since November. She has been a board member since 2015. Colpron was recognized by Automotive News as one of the 100 Leading Women in the North American Auto Industry that same year, as well as in 2010.

"We are honored to have Francoise at the helm of our board of directors," Julie Fream, CEO of the association, said in a statement Friday. "We appreciate her strategic leadership and commitment to champion the mission of OESA."

Ramzi Hermiz, who was chairman since 2018, has been reelected to the board as an industry adviser. He has served on the board since 2015.

Hermiz had been CEO of Shiloh Industries, a global supplier of lightweighting, noise and vibration products for the auto indust…

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Park Place expands 2 months after Asbury deal collapse

Just two months after a $1 billion deal to sell most of its locations fell apart, Park Place Dealerships of Dallas has turned into a dealership buyer.

More acquisitions are possible as the luxury-brand dealership group aims to increase vehicle sales.

Park Place Dealerships will acquire Aston Martin Dallas from John Eagle Auto Group, the company said Thursday. The deal is expected to close within 90 days. Terms of the deal were not disclosed, though the sale includes the purchase of assets from the store.

In December, public retailer Asbury Automotive Group of Duluth, Ga., announced it would buy 10 luxury Park Place stores in Texas with 17 new-vehicle franchises in the Dallas and Fort Worth markets. But in late March amid economic uncertainty brought on by the coronavirus outbreak, Asbury ended its transaction agreements days before the deal was slated to close and said it would pay $10 million in damages.

The Aston Martin brand fits perfectly amon…

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