Michigan auto dealerships to resume in-person sales

DETROIT -- Michigan auto dealerships can resume in-person sales Tuesday, May 26, by appointment only, according to the latest executive order signed by Gov. Gretchen Whitmer, which also now allows gatherings of 10 or fewer people.

The change continues a trend of states relaxing policies on auto dealerships in a national push to reopen key factions of the economy amid the COVID-19 pandemic.

In the initial wave of coronavirus-related closures, Michigan adopted some of the strictest measures to slow the outbreak. Several other states that initially required showrooms to be closed have already rolled back policies that prevent consumers from physically entering showrooms. New Jersey announced Tuesday that it would resume in-person sales at dealerships by appointment only.

"As businesses continue to reopen, it's crucial that they adopt strict safety measures to protect their employees, customers and their families," Dr. Joneigh Khaldun, chief medical executiv…

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CONGRESS CONVERSATIONS: Retailers on recovery and uncertainty

Listen as executives from Carvana, Cox Automotive and PwC discuss the uncertainty over inventory and the digital path forward as the economy slowly reopens.

Speakers:Jason Stein, Publisher, Automotive NewsErnie Garcia, Chairman & CEO, CarvanaSandy Schwartz, Chief Executive Officer, Cox AutomotiveDoug Ekizian, Managing Director, PwC Consumer Finance Group

This conversation was originally broadcast on May 21, 2020 at 11am EDT as part of our Congress Conversations series. The series runs through June 4. Register to watch future Congress Conversations live at http://autonews.com/congress.

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DAILY DRIVE PODCAST: May 21, 2020 | John Krafcik on Waymo’s $3 billion cash raise, AV testing and being in a ‘good place’

Join Automotive News Publisher Jason Stein for a daily podcast series about the coronavirus crisis. He’ll speak with industry experts, insiders and Automotive News reporters about how the virus is impacting and reshaping the automotive industry.

Waymo's CEO opens up about the company netting $3 billion in funding amid the pandemic, resuming self-driving vehicle testing on public roads in Phoenix. He also weighs in on the renewed desire for personal mobility; autonomous deliveries; emerging ''smarter'' from the crisis and more.

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States: Consumers must be able to return leased vehicles during outbreak

A group of state attorneys general, led by California's Xavier Becerra, urged automakers Wednesday to curb "unlawful and predatory" practices regarding the timely return of off-lease vehicles to franchised dealerships during the COVID-19 pandemic.

In a letter distributed Wednesday — which includes signatures from attorneys general in Connecticut, Iowa, Minnesota, Nevada, New Mexico, New York, Oregon, Pennsylvania, Rhode Island, Virginia and Puerto Rico — Becerra directly responded to media reports that consumers are having trouble returning off-lease vehicles.

USA Today reported on April 16 that some dealerships were refusing to accept vehicles with expired lease contracts unless consumers purchased a vehicle in exchange. Some consumers were reportedly told that a lease extension would be their only option.

The states are pressing automakers' finance arms and dealerships to adopt and maintain strict controls to ensure consumers ca…

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Dow, Northwood, dealerships grapple with Michigan flood

Dow Inc. containment ponds were flooded early Wednesday after two dams failed in Midland, Mich. Flood levels were reported at historic highs in the area.

Dow's flood preparedness plan has been activated, the company said in a statement. Dow is a key supplier to the auto industry for various chemicals and plastics. It also manufactures adhesive bondings for vehicles and makes safety-enhanced airbag coatings.

It was too early to determine whether Dow's problems could lead to production disruptions for its automotive customers, who already were in crisis mode as they restarted some North American production amid the coronavirus pandemic.

"The material from the pond commingling with the flood waters does not create any threat to residents or environmental damage," Dow said in an updated statement Wednesday. "There has been no reported product releases."

After days of heavy rainfall led to the dam failures, Gov. Gretchen Whitmer declared a state of eme…

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GM closes in on the million-mile EV battery

General Motors is "almost there" on developing an electric vehicle battery that will last one million miles, a top executive said on Tuesday.

The automaker also is working on next-generation batteries even more advanced than the new Ultium battery that it unveiled in March, according to GM Executive Vice President Doug Parks, who was speaking at an online investor conference.

He did not specify a timeline for introduction of the million-mile battery, but said "multiple teams" at GM are working on such advances as zero-cobalt electrodes, solid state electrolytes and ultra-fast charging.

Current EV batteries typically last 100,000 to 200,000 miles.

Reuters reported n early May that Tesla , in partnership with Chinese battery maker CATL, plans to introduce its own million-mile battery later this year or early next.

CATL provides battery cells to other vehicle manufacturers, and has supply agreements in China with GM and its local partner SAIC …

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Michigan judge’s ruling could permit auto lenders to keep PPP loans

The financial security of small U.S. auto lenders during the COVID-19 crisis may be owed, in part, to the advocacy of a Michigan strip club.

A U.S. district judge recently sided with the owner of the Flint, Mich., topless club Little Darlings, who went toe-to-toe with the federal government about his business's eligibility to participate in the federal Paycheck Protection Program. The decision could open the gate for auto lenders and other financial institutions excluded from the federal program following updated guidance from the U.S. Small Business Administration.

It is unclear how many auto lenders took funds through the SBA or how many returned them on or before the May 18 deadline. Under the most recent guidance, businesses won't be penalized for returning the funds.

An April revision to the PPP loan criteria retroactively excluded a variety of businesses — including auto lenders — from participating in the stimulus. The cha…

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Eye to eye in F&I

Effective negotiation requires charisma, confidence, knowledge and, many experts believe, eye contact. For dealerships pivoting to remote F&I product sales during COVID-19 shelter-in-place orders, the inability to sit down with customers to talk about product sales is a hindrance to profitability.

Face-to-face interaction, whether in person or over video, are more compelling, and experts say it can really make a difference.

Jamie Payne, general manager of Planet Hyundai in Golden, Colo., said the F&I process doesn't work as well over the phone, particularly when trying to sell to people.

"There's a lot of other distractions when you don't have anyone looking you in the eye," Payne said. "If I was trying to buy a car at home on the phone, there's probably not a lot of listening to the finance department that I would have time for."

For Payne, there's a level of respect generated by eye contact that focuses the …

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Higher F&I profits, sales per person at stores with fewer employees in April

Dealerships that identify as having established digital retailing processes reported higher finance and insurance profits in April than those that didn't, according to a study by the National Automobile Dealers Association and digital retailing provider Roadster. Respondents also reported selling more vehicles with fewer employees, an indication that digitizing more of the car-buying experience is alleviating some of the burden on salespeople.

The study, conducted May 6 to 8, asked 236 franchised and independent dealerships to compare April sales results with those in February, before coronavirus-related closures.

F&I profits rose 58 percent on new vehicles in April for respondents with digital retailing processes. Dealerships that didn't offer digital retailing saw a smaller increase in F&I, up about 35 percent.

Dealerships also reported selling an average of 18 vehicles per salesperson in April, compared with a 13 vehic…

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Senator urges EPA watchdog to expand investigation into new fuel efficiency rules

U.S. Sen. Tom Carper sent a letter Monday asking EPA Inspector General Sean O'Donnell to expand the agency's investigation into the new fuel efficiency rules adopted under the Trump administration.

In late February, Carper asked the inspector general to open an investigation into "potentially unlawful efforts and procedural problems" related to the vehicle emissions rules, citing reports received by his office that EPA political officers were dodging certain rule-making and procedural requirements and appeared to be trying to conceal documents critical of the draft rules.

President Donald Trump's rollback of Obama-era vehicle emissions standards was completed March 31. The new rules require 1.5 percent annual increases in efficiency through 2026. The final rules take effect June 29.

In the letter Monday, the Delaware congressman and top Democrat on the Senate Environment and Public Works Committee said his office has obtained new documents revealing "sig…

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German auto lenders under scrutiny as crisis hits car values, report says

FRANKFURT -- Germany's car finance companies are facing increased scrutiny from the country's main financial watchdog as the coronavirus crisis reduces the value of the vehicles used as collateral for their loans.

Bafin has stepped up how frequently the country's car leasing and auto finance companies must report liquidity and capital metrics, according to people familiar with the matter.

Scrutiny of the lenders is now the closest since at least the financial crisis more than a decade ago, the people said, asking not to be identified discussing private information.

A Bafin spokesman declined to comment.

Lockdowns to combat the spread of the coronavirus have resulted in a collapse of car resale values and increased financial stress for many borrowers, a combination that could force increased provisions and writedowns at auto lenders. The companies generally are not subject to much scrutiny because their loans are usually backed by the cars that are…

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Ford briefly halts production at two plants after workers test positive

DETROIT — Ford Motor Co. has briefly halted production at two assembly plants in two consecutive days after workers tested positive for COVID-19. 

Employees at the automaker’s Dearborn Truck Plant in Michigan were sent home early Wednesday afternoon after a worker tested positive for the coronavirus, according to a spokeswoman, although the company hoped to restart production later Wednesday evening. Assembly lines at its Chicago Assembly Plant were briefly halted Tuesday afternoon and again overnight after two workers there were found to have the virus.

Ford again halted production at Chicago Assembly Wednesday afternoon following a supplier parts shortage, a spokeswoman said. The Wall Street Journal reported an issue at the nearby Lear Corp. seating plant. 

The incidents are the first known issues at Ford since the automaker restarted production at most of its North American assembly plants Monday.

The affected employees in Chicag…

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