Outbreak will hit buy-sell market

On his first day back from a precautionary 14-day quarantine March 24, Michael Cuene was at a closing to buy a General Motors dealership.

Despite the coronavirus outbreak being atop his mind, Cuene and his brother David — third-generation auto dealers — nevertheless signed the papers to buy a Chevrolet-Buick-GMC-Cadillac store in Manitowoc, Wis., from longtime owner Bob Pietroske.

"We had no hesitations about closing during the pandemic because it was good fit for both of our families to move forward," Michael Cuene, co-owner of Broadway Automotive, told Automotive News.

That same day last week, however, the Cuenes voluntarily closed two Green Bay dealerships and a Hertz rental-car outlet for two weeks to protect hundreds of employees and their families from the coronavirus. Also Saturday, March 28, they closed Broadway Automotive-Manitowoc just four days after taking over the store.

The coronavirus outbreak is expe…

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Keeping stores open is ‘just not worth it,’ N.Y. dealer says

Walking through one of his empty dealerships wearing a mask and gloves earlier this month, Todd Caputo recalled why he decided to close his stores before ordered to by the state.

One of his technicians had called in sick the morning before with all the symptoms of COVID-19. It meant the technician's wife, a nurse, had to be quarantined.

"Now she can't work at the hospital," Caputo said. "Now she can't maybe save somebody else's life. You know what I mean? I couldn't deal with that."

On March 19 he decided to close his four Sun Auto Group stores in the Syracuse area. The next day, New York Gov. Andrew Cuomo issued an executive order that effectively closed all sales operations for dealers. Service departments were deemed essential businesses and therefore could remain open.

But to Caputo it didn't matter. His mind was made up. "It wasn't worth it to me to sell one more car or to do one more oil change and one more brak…

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Dealerships must focus on customer health

What a crazy few weeks it's been. As a world, we're facing a global pandemic that is monopolizing the media and locking down our communities. As an industry, automotive companies are facing unique challenges and opportunities that could make or break their year.

Dealerships must go beyond a business-as-usual approach to deliver unparalleled, healthy experiences for their customers.

Manufacturers and their dealerships have seen this story before. In 2008, the automotive industry received massive bailouts because of the financial squeeze of the Great Recession in the U.S. With a "global recession" on the tip of some economists' tongues, it's time to consider major action.

We all know that during economic downturns, owners hold onto their vehicles longer and take better care of them vs. purchasing new. Dealerships also spend more time and attention caring for the pre-owned vehicles on their lot to ensure customers are enticed to buy…

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Here’s our annual ranking of the largest U.S. dealership groups

Two pairs of retailers among the 10 biggest dealership groups in the country as ranked by Automotive News swapped places for 2019.

The companies in the top 10 stayed the same, with AutoNation Inc., Penske Automotive Group Inc. and Lithia Motors Inc. once again leading the annual list of the top 150 dealership groups based in the U.S. The groups were ranked using 2019 retail new-vehicle sales.

Hendrick Automotive Group and Sonic Automotive Inc. traded spots to come in at Nos. 5 and 6. Hendrick retailed 115,394 vehicles last year, up 3.2 percent. Sonic retailed 114,131 vehicles, down 7 percent.

Staluppi Auto Group and Ken Garff Automotive Group also swapped positions to come in at Nos. 9 and 10. Staluppi retailed 62,570 new vehicles in 2019, up 5.8 percent. Ken Garff sold 59,305 new vehicles, down 6.8 percent.

New-vehicle sales fell for all six publicly held dealership groups, with AutoNation, Sonic and Penske posting the sharpest declines. AutoNat…

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Bad timing for hot used-car market

In February, the used-vehicle market looked as strong as ever headed into the busy spring selling season. "We were having a good year, and we were tracking up even through the first two weeks of March," said Jonathan Banks, vice president of vehicle valuations and analytics at J.D. Power.

Then the coronavirus pandemic took hold.

For the week of March 16, wholesale vehicle prices dropped 5 percent week over week, according to J.D. Power data. It was an extraordinary drop in one week's time, Banks said. The firm had expected prices to be up 2 percent for the month but now expects a 2 percent decline.

Things will go downhill from there. "We expect the worst price impact to hit in May, and we're expecting prices for used vehicles to go down somewhere around 15 percent," Banks said, adding that's "compared to today's levels."

This is happening despite dropping auction volumes, which in normal economic times would almost certainly cause prices to rise.…

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Pandemic accelerates adoption of digital tools

Before the coronavirus crisis, Germain Toyota of Naples didn't provide home delivery to local customers.

The southwestern Florida dealership's rule: Customers had to live 50 miles or more from the store for remote delivery, a "time-consuming and very cumbersome" practice that involved shipping vehicles and arranging notaries to complete the transaction, said Brian Kramer, the store's general manager.

Then came COVID-19. Suddenly, with local customers reluctant to visit a showroom in person, the 50-mile rule no longer made sense.

"Now we [deliver] across the street," Kramer said.

Like Germain Toyota, dealerships across the U.S. are embracing digital sales — using online car-buying platforms, virtual financing tools and remote delivery — to stay afloat as the coronavirus outbreak drags down traffic and sales. It's even more pressing in states that have issued mandates to close nonessential businesses, particularly whe…

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After shuttering showrooms, dealers lay off employees — and it may be just the start

With vehicle sales plummeting and thousands of dealership showrooms coast to coast ordered to shutter in the wake of the coronavirus outbreak, dealers are desperately slashing costs — including laying off employees en masse.

Stay-at-home mandates by governors and local leaders to curb the outbreak accelerated last week. The resulting restrictions on vehicle sales in those locations added to the rapid falloff in sales and showroom traffic across the U.S. and left one dealership hiring expert predicting that retailers will have to cut a third of their work forces by May.

That would equate to 360,000 or more dealership employees out of work in a matter of weeks. U.S. dealerships last year employed more than 1.1 million people, with an estimated 225,000 people working directly in vehicle sales, according to the National Automobile Dealers Association.

While it's unclear just how many employees have been affected thus far, many dealer…

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Auto industry whips up promotions to coax consumers back to showroom

BEIJING -- China's auto industry has gone from zero to sixty in its post-pandemic campaign drive, with manufacturers and dealers moving quick to woo back lockdown-weary consumers through campaigns as unusual as a makeup-promoting personality touting leases.

Social media celebrity Lipstick King urged millions of fans on a live-streamed shopping show to sign up for a lease deal for one of General Motors Co.'s Cadillac CT4 compact sedans.

"This color has the sense of 'I'm in charge' independence," he said, displaying a scale model of a chocolate-colored car.

The plug is just one part of a flury of promotional campaigns featuring steep discounts, cold calls and gimmicks, from an industry rocked by government restrictions on movement imposed in January to curb the spread of a virus which in China has infected 81,000 people and caused 3,300 deaths.

The economy shrank 21 percent in January-February with sales in the world's biggest vehicle market last mo…

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BYD to supply EV parts to rivals

BYD Co. will start offering a full suite of electric-vehicle components to rivals and aspiring auto manufacturers to diversify its revenue sources amid sputtering car demand.

Among the parts that the Shenzhen-based company makes and now sells are EV batteries, powertrains and lights, founder Wang Chuanfu said in an online press conference on Sunday.

BYD, China’s biggest maker of vehicles powered by alternative energy for the past six years, will use the brand name FinDreams for the parts business.

EV sales have been slumping in China since July, when the country reduced sales subsidies, and the decline has been exacerbated by the coronavirus outbreak. BYD, which is financially more stable than most local EV competitors, is betting the new business will help it return to growth quicker even as the market contracts.

“BYD will open its technology and products to the whole world,” Wang said. “FinDreams units will help change the role participants in C…

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Moody’s slashes outlook for global auto sales

Credit ratings agency Moody's Investor Service on Friday sharply cut its 2020 outlook for global auto sales, with Western Europe expected to take the biggest hit as the coronavirus outbreak worsens outside of China.

The agency said it now expects global auto sales to fall 14 percent in 2020, much more than its previous estimate of about 2.5 percent drop in February.

The credit rating agency now expects auto sales in Western Europe to see the steepest drop-off in demand - at 21 percent this year, sharply weaker than its previous forecast of a 4 percent decline.

In China, the world's largest market, auto unit sales are expected to fall 10%, a steeper decline than the previous projection of a 2.9% drop.

In the U.S., the agency expects light vehicle sales to fall at least 15 percent in 2020, weakening from its previous forecast of a 1.2 percent decline.

The number of U.S. coronavirus infections climbed above 82,000 on Thursday, surpassing the n…

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As deaths grow, when to reopen the plants?

DETROIT — Whenever Fiat Chrysler Automobiles restarts North America production, the UAW members working the lines will have to cope with the grim reality that COVID-19 has claimed the lives of several colleagues.

The rising death count from the global coronavirus pandemic is personal for them now. It includes familiar faces who walked the same halls and toiled on the same factory floors they did.

Clocking in won't be the same for Aric Holloway, a longtime worker at FCA's Warren Truck Assembly Plant north of Detroit. A co-worker who would greet people at the door died Wednesday, March 25.

"He would usually be there in the morning when you come in the front door, shaking your hand and telling you, 'Thanks for coming to work.' It was a joke that we" had, Holloway told Automotive News. "He would be in front of the plant every morning."

These deaths loom as automakers plot their courses of action. Mid-April appears to be the earliest that most North A…

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How self-driving star fell off course

SAN FRANCISCO — On a rainy December afternoon, Anthony Levandowski sat on a stool near the front of a coffee shop, engrossed in his phone.

He scrolled through pictures on a website that dares users to discern the difference between images of humans generated by artificial intelligence and actual photos of humans. For the uninitiated, it’s a crapshoot. The more time spent staring at the images, the more convincing the fakes appear. Doubt seeps in. The more unnerving the game becomes.

For Levandowski, more skilled in separating what’s real from Silicon Valley creations, spotting the telltale signs of images designed to deceive is an easier task. A small discoloration. A stray hair. He has aced six in a row, and his enthusiasm spills over as he gains momentum.

“Look, look at the freckle on the side,” he exclaims, pointing to an otherwise innocuous blemish.

While he examines images with dermatological care, he’s oblivious to the gawkers and passersby…

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