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| Said the dealer, ‘You call this a crisis?’ |
We’re starting to get used to this new normal in the auto industry — the reality that no matter what goes wrong out there, or how wrong it goes, auto dealers are going to make out just fine.
A pandemic darkened the world a year ago — and yet auto dealers burst through it like a squadron of Navy fighter pilots. The U.S. economy crashed — and yet retailers rallied for one of their best years ever.
Last week, it was true once more: Despite months of a confounding global shortage of microchips that shut down factory production of some of America’s most popular vehicles, auto retailers delivered pretty much a bang-up first quarter of sales. Several brands excelled during the quarter, even as they feared chip-related interruptions at their factories, we report.
And as it happens, those thinning inventories of products around the industry are actually goosing dealer profitability. Shoppers are less likely to haggle when fewer models are left on the lot. Rebates aren’t quite so important when there aren’t many trucks left. You don’t have the customer’s desired configuration? No problem. Don’t have it in the right color? Close on it anyway.
But many are beginning to silently fret that this can’t go on.
Jeff Dyke, president of Sonic Automotive (the nation’s No. 7 retailer in Automotive News‘ latest ranking of the top 150 U.S.-based dealership groups, published in this week’s issue) confesses that a little scarcity is actually a good thing for all parties, dealers and manufacturers alike. But it won’t last indefinitely, he warns.
For April, May, June and maybe even July, Dyke tells us this week, “I think that we’ve got a little bumpy road.”
Well, it’s now April, and we will see. But based on that new normal, we’re betting retailers will come out on top anyway.
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“We’ve built the right technology and Volvo’s built the right framework. Together, we’re excited to create and commercialize a powerful set of autonomous solutions for the massive and important trucking market.” |
– AURORA CHIEF PRODUCT OFFICER AND CO-FOUNDER STERLING ANDERSON |
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From “Aurora, Volvo Group join forces on self-driving trucks” |
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Coming Monday in Automotive News:
A clever stunt or a public relations stumble? Volkswagen’s ruse early last week that it intended to adopt the name “Voltswagen” in the U.S. for its coming fleet of electric vehicles was an elaborate plan developed by its marketing agency and approved by top executives. On the one hand, it had the intended result of generating buzz about VW’s new EV, the ID4. But it also undermined years of effort to restore VW’s tattered public credibility following the diesel emissions crisis. Automotive News looks at the fallout of the stunt, concocted by the same company that pleaded guilty in 2017 to felonies for a long-running conspiracy of lying to regulators about how much pollution its “clean diesel” vehicles were illegally sending into the air.
Korean automakers’ big swings in EV market: Hyundai and Kia haven’t generated the kind of EV buzz focused on Tesla, VW, GM and the Ford Mach E, but they are key players. They already have successful, global EV businesses and are launching new dedicated EVs this year that could be sleeper hits: the Hyundai Ioniq 5 and the Kia EV6. Automotive News looks at how Hyundai and Kia are counting on design and faster charging to help them leapfrog the competition.
Weekend headlines
GMC to launch electric Hummer SUV in 2023: The 2024 Hummer SUV Edition 1, which GM will price at more than $100,000, will have a range of about 300 miles, 830 hp and an estimated 11,500 pound-foot of torque.
Tesla appeals NLRB ruling it bullied union activists: The regulator previously said the automaker violated U.S. labor law and ordered CEO Elon Musk to delete a threatening tweet from his account.
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Mercedes to build eSprinter van in S.C.: The automaker will invest in a North Charleston plant amid robust demand for electric delivery vans from logistics companies. The U.S. is the second-largest market for Sprinter vans after Germany.
Lithia bolsters Southwest presence: The nation’s third-largest retailer of new vehicles acquired Avondale Nissan in suburban Phoenix and will keep the dealership’s name. The store is expected to generate $75 million in annual revenue.
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A selection from Shift and Daily Drive:
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April 9, 2014: A 2001 Mallett Hammer Corvette Z06 was the last of eight historic Corvettes recovered from a giant sinkhole that developed beneath the floor of the National Corvette Museum in Bowling Green, Ky. The hole measured about 45 feet wide, 60 feet long and up to 30 feet deep.