CBT automotive newscast: August 9, 2021

Featured Interview:

‘LAcarGUY’ Mike Sullivan discusses continuing his family’s legacy with opening of 13th store
After taking the reins of what was once his father’s single dealership, our next guest expanded his dealer group to 13 stores in California, the latest of which, opened just recently. On today’s show, we’re pleased to welcome Mike Sullivan, owner of LAcarGUY,  to discuss his newest store as well as the EV revolution that is taking place in our industry. Watch the complete segment here.

Top Headlines:

President Biden unveiled another piece of his administration’s plan to help combat the climate crisis by proposing new mileage standards and limits on greenhouse gas emissions from cars and trucks. The program mandates a fleet-wide vehicle mileage of 52 mpg by 2026, up from 40 mpg this year. The Environmental Protection Agency said this would result in a 10% reduction in vehicle emissions in the model year 2023, and then a 5% greater emissions reduction improvement each year after 2026. The EPA said it would be taking public comment on the light-duty vehicle proposal until September 27.

Online used-vehicle retailer Carvana posted its first profit since going public in April 2017. The company posted a net income of $45 million in the second quarter, a turnaround from a loss of $106 million in the year prior. Carvana sold 107,815 units, doubling the number of sales over the same period last year. Revenue almost tripled to $3.3 billion. It was in the first quarter that retail sales exceeded 100,000 units and revenue exceeded $3 billion. The company’s top priority is to increase vehicle production or readjust used cars as quickly as possible. During the second quarter, they opened a thirteenth inspection and readjustment center in Cleveland and have plans to open eight more by the end of 2022.

The National Highway Traffic Safety Administration has opened an investigation into reports of some 2019 Mercedes-Benz Sprinter vans used as Amazon.com delivery vehicles or ambulances rolled away shortly after being put in park. The agency said it had 11 reports on the matter after vehicles were shifted to park using the auto-p function. The NHTSA said it had reports of eight crashes and one injury related to the luxury Sprinter vans. The number of vehicles under investigation was not disclosed. Daimler and Amazon did not respond to comment.

In 1983, Chrysler introduced the first minivan, forever changing the way American families traveled. According to Business Insider, the car became a household favorite with sales peaking at 1.4 million in 2000. What used to be the car of many jokes is on the road to making a comeback. Minivans are now selling for around 8% above the sticker price. There are only four car companies currently offering minivans in America: Toyota, Chrysler, Kia, and Honda. They all have recently redesigned their vans to be nicer and better looking than ever before. Due to inventory shortage, the 8-seater is in high demand. With many cars in transit, consumers have one option: to put down a refundable deposit in order to have first dibs on when the vehicle becomes available.

Ford’s approach to diversity, equity and inclusion involved a unique command for its top leaders including former CEO Jim Hackett and current CEO Jim Farley: stop talking. Following the nationwide protest of George Floyd’s murder, Ford gave minority employees the opportunity to voice their concerns to upper management and executives. The automaker’s top leaders were able to ask questions to gain a better understanding, but other than that, they had to keep their mouths closed, sit, and listen. According to Ford’s Chief Diversity Officer Lori Costew, employees felt “that it was the most impactful hour of their entire career.” Costew, as well as representatives from other companies, stressed the need to go beyond typical platitudes and commit to change.

News & Opinion:

Chevrolet Bolt recall highlights pitfalls for early EVs, opportunity for dealers
On July 23, General Motors announced a second recall regarding a potential fire risk for Chevrolet Bolt EVs. Around 68,000 vehicles could have a battery defect, identified just nine months after a first recall was issued for similar problems. The cost of performing the recall is staggering – an estimated $11,650 per vehicle. The notice from Chevrolet states that “experts from GM and LG have identified the simultaneous presence of two rare manufacturing defects in the same battery cell as the root cause of battery fires in certain Chevrolet Bolt EVs.” Read more

A look under the hood: the rising cost of car ownership
As American consumers face surges in both gas and vehicle prices, it’s no secret that the cost of car ownership is rising. But this spike in prices won’t be felt equally throughout the country and, for many Floridians, the pinch will feel especially sharp. Last month, online bill pay company doxo released detailed statistics on car ownership in the U.S., publishing two reports that break down details on household spending in two key bill categories: Auto Insurance and Auto Loans. The details on average monthly spending per household in each of these categories informed rankings that showed the most and least expensive states and cities for car ownership across the country. Read more