Today’s Featured Interview:
What the auto industry can expect from year-end sales in 2020 – Brian Finkelmeyer, Cox Automotive
What can the industry expect through the end of the year? Today on CBT News, we answer that question with Brian Finkelmeyer, senior director of new car solutions at Cox Automotive. Finkelmeyer recently published an article in the Cox Automotive Newsroom titled Everything About 2020 Is Different, Including Year-End Deals, where he explores how December 2020 will look different from previous years. Watch the full segment here.
Top Headlines:
President-Elect Biden is preparing to nominate former Michigan Governor Jennifer Granholm to Secretary of Energy. Though a formal announcement has not been made, people close to the situation believe Granholm is in line for the position after working closely with Biden during the Obama Administration. Granholm gives automakers an ally in the new administration as she was a strong advocate for general motors and FCA through challenging circumstances during 2009. She will be an instrumental figure for the industry as Biden looks to transition automakers to focus their production on EVs.
U.S. Congress is still working through negotiations of a new $900 billion COVID-19 aid bill. The new bill is expected to include $600 to $700 stimulus checks and extended unemployment benefits. Representatives from both the house and senate have been more positive about ironing out a deal this week than they have in months. According to Senate majority leader Mitch McConnell, Congress made, “major headway toward hammering out a targeted pandemic relief package.” the negotiations come at a pivotal moment for the U.S. economy which is weakening after its initial rebound from the pandemic-related shutdowns.
While many lawmakers, government officials, and auto leaders are all in for EVs, Toyota President Akio Toyoda believes electric vehicles are overhyped. Toyoda recently criticized EV advocates, saying they failed to consider the carbon emitted by generating electricity and the costs of an EV transition. Toyoda went on to say that the industry converting entirely to EVs could cost hundreds of billions of dollars and make cars unaffordable for average consumers. He believes Japan is certainly not ready to take on all EVs as he predicts that the country would run out of electricity in the summer if all vehicles were running on electric power.
BMW expects to make a profit from this unpredictable year, however, the company warned that without a deal in place for Brexit, the company could suffer tremendously. Currently, the automaker expects its profit margin to be between 2% and 3%, nearing the high end of its forecast for the year. BMW CFO Nicolas Peter is concerned the optimism on earnings may be short-lived depending on trade talks between the European Union and the U.K. tariffs on autos that would follow a hard Brexit would cost BMW a,”mid-three-digit” million-euro amount per year. Peter said that the automaker would try to offset the loss by raising prices on vehicles imported to the U.K.
News & Opinion:
Busy third quarter for dealer acquisitions
Things were looking rather bleak for the buy/sell market earlier in 2020 when factories, supply chains, and dealerships were shuttered, but the auto industry is bouncing back quite well, including in the realm of dealer acquisitions. Kerrigan Advisors, self-described as “the most experienced buy/sell firm in auto retail,” released its Q3 2020 Blue Sky Report this week and things seem to be looking up. Kerrigan reported “a significant acceleration” in the dealership buy/sell market and also predicted the upward trend would continue in Q4 2020. Read More
New report calls on legislators to increase support for electric cars
A report released on Dec 15 by the Alliance for Automotive Innovation calls on the government to increase support for both the manufacturing and ownership cycle of electric vehicles. The report from the nation’s top auto lobbying group, simply titled Auto Innovation Agenda, encourages legislators to act swiftly to “remain a leader in the development and adoption of these transformational technologies”. Read More
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