CBT automotive newscast: February 23, 2022

Inside Automotive:

How to improve your car dealership’s first-party data with guest Brian Toole
Today on Kain & Co., host David Kain, President of Kain Automotive, sits down with Brian Toole, Director of Carpathic, to take a deep dive into managing first-party data at the dealership level. In this episode, we’ll find out how car dealers can best clean, manage, and utilize their first-party data. Watch the complete segment here.

Headlines:

The battle between the Securities and Exchange Commission and Tesla CEO Elon Musk is continuing, with Musk alleging in court documents that an unnamed SEC Employee leaked undisclosed information regarding the outcome of an investigation into the automaker. The latest letter from Musk’s lawyer Alex Spiro said the illegal leak is proof of so-called “vindictive” and “improper” conduct by the regulator. The latest claims come after Tesla’s legal team sent a letter to a U.S. judge last week alleging Musk is being targeted by the SEC for his ongoing criticism of the government. The SEC has reportedly denied any wrongdoing.

Two anonymous sources have reported that Volkswagen is considering issuing an initial public offering, which would be one of the largest IPOs ever in Europe’s history. The IPO reportedly may include listing 25% of Porsche A.G. and would potentially offer a dividend incentive to Volkswagen owners in an attempt to gain their support for the move. While the potential plan would mark a historic offering, the sources said no decision had been made and Volkswagen’s largest shareholders declined to discuss the matter.

The fallout from the ongoing cargo ship fire that started last Wednesday near the Azores region of Portugal is expected to be detrimental to automakers. According to the Anderson Economic Group, it is estimated that almost 4,000 vehicles were on board and that most – if not all – will be deemed total losses. The consulting firm said it estimates the fire will end up costing over $334 million, with auto losses alone costing over $250 million. While the initial cause of the fire has not been determined, it has been confirmed that lithium batteries in electric vehicles on board have caught fire and it is likely none of the cars will be salvageable once the fire is contained.

The tension between Russia and Ukraine has serious potential to affect the auto industry and consumers. The United States is seeing the highest inflation rates in decades, and the Central Bank’s response to any type of invasion overseas could raise prices even more. While the U.S. relies less on gas from Russia compared to many European countries and China, the Biden administration has warned that we could see more price hikes at the pump regardless. Supply chain disruptions could also get even worse, as Russia is also a top exporter of raw materials, including metals and other products needed to build vehicles and infrastructure. While the situation is rapidly changing, tensions are rising and the U.S. along with the European Union issued sanctions against Russian President Vladimir Putin on Tuesday after he sent troops into two regions of Ukraine.

Celebrating Black History Month:

This February, in honor of Black History Month, we want to celebrate and recognize the achievements of black retail automotive professionals past, present, and future. Today, we’d like to highlight Eric Peterson, former U.S. Vice President of Diversity Dealer Relations at General Motors.

Peterson started his career with General Motors in their Buick Division in 1976, and completed advanced executive management programs at Northwestern and Harvard University. He held various roles at GM including director of minority dealer development, head of GM’s Dealer Development Program, Vice President of Diversity Dealer Relations. Today, he serves as a foundation board member for the NAACP.

News & Opinion:

Understand the consumer to master their experience
The pressure for convenient, online options has driven dealers to find new ways of doing business, while upholding their tried and true operations at the same time. The result? A balancing act of providing unique experiences to match every buyer’s situation in order to maximize value. These accelerated consumer expectations will have a lasting impact on dealership operations for years to come, but how can dealers meet those expectations? Read More

The value in-house training can bring to your car dealership
A car salesperson typically costs around $10,000 to train up, according to a Hireology report on the cost of employee onboarding. Training a service advisor has less cost associated with it, usually under a thousand dollars for a comprehensive day-long course. However, these roles position the employee to work with customers quickly to become profitable, and seldom is it considered how much it costs in lost revenue when sales-focused positions aren’t fully equipped. Read more

Keep it simple – time to consider a smaller F&I menu
The top complaint of most car buyers is the time it takes to make their purchase and drive off the lot. It takes too long even when the lot has plenty of inventory. Now add the F&I experience and the paperwork, selling, etc. and you have plenty of exhausted and frustrated car shoppers who would rather do anything than ever go back and do it again. F&I menu selling was supposed to alleviate that frustration and help streamline the process of getting through F&I and while many may argue that it has helped, consumers may say otherwise. One of the things that could be hanging up the time taken to complete this process could be the very thing invented to help it – a bloated menu. Read more