CBT automotive newscast: January 15, 2021

Today’s Featured Interview:

Why Minnesota car dealers are fighting a new administrative rule regarding emissions standards – Scott Lambert, MADA
Minnesota car dealers were in federal court last week to fight a proposed change to the state’s emissions rules for new automobiles. The regulations would bring Minnesota’s emissions standards for new car sales up to par with those enforced in California. If the emissions standards are changed, Minnesota would become the first midwestern state to take on the higher regulations. On today’s show, we take a closer look at the lawsuit and why dealers in the state are challenging the proposed emissions standards. We’re pleased to welcome the President of the Minnesota Auto Dealers Association, Scott Lambert. Watch the full segment here.

Top Headlines:

Auto sales are expected to pick up speed in 2021 as Americans continue to avoid mass transit. Since the beginning of the pandemic, the taxi business in New York City has dropped by 90% as many commuters shifted to buying a personal vehicle. Across the country, the ride-sharing industry suffered as Americans became more aware of health and hygiene. Recently during the virtual CES 2021, Carla Bailo CEO of the Center for Automotive Research said, “COVID is probably going to change commuting patterns permanently.” Bailo also noted research that has shown that 90% of Americans expect to go to an office less frequently even after the pandemic has subsided.

Many analysts believe that the used-car market will have a big year in 2021, setting it up for long term success in the years to come. According to analysts from Cox Automotive, used-car sales are expected to eclipse 40 million in 2022 after reaching an estimated 36.7 million in 2020. While the 2020 used-car market was down from 2019, automotive analysts are confident that sales will pick back up to 39.3 million this year. Contributing factors will depend on the rise or fall of new vehicle transaction levels and distribution of the COVID-19 vaccine.

U.S. safety regulators are asking Tesla to recall 158,000 vehicles over media control failures. After an investigation by the NHTSA, officials found that these media failures would cause the touchscreen displays to stop working, disabling safety features such as the backup camera, defogging, defrosting, audible chimes, turn signal indicators, and the autopilot alert. The investigation found that these failures occur once the memory storage in these vehicles reaches its capacity. The only solution is to replace the physical hardware. Vehicles affected by the recall include Model S sedans built between 2012 and 2018 as well as Model X SUVs between 2016 through 2018.

Subaru is cutting its U.S. production as the company feels the strain of the industry-wide shortage of semiconductors. The company announced that it would have to cut output by, “several thousand” vehicles this month. The automaker will reduce production at its Indiana plant according to a spokesperson for the company. Subaru plans to monitor the situation and reevaluate whether further production cuts will be needed in February.

News & Opinion:

TrueCar predicts 16 million new car sales in 2021
Headed into another year of uncertainty, TrueCar is forecasting a healthy increase over 2020’s suppressed auto sales performance, expecting new light-vehicle sales in 2021 to reach 16 million units. That figure represents an overall increase of 10% industry-wide, with retail sales calculated at a 9.6% boost over last year’s results. The positive forecast may come as a surprise to some in the industry with several mitigating factors as the new year experiences a rocky start for automotive. A semiconductor chip shortage is currently causing pains for manufacturing, threatening to thin dealers’ inventories similar to last spring’s COVID eight-week shutdown. Read More

Five tips on how to be customer-centered
A recent PWC report said, “only 36% of consumers feel that their [brand/product] employees understand their needs.” Regardless of the truth or argument, perception is reality. This indeed points to an inadequate focus on customer needs or solutions offered by businesses at worst or a horrible job managing expectations and image at best. Customers aren’t receiving what they need and don’t feel wanted or valued by the business. Could that also be said about your dealership?  There’s no doubt that psychology points to a renewed focus on self during difficult times. Fear causes us to insulate and become protective. It also causes us to focus on our needs at the exclusion of others’ needs. Read More