CBT automotive newscast: March 15, 2022

Inside Automotive:

As automakers go all-in on EVs, will they drop franchise dealers in favor of direct-to-consumer sales?
Consumers today have options at their fingertips and while the automotive purchase process has changed to meet these consumer needs over the past few years, what does this mean for the industry in the long run? Today on Inside Automotive, we’re pleased to welcome Jim Ziegler, automotive retail veteran, speaker, and President of Ziegler SuperSystems, to give us his perspective on what’s to come. Watch the complete segment here.

Headlines:

Financial services firm Jefferies said Monday that high inflation and the ongoing dispute in Ukraine may impact consumers’ decision to purchase high-priced products including vehicles. Jefferies analyst Philippe Houchois dropped Ford’s price target to $18 per share and reduced General Motors’ price target to $44 per share. Houchois said Ford’s European operations are impacting the automaker more than expected, and lower operational levers may hinder GM’s growth.

A Civil Rights lawsuit was filed by five Michigan residents who claim they were racially discriminated against. The Environmental Protection Agency said it will be investigating the state’s Department of Environment, Great Lakes, and Energy. The residents live next to a new Stellantis plant and allege that the EPA failed to conduct a full inspection and impact analysis of the factory, which may lead to increased health issues for their mostly-African American community. The state’s department has 30 days to formally respond to the allegations.

Tesla CEO Elon Musk said yesterday that ongoing high inflation makes it better for consumers to own physical assets and stocks instead of cash, but added he will not be selling his cryptocurrencies. He also posted a tweet asking followers their thoughts on the future inflation rate, which was answered by MicroStrategy’s CEO. Michael Saylor responded that he feels asset values will remain strong while weak currencies will become even weaker. Musk’s tweets did not cause much of a change in the prices of cryptocurrencies on Monday.

February’s Consumer Price Index reached levels we haven’t seen since 1982, ending up at 7.9% for the month. The CPI was almost a full percentage point higher than January’s, and two of the highest price hikes were seen for food and energy. While the price of new and used vehicles did not see significant changes throughout February, they are still exponentially higher than they were a year ago. The Federal Reserve has implied it will be raising interest rates next week in an attempt to curb the inflation rate.

News & Opinion:

Google introduces vehicle ads to help consumers find cars nearby
There is no doubt that the vast majority of today’s car buyers utilize the Internet when looking for a new vehicle, which may include initial searches and/or follow-up research on specific cars. Online car buying has ramped up significantly since the beginning of the pandemic, with Haig Partners reporting last year that almost 30% of vehicle sales were completed online. The shift to online sales should be taken seriously by dealerships, and they must keep up with digital transitions to both attract new customers and retain current ones. Read More

Unifor president Jerry Dias retires due to health issues, effective immediately
On Sunday, the national president of Unifor announced he is retiring from his role, effective immediately. Citing issues of health, the announcement comes just five months before his intended retirement in August. In a statement emailed to all Unifor union members, Dias said, “After eight and a half years I can proudly say we have built an incredible organization and made Unifor the influential and successful union it is today. I have all the confidence the leadership, staff, and locals will continue to build Unifor into a bold and progressive force for working people from coast to coast to coast.” Read more