Within Automotive
LAcarGuy Owner Mike Sullivan on the EV Market: “EVs are an easy business for us here in California”
The last time we met LAcarGuy Mike Sullivan, his operations had expanded as a result of the launch of his 13th dealership, a Genesis store. Let’s continue today Within Automotive episode to see how things progress and if there are more acquisitions in the future. Watch the full segment here.
Top Stories
The Federal Reserve is raising interest rates again, this time by a quarter of a percent. However, Fed officials have backed away from earlier forecasts by the bank’s chairman, Jerome Powell, who suggested that hikes could continue through the rest of 2023. The Federal Open Market Committee, the group tasked with make type adjustments, it now says that future decisions will be based on inputs. data, which “will be closely monitored … to assess the implications for monetary policy.” While continuing to warn that further disinflationary measures may be necessary, the council also suggested that such revisions could come in the form of “policy consolidation” rather than additional rate hikes. Read more
Ford has told investors it expects to lose $3 billion in its electric vehicle business in 2023 alone. That will bring the automaker’s total three-year loss on electric products to $6 billion by 2024. However However, the brand assured shareholders that it remains on track to achieve an electric vehicle profit margin of 8% by 2026. This estimate was provided ahead of a meeting to explain the company’s new global sales reporting system. car manufacturer Instead of accounting for separate regions, Ford will now break down the data by product type. In 2022, the company earned the majority of its revenue in the US, ending the year with an EBIT of $9.2 billion. Read more
Consumer spending on new vehicles hit an all-time high in the first quarter, according to a new report from JD Power. Buyers have spent more than $132 billion on new cars since the start of the year, breaking records for any quarter in automotive history. For March, spending is on track to reach $50 billion, the second highest for the month and up 5.5% from the same period in 2022. Dealership profits this month are also positioned to reach $4.1 billion, finishing slightly lower than last year, but still good. above pre-pandemic levels. Read more
Tesla has told employees it expects the base Model 3 to lose its $7,500 tax incentive after March. The vehicle is the brand’s cheapest entry, and so far customers have been able to claim the credits with their purchases since they became available in January. However, previously delayed sourcing requirements for electric vehicle battery components are expected to come into effect in the coming weeks. Since the cells used in the standard Model 3 are made in China, it’s likely to lose its incentive-qualifying status. The revised guidelines are expected to arrive before next month and could have a widespread effect on the market. Read more
For distributors
Four strategies to create lifelong customers at the dealership
Of new car buyers, it remains true that approximately 70% break down within the first three years of ownership. For used car buyers, it’s even harder to keep them as loyal service customers and repeat buyers, especially if it’s a brand outside of the brand they bought. What is also indisputable is that it costs much less to retain a customer than to attract a new one, which Cox Automotive he says it’s by a factor of ten. Read more
6 Strategies to Build a Better DEI Program in Your F&I Department
All dealers in the new post-lockdown COVID world have had to deal with staff turnover and the consequences of what most economists have dubbed The Great Resignation. Millions of people have left the job market in the past two years and dealerships have not been immune. Add to that the already difficult headwinds of low inventory and rising interest rates, and you have a pretty turbulent time for most dealers. Read more
