FCA AND PSA SPEED UP ALLIANCE WORK
Working groups at car makers Fiat Chrysler (FCA) and Peugeot's owner PSA are speeding up work on closing their alliance deal despite the coronavirus crisis, PSA chief executive officer Carlos Tavares said in an internal note seen by Reuters. Tavares also said in the note the working groups were also speeding up work on synergies.
Source: Reuters
JAPANESE AUTO GROUPS TO CREATE FUND TO SURVIVE VIRUS PANDEMIC
Toyota Motor Corp. President Akio Toyoda said Japan's auto industry is banding together to avoid "fatal injury" as the coronavirus pandemic slams demand for cars and stymies production. Toyoda, speaking as chairman of the Japan Automobile Manufacturers Association, said the industry is considering creating a fund carmakers can use to help retain technology and workers after lockdowns and global restrictions on travel and movements have choked off economic activity.
Source: Bloomberg
NISSAN RESTRUCTURING - CUT OF 1 MILLION CARS TO ANNUAL SALES TARGET
Nissan Motor Co Ltd's management has become convinced the struggling automaker needs to be much smaller and a restructuring plan due out next month would likely assume a cut of 1 million cars to its annual sales target, senior company sources said. Even before the spread of the coronavirus, Nissan's sales and profits had been slumping and it was burning through cash, forcing it to row back on an aggressive expansion plan pursued by ousted leader Carlos Ghosn. The pandemic has only piled on urgency and pressure to renewed efforts to downsize.
Source: Reuters
CORONAVIRUS HAS DEALERSHIPS MOVING TO ONLINE SALES...
And Car Buying May Never be the Same
The way we buy cars may never be the same, as auto dealers adjust to working under COVID-19 restrictions and customers discover they prefer the new approach, which leans heavily on internet sales and vehicle demos and could include valet-style pickup and delivery service for everything from test drives to oil changes.
Source: Detroit Free Press
STOCKING UP CARS: IF NOT SOON, WHEN?
Eventually, the COVID-19 crisis will come to some kind of end. The question facing dealers is whether they can afford to prepare today to sell new vehicles in an unknown tomorrow. According to Cox Automotive and Edmunds data, U.S. inventory levels were down at the beginning of April from where they stood a year ago, at 3.74 million — or about 33,000 fewer new vehicles. However, because of the industry's suddenly anemic March selling rate, the days'-supply measurement shot up at least 30 percent for most brands over the previous month.
Source: Automotive News
AUTO DEALERSHIP M&A STUCK IN NEUTRAL
With the gears of the economy grinding to a halt over COVID-19-related quarantines, it should come as no surprise that auto dealership M&A – coming off a strong year in which 233 transactions were completed nationwide – has stalled. specialize in the sector are telling clients to hold off on selling their dealerships until the crisis has passed or the stimulus package has taken effect, "hopefully sometime this summer," says Erin Kerrigan, founder and managing director of Kerrigan Advisors, an Irvine, California-based auto industry sell-side advisory firm.
Source: Forbes
JAPAN CARMAKERS WILL RECOVER FAST WITH HONDA A BUY, GOLDMAN SAYS
The coronavirus outbreak will reduce Japanese automakers' combined operating profit by 38% this fiscal year, but the manufacturers may rebound faster than they did after the global financial crisis more than a decade ago, analysts at Goldman Sachs Group Inc. said. Demand could "recover relatively quickly" once the pandemic nears an end, Kota Yuzawa and other analysts wrote in a report. Honda Motor Co. was upgraded to a buy rating, from a hold, by the bank, which said its valuation was attractive after a share decline of about 25% this year.
Source: Bloomberg
AUDI RESTARTS PLANT
Volkswagen AG's Audi unit is among automakers gradually reopening factories in Europe, even as coronavirus lockdowns drag on across much of the region. Some 100 workers at Audi's Gyoer, Hungary site, one of the world's largest engine plants, restarted output on an assembly line in a single-shift system, the company said Tuesday. A second line is set to follow at the end of this week.
Source: Bloomberg
FCA FINANCING
Fiat Chrysler said on Tuesday it had successfully completed the syndication of a 3.5 billion euro ($3.8 billion) credit facility which it had agreed last month with two banks. With most of their plants around the world closed and global car demand badly hit by the coronavirus crisis, automakers such as Fiat Chrysler (FCA) are seeking to boost their cash reserves. FCA said it had completed the syndication with a group of 13 banks, including the initial two underwriters.
Source: Reuters
HOW DEALERS ARE KEEPING SERVICE BAYS OPEN AND SAFE DURING PANDEMIC
Eliminating contact between technicians and customers and preventing consumers from entering the building is crucial to making sure service lanes remain safe during the COVID-19 pandemic, Canadian auto dealers say. "None of my staff is coming into contact with anyone," said Tammy Roach, dealer principal of Charlottetown Mitsubishi on Prince Edward Island, which plans to re-open its service lanes on April 15. "I've called all my customers that have tires stored here and customers that are due for oil changes. And 99 per cent of people are totally fine with it. They can make adjustments and have people pick them up or go for a walk or what have you."
The coronavirus pandemic has upended automotive retail throughout the country. Many dealers, whether by choice or due to an order from their respective provincial government, have either entirely closed or are open for service and parts only, often with a skeleton crew and limited hours.
Newel DeSouza, general manager of Maranello BMW in Vaughan, Ont., near Toronto, said the dealership has reduced its staff from more than 100 employees to 16 as the store closed its showroom and instituted limited hours for its service department. Employees are required to stay two metres apart inside the store. "If they get caught inside a two-metre distance, they get a verbal warning," he said. "The second time, they're sent home and another team member is brought in."
Like Roach's dealership, DeSouza said customers are not allowed inside of the store. Instead, customers drop off their keys and information at a drop-off spot at the dealership's drive-through. The technician, wearing personal protective equipment, will then disinfect the vehicle upon entry and place plastics in the vehicle. When the service is done, the plastics are removed and the vehicle is disinfected again. DeSouza said he initially expected customers to bring in vehicles mostly for emergency repairs. However, many have come in for regular maintenance, warranties, performance-related issues or to have their winter tires replaced.
"It's been a mixed bag," he said.
Likewise, Roach said her store is booked for its first week back. She said the dealership has called customers who are due for an oil change or who store tires there to see if they would be interested in booking an appointment and to educate them on what the new safety measures entail. "People have been very understanding and accommodating, which is great," Roach said.
Some dealerships are setting up outdoor waiting areas for customers who drop off their vehicle for service. DeSouza, for instance, said customers at Maranello BMW can wait in an area by the dealership's drive-through where they are spaced several metres apart from others.
Source: Automotive News Canada
CAR DEALERSHIPS SEEM SAFE
For the week ending April 12, retail sales are down 54% from pre-virus forecasts, similar to the decline for the week ending April 5. J.D. Power expects April sales of between 412,000 to 558,000 units, down 49% to 62% from previous predictions. The better-than-bad news is that the decline is stabilizing. That in part "reflects dealer efforts to adapt," including online sales and revising sales processes to accommodate safety protocols, Jominy says.
Source: WardsAuto
TRANSPORT AFTER THE VIRUS WILL BE MORE CARS, FEWER TRAINS
Earlier this year, daily highway vehicle traffic volumes in China were lower than they had been a year earlier thanks to reduced activity during lockdown. By early March, however, China's daily traffic was consistently above that of a year before. Car-buying in Wuhan, the original epicenter of Covid-19 and the first city to be sealed off to prevent its spread, has also rebounded. As an Audi AG sales representative said, "It's like a boom after a two-month dormancy. I thought sales would be frozen."
Source: Bloomberg
FORD TESTS BUZZING WRISTBANDS TO KEEP WORKERS AT SAFE DISTANCES
The small group of volunteers at a Ford factory in Plymouth, Michigan, are trying out wristbands that vibrate when employees come within six feet of each another, said Kelli Felker, a company spokeswoman. The aim is to keep workers from breaching the distance that health experts recommend to avoid spreading the coronavirus. The social-distancing wearable could be part of a broader array of new safety protocols Ford deploys as it resumes production as early as next month after at least a roughly six-week shutdown.
Source: Bloomberg
Originally published by Crowe MacKay, April 2020
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