January 26, 2016
Automakers, Dealerships in Recovery Mode After Historic Snowstorm
According to Automotive News, manufacturers, dealerships, and others in the auto industry find themselves digging out after the weekend’s historic snowstorm that pummeled the eastern U.S. with as much as 3 feet of snow. Winter Storm Jonas, which the National Weather Service said produced as much as 1 to 3 feet of snow from Kentucky to New York and coastal flooding as far south as South Carolina and Arkansas, led to several manufacturing plant closures beginning Friday and slowed sales at dealerships in the affected areas. Toyota Motor Corp. spokesman Aaron Fowles said roughly 200 dealerships closed throughout the region due to the snow on Saturday, in addition to other closures on Friday. Most dealerships reopened on Sunday, but “that was mostly to clear out lots,” Fowles said. “Traffic has been lighter today,” Fowles said. Penske Automotive Group spokesman Tony Pordon said the company's eastern U.S. dealerships were “basically shut down” over the weekend. Jairo Salazar, business development manager at Metro Honda in Jersey City, N.J., said the dealership sold no vehicles on Saturday thanks to the storm, compared with the 20-25 it typically sells on a Saturday. For more on how the weekend’s blizzard impacted the auto industry, click here.
Fed to Rev Up Car Loan Rates Slightly in 2016
The economists and market watchers might not be too edgy about car loan rates nudging up a smidgen in 2016. According to The Detroit Free Press, as much as experts say higher rates won't matter all that much to car sales, consumers still care about how much extra money will come out of their wallets after the Federal Reserve bumps up rates a few times in 2016. Higher rates will hit those with far less than stellar credit — where rates for subprime borrowers can be 10 percent to 15 percent or higher. About 74.5 million consumers had an auto loan balance as of the third quarter of 2015. The subprime share was 18.7 percent of the total, or 13.9 million consumers, according to TransUnion. "It certainly is a very strong finance market for consumers," said Melinda Zabritski, senior director of automotive finance solutions for Experian. Zabritski noted that a variety of factors are expected to keep new and used car sales going in 2016 — many cars and trucks on the road are older with the average age around 11.5 years, more people are getting paychecks so they need and can afford better cars, and car loan rates will still remain attractive. For more on what to expect from car loan rates in 2016, click here.
VW's Mueller Calls for New Emissions Tests
According to Automotive News, Volkswagen Group CEO Matthias Mueller called for emissions tests in Europe to be reworked to close the gap between laboratory and real-world results, an issue brought to public attention by the German car manufacturer's cheating scandal. A recall of 8.5 million affected cars in Europe will begin this week, Mueller said Monday at a company reception in Brussels. "The industrywide discrepancies between official test results and actual usage is no longer tolerable," Mueller said, according to a statement from VW. "We, the industry, need to take a new path." The CEO has been meeting with politicians and regulators to win back trust as Volkswagen seeks to emerge from a crisis that has wiped more than 17 billion euros ($18.4 billion) off its market value. Speaking to European Union officials at the Monday event, Mueller vowed to make VW more environmentally friendly. The effort will include 20 additional plug-in hybrids and pure electric cars by 2020. To support this effort, he called on politicians to support the development of a network of fast-charging stations. For more on Mueller’s comments regarding VW’s emissions issue, click here.
NYC Dealers Deliver 6K Coats Before Blizzard Hits
Just before the huge blizzard hit New York City and other major areas along the East Coast this past weekend, the Greater New York Automobile Dealers Association (GNYADA) coordinated an effort to deliver more than 6,000 winter coats as part of the New York Cares Winter Coat Drive. According to Auto Remarketing, this past Thursday prior to when close to two feet of snow blanketed the area, the coats were delivered to New York Cares distribution center at West 31 St. in Manhattan. New York Cares executive director Gary Bagley was on hand to receive the coats from Mark Schienberg, president of GNYADA, whose organization coordinated the collection through the association’s dealer network. “New-car dealers have always had a strong sense of community and our relationship with New York Cares is no exception,” Schienberg said. “Thanks to this spirit of helping others, GNYADA was able to present New York Cares with 6,000 coats that will be given to those in need,” he continued. “The coats were collected by 100 dealers and thanks to their generosity, and that of their customers and staff, the total number of coats collected by the association over the past four years now tops 25,000,” Schienberg added. For more on a coat drive by New York area dealers, click here.
Startups Aim to Get a Piece of the Driverless Car
You don’t have to be a tech giant to teach a vehicle to drive itself, according to The Wall Street Journal. Big names like Google grab all the attention when it comes to developing autonomous vehicles. But, very quietly, startups have also been getting into the field. These small companies are taking advantage of easily accessible software and plummeting equipment prices to carve out a niche in this emerging industry—retrofitting existing vehicles that do specialized jobs. Thilo Koslowski, a senior automotive analyst with Gartner Inc., says there are dozens of startups adding autonomous functions to military and farm equipment. A smaller number of them, meanwhile, are tackling the biggest challenge of all, automating passenger cars. One of the big advances driving the startup boom is open-source software. For the most part, the programs necessary to run autonomous vehicles have already been developed by universities, which are giving them away free, says John Leonard, a Massachusetts Institute of Technology robotics researcher and one of the leading minds in the autonomy field. “That gives you the ability to rapidly get up to the state of the art. It’s not like an IBM controls that,” Mr. Leonard says. For more on startups aiming to get a piece of the driverless car, click here.
Around the Web
First of 10 Ferrari F60 Americas Delivered to Customer [MotorAuthority]
Winter Storm Got You Down? Try Snowboarding Through Manhattan [Autoblog]
No Money, No Problem With These Affordable Cars [CNET]
Skill, Strategy Needed for Dealerships to Sell Service Contracts on Second Round [WardsAuto]