September 8, 2016
Leasing Trend Moves to Used Vehicles
Leasing continued its upward trend in the second quarter, again reaching all-time-high penetration levels, and used-vehicle leasing is growing with it, according to Experian Automotive’s Q2 2016 State of the Automotive Finance Market report. Automotive News reports that new-vehicle leases made up 31 percent of the market in the second quarter, up from 27 percent a year earlier. Used-vehicle leasing accounts for a small piece of the lease market in comparison, but it grew to 3.7 percent, compared with 3.3 percent a year earlier. By volume, though, used-vehicle leasing has made more remarkable strides. In the past two years, used-car lease volume has surged 43 percent, Melinda Zabritski, senior director of automotive finance for Experian Automotive, told Automotive News. The past few quarters, used lease volume has averaged around 40,000 vehicles, but two years ago, it was around 30,000. For more on how used-vehicle leasing is growing, click here.
Mazda Recalls Over 759K Vehicles; Rear Hatches Can Fall
Mazda is recalling 2.2 million cars and SUVs worldwide because the rear hatches can fall on people and injure them, reports The Detroit News. The recall covers certain 2010 through 2013 Mazda 3 compact cars, as well as 2012 through 2015 Mazda 5 vans. Also included are certain 2013 to 2016 CX-5 and 2016 CX-3 SUVs. More than 759,000 vehicles in the U.S. and Canada are affected. Mazda says the corrosion protection coating applied to the hatch lift supports at the factory wasn’t sufficient. Over time, water containing road salt can get into the supports, causing them to corrode and break. Mazda says it has no reports of accidents or injuries caused by the problem. Dealers will replace both lift supports. Customers will be notified in September or October about when to bring their vehicles in for repairs. For coverage of Mazda’s recall of rear vehicle hatches, click here.
Untapped Potential in Vehicle Trade-Ins
Recent data suggests that there may be a good bit of untapped potential for the car business to make some headway with trade-ins. And that could start with educating the public. According to Auto Remarketing, half of the respondents in a recent CarMax consumer survey said they had a firm grasp on how much their trade-in was worth. But more than a third (35 percent) said they were not sure or they were completely clueless. Dealers may actually benefit by putting more emphasis on trades in the first place. In an AIADA AutoTalk webinar in August, automotive consultant Mike Rossman—formerly a vice president with AutoNation—urged dealers to be more aggressive with potential trade-ins and keep more trades. “That’s really going to help drive our new-car business as well as our used-car business,” Rossman said. Rossman and Bob Grill, a senior partner and development manager at Carfax, were discussing ways dealers can reduce risk during depreciation in the used-car market. For more on the potential in vehicle trade-ins, click here.
Average U.S. Fuel Economy Drops Slightly in August
The average fuel economy for new cars and light trucks sold in August was 25.3 mpg, down 0.1 mpg from July, the University of Michigan Transportation Research Institute said in a report. According to Automotive News, researchers Michael Sivak and Brandon Schoettle said in a statement that the slight decrease reflects cheaper gasoline prices throughout August, along with increased light-truck sales. The national average for a gallon of regular gasoline was $2.199 on Tuesday. The average price for the month of August was $2.123 per gallon, AAA reported. Total vehicle sales in August fell 3.5 percent from the previous year. Car sales dropped during the month by 14 percent, while light-truck sales managed a 4.3 percent gain. SUVs and premium crossovers led the year-over-year increase for the light-truck segment. SUV demand jumped 13 percent, and premium crossover sales increased 12 percent. For the latest on average U.S. fuel economy, click here.
Fasten Your Seat Belt, Connected Car Data Worth $1.5 Trillion
Data is literally everywhere and in many cases, we’re not even sure where it’s going. This conundrum raises plenty of questions, especially when it comes to connected cars: Who owns the data? Who gets to analyze it? What can be done with it? And perhaps most important of all, is it worth anything? According to Forbes, McKinsey projects the value of this data could reach—fasten your seat belts—$1.5 trillion by the year 2030 and it might even become a key focus area for the automotive industry. Naturally, high-tech giants will want to take a short cut onto this revenue-generating roadway—not to mention the myriad startups and service providers that also desire to rev up data mining capabilities for connected cars. Apanel of experts recently discussed the risk and reward of making money from connected cars during a recent SAP Radio broadcast, “Future of Cars: Show Me the Value—Connected-Autonomous Vehicle Data.” For more on the value in connected car data, click here.
AIADA Announces Special AutoTalk Election Series
As the election season heats up join AIADA for a special AutoTalk Election Series. AIADA will kick off the series on September 20 with Rep. Mike Kelly, a past auto dealer and current U.S. Representative. Sessions will be held at 10:00 a.m. and 4:00 p.m. EDT. Rep. Mike Kelly was first elected to Congress in 2010, and represents Pennsylvania’s third district. A long time auto dealer, his dealerships, including Hyundai and Kia franchises, currently employ more than 100 people from the region, and are leaders in the local and national automotive industry. Rep. Kelly is a member of the House Ways and Means Committee, the oldest committee of the United States Congress, which oversees trade policy among other issues.
To register for the 10:00 a.m. EDT session click here.
To register for the 4:00 p.m. EDT session click here.
Around the Web
Mercedes-Benz Vans Unveils Drone Van Concept [USA Today]
How Driverless Cars May Interact with People [NY Times]
Why Dealer Principals and Controllers Need to Understand Parts Dept. [WardsAuto]
5 of the Best Cars If You Have 3 Kids [Road Show]