CoVid-19 Industry Updates

CoVid-19 Industry Updates (169)

Vehicle owners remain vastly loyal to their specific brands, in part due to the effects of pandemic lockdowns, according to the J.D. Power 2021 U.S. Automotive Brand Loyalty Study. With many vehicle shoppers hesitant to venture out to showrooms, they often relied on their relationship with their current dealer.

“The time period for this study traversed nationwide lockdowns, a recovery from the worst of the pandemic and the effect chip shortages had on vehicle inventory,” said Tyson Jominy, vice president of data & analytics at J.D. Power. “During the height of the lockdown, shoppers who were unable—or unwilling—to visit showrooms in-person weren’t shopping around as much but could still call a dealer and have a vehicle delivered to their homes.

“The bottom line is that finding a vehicle required working closely with a dealer and, when presented with obstacles, shoppers turned to the dealer they already knew. As a result, the level of increased loyalty this year is remarkable.”

Using data from the Power Information Network, the study calculates whether an owner purchased the same brand after trading in an existing vehicle on a new vehicle. Customer loyalty is based on the percentage of vehicle owners who choose the same brand when trading in or purchasing their next vehicle.

The study finds, in general, brand loyalty improved across the board and is also stronger for the highest-ranked brands compared with 2020.

Lexus ranks highest among premium brands for a third consecutive year with a 51.6% loyalty rate. Porsche (50.2%) ranks second, followed by Mercedes-Benz (47.0%), BMW (45.6%) and Audi (45.5%).

Subaru ranks highest among mass market brands and highest overall in the automotive industry for a third consecutive year with a loyalty rate of 61.8%. Toyota ranks second (61.1%), followed by Honda (59.3%), RAM (56.8%) and Ford (53.9%).

The most improved brand year over year in the premium segment is Acura (+7.1 percentage points), while Mazda (+5.9 percentage points) has the highest improvement in the mass market segment.

The 2021 U.S. Automotive Brand Loyalty Study calculations are based on transaction data from June 2020 through May 2021 and include all model years traded in.

The Wichita Police Department is launching Operation “Cat Guard” to address the rising numbers of catalytic converter thefts in Wichita, Kan. During this effort, police are partnering with area automobile dealerships and auto repair shops to install 2,000 unique serial numbers on catalytic converters. Owners can then register the serial numbers into a national database. The operation will be taking place on Saturday, Aug. 21 between 9 a.m. and 3 p.m. at more than a dozen auto businesses.

“This year over 760 catalytic converter thefts have been reported, which is over 200 more than reported in all of 2020,” Chief Gordon Ramsay said. “We are working on innovative ways to reduce this crime that has been having a significant impact on businesses and residents. The police are grateful for area dealerships and auto repair shops partnering with us to help reduce these thefts. The scrap metal industry must start to be part of the solution instead of fighting legislation that will help us stop this expensive crime.”

The New York International Auto Show has been canceled for the second year in a row. The event, which was scheduled for Aug. 20-29, has closed its doors due to concerns over the spread of the Delta variant of COVID-19 and the increased prevention measures announced recently by N.Y. state and local officials. 

“The COVID pandemic has challenged our City, the country and the entire world, but just like the automobile industry, we know that the New York Auto Show will rebound and be bigger and better than before," said Mark Schienberg, president of the New York Auto Show, in a recent press release. "Over the past few weeks, and especially within the last few days, circumstances have changed making it more difficult to create an event at the high standard that we and our clients expect.”

The show, which has been around for 121 years, plans on returning to its regular spring schedule in April 2022. 

 

For the second quarter 2021, Hertz Global Holdings generated total revenues of $1.9 billion, reflecting strong leisure travel demand coupled with tighter fleet inventory. Adjusted Corporate EBITDA was $639 million resulting in a 34% margin. The improvement resulted from strong revenues, efficient fleet management and over $400 million of structural, and recurring, cost reduction. The company generated a net loss of $168 million or $1.05 loss per share, which included $633 million of reorganization expenses.

“Hertz delivered an outstanding second quarter as travel continued to rebound,” said Paul Stone, Hertz Global president and chief executive officer. “With resurgent demand and tight supply across the industry, we remained agile in managing our fleet to meet customers’ needs. At the same time, we benefited from the important operational and financial improvements we made through our restructuring process. Our improved financial position and capital structure give us the flexibility and resources to build upon our strengths and capitalize on accelerating momentum in the quarters ahead.

“We are optimistic about a sustained recovery and travel rebound. We are carefully managing our fleet accordingly to deliver superior customer experience while optimizing profitability.”

Hertz Global emerged from its Chapter 11 process on June 30, 2021 as a well-capitalized company with the flexibility and resources to pursue exciting new growth opportunities. The Company anticipates a re-IPO, which includes hosting an investor roadshow and relisting on a major exchange by year-end 2021.

America’s Rental Car (RAC) Summary

Americas RAC

Three Months Ended

June 30,

 

Percent
Inc/(Dec)
2021 vs.
2020

 

Percent
Inc/(Dec)
2021 vs.
2019

($ in millions, except where noted)

2021

 

2020

 

2019

 

 

Total revenues

$

1,643

 

 

$

543

 

 

$

1,849

 

 

NM

 

 

(11)

%

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

$

664

 

 

$

(485)

 

 

$

166

 

 

NM

 

 

NM

 

Adjusted EBITDA Margin

40

%

 

(89)

%

 

9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Vehicles (in whole units)

350,122

 

 

517,973

 

 

575,172

 

 

(32)

%

 

(39)

%

Vehicle Utilization

78

%

 

28

%

 

81

%

 

 

 

 

Transaction Days (in thousands)

24,992

 

 

13,321

 

 

42,593

 

 

88

%

 

(41)

%

Total RPD (in whole dollars)

$

65.42

 

 

$

37.95

 

 

$

42.71

 

 

72

%

 

53

%

Total RPU Per Month (in whole dollars)

$

1,557

 

 

$

325

 

 

$

1,054

 

 

NM

 

 

48

%

Depreciation Per Unit Per Month (in whole dollars)

$

76

 

 

$

270

 

 

$

245

 

 

(72)

%

 

(69)

%

NM - Not meaningful

 

Americas RAC second quarter 2021 revenues reflect upward pricing trends due to continued positive momentum in domestic travel combined with industry-wide fleet constraints. Americas RAC Adjusted EBITDA of $664 million and margin of 40% reflect the impact of demand-driven pricing, strong residual values, disciplined fleet

TCN, Inc., a global provider of a comprehensive cloud-based call center platform, recently released the results of its inaugural “Consumer Insights about Customer Service” survey. The national survey, conducted by OnePoll and commissioned by TCN, reveals Americans overwhelmingly prefer to interact with a live person when dealing with customer service centers. Furthermore, when waiting to speak to a customer service representative by phone, they are willing to wait on hold for six minutes on average, but the average actual wait time is three times longer, averaging 17.4 minutes. The survey also finds companies that prioritize good customer service are likely to be rewarded by consumers with increased brand loyalty and positive online reviews.

In the survey, nearly 7 in 10 respondents (69%) said talking to a live agent by phone is one of their top three preferred methods of communication with a company’s customer service department; 5 in 10 (54%) said email; 4 in 10 (46%) said an online chat with a live agent. When asked to pick the top three most important qualities of a customer service agent, 60% selected “willingness to help;” 60% chose “ability to solve my issue;” and 58% indicated “knowledge about the product or service.” Fifty-four percent said either “pleasant to talk to” or “having a compassionate attitude.” By age groups, Millennials (18-24) value a compassionate attitude (28%) twice as much as Baby Boomers (57-75) (13%).

Americans are willing to wait on hold, but not for long. When calling a company’s customer service department, Americans said they are willing to wait on hold for six minutes, but the actual wait time on average is three times longer. One-third (34%) said they’re willing to wait on hold between five to seven minutes, an average of six minutes overall, with women (15%) twice as likely as men (8%) to be willing to wait 10 minutes or longer. However, the average actual wait time on hold is 17.4 minutes, with 2 in 3 (62%) saying they’ve waited on hold longer than 10 minutes and nearly one-quarter (23%) saying they’ve waited on hold for 30 minutes or longer. Women are more patient -- they’re twice as likely (31%) as men (13%) to wait on hold more than 30 minutes.

In the survey, consumers said they are likely to reward companies with good customer service with increased brand loyalty and positive online reviews. After a positive customer service experience, 3 in 10 (33%) said they post an online review. Conversely, after a poor customer service experience, 4 in 10 (42%) said they have posted an online review

 

Sonic Automotive announced all-time high quarterly revenues and earnings per share in its financial results for the second quarter and six months ended June 30.

Key highlights include all-time record quarterly revenues of $3.4 billion, up 58.7% year-over-year, all-time record quarterly income from continuing operations before taxes of $151.0 million, up 303.4% year-over-year and all-time record quarterly earnings from continuing operations of $114.0 million ($2.63 per diluted share).

The results also included record quarterly selling, general and administrative expenses as a percentage of gross profit of 62.8% and a quarterly adjusted EBITDA margin of 5.7%, up 220 basis points year-over-year.

Record results were also reported for quarterly total Finance & Insurance gross profit per retail unit of $2,214, up 13.8% year-over-year, along with record quarterly EchoPark revenues of $595.6 million, up 88.9% year-over-year.

The National Association of Minority Automobile Dealers is partnering with vFairs to host a first-of-its-kind Virtual Mini-Conference, offering opportunities and support to minority auto dealers to help grow their businesses. The virtual event kicks off July 7, with additional sessions each Wednesday in July. and will be open throughout the month of July.

NAMAD's VNC will feature virtual panel sessions related to important auto industry topics ranging from “The Future of the Auto Industry to Electrification to Using Data as a Competitive Advantage.” Sponsors and vendors include automobile manufacturers and suppliers, financial companies that support the industry, and associated companies that regularly work with dealerships.

"These semi-live virtual sessions are unlike the endless video calls we've all been a part of since early 2020, as the Virtual Conference Center and Virtual Exhibit Hall settings you will experience represent the state-of-the-art in presentation and interactive technology," said Damon Lester, president of NAMAD.

The event aims to support auto dealers through education and networking, and to help the next generation of minority auto dealers in understanding current and future markets. Skill-building and scholarship opportunities are key points to be covered within the event. Closing out the conference will be the Diversity Volume Leadership Awards, a NAMAD/IHS Markit annual event that recognizes vehicle manufacturers who market their products directly to the ever-growing group of minority vehicle buyers.

The virtual speaking sessions, discussions, panels and exhibits will all be hosted on a user-friendly virtual platform powered by vFairs, which mimics an in-person event.

Kia America announced its highest ever first-half yearly sales of 378,511 units. After posting three consecutive monthly sales records in March, April and May, June was also a record-breaking month with 68,486 units sold – a 43.1-percent increase over June 2020. Through the first six months of 2021, Kia’s U.S. sales were up 43.7-percent year-over-year. Standout June sales performances include:

Also, as Kia America introduces its EV line-up, a limited run of 1,500 First Edition EV6 all-electric vehicles were fully reserved within hours of becoming available on Kia.com, with delivery to local dealers expected in Q1 2022.

“Kia closed the first-half of the year with incredibly strong sales, and this unprecedented momentum will continue as we further implement our growth strategy to gain market share even in light of industry-wide supplier issues and delayed production,” said Sean Yoon, president and CEO of Kia North America and Kia America.

Hyundai Motor America reported total June sales of 72,465 units, a 45% increase compared with June 2020. This was the highest June sales total in Hyundai history and the fourth consecutive month setting a new monthly record.

Retail sales rose for the entire lineup with SUVs (+24%), cars (+64%) and eco-friendly vehicles (+639%), all growing substantially. Eco-friendly vehicles also accounted for 11% of the retail volume.

In the second quarter, Hyundai sold 240,005 total (+69%) and 226,094 retail (+69%) units, both all-time Q2 records. The first half also saw new records with 407,135 total (+49%) and 383,564 retail (+55%) sales.

In the week ending June 19, the advance figure for seasonally adjusted initial claims was 411,000, a decrease of 7,000 from the previous week’s revised level. The previous week’s level was revised up by 6,000 from 412,000 to 418,000. The 4-week moving average was 397,750, an increase of 1,500 from the previous week’s revised average. The previous week’s average was revised up by 1,250 from 395,000 to 396,250. The advance seasonally adjusted insured unemployment rate was 2.4 percent for the week ending June 12, a decrease of 0.1 percentage point from the previous week’s unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending June 12 was 3,390,000, a decrease of 144,000 from the previous week’s revised level. This is the lowest level for insured unemployment since March 21, 2020 when it was 3,094,000. The previous week’s level was revised up 16,000 from 3,518,000 to 3,534,000. The 4-week moving average was 3,552,500, a decrease of 55,250 from the previous week’s revised average. This is the lowest level for this average since March 21, 2020 when it was 2,071,750.

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