CoVid-19 Industry Updates

CoVid-19 Industry Updates (147)

The National Association of Manufacturers released a new study detailing the potential short- and long-term damage to the American economy under tax proposals to increase the corporate tax rate.

The study calculated the effects of increasing the corporate tax rate to 28%, increasing the top marginal tax rate, repealing the 20% pass-through deduction, eliminating certain expensing provisions and more. The negative consequences would include the following:


  • One million jobs lost in the first two years;
  • By 2023, GDP would be down by $117 billion, by $190 billion in 2026 and by $119 billion in 2031;
  • Ordinary capital, or investments in equipment and structures, would be $80 billion less in 2023 and $83 billion and $66 billion less in 2026 and 2031, respectively.


“Manufacturers want to help President Biden achieve his goal of creating jobs in America and strengthening the supply chain so that our country does not face critical shortages, especially during times of national crises,” said NAM President and CEO Jay Timmons. “Manufacturers can, and should, lead the economic recovery in the wake of the pandemic. But this study tells us quantitatively what manufacturers from coast to coast will tell you qualitatively: increasing the tax burden on companies in America means fewer American jobs.”

According to the car shopping experts at Edmunds, new vehicle inventory on sale at dealerships nationwide is down by 36 percent in March 2021 compared to a year ago, and prices are rising for both new and used vehicles as a result. Edmunds analysts forecast that the average transaction price (ATP) for new vehicles will climb to $40,563 in March compared to $38,601 a year ago; the ATP for used vehicles is expected to hit $22,663 compared to $20,273 last year.

Full-size trucks have been disproportionately affected by shortages

“The chipset shortage has snowballed into a bigger crisis for the automotive industry,” said Jessica Caldwell, Edmunds’ executive director of insights. “Major auto manufacturing plants are implementing temporary closures, and we’re seeing the industry being hit hard on both sides: Retail customers are being offered fewer choices and paying higher prices, while fleet customers are likely seeing their orders delayed as auto manufacturers shift their focus to serving consumers.”

Edmunds analysts note that full-size trucks and large SUVs are among the vehicle categories most disproportionately affected by these shortages. According to Edmunds data, full-size truck inventory was down by 60 percent in March compared to a year ago; the average transaction price for new full-size trucks is expected to climb to $54,763 compared to $51,164 a year ago, while the average transaction price for used full-size trucks is expected to climb to $34,445 compared to $28,156 a year ago. Large SUV inventory decreased 56 percent in March compared to last year; the average transaction price for new large SUVs is forecasted to climb to $67,542 compared to $62,620 in March 2020, and the average transaction price for used large SUVs is expected to climb to $35,035 compared to $31,232 a year ago.

The car shopping experts at Edmunds forecast that 3,818,503 new cars and trucks will be sold in the U.S. in the first quarter of 2021. This is an 8.6 percent decrease in sales from the fourth quarter of last year but an 8.9 percent increase in sales from Q1 of 2020.

“First-quarter sales are starting off on a strong note. The fact that we’re surpassing last year’s numbers when the pandemic didn’t even hit the industry until the last two weeks of March 2020 is no small feat,”

Jessica Caldwell, Edmunds’ executive director of insights

said Jessica Caldwell, Edmunds’ executive director of insights. “Seeing sales continue at such a strong rate despite all of the challenges presented by COVID-19 is an ongoing testament to the strength of the automotive industry and the confidence of the American consumer.”

Edmunds experts note that limited inventory created by pandemic-related production issues and chipset shortages continue to present challenges for the industry. According to Edmunds days-to-turn (DTT) data, vehicles are selling at a much faster pace because inventory is in such short supply: In March 2021, 17 percent of all new vehicles sold within five days of arriving on a dealer lot, compared to 14 percent last year. Edmunds analysts note that older new vehicle inventory is harder to come by as well: Edmunds data reveals that just one in five new vehicles sits on the lot for more than 100 days before selling, compared to nearly one in three last year.

“Some consumers seem to be catching on to the microchip shortage and are responding by making more aggressive purchasing decisions,” said Caldwell.

Despite the ongoing challenge of inventory shortages, Edmunds notes that a rise in the average transaction prices (ATP) in the first quarter is a positive trend in terms of profitability for automakers and dealers. Edmunds analysts anticipate that the ATP for new vehicles will climb to $40,320 in Q1, the highest Edmunds has on record for any quarter.

On March 14, nearly one year after the first COVID-19 case was reported in North Carolina's Iredell County, Manheim Statesville hosted a drive-thru vaccination clinic for the Iredell County Health Department and provided 20 Manheim Statesville employees to support the event.

“When the Iredell County Health Department (ICHD) approached us about hosting this drive-thru clinic, we immediately wanted to help,” said Manheim Statesville General Manager Mandy Savage.  

Iredell County Health Department Director Jane Hinson shared that one of the county’s biggest challenges in its fight against COVID-19 was not inadequate vaccine supply, but rather finding adequate space to administer the shots.

As Manheim Statesville’s parking lot can accommodate hundreds of vehicles, the company was able to support the Iredell County Health Department in this important community effort. As a result, 1,197 people received the one-dose Johnson & Johnson vaccine safely and efficiently. 

“One of Manheim’s core values is giving back to the communities in which we live and work,” added Savage. “I am so proud of our team and the overwhelmingly positive feedback we received from the county and members of the community.”

Despite COVID-19 and the lockdowns, dealer service visits are only down 6 percent from the previous year and overall satisfaction increases to 847 (on a 1,000-point scale) from 837 a year ago, according to the J.D. Power 2021 Customer Service Index (CSI) Study, released recently. Overall satisfaction also increases for a sixth consecutive year.

“When one- to three-year-old vehicles required service in 2020, dealers captured an even greater share of service visits, which is the highest level in at least five years,” said Chris Sutton, vice president of automotive retail at J.D. Power. “Dealerships made the most out of a disruptively bad situation.

“Completing work right the first time, as well as focusing on customers’ needs, play significant roles in satisfaction—and dealers are nailing these key performance indicators nearly 100 percent of the time.”

The study measures satisfaction with service at a franchised dealer or independent service facility for maintenance or repair work among owners and lessees of one- to three-year-old vehicles. It also provides a numerical index ranking of the highest-performing automotive brands sold in the United States, which is based on the combined scores of five different measures that comprise the vehicle owner service experience.

Following are key findings of the 2021 study: remote or online payment options boost satisfaction; using express service increases satisfaction: battery-electric vehicle owners less satisfied with service; BEV owners less satisfied with maintenance than repairs.

Porsche ranks highest in satisfaction with dealer service among premium brands with a score of 899. Lexus (895) ranks second, followed by Infiniti (887), Cadillac (883) and Lincoln (872). MINI ranks highest in satisfaction with dealer service among mass market brands, with a score of 864. Buick (859) ranks second, followed by Mitsubishi (857), GMC (856) and Kia (855).

The 2021 U.S. Customer Service Index Study is based on responses from 62,519 verified registered owners and lessees of 2018 to 2020 model-year vehicles.

Cox Automotive recently released its 11th annual Car Buyer Journey Study that suggests the automobile buying process improved during the prolonged downturn. Both new- and used-vehicle buyers in 2020 report the process took less time and was more efficient than before. Overall, buyer satisfaction reached an all-time high in 2020.

Vehicles buyers in 2020 were motivated by “want,” as opposed to “need

The extensive study is based on a survey of consumers who bought or leased a new or used vehicle and is designed to offer a detailed look at the vehicle buying process in America, from start to finish.  

The amount of time spent actively shopping and buying dropped significantly in 2020, according to the study. Buyers reported spending an average of just over 13 hours in the entire process, from start to finish, down from nearly 15 hours in 2019. New-car buyers spent just over 11 hours on the necessary steps, everything from shopping and negotiating the deal to taking delivery of the new vehicle. The biggest time savings in 2020 was in the online shopping phase. 

As dealers adapted their business due to COVID-19 the overall vehicle-buying process was streamlined. As a result, the number of dealerships visited and the amount of time spent in dealerships dropped in 2020. One of the top steps added due to COVID-19 was test drive home delivery. Notably, an estimated 22 percent of vehicle buyers said they did not test drive a vehicle at the dealership; however, of the buyers who took a test drive, approximately 81 percent were satisfied with the process, the highest satisfaction rating for any step.

According to the CBJ Study, as the vehicle buying process becomes more efficient, satisfaction levels increase.

Toyota Motor Manufacturing West Virginia (TMMWV) will invest $210 million to upgrade existing engine production and add 100 new jobs to increase assembly capacity of its four-cylinder engine. Once complete, TMMWV’s total investment will be more than $1.8 billion and total employment will exceed 2,000.

The $210 million investment will upgrade TMMWV’s current six-cylinder engine production line with new equipment and machinery, creating flexibility based on market demand for Toyota’s vehicle assembly plants in the U.S. and Canada.

The 100 new jobs will create a third shift due to a significant increase in RAV4 engine production at the Buffalo site, increasing assembly of an additional 5,900 engines per month, or more than 70,000 engines per year. 

In January, the unemployment rate fell by 0.4 percentage point to 6.3 percent, and the number of unemployed persons decreased to 10.1 million, according to the U.S. Bureau of Labor Statistics.

Although both measures are much lower than their April 2020 highs, they remain well above their pre-pandemic levels in February 2020 (3.5 percent and 5.7 million, respectively.

Among the major worker groups, the unemployment rates declined over the month for adult men (6.0 percent), adult women (6.0 percent), Whites (5.7 percent), and Hispanics (8.6 percent). The jobless rates changed little for teenagers (14.8 percent), Blacks (9.2 percent), and Asians (6.6 percent).

Among the unemployed, the number of persons on temporary layoff decreased in January to 2.7 million. This measure is down considerably from the recent high of 18.0 million in April but is 2.0 million higher than its February level. The number of permanent job losers, at 3.5 million, changed little in January but is 2.2 million higher than in February. The number of reentrants to the labor force decreased in January to 2.0 million. (Reentrants are persons who previously worked but were not in the labor force prior to beginning their job search.)

Due to the ongoing health emergency in the District of Columbia and around the world, the 2021 Washington D.C. Auto Show will be unable to open during the previously scheduled March 26 through April 4 timeframe. Show organizers are working closely with the District government and the Walter E. Washington Convention Center to find dates later in the spring to host the event.

“Nothing is more important to us than the safety and health of our loyal attendees, our participating exhibitors, and all those who work so hard to make the show a success every year,” said Washington D.C. Auto Show CEO John O’Donnell. “With that in mind, we are doing everything we can to host a show in 2021 that meets the high standards our visitors are used to, while ensuring that our region stays safe and finally defeats this terrible pandemic.” 

The Washington D.C. Auto Show is the District of Columbia’s largest annual indoor event and has been held every year since the end of World War II. The 2020 show, which commenced before the COVID-19 pandemic, was one of the best-attended shows in the event’s history and featured more than 600 new vehicles from nearly three-dozen auto manufacturers.

Further details about the auto show’s programming, including updates on scheduling, participating manufacturers, media and industry-related events, and much more, will be announced in the coming months. 

Contagion Busters Inc., recently formed in response to the pandemic threat, now offers auto dealers and repair shops the equipment and training to sanitize in minutes the interior of an automobile.

The Contagion Busters process employs UV-C frequency light, the same light used in hospitals and EMT vehicles to sanitize operating rooms, patient rooms and ambulance bays. 

Sanitizing a vehicle with UV-C in a shop environment presents special challenges. The process must be effective and fast, even faster than an oil change. That requires the irradiating power of advanced medical equipment, a level far greater than consumer UV lights can deliver.

Contagion Busters technicians upgraded components of the industrial units to deliver UV-C frequency with the irradiating power of hospital UV-C systems—systems that usually require unmanned and robotic equipment to deliver the extended exposure time necessary to assure every corner of the space has been adequately irradiated. The Contagion Busters lamp, the most powerful hand-held unit made, can safely sanitize a vehicle interior in minutes. It can neutralize pathogens as far as eight feet from the light source and, because it is aimed by hand, a trained technician can focus on critical touch points and quickly navigate any cabin configuration.

James Stevens, president of Contagion Busters, said Contagion Busters UV-C sanitizing may be added to the service menu as a courtesy service or as a service option.

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