CoVid-19 Industry Updates

CoVid-19 Industry Updates (169)

Carvana, the e-commerce platform for buying and selling used cars, in an effort to provide customers more flexible financing options during this difficult time, is now giving customers up to 90 days to make their first payment.

Carvana provides “Touchless Delivery” and a 7-day return policy. Customers can shop more than 25,000 vehicles on Carvana.com with high-definition, 360-degree virtual vehicle tours, finance, purchase and select as-soon-as-next-day Touchless home delivery, all in as little as 5 minutes. Customers financing with Carvana are eligible to opt in to the payment extension option, as long as they complete their purchase by April 20, 2020.

“Carvana has always been a company intensely focused on doing the right thing for our customers, and in a time when many are feeling the strain between needing safe transportation to an essential job and personal finances, we want customers to know we’re here for them,” said Ernie Garcia, Carvana founder and CEO. “Our hope is that those who simply can’t put a vehicle purchase on hold are able to get what they need quickly and easily, so they can keep moving.”

Xtime is offering enhanced resources and multiple key features at no additional charge, helping dealers support consumers in the changing landscape while preparing them for a more digital and profitable future beyond the COVID-19 pandemic.  

“The latest numbers from our recent Cox Automotive COVID-19 Dealer Impact Study confirm that dealers anticipate service appointments to be the second most impacted area of business, despite fixed ops being deemed essential work in many states,” said David Foutz, vice president of sales at Xtime. “At Xtime, we’re in a position to help dealers not only weather the storm but come out the other side even stronger than before and that’s exactly what we intend to do by offering free services for 90 days of features that promote social distancing like service pickup and delivery, and online payment to our clients.”  

Dealerships should adopt the following best practices: offer vehicle pickup and delivery, and service pickup and delivery, powered by Clutch (offered at no cost through the end of July 2020); enable online payments; adopt a digital check-in process; and exercise social distancing among staff.

American Honda has pledged $1 million to address needs of communities across North America and is donating personal protection equipment and the use of 3D printers in Honda operations to produce face shields for healthcare providers.

The automaker, like others, has taken a major hit because of COVID-19 and government shutdown orders.

March and COVID-19 stopped American Honda’s strong 2020 start as sales fell 48 percent in the month.

“As a society, we're all in this together. After a strong start to the year, industry sales are going to suffer in the short term, and we have suspended auto production as part of our effort to carefully manage our business in the face of the steep decline in demand,” said Steven Center, vice president of automobile sales at American Honda. “At Honda, we are focused more than ever on supporting our customers, our dealers, our associates, and the communities where we live and work. Our country is going to come back strong and we are going to come back strong, and we know there are better times ahead.”

As a result of the pandemic, hundreds of Honda and Acura dealers closed during March, complying with government mandates.

Dealers that remained open focused on taking care of existing customers through maintenance and repair.

Unemployment claims rose to 6.8 million for the week ending March 28, the highest level of seasonally adjusted initial claims in history, according to the U.S. Department of Labor.

Last week’s claims were adjusted up to 3,307,000.

The advance number of actual initial claims under state programs, unadjusted, totaled 5,823,917 in the week ending March 28, an increase of 2,903,757 (or 99.4 percent) from the previous week. The seasonal factors had expected a decrease of 23,150 (or -0.8 percent) from the previous week. There were 183,775 initial claims in the comparable week in 2019. The advance unadjusted insured unemployment rate was 2.3 percent during the week ending March 21, an increase of 0.9 percentage point from the prior week.

The advance unadjusted number for persons claiming unemployment insurance benefits in state programs totaled 3,383,382, an increase of 1,308,646 (or 63.1 percent) from the preceding week. The seasonal factors had expected a decrease of 82,062 (or -4.0 percent) from the previous week. A year earlier the rate was 1.3 percent and the volume was 1,908,355.

Wuhan, a city of 11 million, known as China's 'Detroit' is reopening after the city was put on lockdown on January 23rd . The city, the original epicenter of the novel coronavirus, reopened train stations on sat and bus and subway service on Monday. This comes as good news as Chinese officials have been working to revive manufacturing and other industries while also preventing a spike in infections as people return to work. Automakers and parts suppliers in and around Wuhan are still dealing with partially blocked roads and health inspections on major transportation arteries, which has created problems moving around raw materials and finished parts.

The opening of public transit and loosening of travel around Hubei province means more people can get back to work in the manufacturing hub and more auto parts can be shipped out.

Chinese automakers and parts producers exported $53 billion worth of automotive components to the United States, Europe, Japan, South Korea and elsewhere last year. 

  • Honda is expecting to reopen its Wuhan hub this week after the lockdown is lifted. Together, Honda’s two China hubs have the capacity to produce 1.2 million vehicles a year, or more than 20% of the company’s total global production.
  • Nissan and Hyundai both have manufacturing facilities in Hubei province and have seen disruption to their supply chains but they are beginning to ramp up production as transportation in Wuhan and around Hubei province continues to open up and staff can return to work.
  • U.S. auto supplier Cooper Standard headquartered outside of Detroit has 13 factories across China which have resumed production with 65% of the normal workforce.
  • U.S. drivetrain supplier Dana Inc has luckily avoided any significant disruptions of there Chinese supply lines. 

 

 

Penske Automotive Group Inc. announced a hiring freeze, negotiated rent deferrals for up to 90 days and a postponement in $150 million in capital expenditures.

“The COVID-19 crisis is impacting our operations requiring us to take swift and decisive action to address declining business levels. I am confident the actions we are taking will help our business overcome these challenges,” Penske Automotive Group CEO Roger Penske said.

The company reported that the majority of OEMs the company represents, and their respective captive finance companies, have offered significant support during this crisis, including interest payment deferrals. In addition, executive and management compensation has been significantly reduced, including a 100 percent reduction in salary for the CEO and president for the duration of the crisis and the board of directors has waived cash compensation for the next six months.

The company said virtual/online sales of new and used vehicles remain available in most locations, while the service departments remain open to support critical transportation needs.  

Commercial truck dealership sales and service operations remain open in most locations around the U.S. and Canada. Currently, this part of their business is experiencing a consistent flow of service customers, the report said. Hours of service restrictions on motor carriers have been lifted for those involved in essential business support. 

The National Auto Auction Association’s weekly conference call with industry leaders was less eventful than in recent weeks, said CEO Frank Hackett.

The March 30 call showed that few live sales are happening and government shelter-in-place orders may have something to do with that.

“Most everybody now is doing simulcast,” Hackett said. “There are a few independents that are still trying to do brick-and-mortar sales, but we’re finding those are fewer and fewer every week.”

More auctions are furloughing employees as this crisis continues, he said.

“The difference between a layoff and a furlough is the furlough means you’re coming back, we’re just not paying you,” Hackett said.

He said there hasn’t been a big change in the industry from last week.

“(AutoTec CEO) Chuck Redden said he is beginning to see a little bit of an increase in payment problems,” Hackett said. “We’re continuing to watch for fraud at the auctions. But at this point, I can’t say much has changed from last week.”

Hackett said the group will continue to conference each Monday until members feel it’s not needed.

Manheim President Grace Huang released a statement that the company will move forward on digital sales at this time.

“After thoughtful consideration and with our objectives in mind, we have made the decision to extend our current auction operations, as local, state and national directives allow,’ Huang said in a press release on March 27. “We will continue to closely monitor changing conditions and be prepared to address COVID-19 developments as they arise. Listed below are details related to this update.”

Huang said Manheim will continue to offer Simulcast-only sales at Manheim locations, where local, state and national directives allow. Manheim will continue to waive Simulcast buyer and seller fees. Online Vehicle Exchange (OVE), Manheim Express and Private Stores remain open as digital inventory sources.

All auction facilities will remain closed to buyers and sellers on both sale and non-sale days. Only vehicle pick-up and drop off will be allowed.

Sellers will not be allowed to represent their vehicles at our auction locations. All selling will be conducted via the Remote-Seller tool. Transactions such as payments and arbitration will be handled via alternate means.

The company’s ongoing policies include continuing existing measures to limit exposure to COVID-19 at Manheim locations: follow protocols to activate closures, deep cleanings and quarantine procedures, as needed; routinely communicate about and follow CDC sanitation guidelines; extend cleaning crew hours; post signs to remind team members to wash and sanitize their hands often and instruct team members who feel ill not to report for work and communicate with their managers.

To support independent dealers during this challenging time, NextGear Capital is offering a relief package.

 

 

The North American International Auto Show (NAIAS) announced it will cancel its June 2020 show in Detroit in light of the coronavirus (COVID-19) pandemic sweeping across the world and the Federal Emergency Management Agency’s expected plans to repurpose TCF Center into a temporary field hospital. 

“With the more than 100 convention centers and facilities around the country being considered to potentially serve as temporary hospitals, it became clear to us that TCF Center would be an inevitable option to serve as a care facility to satisfy our community’s urgent health needs,” he said. 

“One of the hallmarks of NAIAS since the very beginning has been our commitment to being socially responsible,” Alberts said. “Our thoughts continue to be with those whose lives have been impacted by this devastating virus.  And, we support the city and state’s mission to help preserve life in the face of this challenging situation.”

NAIAS will hold its next annual show in June 2021. 2020 NAIAS Chairman Doug North said show officials are also discussing plans for a fundraising activity later this year to benefit the children’s charities that were designated as beneficiaries of the 2020 Charity Preview event.     

“We know these organizations rely on the money raised at Charity Preview to fund many wonderful support services for the most vulnerable in our community,” North said. “With this in mind, we will be in touch with the charities in the near future to present some ideas.”

North, who will act as Chairman of the 2021 NAIAS, expressed the show’s gratitude to all of its stakeholders.

“The level of excitement for the 2020 show was extraordinary, and we deeply appreciate all of the support from our OEM partners and our more than 200 valued sponsors, as well as the city of Detroit and the state of Michigan,” North said.

“We will be ready to unleash this energy and enthusiasm when June 2021 rolls around to produce the absolute best show and experience ever. We look forward to literally redefining the auto show landscape with fresh ideas and innovative opportunities for mobility activations and partnerships,” North said.

All tickets purchased for the 2020 NAIAS show, including tickets for the Public Show, Industry Preview and Charity Preview will be fully refunded. Charity Preview ticket holders will be given the option of a refund, or the opportunity to donate the proceeds of their refund to one of the nine designated Charity Preview beneficiaries. The NAIAS ticket office will be in contact with all ticket holders.  

The NAIAS sponsorship team will also be in contact with each sponsor directly to answer questions regarding refunds and their contracts.

 The 2021 show dates are:

  • Motor Bella: Friday, June 11 – Monday, June 14
  • The Gallery: Monday, June 14
  • Press Preview: Tuesday, June 15 – Wednesday, June 16
  • AutoMobili-D Powered by PlanetM: Tuesday, June 15 – Thursday, June 17
  • Industry Preview: Wednesday, June 16 – Thursday, June 17
  • Charity Preview: Friday, June 18
  • Public Show: Saturday, June 19 – Saturday, June 26

 

Watch WXYZ-TV Detroit | Channel 7 reporting on the NAIAS cancelation below: 

 

New York has changed  course and designated auto sales as an essential service.

On March 26, the Empire State Development Corp. authorized dealer sales by adding new authorization language: “automotive sales conducted remotely or electronically, with in-person vehicle return and delivery by appointment only.”

The New York Independent Automobile Dealers Association had lobbied heavily for the change and celebrated the announcement.

This language allows dealers to sell vehicles over the phone and over the internet and schedule in-person vehicle return and delivery by appointment only,” stated Paula Frendel, executive director of the NYIADA. “This change allows our independent dealers to continue to sell vehicles to our population, who need vital transportation for individual and family safety and maintenance purposes during this time. This will mitigate negative economic repercussions which would have occurred for a full closure as well.”