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.
U.S. Senate Majority Leader Charles E. Schumer announced Senate passage of the U.S. Competition and Innovation Act, which combines Schumer’s Endless Frontier Act, other bipartisan competitiveness bills, and includes $52 billion in emergency supplemental appropriations to implement the semiconductor-related manufacturing and R&D programs Schumer authorized in last year’s National Defense Authorization Act. It also includes a program to support legacy chip production that is essential to the auto industry, the military, and other critical industries. An additional $1.5 billion was included for implementation of implement the USA Telecommunications Act that was also passed as part of last year’s NDAA to foster U.S. innovation in the race for 5G.
Average wholesale used vehicle prices cracked the $14,000-mark for the first time ever in April and then proceeded to set new highs above $15,000 in May, according to Tom Kontos, chief economist for KAR Global.
He stated, “This is the latest sign of the seemingly never-ending rise in wholesale values resulting from a deluge in demand and a drought in supply.”
Retail used vehicle and CPO sales did slow down a bit in April, but it is unclear if sales were limited by demand or supply and nevertheless remained high, Kontos stated.
According to KAR Global Analytical Services’ monthly analysis of wholesale used vehicle prices by vehicle model class, wholesale prices in April averaged $14,436 — up 5.9% compared to March, up 50.0% relative to April 2020, and up 25.7% compared to pre-COVID/April 2019.
Compact cars and full-size SUVs/CUVs both had month-over-month increases of above nine percent, exemplifying the breadth of demand across all used vehicle segments, small and large, Kontos stated.
When holding constant for sale type, model-year-age, mileage, and model class segment — using criteria that characterize off-lease units — prices in April were up significantly on a year-over-year basis versus April 2020 and April 2019 for both midsize cars and midsize SUV/CUVs.
Average prices have been well above pre-COVID levels each week since the start of the year, regardless of vehicle type and generally at an increasing rate.
Based on NADA data, retail used vehicle sales by franchised and independent dealers in April were down 13.3% month-over-month and down 8.1% versus April 2019/pre-COVID sales. CPO sales were down 10.1% from the prior month but up 9.8% versus April 2019/pre-COVID levels, according to figures from Autodata.
Total payroll employment rose by 266,000 in April, and the unemployment rate rose slightly, the U.S. Bureau of Labor Statistics reported last week.
“Today, the Bureau of Labor Statistics reported that the American economy added 266,000 jobs in the month of April, and the unemployment rate was 6.1 percent, up marginally from 6.0 percent in March,” said Labor Secretary Marty Walsh.
“However, the numbers also show we have a steep climb ahead of us. We have yet to recover roughly eight million jobs that existed prior to the pandemic.”
The number of unemployed persons, at 9.8 million (not including farm workers), was little changed in April. These measures are down considerably from their recent highs in April 2020 but remain well above their levels prior to COVID-19 (5.7 million).
Among the major worker groups, the unemployment rates for adult men (6.1 percent), adult women (5.6 percent), teenagers (12.3 percent), Whites (5.3 percent), Blacks (9.7 percent), Asians (5.7 percent), and Hispanics (7.9 percent) showed little or no change in April. Among the unemployed, the number of persons on temporary layoff, at 2.1 million, also changed little in April. This measure is down considerably from the recent high of 18.0 million in April 2020 but is 1.4 million higher than in February 2020. The number of permanent job losers, at 3.5 million, was also little changed over the month but is 2.2 million higher than in February 2020.
This year's used car market is shaping up to be one of the hottest on record and market experts are expecting the surge to continue for the foreseeable future. It's a dramatic shift from a year ago when many car dealerships had shuttered their doors or were limited to providing service and maintenance.
New-car sales plunged 30% from March 2020 to June 2020, the largest decline in almost 100 years. What started as a shortage of vehicles for sale due to factory shutdowns caused by the COVID-19 pandemic, continues to unfold in 2021 with a global shortage of semiconductor chips affecting auto manufacturing and many other industries.
Semiconductors were already in high demand before the pandemic, fueled by 5G, electric vehicles, smart appliances, cell phones and gadgets of all shapes and sizes. When the pandemic hit and lockdowns took hold across the globe a rise in demand for computer displays, laptops, and other work-from-home and play-from-home gear deepened the strain on chip producers. Taiwan, one of the world’s largest producers of microchips is also experiencing a water shortage that has no end in sight, and the industry may experience a shortfall for a year or two.
The auto industry alone consumes 12.2% of semiconductors and the shortage has taken a bite out of auto production in this year's first and second quarter. The shortage is forcing auto manufacturers like GM, Ford, VW, Toyota and Stellantis to continue cutting production. GM announced around 10,000 workers will be furloughed over the spring and potentially into summer. GM is even cutting some tech from its vehicles to get them on dealer showrooms sooner than later.
“GM is building some vehicles without certain modules when necessary,” the company said in its Q1 sales report. “Those will be completed as soon as more semiconductors become available, which will help GM quickly meet strong expected customer demand during the year. GM is also targeting recovering lost car and crossover production where possible in the second half of the year.”
There are plans reopen Ford plants at the end of May in Chicago; Flat Rock, Mich.; and Kansas City that were idled this spring. The F-150, Mustang, Edge, and Transit van have all suffered production losses. Stellantis’s plant in Detroit has reduced production till the end of May, affecting the Jeep Grand Cherokee and the Dodge Durango. According to new research from AlixPartners, a global consulting firm, the auto industry is facing the loss of production of around 36 million vehicles this year through 2022.
AlixPartners is forecasting this year to be a “year of mixed-speed recovery,” with China recovering the quickest, to 23 million units; followed by the U.S., at 13.6 million; and Europe (parts of which were regarded to be hit the hardest by COVID-19), at just 14.1 million. Overall, AlixPartners doesn’t see global sales returning to recent-peak levels (2016's 17.5 million) until after 2025.
“We expect that production shortages will continue to impact new-vehicle sales for at least the second quarter and likely spill over into the third quarter,” said NADA Chief Economist Patrick Manz in NADA's "Issues Analysis of 2021 First Quarter Auto Sales" report. “The longer these production disruptions linger, the longer it will take for automakers to rebuild inventories to levels necessary to meet demand, and the less likely it is that automakers will be able to make up sales lost to both retail and fleet customers.”
The shortages have been a once-in-a-century boon for used car dealers as buyers are turning to the used car market unable to attain a new model of their choosing. Prices are up in both the retail and wholesale markets. Wholesale used vehicle prices rose 3.74% in the first 15 days of March compared with average prices for the month of February, according to the Manheim Used Vehicle Value Index. The index hit an all-time high of 175.5 in mid-March, up 24% from a year earlier and up 8% since the beginning of 2021.
Retail used car prices are up 7% this spring. Manheim’s wholesale marketplace reports the average wholesale price for a used car was $19,094 in mid-April, which was up from $12,548 a year ago. It is among the fastest increases in decades.
“A big comeback story of 2020 is without a doubt the recovery of retail vehicle sales, which have nearly returned to pre-pandemic levels,” said Jessica Caldwell, Edmund’s executive director of insights. "The chip shortage is wreaking havoc on new vehicle production, but we're also seeing surprisingly healthy car shopper demand, which has likely grown stronger in light of vaccines rolling out quicker than anticipated. These two factors combined are disrupting the market in a way we haven't ever really seen before.”
According to TrueCar spring data vehicles are turning over on dealer lots much quicker, inventory is spending an average of only 56 days on the lot compared with 70 days at this time last year. This is causing the price of used vehicles to increase significantly, TrueCar reported the average listing of used vehicles on the site is up $2,300 year-over-year right now.
A number of factors are fueling the buying frenzy, including an improving job market, employees returning to the office who were working from home, stimulus checks, and low interest rates. Inventory at the end of the first quarter of 2021 was 12.8% lower than at the beginning of the year with fewer choices on dealer lots according to NADA. Experts are forecasting the used-vehicle market will remain hot well into the summer and probably beyond as auto manufacturers continue to deal with slowed new-vehicle production and low inventory.
Black Book released its Used Vehicle Retention Index for April (152.4), an increase of 11.2 points (or 8.0%) from February (141.2). The Index currently stands 43% above where it was the same time last year, during the initial economic shutdown due to COVID-19.
“Wholesale prices continued their ascent each week in April, although the rate of increase declined slightly at the end of the month,” said Alex Yurchenko, SVP, Data Science and Analytics.
“Demand for used and new vehicles remained strong but available inventory continued to decline. This elevated demand and low inventory coupled with low incentives levels on new vehicles helped the retention index to increase for the fourth month in the row. This month, all segments showed increases, with Compact Car and Minivans having the largest gains.”
The Chicago Auto Show has received approval from state and city officials to host a special edition of the show July 15-19 at McCormick Place. The Chicago Auto Show will be one of McCormick Place’s first live, in-person events since the COVID-19 pandemic shutdown.
The special show will move to the West Building of the McCormick Place complex and expand outdoors to take advantage of July weather. With the show’s move, attendees will now experience more outdoor test drive opportunities, test tracks and technology demonstrations, which will take place along Indiana Avenue and surrounding city streets.
Auto show fans will be able to enjoy favorites like the Camp Jeep and Ram Truck indoor test tracks as well as Subaru’s popular pet adoption event – all of which will be executed in a safe manner. Ford has also embraced the show’s outdoor space availability with experiences featuring the new Bronco, Bronco Sport and all-electric Mustang Mach-E SUV.
“We’ve been working with McCormick Place officials for months on an opening plan, and very early on they saw that our show may provide a pathway to re-opening the facility,” said Chicago Auto Show General Manager Dave Sloan. “We stand committed to providing a safe environment for all involved and will carefully adhere to the health and safety protocols and guidelines set forth by city and state officials.”
Tickets for the 2021 Chicago Auto Show will be sold exclusively online. Attendees will be able to select their preferred attendance date and time utilizing timed entrance windows designed to carefully control crowd capacity throughout each event day. Show organizers will also intentionally regulate the number of attendees throughout the day to control the number of people on the show floor at any given time.
Attendees will also have the opportunity to pre-register for onsite activations including indoor and outdoor test track and ride-and-drive events. This will allow attendees to schedule participation in various show attractions ahead of time, diminishing lines and reducing congestion within exhibits.
April U.S. auto sales, when announced next week, are expected to reveal a very hot new-vehicle market, according to Cox Automotive.
The April sales pace is expected to finish near 16.5 million, which is down from last month's robust 17.7 million level but still a healthy pace for the industry. Sales in March were especially strong due in part to some February sales being delayed as a result of bad weather and the resulting power outages. The extra boost that benefitted March is not likely to be seen in April though.
"The robust sales pace is the story for the industry right now, as strong retail demand continues, even though a downtick from March is expected," said Charlie Chesbrough, senior economist, Cox Automotive. "There is little reason to expect buyer interest to wane anytime soon given recent economic growth rate expectations and improvements to consumer sentiment. But inventory is a huge problem in the vehicle market – a lingering result of the COVID-19 shock last year." The computer chip shortage also remains a problem.
Sales volume is expected to finish near 1.36 million, up nearly 640,000 units, a near 90% increase from last April's historic low result. Given the shock to the market last spring, a better comparison to measure the strength of the market is calendar year 2019, the last year the industry saw a robust 17.0 million market. Versus April 2019, vehicle sales are expected to increase more than 30,000 units, or 2.3%, which suggests automobile sales are normalizing. There is the same number of selling days this month as last month (26) and last April; however, there is one more than in April 2019.
The average value for all used vehicles traded in during the month of March hit an all-time high, climbing to $17,080, compared to $14,160 a year ago. Edmunds analysts say that demand is soaring for used vehicles as chipset shortages continue to severely constrain the supply of new vehicles in the market. New vehicle inventory on sale at dealerships nationwide was down by 36% in March 2021 compared to a year ago.
According to Edmunds data, trucks retain the greatest value and command the highest trade-in prices of all consumer vehicles in the market right now. Edmunds analysts looked at all 2018 model year vehicles traded in during March and determined their respective retained values by comparing the average trade-in price of each model against its average original MSRP. Ford F-250 Super Duty, GMC Sierra 2500 Heavy Duty and F-350 Super Duty all tied for the No. 1 spot on the list, retaining 80% of their value on average. The complete Top 20 list, together with the full list of vehicles with the greatest retained value broken out by segment, can be found below.
“The chipset shortage is wreaking havoc on new vehicle production, but we're also seeing surprisingly healthy car shopper demand, which has likely grown stronger in light of vaccines rolling out quicker than anticipated,” said Jessica Caldwell, Edmunds' executive director of insights. “These two factors combined are disrupting the market in a way we haven't ever really seen before.”
Edmunds analysts say that consumers who might have typically been new-car shoppers are increasingly turning to the used market in search of more alternatives and better value. Traffic to the Edmunds website's used vehicle inventory pages jumped approximately 300% in March compared to a year ago.
Nevertheless, March sales were at near record levels for new cars.
“It seems impossible, with the pandemic still raging in many parts of the country, that new vehicle sales could be at the highest March level in more than two decades, but here we are,” said Caldwell. “Until automakers can start cranking out new vehicles again, we're going to see increased demand and higher trade-in values for used vehicles as well.”
Used-vehicle inventory tumbled through March to lows not seen since last summer, according to a Cox Automotive analysis of vAuto Available Inventory data.
The total supply of unsold used vehicles totaled 2.34 million vehicles at the end of March, down from 2.59 million vehicles at the end of February, which was lower than January, Cox reported.
March stock compares with a supply of 2.86 million vehicles in the same year-ago period. Used-vehicle supply was 18% below March a year ago and 16% below the end of March 2019.
Cox data showed used-vehicle days’ supply throughout March kept dropping, plummeting to 33, down from 48 in January and February. By the end of the month, the days’ supply was down to levels seen during the inventory dry months of June and July 2020. March 2021 days’ supply was 33% below March 2020 and 20% below the same period in 2019.
The days’ supply of used vehicles had remained relatively stable since last October, but strong spring sales, thanks to tax refunds and stimulus checks, depleted the supply, according to Cox Automotive. Used-vehicle sales were brisk during March, running 22% ahead of the same period in 2020 and even 5% higher than the comparable period of 2019. The Cox Automotive days’ supply is based on the daily sales rate for the most recent 30-day period.
Franchised dealers had 1.33 million used vehicles in inventory for a 31 days’ supply. Independent dealers had 1.01 million vehicles in inventory for a 34 days’ supply.
The average listing price continued to be high, closing the month at $21,343. That was nearly 13% higher than the same week a year ago. The pace of rising prices is starting to slow slightly. For franchised dealers, the average listing price was $23,270. For independents, it was $18,802.
Used vehicles with a listing price of under $10,000 were in the lowest supply at 23 days. Vehicles in the $10,000 to $25,000 range had at or slightly below average inventories. Vehicles priced above $25,000 had a bit better supply, according to Cox.
ADESA Canada will hold new daily sales hosted on the company’s proprietary Simulcast+ technology. The sales offer dealers across Canada exclusive access to first-run, off-lease inventory from top-tier automotive consignors not available on any other platform.
The new Simulcast+ sales take place daily, Monday through Friday at 10:30 a.m. EDT and feature more than 60 first-run in an open auction, off-lease vehicles from some of Canada’s top consignors. With daily events, the sales provide dealers with additional convenient options to simultaneously source, bid and buy the highest quality inventory from any computer or mobile device.
Simulcast+ is ADESA’s proprietary marketplace technology that simulates the competitive live auction environment in an entirely digitized, highly automated, live streaming format.