Cars.com. reported a 31 percent year-over-year revenue drop as it recently released its financial results for the quarter ended June 30, 2020.

Revenue of $102.0 million was down $46.2 million year-over-year due to the invoice credits of 50 percent in April 2020 and 30 percent in May and June 2020.

It reported a GAAP Net Loss of $24.6 million, or $0.37 per diluted share, compared to GAAP Net Loss of $6.0 million, or $0.09 per diluted share in the prior year period. The adjusted Net income was $8.0 million, or $0.12 per diluted share, compared to adjusted net income of $20.0 million, or $0.30 per diluted share in the prior year period. The adjusted EBITDA of $23.2 million, or 23 percent of revenue, was down $20.3 million year over year. Free Cash Flow was $48.9 million for the six months ended June 30. Cars.com also reported $56.9 million of cash and cash equivalents on the balance sheet and total liquidity of $232.2 million, including availability under our revolving credit facility, as of June 30.

The website reported Average Monthly Unique Visitors of 22.8 million, up 6 percent year over year. Traffic visits are up 10 percent to 144 million year over year. Mobile traffic was 75 percent of total traffic, compared to 71 percent in the second quarter of 2019.

Dealer customers declined from 18,938 at March 31, to 18,033 at June 30, primarily due to cancellations and lower sales of marketplace customers as a result of COVID-19, partially offset by growth in digital solutions customers.

Subaru of America Inc. recently reported 51,458 vehicle sales for July 2020, a 20 percent decrease compared with record July 2019. These results reflect the impact of the COVID-19 global pandemic and the uncertainty surrounding economic recovery. Following 11 consecutive years of sales records, Subaru reported year-to-date sales of 318,572, a 21 percent decrease compared to the same period in 2019.

July marked the third consecutive month of 50,000+ vehicle sales for the automaker. As the top performing carline by volume, Forester sales increased 4 percent in July 2020 compared with the same month a year ago. WRX/STI posted a 6 percent increase, while BRZ posted a nearly 60 percent increase compared to July 2019.

“Given our low supply of key models such as Forester, Outback, Crosstrek and Ascent, overall, we were extremely pleased with our sales results which were delivered by our retailers, who are also persevering through the COVID-19 pandemic,” said Thomas J. Doll, president and CEO, Subaru of America Inc.

ADESA hosted a single digital auction event with vehicles in 22 different locations using the company’s Simulcast+ technology. The sale was hosted in late July on behalf of The Hertz Corporation and sold vehicles to buyers in 19 states across the country. Simulcast+ is ADESA’s new digital auction platform that simulates the competitive live auction environment in a fully digitized, highly automated, live streaming format.

“We launched Simulcast+ months ahead of schedule to support our customers during the COVID-19 lockdowns, and it has grown exponentially since then,” said Jim Hallett, chairman and CEO of KAR Global, ADESA’s parent company. “It’s faster than a physical auction, it’s safer than a physical auction, and it allows sellers and buyers to participate in live auctions anytime, anywhere. Last week’s successful Hertz sale reinforces Simulcast+ as the premier solution to effectively remarket inventory from multiple locations and reach a broad, highly engaged national buyer base.”

The Simulcast+ technology was first utilized by ADESA in April 2020 and has since been used for more than 400 auction events. Over 11,000 buying dealers have participated in those events, casting over 400,000 bids and resulting in tens of thousands of digital vehicle sales.

“We were pleased with the results of this sale in terms of dealer attendance, bidding activity, conversion and proceeds,” said Jeffrey Adams, senior vice president of remarketing at The Hertz Corporation.

For sellers, the Simulcast+ platform offers full control to set and adjust floors, pass on bids, post new asking prices and communicate directly with buyers during the sale. The integrated seller dashboard also captures comprehensive pricing, bidding and behavioral data that can be utilized to inform and market future sales. For buyers, Simulcast+ provides the ease, convenience and safety of bidding from any location and allows access to sales well outside their usual geographic auction market. It also delivers a more transparent bidding experience by clearly displaying every bid and every bidder on every sale. 

GWC Enhances Products

August 03, 2020

GWC Warranty announced significant updates to their core vehicle service contract that allow dealers to provide even better levels of coverage and more options for consumers. These enhancements to the already expansive vehicle service contract product were developed based on market feedback and industry trends, improving GWC’s ability to serve the needs of dealers of every size.

 

Dealers can now provide service contracts for older models on their lot, with new coverage options for vehicles up to 20 years old. GWC is also introducing coverage for over 120 previously excluded hi-line vehicles. Recognizing a growing need in the industry, coverage is now available for vehicles used for commercial purposes, giving drivers entering the rideshare and delivery market the chance to protect their investment and their livelihood.

 

“By providing the right F&I products for inventory they have on their lot, GWC can help dealers drive the results they need from their used-car operation,” says Matt McKenna, senior vice president of GWC Warranty & APCO.

Other significant changes in this update include improved driver benefits like rental car or substitute transportation coverage, roadside assistance, and trip interruption protection. GWC is also introducing new deductible options to give drivers more flexibility over what they’ll have to pay out of pocket, including a disappearing deductible option for dealers with a service bay that encourages customers to return for maintenance and repairs. Dealers can also offer buyers contracts with an “any time, any reason” cancellation policy.

 

“We’re introducing hundreds of new term and mileage combinations, including even more competitive rates and term options for vehicles that still have a basic manufacturer’s warranty remaining,” McKenna said. “And, as part of our goal to protect our contract holders from out-of-pocket repair costs, we’re now offering coverage on sales tax for diagnostics, labor, and parts for eligible repairs.

The growing number of COVID-19 cases and overall economic uncertainty continue to stifle a more robust recovery, according to a report released by Cox Automotive.

Cox forecasts that  the seasonally adjusted annual rate (SAAR) of auto sales in July is expected to be 13.3 million, up from last month’s 13.0 million pace, but down from last year’s 16.9 million level. Sales volume in July, forecast at 1.13 million units, will be down 19 percent from July 2019.

According to Charlie Chesbrough, senior economist at Cox Automotive, “The market has been making slow but steady gains since April’s low, but there are many headwinds hampering our recovery.” 

Consumer sentiment for the most part drifted downward throughout the month of July as surges in COVID-19 cases in the South and the West dominated the news headlines. Concerns over high unemployment, a troubled U.S. economy and the resulting severe recession also weighed heavily on potential auto buyers, keeping many out of the market. Shoppers who stayed in the market were likely impacted by a limited supply of product at dealerships.

Buyers are turning more to online shopping for cars
Buyers are turning more to online shopping for cars

Based on Cox Automotive analysis of vAuto Available Inventory data, there was only 67 days of inventory available in mid-July based on the current sales pace—far below the July 2019 level of 86 days. Lean supply can be a positive for dealers and automakers, as it often leads to less aggressive incentive spending and high grosses, according to Cox analysts. However, low inventory will also drive down market volume, as vehicle shoppers may not find the product they want. Toyota and Subaru had the tightest inventory among larger brands in July, both below 40 days of supply. At the other end of the scale, Chrysler, Dodge and Ford all had days of supply above 90 days in July. Mitsubishi had the most inventory on hand in July, with 135 days of supply.

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