Group 1 Automotive Inc., an international, Fortune 500 automotive retailer, announced that effective immediately, it is suspending its cash dividend and canceling its prior share repurchase authorization.

“Due to the dramatic impact of the COVID-19 pandemic on the auto retail market and the associated temporary displacement of so many of our valued employees, the Group 1 Automotive Board of Directors has decided to suspend the quarterly dividend and cancel our existing share repurchase authorization at this time,” said Earl J. Hesterberg, Group 1’s president and chief executive officer. “In addition, we have reviewed our planned capital expenditures and are making significant reductions to this year’s planned spending. These actions will further strengthen our balance sheet and provide additional resources during this period of market disruption.”

Edmunds forecast that 4,340,488 new cars and trucks will be sold in the U.S. in the fourth quarter. This reflects a 0.3 percent increase in sales from the third quarter but a 0.8 percent decrease from Q4 of 2018.  Edmunds analysts estimate 17,145,333 new vehicles will be sold in total in 2019, marking the fifth year in a row that new vehicle sales will top 17 million. 

“The fact that new car sales have stayed this strong for this long really defies the odds, especially given that high interest rates and record prices squeezed buyers this year,” said Jeremy Acevedo, Edmunds senior manager of industry insights. “But if 2019 taught us anything, it’s that you can’t underestimate the power of a strong economy.”

In 2019, consumers also solidified their move away from passenger cars in favor of SUVs and trucks. In Q4, Edmunds estimates SUVs will garner more than 50 percent market share for the first time, and market share for pickup trucks will also hover above 19 percent, a level not seen since 2005. Conversely, market share for passenger cars is expected to hit an all-time low of around 26 percent in the fourth quarter.

Customers prefer to buy vehicles at a dealership, rather than online, according to a recent survey conducted by Swapalease.com, a car lease marketplace.

Fifty-one percent said they start by shopping online, while 23 percent said they visit their local dealer.  However, when asked if they would buy or lease a vehicle entirely online if given the opportunity, only 13 percent stated they would do so. The majority (49 percent) said they prefer to shop online but visit the dealership for final negotiation and paperwork, while 38 percent said they prefer to shop only at the dealership.

 

Nearly 70 percent of Americans (69 percent) would be likely to consider a used vehicle for their next auto purchase, according to a survey from Ally Financial conducted online by The Harris Poll among more than 2,000 American adults.

Even though 69 percent of Americans would be likely to consider used vehicles for their next vehicle, they expressed concerns about their reliability and repair needs, the survey found.

According to the survey, consumers would be more likely to purchase a used vehicle over a new vehicle with the following attributes: Higher-quality used vehicles (40 percent); Vehicle certified by dealer or factory (39 percent); Detailed maintenance/repair history report of the vehicle (36 percent) and a vehicle service contract that extends the warranty or covers major repairs (34 percent).

Used car owners say they currently own used because: It was less expensive than a new vehicle (61 percent); they liked the brand/model of the used vehicle (40 percent) and they were able to get more car for their money (34 percent).

Across Manheim, digital wholesale channels have seen exponential growth in 2019 - hitting the two million transaction milestone in the first week of November. In addition to providing an efficient auction experience, Manheim’s digital platforms provide a safer way to buy while helping clients more effectively run their businesses.

In October, 48 percent of vehicles were sold to a digital buyer. Digital-only transactions - those that take place through Manheim.com, Manheim Express, OVE and Private Stores - are up 22 percent year over year, and Simulcast transactions are up 9 percent in that same timeframe. Some sellers in Manheim’s Digital Private Stores have seen as much as 50 percent growth in their sales.

In addition to growing its various digital-only platforms, Manheim has also ramped up the number of Digital Blocks across its physical footprint, which now comprise 20 percent of the company’s physical lanes (up 30 percent in the last three months). Digital Blocks provide all the things clients enjoy about a physical sale - the excitement, auctioneer and in-lane and online bidders. The only difference is that vehicles are shown on screens rather than being driven through the lanes. 

Manheim Tucson recently became the company’s first location to go “all digital,” converting all of its lanes to Digital Blocks. Sales rates and vehicle values have continued to show strong results.

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