Automotive News - June 7, 2021 - 35

JUNE 7, 2021 * 35
CHIPS
Shortage keeps
inventory tight
continued from Page 1
" I regret the decision to upgrade every
day the weather is nice, " Stallons,
who lives in Lexington, Ky., told Automotive
News. " At some point, all the
fun and excitement will have faded,
and I don't know what I'll think or do. "
Ford Motor Co. isn't the only company
grappling with the chip shortage,
but its dealers, customers and
bottom line have been stung particularly
hard. May was the worst month
for its F-Series pickups in more than
nine years, with U.S. sales plunging
29 percent even from last year's pandemic-scarred
volume.
Ford's overall sales rose 3.7 percent
from a year earlier, but the automaker
was outsold by Toyota Motor
North America, American Honda
and Hyundai-Kia. And Ford dealers
don't expect June or July to be any
easier, with few truckloads of new
vehicles on the horizon.
Ford finished May with a 30-day supply
of inventory, down from 35 days'
worth in April and 77 a year earlier.
" Ford and its dealers are working
harder than ever to match the right
mix of inventory to best meet the
needs of our customers at the local
level, " Andrew Frick, the company's
vice president of U.S. and Canada
sales, said in a statement.
The chip shortage has slashed
MINORITIES
NAMAD: Don't
let goals fall flat
continued from Page 4
social justice uprising.
" The past year has brought about
significant change for many of us, "
Keri Floyd Kelly, director of diversity
and inclusion for Nissan Group of the
Americas, said in a statement to
Automotive News last month around
the one-year anniversary of Floyd's
death in Minneapolis. " At Nissan,
that change included a thorough and
thoughtful examination of our commitment
to diversity, equity and inclusion
led by the leadership team,
and a vow to be more aggressive,
comprehensive and transparent in
our actions. "
Lester said NAMAD will continue
to hold automakers accountable and
hopes that the various commitments
around diversity and inclusion made
since Floyd's death don't fall by the
wayside.
" Before, we've always asked, 'What's
your plan? And what do you want to
do in writing? What's your goal?
RESIDUALS
More data could
help set EV values
continued from Page 8
Hyundai put a $319-a-month lease
offer on its subcompact Kona Electric,
with $3,999 due at signing.
History has demonstrated that automakers
and their captive finance
arms can get sideways in a hurry if
residual values aren't set properly, or
if they're artificially inflated in a misguided
bid to lower lease payments
Chip shortage toll rises, but slower
The estimated number of microchip-related vehicle production losses
rose again last week, but the rise was smaller than in previous weeks,
according to the latest industry report from AutoForecast Solutions.
AFS estimated that about 49,000 vehicles were taken out of North
American production schedules last week due to the global shortage
in chips. Stellantis accounted for more than 20,000 of the production
cuts. That includes 9,800 Chrysler Pacifica and Voyager minivans
(Windsor, Ontario), 6,000 Jeep Cherokee midsize SUVs (Belvidere,
Ill.), and 4,400 Jeep Compass compact crossovers (Toluca, Mexico).
Hyundai accounted for nearly 20,000 vehicles: 12,800 Sonata midsize
sedans and 7,100 Elantra compact sedans (Montgomery, Ala.).
Nissan took nearly 9,000 Micra/March subcompact sedans, Versa
subcompact sedans, Kicks subcompact crossovers and Sentra compact
sedans (Aguascalientes, Mexico) out of its production plans.
- Alexa St. John
The breakdown
ANNOUNCED
PROJECTED
North America 1,275,000 1,504,000
Europe
Rest of Asia*
China
South America
953,000 1,395,000
414,000 668,000
444,000
86,000
Middle East/Africa* 19,000
*Unchanged from a week earlier
Source: AutoForecast Solutions
autoforecastsolutions.com
more than 400,000 vehicles
from
Ford's planned production, according
to AutoForecast Solutions, with
F-Series pickups accounting for a
third of that volume. Ford has been
unable to build about 15,000 Mustangs,
including Stallons'.
Running out of gas
Richard Bazzy, owner of Shults
Where they stand
10 automakers with the most
minority-owned dealerships
NUMBER
Industry
GM
Stellantis
Ford
Toyota
Nissan
Honda
Hyundai
VW-Audi
Kia
Subaru
Source: NAMAD
What's your vision for diversity and inclusion?'
" Lester said. " Now we have
press releases, we have statements
from the heads of these corporations
that have expressed what their vision
is, what is acceptable, what their goal
is and what's not acceptable to them.
And so we use that as a blueprint, not
to hold it against them, but hold them
accountable, and helping them try to
create a blueprint for success. " a
and drive sales. That was the case at
Chrysler when gasoline prices spiked
in 2008, driving down the value of
that automaker's stable of big pickups
and SUVs coming off lease. Each
vehicle turned in meant thousands in
losses for Chrysler Financial, with the
end result being a shuttering of the
captive and an acceleration into the
automaker's 2009 bankruptcy.
" Residuals are always going to be
wrong on a unit-by-unit basis, but
you have to limit the amount by
which you can be wrong. And when
you don't have historical data, the
propensity to miss is higher, " said ErYOY
AS
OF DEC. 31 CHANGE
1,257
291
183
160
104
92
77
73
65
54
28
+14
+4
+2
+5
+15
+3
-3
+3
+4
Ford-Lincoln group in Pittsburgh,
said he had about 70 vehicles left at
one of his four stores after record
sales in May.
" It's almost like the Indy 500, " he
said. " 'We're only giving you enough
fuel to win; you can't cruise afterward.'
Now I'm pretty much out of gas. "
Bazzy said he has been expecting
tight inventory for months now - Ford
CDK
Company to grow
Roadster's base
continued from Page 3
Moss and CDK executives said the
deal began to come together about
six months ago after a longer partnership
between the companies integrating
Roadster with CDK's systems,
including its Elead customer
relationship management system.
CDK COO Joe Tautges said the
company expects to be able to grow
Roadster's customer base. He referenced
CDK's experience of doubling
the number of Elead dealership customer
sites in the two and a half
years after that company was acquired
and said CDK leaders would
be " disappointed " not to achieve a
similar pace of customer expansion
for Roadster. CDK did not disclose its
current Elead customer count.
Mahesh Shah, CDK's chief product
and technology officer, said the company
has invested in digitizing the
purchase process in recent years,
from acquiring Elead in 2018 to investing
in data and launching a reic
Lyman, vice president of ALG,
which is part of J.D. Power.
While volumes of BEVs are still
small, reducing the risk, the amount
of data needed to better set residual
values is growing.
This year marks a decade since the
first generation of BEVs started coming
to market.
Lyman said the added volume of
new EVs coming to market is " going
to help with that learning curve. "
But he admits that forecasters
missed pretty big when the first
generation of EVs - those with
ranges of about 100 miles or less -
Tautges: Goal is
1 retail process
Shah: Investing
in digitizing
mote e-signature tool, Sign Anywhere,
last year during the pandemic.
The company's existing online retailing
tool, Connected Store, provides
payment and quoting capabilities
and is used by about 1,000 dealership
customers now, Tautges said.
CDK said in May 2020 that it would
provide the product at no cost to
dealerships through the end of 2021.
It's not clear what CDK's plans are
for Connected Store after the acquisition
of Roadster. Tautges said more
will be shared in the future, but CDK
will have " one modern retailing process. "
" We'll
continue to support those
[Connected Store] customers, and
we're going to be very thoughtful as
we bring the best of CDK both to the
Connected Store customers as well
came to market.
" We did struggle with those; we
over-called them. And the reason we
did was that we believed the demand
side was going to be far greater than
what it ended up being, " Lyman said.
But he's less concerned about a big
miss in EV residuals now because at
auction, BEV values have reached
" near parity " with gasoline-powered
vehicles in the same segment that
are similarly equipped.
" That's a real boon for us as forecasters,
seeing values that are kind of
similar, " he said, adding that it is a
sign that more consumers see modhas
indicated dealers won't see meaningful
new inventory until the third
quarter - and has been able to generate
money from other areas of the business,
such as parts and service.
" It's managing the customers and
their expectations more than anything, "
he said. " A lot of them are very
upset that we can't deliver. "
Other customers are more understanding
and willing to pick a second
or third choice, according to
John Huselton, general manager of
Bazzy's store in Wexford, Pa.
" They're basically saying, 'What
577,000
121,000
30,000
can I get?' and not thinking about it
very long because if they wait a couple
days, that car might not be here, "
Huselton said. " It seems like they're
a little more nervous they're not going
to be able to get a car. "
The crisis has taken an outsize toll
on the Detroit 3, according to AutoForecast
Solutions data. General
Motors said last week that its financial
outlook for the second quarter
had improved and that it had found
ways to more efficiently use its limited
chip supplies, but executives acknowledged
that the company is not
yet out of the woods.
GM still can't say " unequivocally
that the situation is getting better, "
CFO Paul Jacobson said at a Credit
Suisse conference last week, describing
the shortage as " fluid and
volatile. " The automaker said it was
able to pull some chip deliveries forward
from the third quarter and will
be able to ship by early July 30,000
midsize pickups that
been built without chips.
Ford also has tens of thousands of
vehicles that it built without chips
sitting in parking lots around the
country until enough of the missing
pieces are available.
" We're looking into Q3 or Q4 before
things turn around, " said Sam
Fiorani, vice president of global vehicle
forecasting at AutoForecast. " The
fear is it could be longer. "
Ford expects to resume production at
the Mustang plant in Flat Rock, Mich.,
the week of June 14, but how it will prioritize
orders remains to be seen.
Though Stallons is frustrated with
Ford for not warning him about the
potential for delays before he ordered
his car and sold his old one, his loyalty
to the brand hasn't wavered. He
still remembers the moment, nearly
53 years ago, when was cutting the
grass at his childhood home and
spotted a 1968 maroon Mustang convertible
on the corner of the block.
" That beautiful car stole my 14-yearold
heart, and it is a love affair that
continues to this day, " he said.
While he waits, he has a 2020 Ford
Escape to get around in and is eyeing
a couple of used Mustang convertibles
he might switch to if his production
date is postponed further.
But he's worried he would rue the
decision to cancel that Antimatter
Blue coupe with the white stripes.
" Lexington has 320,000 people, " he
initially had
said, " but I am certain that if I don't
buy it, that the person who does will
pass me every morning as I go to
work. " a
as the Roadster customers, " he said.
CDK in March completed the sale
of its international business to private
equity firm Francisco Partners
in a $1.45 billion deal. CDK has said
it will use the sale proceeds to invest
in its North American operations
and repay debt. The company also
sold its digital marketing business in
April 2020 to Ansira Partners Inc., a
marketing agency owned by private
equity investors.
The Roadster purchase is the result
of CDK's efforts to " really strengthen
our core focus and strengthen our
balance sheet to be able to make strategic
moves like this, " Tautges said.
CDK said last week in a regulatory
filing that it formed a wholly owned
subsidiary, Spyder Merger Corp., for
purposes of the merger with Roadster.
Roadster, which employs 158,
will continue as a CDK subsidiary.
CDK said Roadster will have an immediate
effect on CDK's revenue
and revenue growth, adding that the
company will share details of the financial
impact of the Roadster acquisition
when it provides fiscal-year
2022 guidance with its fiscal 2021
full-year earnings results this summer.
c
ern EVs as having equal utility with
similarly sized combustion models.
And, he said, while early EVs were in
segments that weren't particularly
popular, that's not the case with the
coming wave of battery-powered
pickups, crossovers and SUVs.
For Templin and his team, the
planned EVs coming from Toyota and
Lexus will be processed like any other
nameplate: " You can't anticipate what
the demand is going to be, so there's a
lot of unknowns right now when it
comes to the [residual]-setting piece,
but I have more confidence in our
team than anyone else. " a
https://www.fjautogroup.com/ https://www.fjautogroup.com/ https://media.ford.com/content/dam/fordmedia/North%20America/US/2021/06/03/ford-2021-may-sales.pdf http://www.autoforecastsolutions.com https://www.autonews.com/dealers/cdk-completes-sale-international-unit https://www.autonews.com/dealers/cdk-completes-sale-international-unit https://www.autonews.com/dealers/cdk-completes-sale-digital-marketing-business-ansira https://www.autonews.com/dealers/cdk-completes-sale-digital-marketing-business-ansira https://investors.cdkglobal.com/node/11056/html https://investors.cdkglobal.com/node/11056/html
Automotive News - June 7, 2021

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