#541 - 🛻🏦🪜 Auto Rates Climb

TOGETHER WITH

Taking time to communicate clearly may seem like a lot of work, but repeating yourself a dozen times is more work by far.

Take your time. We’re all ears. 🌽

Keep Pushing Back
-Paul, Kyle, Chris & Kristi

TODAY’S LOT WALK

• Business: Loans hit new highs, Polestar hits SK, Swedish Tesla mechanics hit the picket line, Jeep hits the gas on EVs, BYD hits Hungary. 🎯

• Data & Insight: Tracking economic trends for retail auto. 📈

• Culture: OpenAI hosts its developer’s conference nearly a year after it was released to the public. 🤖

Reading time: 4 mins 51 secs

No need to reply twice. We are keeping count. 🤓

BUSINESS

Getting to the Point

Auto Loan Payments Reach New Highs

Surging interest rates and sticker prices are reshaping the American car market. Average monthly auto loan payments are now approaching $725, with some even surpassing $1,000. Affordability is a growing concern for consumers facing declining trade-in values and limited credit negotiation options. While deals are available—such as OEM financing on overstocked models like Buick—budget strains are increasing due to higher insurance rates and longer-term loans, leading to more pressure on service centers and concerns over loan delinquencies.

Polestar's Innovations and Partnerships

Polestar has partnered with SK On for battery supplies for its upcoming Polestar 5 EV. In a separate move, Polestar is offering a flexible leasing program for the 2024 Polestar 2, with rates starting at $349 per month and a unique option to return the vehicle after just five months. The lease includes an $8,500 credit, enticing consumers to electric cars in a competitive lease market.

Tesla Faces Labor Strikes in Sweden

In Sweden, Tesla mechanics are on strike, demanding collective labor agreements. Their efforts are gaining momentum as dockworkers have joined in, refusing to unload Tesla shipments. Tesla is now initiating negotiations, spotlighting the strong influence of unions in Sweden and the growing global push for organized labor rights within Tesla's operations.

Jeep's Electrification Plans

Jeep is going electric, with plans to launch an electric Wrangler by 2028 and an all-electric Grand Cherokee expected in 2027. Parent company Stellantis invests $19 billion in EV development, including new battery plants and updating facilities. This commitment is part of a more significant labor agreement with the UAW, offering substantial worker benefits and marking a significant shift in the automotive industry as Stellantis gears up to introduce new EVs for Dodge and Ram.

BYD Expands in Europe

China's EV giant BYD is reportedly opening its first European car factory in Hungary, building on its electric bus operations. This move strategically positions BYD to sidestep potential EU tariffs. It is a response to Hungary's open-door policy toward Chinese investments. BYD's expansion indicates a broader trend towards localizing EV production, a strategy also encouraged by incentives like the U.S.'s IRA. 

TOGETHER WITH USED CAR WEEK AND NAVICON

Used Cars and a New Cup!

Used Car Week is here!

While enjoying the event in-person or from afar, plan to catch NAVICon, Steve Greenfield's all-day event on November 9.

It features notable speakers like CarGurus CEO Jason Trevisan, Chase Fraser of Fraser McCombs Capital, and CarDealershipGuy taking live questions via Zoom and the NAVIcon Cup, where ASOTU's Kyle Mountsier will rate five 5-minute pitches shark-tank style. 

Stay tuned to catch the highlights (and winners 😉) on LinkedIn! 

/Positivity

If we tried to tell all the wonderful, charitable, and creative stories happening in dealerships across our industry, we would need a bigger email. But we have just enough space in this email for YOUR story. Let us help show the community and world what you have going on in your store!

DATA & INSIGHT

Economic Trend Tracking

🔴 Inflation Station:

• Inflation rates have cooled since their peak in June 2022 but remain stubbornly above desired levels.

• In October, the Bureau of Labor Statistics reported that the core inflation rate rose in September by 4.1% YOY — more than double the Federal Reserve's target of 2%.

🟡 Interest Rates:

• Interest rates will likely be elevated for quite some time, with economists forecasting only a 1% drop in 2024, which means that it will remain expensive to borrow money.

• On the flip side, attractive interest rates on high-yield savings accounts will persist as well.

🟢 Market Updates:

• New vehicle retail sales show a 6.9% YOY climb.

• Truck/SUVs are expected to have accounted for 79% of new-vehicle retail sales in October.

• Inventory levels increased by 5.5% from last month (but prices are taking a slight downturn).

AROUND THE ASOTU-VERSE

Coming Soon

• NOVEMBER 16 @ 2:00 pm EST

  ASOTU EDGE 30-Minute Webinar in partnership with Invoca

  “Revolutionizing Phone Call Management: Adapting to the Digital Era.”

  Discover how the automotive industry is revolutionizing phone call management, personalizing marketing through call data, and enhancing customer experiences with cutting-edge tools like Invoca's AI technology. Dive in, decode, and drive success in today's digital age!

  ☎️ Register now ☎️
   

• FEBRUARY 1-4, 2024

  NADA 2024 in Las Vegas

  Lights, camera, actions! Paul and Kyle will be at NADA creating content for exhibitors. Hit us up to let us know what we should see, who we should talk to, and what we should cover while we’re there.

  🎤 Don’t miss a thing 🎤
   

• MAY 14-17, 2024

  ASOTU CON 2024 in Baltimore

  The design team is putting the finishing touches on elements and assets for the event. All participants and collaborators can expect to see the release during the first week of November!

  🗓 Add it to your calendar 🗓
   

  👋 Word on the street is Paul and Kyle will be at Used Car Week (this week) and MRC (next week) — come say ‘hi’! 👋
   

CULTURE

OpenAI's Developer Conference

OpenAI's DevDay conference is showing off the company's groundbreaking AI advancements, and we wonder: How will you revolutionize retail auto with these new tools?

Here are a few of the exciting announcements:

• GPT-4 Turbo: OpenAI's latest iteration boasts up-to-date knowledge, enhancing capabilities for analysis and customer engagement.

• GPT Store Launch: Share and monetize custom bots, offering a new realm of interactive and personalized services.

• Cost Reductions: Cheaper development costs to foster greater innovation in automotive applications.

• Copyright Shield: Protection for enterprise users, enabling the fearless integration of AI within legal boundaries. 

Everybody knows conferences are where the real magic happens. 👀

Quick Hits

• Starbucks is preparing a 3-5% pay increase across its workforce starting Jan 1. ☕️

• Saturn’s rings will disappear in 2025. 🪐

• The new “Godzilla Minus One” trailer dropped. 🦖

History

• 1929: The Museum Of Modern Art opens in New York City. 🖼️

• 1944: Franklin Delano Roosevelt wins an unprecedented fourth term as president of the United States. 🇺🇸

• 1973: New Jersey becomes the first state to allow girls into Little League. ⚾️