#466 - 🥶 Inflation Takes a Chill Pill

TOGETHER WITH

It isn’t a celebration unless we celebrate it with our whole squad!

Celebrate Jordan Cox joining ASOTU Crew with us!

Jordan will bring his outstanding ability to connect with and care for people to our team as our Community Engagement Lead.

We are honored to have Jordan on the team, and excited to introduce him to you!

Keep Pushing Back
-Paul, Kyle, & Chris

LOT WALK

In Today’s Email

• Flow Auto takes care of its people. 🫂

• The economy is looking up. 📈

• We do some automaker math. 🧮

• Customers are feeling bamboo and skipping in-car apps. 📵

Reading time: 4 minutes 02 sec

DEALERS

John’s New Ride

With a little limp left over from his recent encounter with an 18-wheeler, Flow Automotive's John Monopoli walked to take a better look at his new BMW X5.

Joe Diggs shared on LinkedIn that it has been less than a week between the accident and handing John the keys to his new ride.

The Flow crew and their leader, Shawn Ayers, celebrated John's safe return and shared that they felt a cash donation wouldn't adequately express their gratitude for him as part of their team and family.

"You gotta work overtime now," somebody at the event jested.

But John has other plans: "I'm going to Disney!"  

Treating people well has to start inside if it will make its way outside. Based on this story, we trust every member of Flow’s community knows who they are and what they’re about.

AUTOMOTIVE

American Wallets Breathe Sigh of Relief

As inflation takes a chill pill, Americans are finally finding some relief from sky-high prices. However, dealers are still facing hurdles. Here’s what we took away from this week’s report by John Ellis and the Automotive Advisor Team:

📊 Taming Inflation —

• Inflation takes a downward turn, settling at 3% in June.

• Easing gas, airfares, used cars, and groceries prices have contributed to the decline.

📊 The Economy and Retail Outlook —

• The unemployment rate fell to 3.6%, nearing a half-century low.

• There was a mild overall price increase of 0.2% from May to June.

• The average interest rate for a new vehicle increased to 6.58%. The average interest rate for a used vehicle jumped to 11.17%.

• The average loan amount for a new vehicle increased by $1,213 YOY but decreased by $1,590 YOY for a used vehicle.

📊 New Car Outlook —

• The pandemic-driven demand surge has catapulted average new vehicle costs by a staggering 24%, hitting nearly $48K in April.

• The Fed's aggressive interest rate hikes to combat inflation have resulted in typical new-car loan rates soaring to 7% and burdening buyers with a hefty monthly payment averaging $729.

📊 Used Car Outlook —

• People are buying but also holding onto their cars for longer.

• Used cars are selling slightly faster than pre-pandemic, with 60.3 days per vehicle versus 61.5 in 2019.

• The average used vehicle has aged an additional 23%, becoming 7.5 years old and carrying 13% more miles than in 2019 (68,671 vs 60,848).

📊 Wholesale Outlook —

• Wholesale sold prices have surged by 33% since 2019, while the average retail margin has seen a 4% rise compared to 2022.

• The wholesale market shows margin opportunities for dealers who quickly get their cars to the front line.

TOGETHER WITH STITCH FIX

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AUTOMOTIVE

News Math: Ford, Fiat, Alfa Romeo, Volvo, and Mercedes

🛻 + 🇨🇳 = 😠

US House committees probe Ford's $3.5B CATL partnership, citing China-dependence concerns and potential violations of EV tax credit rules. Some of Ford’s EVs may lose tax credit eligibility if the Treasury feels the automaker is too cozy with US rivals in Bejing.

🚙 = 🚙 = 🛑

Fiat Chrysler will try again to halt US sales of Mahindra's Roxor off-road vehicles claiming Mahindra copied Jeep design. The 6th US Circuit Court of Appeals has instructed a lower court to reconsider its previous decision. You know what they say: if it looks like a Jeep and quacks like a Jeep, it may be a Roxor. 🦆

🖥️ + 💯 = 😊

According to JD Power's Manufacturer Website Evaluation Study, Alfa Romeo and Ram top the rankings for the best automotive websites, while VW and Audi lag behind. Mostly the study notes that an appealing, easy-to-navigate website plays a part in bringing people into the showroom. 🌐

🐌 x 👩‍💻 = 🗓️

Volvo has delayed its flagship electric EX90 crossover until mid-2024 due to software challenges. While software complications have plagued several vehicle debuts, this one is with the company’s first attempt to incorporate standard lidar tech, so we assume the infotainment system is still fine and may include smell-o-vision any day now. 👃

🇩🇪 \ 🇨🇳 = 👍️

Mercedes-Benz will center its EV strategy on China from 2025, tailoring its models to meet local needs. Despite Germany's efforts to reduce its reliance on China, the country remains a crucial market for the automaker. Relying on China as a supplier and market are two different crutches, which is often how crutches work — in pairs.

TECHNOLOGY

Feelin’ It? Or, Dealin’ With It?

😎 Feelin' It. Modern cars are pushing boundaries, not with horsepower, but eco-chic. Rolls-Royce and Volvo are pioneering luxury sustainability with materials like bamboo fibers, recycled metals, and denim interiors.

Customers are embracing this green turn, with many lauding their vehicles' new, eco-luxe feel.

🙈 Dealin' With It. Dissatisfaction among drivers about infotainment systems is growing. According to JD Power's survey, many prefer Apple CarPlay and Android Auto to built-in systems thanks to more intuitive, user-friendly interfaces.

Interestingly, Google-built native systems buck the trend, gaining user approval, but that seems like Android with branded colors.

Quick Hits

• Twitter nixes the bird logo and rebrands with a single X. 🐦❌

• Spotify prices jump as much as $2. 🎶💸

• Barbie breaks box office records for woman directors. 💁‍♀️🎬

History

• 306: Constantine I is proclaimed Roman emperor by his troops. Eventually, he would convert the empire to Christendom. 👑

• 1959: A hovercraft crosses the English Channel. 🇬🇧

• 1978: First "Test Tube Baby" is born to Lesley Brown in the UK. 🧪

#466