#722 - 🚗 Mid-Year Musings

TOGETHER WITH

Thursday already, huh?

Today, we’ve got some big moves by VW, a mid-year market update, and some delightful first days from the Carter Myers Automotive folks.

What’s your most memorable first day on the job?

Keep Pushing Back
-Paul, Kyle, Chris & Kristi

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BUSINESS

Take A Look: VW+Rivian, SK Fire, and Delorian EV

There was a time when Rivian was like NASCAR; most people were only watching for the eventual crash. (Not us, no way. We watch for all those expertly executed left turns)

However, a few strong investments and strategic partnerships can really make (or break) a company.

Do you think Rivian will rise to the level of BYD and Tesla with this massive VW investment?

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Volkswagen and Rivian: A $5 Billion EV Affair

Volkswagen is making a substantial investment in Rivian, with an initial $1 billion and an additional $4 billion to follow. This joint venture aims to integrate Rivian's cutting-edge EV technology into VW's extensive lineup, promising exciting developments for both companies.

• Investment Breakdown: Initial $1 billion investment with an additional $4 billion over time.

• Joint Venture: Co-owned by Rivian and VW Group.

• Rivian R2 Launch: Targeted for 2026, priced at $45,000.

• Technology Integration: Rivian's zonal architecture and software to be utilized across VW's brands.

• Market Expansion: VW's global reach to help Rivian's technology reach a broader audience.

As electrification ramps up, partnerships like this highlight the importance of collaboration. Rivian’s innovative technology and VW’s extensive market reach could become an untamable force in the EV market.

However, with the cooling demand for EVs and ongoing software challenges, both will need all their talent and maybe some luck to make it count.

Battery Blaze: South Korea's Industrial Tragedy

A fire at Aricell's lithium battery factory in Hwaseong, South Korea, killed 23 people. The plant has been shut down for inspection as authorities investigate safety violations.

The fire quickly spread due to stored lithium batteries. This draws a circle around the need for updated safety practices as batteries become more common in the industry.

Aricell faces scrutiny over its safety measures and employing foreign workers without adequate training.

It’s never easy to talk about the loss of life; we only hope this tragedy is a wake-up call to those sleeping on the danger of not respecting these materials properly.

Back to the Future: DeLorean's EV Revival

Electrogenic has introduced a "plug and play" EV conversion kit for the classic DeLorean DMC-12. So if you have an extra DeLorean lying around, you can use the kit to transition it from the standard flux capacitor to a battery.

• Battery Power: 43 kWh

• Performance: 160 kW, 229 lb-ft torque, 0-60 mph in under 5 seconds

• Tech Upgrades: Regenerative braking, virtual dashboard

• Range: 150+ miles per full charge.

Enough for a trip to the past, but you’ll have to take the long way back to the future.

TOGETHER WITH CONGRUENT

Feel The Flow

Everyone knows good design attracts more attention. It gets consumers feeling the vibe and even makes your team stand a little taller.

So when Tom Gill Chevrolet wanted to get consumers buzzing on EVs, the savvy design team at Congruent spun up icons, landing pages, ads, and more that had everyone feeling the flow.

Congruent is the creative marketing agency founded by Paul J Daly who can make your brand look so good, everyone feels the jolt.

They’re not just another pretty face either, Congruent has deep ties and understanding of Dealership operations from front to back.

If your drab design has you feeling depleted, check out some of their work or just say ‘hi’.

BUSINESS CONT’D

Extra: Cox Data, Cup holders, and CarMax

Cox’s Mid-Year Market Musings: Slowing but Steady

Cox Automotive's mid-year review says we’re sitting in a slowing economy and new vehicle supply is stabilizing. Check out this detailed forecast for the remainder of 2024.

Gimme the deets:

• GDP Growth: Expected to be 2.1% for Q2 2024.

• Employment: Unemployment at 4.0% in May 2024.

• Consumer Sentiment: Dipped to 65.6 in June 2024.

• Auto Finance: Average new auto loan rate increased to 10.01%.

• New Vehicle Sales: Forecasted at 15.7 million for 2024, with a 2.9% rise in H1 2024.

• Dealer Sentiment: Mixed feelings about the economy and vehicle market, with rising uncertainty due to upcoming elections.

Election Jitters: Auto Industry on Hold

Cox Automotive's report suggests the uncertainty in the US auto industry due to the upcoming presidential election. While new vehicle sales in H1 2024 rose by 2.9%, consumers are hesitant to make large purchases amid economic unpredictability. Inflation remains a top concern for both consumers and dealers.

Why the worry?

• Economic Uncertainty: Upcoming presidential election affecting consumer confidence.

• Inflation Worries: Top concern for 74% of consumers and 81% of dealers.

• Consumer Hesitation: Many are waiting for potential post-election changes in interest rates and economic conditions.

Broader Implications

The automotive industry faces a complex landscape with mixed economic signals and significant political uncertainty. As the market adapts to these challenges, dealers and consumers must navigate this evolving environment cautiously.

King of Cups: Mercedes eSprinter

Thirsty? The new Mercedes eSprinter cargo van has a staggering ten cupholders for two seats, breaking records with five cupholders per passenger. This electric van, designed for practicality and convenience, showcases the automaker's attention to detail in enhancing user experience.

CarMax: Sales Dip, but Margins are Strong

CarMax's data is sometimes a microcosm of the industry so when they drop their reports, we give em' a look.

• Retail Used Unit Sales: Down 3.1%

• Comparable Store Sales: Down 3.8%

• Wholesale Units: Down 8.3%

• Gross Profit per Retail Used Unit: $2,347

• Gross Profit per Wholesale Unit: $1,064 (a record high)

• Vehicles Sourced from Dealers: 35,000 (again, a record high)

• CarMax Auto Finance Income: Up 7%

What does it mean for the rest of us?

• Strong Margins: Despite sales declines, profit margins per unit remain robust.

• Operational Resilience: Increased sourcing and finance income demonstrate effective management.

• Market Position: CarMax maintains strong profitability and strategic sourcing amid challenging market conditions. 

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You can tell a lot about a person by what they have in their car. Trunk, floorboard, cup holder. Time to confess:

AROUND THE ASOTU-VERSE

MORE THAN CARS MOMENTS

Welcome Home, New Techs!

Our friends at Carter Myers Automotive recently honored their new apprentice technicians with celebratory signing ceremonies akin to college athlete recruiting events.

These events, attended by over 100 people, including family, friends, and local officials, highlight the benefits of trade careers. By partnering with high schools, Carter Myers aims to elevate the profile of auto repair careers, offering apprentices tools and dealership gear.

This initiative celebrates the students' choice of a lucrative, debt-free career and addresses the nationwide shortage of technicians.

Talent acquisition specialist Beth Lucchesi spoke on the importance of these ceremonies in promoting vocational education and changing the perception of trade careers. "We want our students to feel just as celebrated and excited as any college-bound athlete. These ceremonies help show that a career in the trades is valuable and rewarding, and we're here to support them every step of the way," she said.

/More Than Cars Moments

We want to help you show the world who dealers really are.

Share your stories of your team going above and beyond for your customers, serving your community, or achieving the success of your people, and we will share your stories here.

Encourage the community while shining more light on the good things happening in dealerships every day!

Quick Hits

• Scientists made a robot that can smile using human skin cells. We are too weirded out to read anymore. 😃 

• Another monolith appeared and has been removed from the mountains near Las Vegas. It isn’t clear who is setting them up or why. Our bet is that Banksy cat. 🎨 

• They’re making a Harry Potter HBO show. Some details are available. 🪄 

• Walmart is replacing its price stage with digital signs. But says it won’t use the tech to participate in surge pricing. 🤑 

History

• 1898: The first solo circumnavigation of the globe is completed by Joshua Slocum from Briar Island, Nova Scotia. ⛵️ 

• 1950: The United States decides to send troops to fight in the Korean War. 🇰🇷 

• 1985: Route 66 is decertified. 🌵 

Thanks for reading, friend! We’re excited to hear your personal stories of thriving despite this CDK Outage. The best stories are about the challenges we’ve overcome. No pirate tells stories about easy seas.