In the news release, Penske Automotive Group and Cox Automotive Debut Automated Platform for Retailing Used Vehicles, issued 22-Jul-2021 by Penske Automotive Group, Inc. over PR Newswire, in the first sentence of the second paragraph, Cox Automotive’s technology should be “Esntial Commerce” and not “Essential Commerce”, as originally issued inadvertantly by PR Newswire.
Penske Automotive Group and Cox Automotive Debut Automated Platform for Retailing Used Vehicles
Digital Platform Enables Consumers to Transact 100% Online
BLOOMFIELD HILLS, Mich. and ATLANTA, July 22, 2021 /PRNewswire/ — Penske Automotive Group, Inc., (NYSE:PAG) and Cox Automotive, Inc. (“CAI”), announced today they have jointly developed a transformational, fully automated technology platform to enable the online retail sale of used vehicles. The automated online buying platform, which is owned exclusively by Cox Automotive,allows consumers to select from high-quality, preowned vehicles through PAG’s U.S. CarShop used vehicle SuperCenters and franchised dealerships.
Cox Automotive’s patent-pending artificial intelligence retail technology, Esntial Commerce™, powers CarShop’s U.S. digital platform to provide consumers with an automated,100% online vehicle purchase. Features include personalized monthly payments across all inventories, trade-in capabilities, application, approval for financing, digital contracting, and digital signatures.
Esntial Commerce offers payment personalization based on the consumer’s risk profile, selected vehicle, and preferred deal structure using an AI/machine learning algorithm. Offering actual financing and the ability to immediately transact online allows consumers to move forward confidently, knowing their financing has been approved.
This industry-first scalable eCommerce platform and its artificial intelligence enable automation for retail operations so that consumers can:
Instantly compare up to four vehicles
Receive personalized payments for the consumer’s selected vehicles based on each consumer’s credit profile, including payments for taxes, titling, and other fees
Select their payment terms based on credit profile
Add aftermarket protection products
Determine trade-in value
Receive approval for financing
Complete and sign deal paperwork online
Make any required down payment
Arrange for delivery directly to the consumer’s preferred location, either at home or one of CarShop’s U.S. locations
CarShop is the first retailer in-market with Cox Automotive’s industry-leading solution. Penske Automotive Group Chair Roger Penske said, “Over the last year the PAG and CAI teams have collaborated on this unparalleled technology that delivers a completely digital solution to the marketplace. This new digital platform meets the digital-first demands of today’s customer while providing us with the opportunity to offer our customers 100% online functionality.”
“Penske’s CarShop powered by Cox Automotive Esntial Commerce delivers personalization, F&I automation, and a seamless closing of the transaction when buying a vehicle online,” said Steve Rowley, President, Cox Automotive. “No one has delivered an automotive eCommerce solution that can scale to support the industry’s transformation for retailers and for consumers – until now. As our solution matures, we expect it to drive both consumer satisfaction and profitability.”
PAG has launched this fully functioning digital platform in select markets through its CarShop used vehicle SuperCenters at www.carshop.com. Cox Automotive continues to focus on development to further enhance the user experience, operational efficiencies, market
LOS ANGELES — HAAH Automotive Holdings is ending its seven-year effort to import Chinese vehicles and distribute them through a dedicated U.S. dealership network, CEO Duke Hale told Automotive News.
Hale cited tense U.S.-China relations that scared off potential investors.
The Irvine, Calif., startup will file for bankruptcy Monday after a conference call with prospective dealers, who have paid nonrefundable deposits from $100,000 to several hundred thousand dollars for franchise points in the U.S., Hale said.
“We don’t see a way forward right now for Vantas and T-GO,” Hale said of the two U.S. brands created to sell vehicles from China’s Chery Automobile Co. “There’s going to be no cars, there’s going to be no parts, there’s going to be no revenue,” Hale said of the bankruptcy filing.
Although he said in a previous interview that HAAH would file for bankruptcy on Monday, Hale would not confirm that the filing had been made when asked on Tuesday. “Our attorney has asked that I not comment further,” Hale said in a text message to Automotive News. An electronic search for the bankruptcy filing did not turn up any results as of Tuesday afternoon.
HAAH pulled the plug after the investors it needed to move forward became increasingly risk averse because of tensions in U.S.-China trade relations, stiff auto tariffs and negative U.S. public sentiment toward China’s role in the coronavirus pandemic, Hale said.
Hale said that half a dozen investors had expressed interest in the HAAH plan with Chery, which is a major Chinese automaker and top exporter. But in recent months, that interest dried up. And HAAH’s previous confidence in raising the needed money dried up as well.
“All of the big investors moved away from the deal because of U.S.-China relations,” Hale said. “They do not see it as the right place to invest. Even though I didn’t want to hear it from the investors, it wasn’t hard to understand.”
He did not identify the investors.
“These were major Wall Street private equity types of investors,” Hale said. “These were the big money guys.
“I don’t have total insight into their decision, but basically the response is that China-U.S. relations are not very good, not very stable and really haven’t gotten better under President Biden,” Hale said. “Americans aren’t very fond of where they believe COVID came from.”
In an industry first, by integrating the data, products, services and technology across its portfolio, the Group will connect car maker, financiers, dealer and consumer in the most efficient way possible. An essential component is connecting finance data, the core thread of new and used vehicle sales. Seamlessly integrating this will unlock the barriers to offering a complete ‘omnichannel’ customer experience – blending physical showrooms and the virtual world – from first sale, through aftersales and re-sale.
The commercial gains on offer are vast. Based on the 77 million new cars sold globally in 2020, with a value of $2.5 trillion**, a 1% shift in ecommerce sales would equate to $25 billion in revenue. And that’s without factoring in the potential of global used car sales – the forecast for Europe in 2025 alone is €357 billion*.
The Automotive Transformation Group is also looking to help its customers to improve their profitability. By leveraging its products and services to cut transaction times and reduce sales process costs, the industry could generate an additional £2.2 billion per year in global profitability based on an extra £142 per new vehicle sale.***
The new Group already handles one transaction every 3.5 minutes ($4.25 billion annually) and has an unrivalled experience and operational scale in the industry. The company serves more than 20 car manufacturers in over 10,000 locations across 96 countries.
Commenting on the launch of the Automotive Transformation Group, Chairman David Riemenschneider said: “The digitalisation of the sales process is advancing at an unrelenting pace. The Automotive market, which is one of the largest in the world, has lagged other sectors in terms of the speed of transition to online sales, but that is changing rapidly. Until now, the cost and complexity of integrating each element of an online and offline experience into a brand consistent omnichannel one, has prevented it being delivered at scale. The Automotive Transformation Group aims to change that. By joining up the dots we will enable car manufacturers, financiers and retailers to unlock the huge potential and efficiencies in today’s sales process and overall value chain. And now is the time to act.”
CEO Christian Erlandson added, “Since we announced the merger between Autofutura and GForces, we have been engaged in strategic discussions with some of the biggest players in the industry. This demonstrates just how dynamic the automotive industry is and how fast it is shifting towards digitalisation. We offer something truly unique. By connecting vehicles and consumers, serving the right offer, at the right time, to the right customer and then facilitating the seamless transition from one vehicle to another, we are streamlining the customer journey, right from the first transaction. We believe the companies which we support will not just have happier, longer standing customers, they will also be even more successful as a result of the substantial efficiencies they have achieved.”
*, **Car sales and forecast data (Frost & Sullivan, May 2021)
***Calculations based on Automotive Transformation Group proprietary UK
U.S. fleet sales were up by 5% for January – June, compared to the same period last year, but were 40.5% lower than for the same period in 2019, according to Cox Automotive.
New light vehicle inventory fell from an estimated 2.7 million vehicles nationwide in January to 1.4 million in June.
IHS Markit estimates that semiconductor capacity will begin to have the ability to adequately meet demand and fill missing backlog starting in the first quarter of 2022.
Ford will cut production at eight North American plants over various weeks in July and August as a result of the chip shortage; the automaker has lost production of over 350,000 vehicles this year, according to estimates from LMC Automotive.
Toyota’s second quarter sales volume surpassed GM’s for the first time in the U.S. The achievement is described as a short-term event attributed to Toyota’s decision to build a four-month supply of key components such as semiconductors.
A COVID-19 Task Force comprised of the UAW, Ford, General Motors and Stellantis announcedmask requirements ended July 12 for fully vaccinated union-represented workers in the U.S.
A new report from cybersecurity ratings provider Black Kite found that nearly half of 100 automakers and over 17% of suppliers surveyed are at high risk for ransomware attack. Key areas of vulnerability include patch management, with 71% of surveyed companies having “F” or “poor” ratings.
Electric vehicles and low emissions technology:
Stellantiswill investover 30 billion euros through 2025 in electrification and software, and low emissions vehicles are intended to represent over 70% of sales in Europe and 40% of sales in the U.S. by the end of the decade.
According to estimates from the Department of Energy, the U.S. will need 600,000 Level 2 public chargers by 2030 to meet demand, up from the 41,000 available currently. Tesla, EVgo, Chargepoint and Electrify America are among the companies offering Level 3, or DC Fast Charging.
As part of its new Alliance Strategic Partner framework, Nissanwill compensate a portion of its suppliers’ costs if a jointly developed EV part is not adopted; the decision is intended to strengthen collaborative relationships and share cost burdens.
Market Trends and Regulatory
U.S. new light vehicle sales in June reached 1.3 million units, for a seasonally adjusted annualized rate of sales of 15.4 million units. June’s results fell short of expectations for a SAAR of 15.8 million to 16.4 million units. Total sales in June were up
Widespread inflation has led to the highest raw material cost per U.S. vehicle since 2011, a new Bank of America (BAC) Global Research report found.
The report examines the recent bout of US inflation and examines its consequences for the automotive industry.
One key takeaway from the report is that the cost of raw materials has risen sharply since mid-2020. “In the past year, the raw material cost in an average U.S. vehicle has been steadily rising, increasing ~87% from a low point of approximately $2,200/unit in Apr ’20 to now roughly $4,125/unit in May ’21,” the report found. “During this raw material cost inflation, average transaction prices seem to have stalled, although [they] still remain elevated at record high levels.”
The compressing spread between rising raw material prices and stagnating average transaction prices is expected to increase pressure on automakers and suppliers’ respective financial bottom lines.
The average vehicle is composed of 39% steel and 11% aluminum. The increase in raw materials cost has been concentrated heavily in high steel prices; the Bank of America report estimated that the average cost per pound for steel used in automotive manufacturing has increased 106% year over year as of last month. This is “relatively alarming,” according to the report, given the high makeup of steel in the average vehicle.
Suppliers and original equipment managers (OEMs) are expected to bear the brunt of rising material costs, with the latter facing even greater exposure to indirect costs from the former.
Rising inflation costs, plus pre-existing damage to supply chains caused by the pandemic present problems for both groups. “The automotive value chain is already facing significant headwinds from supply chain disruptions and production stoppages,” the report noted, “which continue to pressure margins in addition to rising raw material costs.”
The costs of raw materials have risen so greatly that they now make up a significantly larger percentage of the price of a vehicle. “The cost of raw materials in an average vehicle as a % of the average transaction price (ATP) in the U.S. reached historical lows around 6% (5.9% in April ’20) at the beginning of the COVID-19 pandemic, driven by historically low raw material costs and all-time high average transaction prices,” the report found. “However, this cost ratio has since increased, now reaching ~11%, as commodity prices have bounced materially off of lows and ATPs have remained near peak levels.”
By the end of spring, raw material costs had approached post-2000 historical levels, while average transaction prices remained essentially unchanged, posing “significant headwind for companies at the front end of the value chain,” according to the report.
A new survey conducted last month by Automotive News about the global chip shortage finds that almost everyone in the auto industry thinks it’s a big problem.
Today, according to the survey, 53 percent of respondents said they source their chips from outside the U.S., and 55 percent are looking for alternative chip sources outside the country.
Changes are happening, of course, from temporary production pauses and a shift to models that are either in high demand or require fewer chips.
The auto industry is fully aware just how bad the current chip shortage is. Anecdotally, this has been clear for a while. Ford CEO Jim Farley, for example, recently said that the chip shortage is “perhaps the greatest supply shock” he’s ever seen. Automotive News used that quote in a new survey of automakers and suppliers called Examining the Global Chip Shortage, which gives us plenty of survey data to back up the feeling that this is a big, big deal.
Perhaps the most surprising number in the survey is that only—yes, only—93 percent of respondents said that they think the chip shortage will have a severe impact on the auto industry. The survey was conducted a month ago, before recent estimates put the shortage’s impact on the auto industry at $110 billion in lost revenue this year. But even in January, the estimates were around $50 billion, which apparently wasn’t severe enough for 7 percent of respondents.
There’s also the feeling that the chip shortage will stretch out for most of the rest of the year. Almost three-quarters of respondents, 72 percent, said they expect the chip shortage crisis to impact the industry for at least six months.
Just a reminder that the shortage of the chips, used in cars, computers, and other products, was caused by worldwide demand for electronic goods that intensified because of the coronavirus pandemic, along with inadequate planning in the supply chain and weather problems. As the New York Timespointed out, a new vehicle can have up to 100 of these semiconductor chips on board; they’re used (and needed) in components from touchscreens to transmissions.
While there have been efforts to start making more semiconductors in the U.S., newly proposed plants will take time to build and start producing chips. The survey provides us with some insight into where automakers and suppliers are getting their chips now: 53 percent get them from outside the U.S. today and 55 percent are looking to source chips from outside the U.S. in the future. Forty-eight percent said they’d rather buy chips from domestic suppliers.
Survey respondents were somewhat uncertain about which segments of the industry will be most impacted by the shortage. Half (49 percent) said it will be the automakers, while 30 percent believe dealers and retailers will be hardest hit, and 23 percent said it will be the suppliers.
If there are bright spots to be found in the numbers, they lie in the way the industry is adapting to the situation.
Mercedes-Benz owner Daimler is stepping up the pace of its transition to electric mobility and plans to largely eliminate internal combustion engines before the end of the decade.
“We are switching from EV first to EV only,” a high ranking executive familiar with the plan told Automobilwoche, a sister publication of Automotive News Europe.
This means that every model series will have a full-electric version, while production, sales and structures will be switched to a business without diesel and gasoline engines.
Plug-in hybrids could also cease to play a role after 2030, Automobilwoche reported.
However, there will initially be no firm date for dropping combustion engine cars because they will be in demand after 2030 in some markets, depending on the charging infrastructure, Automobilwoche said.
Daimler CEO Ola Kallenius plans to present details of the plan at a strategy day on July 22, sources told Automobilwoche.
The automaker is expected to announce plans to introduce new platforms for additional electric models as well as its own software operating system in 2024.
Previously, Daimler had said it only expected plug-in hybrids or purely electric vehicles to account for more than 50 percent of passenger car sales by the end of the decade.
Daimler declined to comment when contacted by Automotive News Europe.
The move to all-electric would put Mercedes on a par with other automakers that are shifting to electric-only sales, especially in Europe where tougher CO2 emissions limits are expected to make combustion engine cars unviable.
Opel CEO Michael Lohscheller said during parent Stellantis’s electrification strategy update on Thursday that the automaker will become a pure electric brand in Europe by 2028.
Audi said last month that it will phase out production of combustion engines by early next decade except in China.
The Jaguar brand has said will become all-electric starting in 2025. Volvo and Bentley have said they expect to be electric-only brands by 2030. Ford has said it will only sell full-electric cars in Europe by 2030.
BMW has a more cautious approach. It says it expects half of its sales to be full-electric models by 2030.
Volkswagen brand plans to stop selling combustion engines cars in Europe by 2035 as it shifts to full-electric vehicles, but later in the U.S. and China.
Parker is a mother, too, and sees the chance to create change for her two daughters and other women coming up through the professional world.
“I think the Petersen is visionary in what they’re doing and driving toward reaching parity in the automotive industry,” Parker says. “There are a lot of women out there who are creative, innovative, smart, and scrappy and have everything they need to make huge contributions except for financial backing. Only two percent of all venture capital goes to women-owned businesses, so there is a gap. It was nudging up slightly, and in 2020 it dropped and started heading the wrong direction, partly because women took the brunt of the home-based challenges.”
The committee is accepting applications until July 31, and includes not just the financial backing and mentorship but an office inside the Petersen and access to all the contacts and resources the Petersen has to offer. Applicants can own a business that touches automotive in wide ways, like aftermarket vehicle accessories, driving-related apparel, transport and delivery. Potential mentees must be a southern California-based company for 2021, although Lassek says they hope to grow the program nationwide.
“Having access to those who have paved the path and are further along is really remarkably valuable,” Parker says. “This is a game changer.”
Got a tip? Send the writer a note: email@example.com
PARIS — France is resisting the European Union effectively phasing out combustion-engine car sales by 2035, advocating for a more lenient target for the end of the decade and a longer leash for plug-in hybrid models.
The French government backs a target to reduce emissions from cars 55 percent by 2030 from 2021 levels and for hybrids to remain on the market for longer, an official in President Emmanuel Macron’s office said.
The European Commission is expected to unveil on Wednesday plans to require emissions to fall by 65 percent from 2030 and drop to zero from 2035.
The French official, who asked not to be identified, commented after Macron met with top executives at auto companies including Stellantis and Renault, suppliers Valeo, Faurecia and Plastic Omnium, as well as labor representatives to discuss the transition to electric vehicles.
German Transport Minister Andreas Scheuer also warned the commission against setting too strict targets for the auto industry.
“I believe that all car and truck manufacturers are aware that stricter specifications are coming. But they have to be technically feasible,” he told the German press agency DPA.
Scheuer said he supported the shift to battery-powered drivetrains for passenger cars as fossil fuel combustion engines are phased out. For heavy trucks “there needs to be more focus on hydrogen,” he said.
The French and German positions could signal a battle is brewing within the EU over new climate targets and how they will affect the auto industry.
The effective ban on combustion engines by 2035 is part of an ambitious plan to align the region’s economy with more aggressive climate targets. It would also mean a faster phasing-out of hybrids than some executives and labor officials expected.
The new EU emission targets would be significantly stricter than existing fleet-wide goals requiring a 37.5 percent emissions reduction by 2030. While the auto industry has been bracing for tougher rules, the meeting with Macron was part of an effort to gain support for a slower phasing out of combustion engines.
La Plateforme Automobile, or PFA, France’s main lobby group for the industry, estimates 17.5 billion euros ($21 billion) in investment is needed in the country by the middle of the decade to develop batteries, charging stations, hydrogen and related services.
The phasing out of combustion engines could lead to a loss of roughly 100,000 auto jobs in France through 2035 and the shutdown of manufacturing sites, according to a PFA presentation. The industry directly employs about 190,000 people currently.
Production of electric and fuel cell vehicles is less labor-intensive compared with hybrids and those with diesel or gasoline engines, the PFA said. France lags countries including Germany, Japan and the U.S. in terms of the number of robots used by the auto industry, and French workers are more expensive than their counterparts in eastern and southern European countries.
The Japanese arm of Joyson Safety Systems, a United States-based automotive safety component maker, found 1,000 cases of data falsification when it came to Takata’s seatbelt tests, Reuters reports.
This investigation began back in October of 2020, and the results are conclusive: plants in Hikone, Japan and in the Philippines were found to have falsified test data on belt webbing for adult seatbelts and child safety seats. This webbing is the core of the belt’s strength, so it’s crucial that these elements are in top condition.
Unfortunately, the plants in question doctored data in order to meet client standards. It does not appear that these elements compromised safety, and there are currently no recalls issued for the belts at the moment. That said, Hisayoshi Iwamitsum president of JSS Japan, said JSS Japan submitted an investigation report to Japan’s transport ministry on Friday.
Here’s a little more from the Reuters story:
As part of preventive measures, the company introduced an electronic system in March that would prevent data from being falsified, and is working on expanding human resources for quality management, he added.
The investigation also showed that data had been falsified at Hikone plant over a two-decade period until Jan. 2020, overlapping with when Takata was embroiled in airbag scandals.
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Yes, having both seatbelt and airbag issues is not great. That doesn’t lend a lot of confidence to your company—but at the very least, the seatbelt issue doesn’t seem to be anywhere near as devastating as the airbag one, in part because the safety of the belts were confirmed by other tests.
If you’ve forgotten, about 67 million Takata air bags were recalled for potentially causing harm to drivers involved in accidents. Airbags exposed to high heat or humidity were prone to failing.