TOGETHER WITH:
Howdy, Fam!
Last Saturday, Brattleboro Subaru in Vermont turned its parking lot into a Halloween wonderland. The fourth annual Trunk or Treat, hosted by the Brattleboro Reformer, packed the lot with about 17 decorated trunks, local first responders and a record crowd of superheroes, ghosts and pint-sized monsters.
They also went through 240 cider doughnuts in no time flat.
Photo Credit: KRISTOPHER RADDER — REFORMER
That’s a dealership doing what dealerships do best: giving the town a place to show up. If your store is hosting one this weekend, order extra doughnuts.
In today’s email...
Q3 earnings from Ford, Stellantis, Carvana and Aston Martin, plus the Fed’s pause
Used markdowns climb to 47% as aged inventory piles up
GM’s Nasdaq promise, China’s slump and LiveWire’s reset
Keep Pushing Back,
—Chris with Paul, Kyle & Kristi
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Ford, Stellantis, Carvana and Aston Martin all reported third-quarter results this week.
Here’s the scorecard:
Company | Q3 headline | Why dealers should care |
|---|---|---|
Core profit up slightly to $2.7 billion; full-year guidance floor raised $500 million to $10.5 billion | F-150 supply is held at 55-60 days against the typical 80-100, while commodity costs climb to nearly $2.5 billion from about $2 billion | |
Adjusted operating income up 184% to €256 million; stock up 13% | It reaffirmed its target of positive free cash flow in 2027 | |
Net income up 84% to $483 million; a record 217,385 retail units | It now owns seven CDJR franchises and targets 3 million units a year by 2030-2035 | |
Revenue up 36% to £389 million; pretax loss narrowed to £77 million from £112 million | Valhalla deliveries lifted margins while core volumes fell 9% |
What does the Fed’s pause mean for the F&I office?
The Fed held its benchmark rate at 3.75% to 4% on Wednesday, after raising it in September, and another quarter-point hike is possible at its Dec. 9 meeting. According to Edmunds, the average new-vehicle loan rate has climbed to 7.3% since September, with payments near $797, and used rates sit near 11%.
Edmunds’ Ivan Drury expects automakers to subsidize new-vehicle rates through year-end, but that support rarely reaches weaker-credit or used-vehicle buyers.
Ask your captive about Q4 rate support now, before December’s Fed meeting.
Leave ACW With a Better Buy Strategy
More used EVs are coming back into the market, and dealers are going to have to get much better at knowing what to buy, what to pay, and how fast they can move it.
Jimmy Douglas has lived inside that problem for years. He led used-vehicle remarketing at Tesla, then founded Plug to help dealers, lenders, fleets, and automakers value and move used electric inventory with better data.
At ASOTU CON West, Jimmy is getting into what dealers need to watch as off-lease volume grows, values move, and more of these cars hit the wholesale and retail market.
Used vehicles sold with a markdown rose six points to 47% in Q3.
Lotlinx’s Q3 Vincensus Report shows inventory piling up faster than it’s selling:
Aged used inventory: 50%, up four points
New-vehicle day supply: 62 days, five above last year
Price gap: In-stock new vehicles list for nearly $4,000 more than the ones that sold, up from about $2,300 in Q2
Stellantis: Its brands hold the four highest day supplies, led by Dodge at 135, and account for 13% of new inventory against 6% of sales
The exception: Used EVs hit a record 3.3% of used sales in September, and their days’ supply fell to 35, 11 days below gas vehicles, according to Cox Automotive
Higher rates make the pressure worse. Chris Singleton, managing partner of Mike Terry Chevrolet in Refugio, Texas, told Automotive News that a $20,000 car that once carried a $400 payment now carries $450, and he suggests lowering average used-inventory prices by $3,000 to $5,000.
Pull your oldest 10 used units today and decide which ones to price for a fast turn.
GM’s move to Nasdaq is a promise to act like a tech company.
GM begins trading on Nasdaq on Nov. 17. On yesterday’s show, Paul and Kyle split on what it means.
Kyle’s take: It’s “say before you do.” GM is still a cyclical, capital-intensive automaker.
Paul’s take: It gives GM a filter to lead by, as long as it follows through, starting with not dropping tech partners like Apple CarPlay.
China’s car sales fell 22% at home as exports head toward 12 million.
China can build about 63 million vehicles a year, more than triple what its buyers will purchase this year.
BYD now has 1.02 million workers, and its overseas sales are up 92.7% to 1.34 million through September.
Honda is urging the U.S., Canada and Mexico to coordinate restrictions while it works to cut costs.
“We’re not going to be able to keep them out forever.” Jennifer Thomas, American Honda
Harley-Davidson’s LiveWire has shipped 358 bikes after forecasting 100,000 a year.
The electric spinoff named a chief restructuring officer after its CEO resigned, with losses now past $300 million. Paul’s diagnosis on yesterday’s show: it was marketed like a Harley when it needed to become “niche cool” first.
🎙️ Coming Tuesday on Auto Collabs: Jack Hollis
Jack Hollis, former EVP and COO of Toyota Motor North America and now managing partner at Accrual Equity Partners, joins us Tuesday, Nov. 3.
Subscribe to Auto Collabs wherever you listen so both land in your feed. Want to meet Jack in person? He’s one of our keynotes at ASOTU CON West on Nov. 18 in LA.
Black Tuesday (1929): The stock market crashes, helping set off the Great Depression.
The first internet message (1969): A UCLA computer sends the first message over ARPANET to the Stanford Research Institute.
Back to orbit (1998): John Glenn, 77, returns to space aboard the shuttle Discovery.
Thanks for reading, Friend! Send us a picture of your spooky decorations and we will tell you how awesome they are.
