New VW Brand to the US, Super Cheap Lease, Vroom Wound Down

March 22, 2024
It’s the fourth Friday in March with one still to go as we talk about a new EV brand entering the US market. We also discuss the surprising cheapest lease in America right now, as well as a smooth stop for online retailer Vroom. 
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There’s going to be yet another new EV brand in town as Volkswagen Group's sporty, electric vehicle-focused Cupra brand is set to enter the U.S. by the end of the decade, debuting with two utility vehicles and leveraging VW Group's Mexican assembly plants for production.some text

  • Cupra plans to introduce an electric Formentor crossover and a larger, unnamed electric crossover SUV to the U.S., using a new distribution model the company didn’t articulate
  • In 2023, Cupra's sales surged by 51%, with Germany as its largest market, yet it eyes the U.S. for a bigger global footprint.
  • Focused on "young, progressive customers," Cupra will target selected states, especially on the East and West coasts and the Sun Belt, using a novel distribution model.
  • Current vehicles include the Tavascan, Born, Formentor, Leon, Leon Sportstourer, and Ateca
  • Cupra CEO Wayne Griffiths, emphasized readiness and market fit for their U.S. venture saying"We know it's always been a matter of being well prepared and doing it right if you go to the U.S.

Hyundai's Ioniq 6 SE is now America's cheapest lease deal, offering a no-money-down lease for just $239 per month for 12k miles per yearsome text

  • Hyundai has rolled out an unadvertised lease offer to dealers for the 2024 Ioniq 6 SE, making it available until April 1, 2024.
  • Comparatively, the Ioniq 6 SE's effective cost of $249 a month undercuts the lease cost of vehicles like the 2024 Toyota Corolla LE in Southern California by over $100 monthly.
  • While the offer applies to a 24-month lease with a 12,000-mile annual limit, it requires only the first month’s payment upfront
  • Cost of ownership may still have a few surprises for lessees as lessees as insurance costs for Ionic 6 might be higher than expected

It looks like our friends at Vroom are coasting to a stop as they navigate the final lap of their ecommerce operations. Vroom's journey through the used-car retail market is drawing to a close, with the company anticipating a complete wind down by the end of Q1.some text

  • Vroom has successfully sold off nearly all its used vehicle inventory as part of its strategy to wind down ecommerce operations and exit the used-car retail sector.
  • Following the sell-off, Vroom has cleared its floorplan facility debt with Ally, boasting about $94 million in cash reserves as of February's end.
  • The company is reducing its workforce to align with its scaled-down activities.
  • CEO Tom Shortt expressed pride in the team's professionalism during this transition, focusing on an efficient and cost-effective wind-down process. Vroom now aims to leverage its remaining entities, United Auto Credit and CarStory, to enhance stakeholder value.

Paul J Daly: 0:00

Got it is the fourth Friday in March, and they're still want to go. It's the best part of this. Today we're talking about a new VW brand to the US. Yes. Another brand, super cheap lease and rooms wind down.

Kyle Mountsier: 0:33

The people really weren't super cheap lease.

Paul J Daly: 0:37

I liked that cheap lease.

Kyle Mountsier: 0:38

Like there's a good there's a commercial alongside that like we got a super cheap please would

Paul J Daly: 0:43

you please? cheaply? That's it. I can see it. I feel it. I mean, yeah,

Kyle Mountsier: 0:52

I can feel it. You know, we're always thinking we're always thinking like how you gonna create something, you know,

Paul J Daly: 0:57

always that that meme with Eddie Murphy who's like, yeah, so it's always it always is it kind of always relevant. It's one of those memes that will be fully timeless forever and ever. Hey, next week, we are premiering episode three of our more than cars Docu series, we have been talking about this. I don't think as much as we should have been. We shouldn't have been putting it all over social media. But it's time because there's so much going on. Right with the soda kind of thing. So next Wednesday. Is it Wednesday? I just said Wednesday, March 27

Kyle Mountsier: 1:29

pm Eastern, I believe?

Paul J Daly: 1:31

Yes. Correct. The best way to get to this is I mean, I know we have a LinkedIn event set up and if you don't follow us on LinkedIn, you show we put out a lot of fun stuff there a lot of great conversation. What is it upon more than more than

Kyle Mountsier: 1:45

Yeah, well, we have we'll have the episode and the link to the YouTube the link to the LinkedIn live all that. Or you can go to our website like we're putting it everywhere because

Paul J Daly: 1:56

okay, it's always fun to be part of the live stream because we're gonna have like usually a little guest little intro, we'll roll the episode. People are in the comments, having a good time. We'll be there in the comments, having a good time. And Episode Three is so much fun. We're at the West, her group, Buffalo, New York and we shot it it was a little warmer out so so

Kyle Mountsier: 2:14

Oh, and I were a little tan. You know, I

Paul J Daly: 2:17

was surprised at how nice it is in upstate New York. Right when we when we started the day off we went to we went to an amazing fair we were at a movie theater, we are in all kinds of dealerships. There's a little love story going on in there. So it's it's a lot of a lot of a lot of good people in dealership stuff going on there. So please join us for the premiere Wednesday, upcoming Wednesday on the 27th at 1pm. Eastern, and also can't gotta say soda cons coming 53 days away. We're releasing a lot of session sessions and speakers today. We locked a few more yesterday and we're excited like now comes the onslaught of all the reasons you need to come because we're talking about critical issues like expenses, affordability, EVS coming, how to get your culture right how to keep your salespeople that used to make a ton of money and now they make less because the market is what the market is all these important things that you're working through all great reasons to either come yourself or tell your dealer that you really shouldn't go so you can come back. You know, we'll give you a money back guarantee if you don't get at least the admission price. I mean, that's kind of him it's kind of impossible, because it's not a really expensive Vega. Alright talking about some news today. Let's do it. This is a fun one so like we don't have enough Evie brands but there's going to be yet another Evie brand in town as Volkswagen Group sporty electric vehicle first, Cooper I've never heard of this until I saw this article today is set to enter the US by the end of the decade the logo looks something like it's out of a Transformers movie. debuting with two utility vehicles leveraging VW is Mexican assembly plant for production. Cooper up plans to introduce the Formentor that sounds like a transformer and crossover and a larger unnamed electric crossover to the US with utilizing this is interesting a new distribution model that they're not specifying right now.

Kyle Mountsier: 4:06

If I'm an if I'm a VW dealer I'm like scow coupe bruh Yeah, distribution that you like yeah. I'll do it. Oh, there's a thing.

Paul J Daly: 4:18

I know I know. I have a feeling it's gonna be a regional distribution model that's just my guess. In 2023 their sales surged by 51% in Germany its largest market and now it's looking to expand it to a more global footprint with the US kind of leading that charge it's focused on quote young progressive customers so they're going to select target states to to like focus their advertising in here the vehicles current vehicles to have a scan born Formentor Lian Lian sports store, and the A Teca. So I mean, like they're going all in on like, let's just make it hard to understand. And yeah,

Kyle Mountsier: 4:58

like hard to even say what is the is even mean what is a Lyon? What is an Attica? Site though remember the old Aztec? It's

Paul J Daly: 5:07

nothing like that that's the trigger triggering moment. But if you go to their site the vehicles are actually really cool looking. They have looks like they partnered with like some younger influencers that have this Metaverse experience thing. So like, I don't know if they're like, a few years back or a few years ahead. I can't tell yet. But who knows? I don't know. But at least this is coming with, you know, a little momentum and a company behind it.

Kyle Mountsier: 5:33

Yeah, I mean, gotta check out the website because it is just kind of an inch. Like you wouldn't expect it's unexpected from an automaker. You know, whether or not it makes it all the way through to the end of the decade, like they're saying, we'll see. But I think it's like,

Paul J Daly: 5:50

it could be like a Scion could have a run like Scion did.

Kyle Mountsier: 5:54

That's, that's so cold blooded, though.

Paul J Daly: 5:56

Why? I was like, I

Kyle Mountsier: 5:58

don't have a good run kind of like sigh on I mean,

Paul J Daly: 6:01

a silent saying I had a great run. And then now it's just a history lesson. But yeah, is it See up Ra.

Kyle Mountsier: 6:10

Yes. CPRA. We'll check it out. Cooper official, right.

Paul J Daly: 6:15

Someone had confused with Cooper. Right. Oh, man. I don't know how we're going to transition can have

Kyle Mountsier: 6:22

a history lesson. Oh,

Paul J Daly: 6:24

I don't know what segue lesson. All right. If you had to guess what the cheapest lease in America right now is what would you guess Kyle? You can't guess because you probably saw the show notes. It's Hyundai's Ionic six S E. It's now America's cheapest lease offering a get this no money down. And 239 a month for a 12,000 mile a year lease on really slick EV. Right this is so they rolled out it's an unadvertised. The Steelers have gotten this kind of like memo bulletin that they can offer this. It's not in any advertising. And it's the 2024 ionic six s e available only until April 1. So you got a week to get it comparatively. A Toyota Corolla LE is $100 more obvious $100 cheaper than a Corolla? 20. And it's only a 24 month lease. Yeah, and it's only a 24 month lease. So I mean, for

Kyle Mountsier: 7:22

the person that's trying to figure out whether or not they want an Eevee This is a super easy way to get in, you know, entry into the brand of Eevee. And I mean, everybody's raging about this or ionic six, or eight car

Paul J Daly: 7:36

239 a month. I feel like I haven't seen a number like that in a long time. Right. So hey, go there. It's worth noting though, you know, started there's some people saying like you need to really consider cost of ownership because there have been a few insurance surprises when people want to insure their Eevee I don't know how the the the Hyundai on i Six is kind of like insurances out. But I mean, I feel like the insurance could easily be $100 more a month than you thought. I don't know. I don't know.

Kyle Mountsier: 8:08

I'm just happy to see lower lease prices because the market is going to push that every for everyone. And we need leases to be back in the market for now and for three years for at least three years. Right just to have the used car market not be so volatile in the next two or three years. So what were

Paul J Daly: 8:24

we talking to was it was a Brian benstock We run with yesterday. It's all Yeah, about how Honda's just getting crushed right now.

Kyle Mountsier: 8:31

It's not just Honda two, it's a lot of manufacturers that right now are going to be crushed because they don't have CPO vehicles coming back into the market from lease returns. From the last two and three years when leases were basically non existent. No manufacturer was pushing incentives toward them. New Car inventory wasn't available. And like this is something I remember talking about, you know, Jonathan smoke was talking about two years ago, when we didn't have a lot of leases, saying watch out for two or three years from now, when we don't have the used car inventory we're expecting, right? And we've seen used car inventory increase over the past year, but we're gonna see another wave of it. And so being savvy with your use cars understanding, not just having CPAs in your market or how to get those CPAs not from the auction or not from the manufacturer. So it's going to be super important. Yeah. Yeah,

Paul J Daly: 9:24

you know what, so every time we've ended a store today, I'm trying to think so hard of a segue, as they rolled so easily in the beginning of this this week, like literally on Monday, you bumped that three segways in a row and then Tuesday was the same Wednesday was okay yes, I

Kyle Mountsier: 9:40

feel so bad. It's like we're trailing on a Friday. No,

Paul J Daly: 9:43

no, not really.

Kyle Mountsier: 9:44

There's so much that we're just kind of winding down speaking of winding down oh we did there we really needed that. We needed that bad. It looks like our friends at zoom are final li coasting to a stop as they navigate the final lap of their e commerce operations. Their journey through the use car retail market is drawing to the close. After announcing early in q1 that they were shutting their doors, they have successfully now sold all of their used car inventory as part of its strategy to get rid of the E commerce version portion of their business. Now, having cleared its floorplan facility debt with Ally, they now have$94 million in cash reserves as of February's end, which is nuts. They are working to align their workforce with their scaled down activities. Obviously, they have a room actually hosts to other entities United Auto credit, a financer and car story, SAS product available to dealers primarily, but also kind of a third party marketplace, just to re enhance stakeholder value in the company. So they're not going down as a company. It's just that they got rid of the E commerce business altogether to free up cash and, you know, get their operations tight. So yeah,

Paul J Daly: 11:09

and they had a great experience with, you know, on the sad news that they weren't closing, so many room employees join the soda community, when we like kind of posted the listing of all the employees and tried to say, Hey, how can we find them a place and I know, we both know, there are now many room employees, former room employees that are nestled tight inside some of the great auto dealer groups. And so, you know, like there's a silver lining to this for us, in that we, you know, we're able to keep and kind of like fully integrate some really great people as a result of this in a room. You know, companies, companies come back swinging, right, like they're building now. They have tech, who knows, like a couple years from now room could build like some kind of crazy staple tech to the auto industry back. Yep. And they got they got a couple of bucks. It's not like

Kyle Mountsier: 11:58

they sold off the IP or the technology. Right? So they're on a shelf. We'll see what happens.

Paul J Daly: 12:03

Don't don't count him out. Folks. Don't count him out. Well, whatever you are doing today, we're not going to count you out. You have a Friday, fourth Friday. You have a fourth Saturday, tomorrow and then you have a fifth Friday and fifth Saturday next week. So we still have a lot to go on this month. We'll talk to you soon.

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