#DealerNews

A New York judge has halted Ford and Lincoln from instituting a specific set of requirements before allowing dealerships to sell the brands’ all-electric vehicles. This comes after five stores operating within the state launched a lawsuit against Ford Motor Co. for introducing a new certification process for EVs. The issue was that the automaker was asking too much from dealerships and effectively favoring those with deeper pockets by forcing changes that required significant financial investments.

Ford introduced its tiered dealer program nearly twelve months ago, splitting stores interested in selling electric into “Model e Certified Elite” and “Model e Certified.”

The United States doesn't have a monopoly on shady car dealerships.

Nobody likes bureaucratic red tape or waiting on payment and this seems to have become a sticking point for retailers nervously waiting to see how the United States’ updated EV tax credit scheme plays out.

According to a report from Automotive News, dealers are getting worked up about the prospect of not receiving money swiftly enough — mimicking some of the hardships endured during the Cash-for-Clunkers period.

Those who follow the automotive industry will have undoubtedly noticed that dealer inventories are slowly approaching levels that would have been considered normal before the pandemic. While this is presumably good news for people who have absolutely had it with dealerships marking up their products, some are growing concerned by how much electric vehicle inventories are outpacing their gasoline-reliant counterparts.

Despite elevated fuel prices, aggressive marketing, and most companies vowing to transition toward building electrified automobiles exclusively, America has an EV supply of more than 100 days on dealer lots. That’s about double the average for gasoline vehicles. While it would seem that people are losing interest in battery-driven automobiles, industry experts are claiming that all is not as it seems.

Canadian dealers of Mercedes-Benz vehicles are reporting that the automaker is considering revising its strategy for North America.

The dealers attended a market-wide retailers meeting in Vancouver held in May and noted that the automaker was fretting about consumer hesitancy over expensive electric vehicles. Concerns centered around the ailing economy, which has been undermined by higher interest rates and ongoing inflation.

Stellantis is reportedly no longer allocating gasoline-only vehicles to the fourteen states with leadership that has agreed to adhere to the emission standards set by the California Air Resources Board (CARB). While the rules exceed federal standards, they’ve been embraced by coastal regions and beginning to influence how the industry does business. 

For Stellantis brands (e.g. Alfa Romeo, Chrysler, Dodge, Fiat, Jeep, Ram, etc.) this means dealer allocation will prioritize powertrains based on how restrictive the local emissions standards happen to be.

Today's shady dealership story comes to us from the Chicago suburb of St. Charles.

This is where Nissan of St. Charles owner Fred Vargason was forced to pay more than $13,000 out of his personal accounts toward his employees' retirement funds.

Here's a story involving shady behavior and dealerships that is a flip of what we've covered lately. In this case, it's a would-be customer screwing the dealership.

The latest research from Carfax has led the company to report that more than 1.9 million vehicles on the road have rolled-back odometers – noting that this represents a 7 percent increase against the previous year.

“Many people think odometer fraud disappeared with the invention of digital odometers,” stated Emilie Voss, Public Relations Director for Carfax. “But that couldn’t be further from the truth. We’re still seeing the number of vehicles on the road with a rolled-back odometer rise year-over-year.”

Connecticut legislators from both sides of the political fence appear to be less than thrilled with Ford about the deadline it’s imposing on dealerships vying to sell all-electric vehicles. Blue Oval wants retailers to make sizable investments to install on-site charging stations and retrain their staff on how to service EVs. For some stores, this means doling out over one-million dollars just to have the privilege of selling the latest models coming from the Ford Motor Company.

Carvana – the used vehicle retailer with giant automotive vending machines – has reported that it suffered a $508 million net loss for the third quarter of 2022. Combined with the $945 million it bled through the first half of the year, the business is upside down for nearly $1.5 billion and we’ve still got three months left. 

Federal Trade Commission (FTC) has proposed comprehensive rules changes regarding dealership advertising and how finance and insurance offices are handled. However, dealers, specifically the National Automobile Dealers Association (NADA), aren’t happy with these new ideas and have issued formal challenges to the regulatory scheme.

Younger drivers have reportedly had it with the dealership experience, with Gen Z even more disenfranchised than Millennials. Though it’s difficult to imagine anybody visiting a showroom within the last 12 months having any other reaction. Incentives are down, prices are up, and there’s a good chance whatever you wanted to buy isn’t going to be on the lot anyway. Someone saying they had an exemplary dealer experience is becoming about as common as people claiming they enjoy going to the DMV.

However, CDK Global Inc. still opted to conduct a survey in the hopes of determining just how much less tolerant younger shoppers might be compared to older generations. The takeaway probably isn’t going to shock you, even if the sheer volume of first-time buyers that don’t care for dealerships might.

The U.S. light-vehicle market doesn’t appear to be in the best health. While many automakers now opt against issuing monthly sales reports, those that still do are posting some pretty brutal numbers.

This does not bode well for an industry that seemed pretty certain that 2022 would be its recovery year. However, it is on-brand with the slew of announcements made by manufacturers warning about supply constraints and an inability to manufacture at scale. There has also been a growing sense that some consumers may be shunning vehicles that have spent the last several months trading well above what seems rational. Wholesale pricing actually declined by roughly 6 percent since the January record. Though you may not see that represented on dealer lots or even have noticed if it was because last month still saw transactions averaging 14 percent higher than they were last year.

Following word that Mercedes-Benz wanted to refocus on producing high-end luxury vehicles with loftier profit margins, the German automaker has decided to eliminate dealerships in Europe so it can move on a direct-sales model similar to what’s offered by Tesla.

The company is reportedly eliminating up to 20 percent of its dealerships in its home country and roughly 10 percent globally (with a focus on Europe). This follows previous assertions by Mercedes that half of the brand’s domestic sales will be done via an “agency model” by 2023. Following an agreement with its own dealer network, the company said late in 2021 that it would begin eliminating the traditional scheme of dealers buying their vehicle stock based on market conditions with consumers coming in to haggle. The new plan puts more financial pressure on Mercedes and eliminates any chance of price negotiation. Meanwhile, dealers will get some cash for every vehicle sold and whatever after-sales services they can render.