Crossroads of Tradition and Technology

Future of Dealerships, The Impact of AI, and the Resurgence of Electric Vehicles

June 22, 2023

Good morning,

Welcome back to the Topmarq Dealer Weekly, your snapshot of industry news and happenings. In this week’s edition - updates on Tesla sales model, Rivian grows their charging network, and Toyota’s could be made by AI.

Cheers!

Daily Average Private Party Vehicle List Price

Headlines

  • Florida law strengthens dealership protections but will allow Tesla model - AutoNews

  • Future Toyota Vehicles Could Be Partially Designed By AI - Motor1

  • Generative AI is Coming to Automotive Paid Search - DealerOn

  • Ford, GM see strong U.S. consumer demand for vehicles - AutoNews

  • Mazda Restarts Rotary Engine Mass Production After 11-Year Hiatus - Motor1

  • Stellantis stops stocking gasoline vehicles in 14 states - AutoNews

  • Honda Ridgeline, Toyota Tundra More American-Made Than F-150, Silverado: Study - Motor1

  • 1987 Range Rover Abandoned In Forest Only Has 23,000 Miles On The Odometer - Motor1

  • Rivian will try selling its electric trucks outside its Illinois factory - AutoNews

Dealer Ops & Strategy

  • Column: Auto dealerships: First impressions - AutoNews

  • Hyundai aims for double-digit EV profit margins by 2030 with new platform - AutoNews

  • [Podcast] Jeff Turley, Head of Auto Lending, PNC Bank - DNT

  • 1 Thing We're Talking About: Penske, college establish tech training program - AutoNews

  • [Podcast] Matthew Phillips, CEO, Car Pros Automotive Group - DNT

  • Sales at SAIC-GM rise for 2nd straight month - AutoNews

  • How a Ford dealership celebrates techs to instill pride - AutoNews

  • California GAP law: Dealers quick to comply - AutoNews

  • KPA offers tips on repairing EVs safely - AutoNews

  • Guest commentary: Are dealers — and their websites — ready for the next wave of EV adoption? - AutoNews

Rivian Acquires Route Planning App Maker Iternio

Rivian has made a significant move towards enhancing its electric vehicle services by acquiring Swedish EV route planning app maker, Iternio. Rivian plans to use Iternio's technology in its electric pickups and sport utility vehicles and to expand its own charging network. Iternio's app, A Better Routeplanner (ABRP), is popular with EV owners in North America and Europe for its comprehensive route calculation services that consider weather conditions, charging stops, vehicle weight, and other factors. Rivian's CEO, RJ Scaringe, emphasized that this acquisition will help the company build a more effective charging infrastructure based on the data obtained from the active user base of the app​2​.

Tesla's Direct Sales Model Deep Dive

In a rapidly evolving auto industry, the traditional dealership model continues to play a pivotal role in serving consumers. This Yahoo News article discusses the strength and resilience of the dealership model in the face of new market entrants like Tesla, which employs a direct-to-consumer sales approach.

The article highlights how dealerships, with their rich history, have been the backbone of the American automotive market since the 1930s. They have been the stalwarts in ensuring that automakers, who might otherwise exert undue control, remain in check. Dealerships have successfully established a network that is finely tuned to the local markets, which is something that large automakers would find challenging to replicate.

Furthermore, dealerships emphasize the invaluable role they play as consumer advocates, especially in warranty and service matters. Their presence ensures competition, which is beneficial for consumers, as they can test-drive cars, compare prices, and have a more streamlined buying and registration process. This customer-centric approach has made dealerships indispensable in the communities they serve.

While Tesla’s direct sales model is innovative, time will tell how the distribution of the landscape will change as some of the newer entrants reach maturity and either grow like Tesla or crash like Fisker.

Adoption by Other EV Makers and Legacy Automakers

Other electric vehicle makers like Rivian, Lucid, and Polestar have adopted their own direct-sales models. Legacy automakers like Volkswagen, Ford, Mercedes-Benz, and BMW are also considering or moving toward direct sales or transparent pricing models for their electric vehicles, but contractual and pipeline commitments make those much less likely to come to be.

Market Stats

Private party vehicles saw an anomalous dip in average age last week but have since recovered and are hovering just shy of 10 years old on average. Still slightly below what we’ve seen over most of the month.

Vehicle price distribution remains in line with what we’ve seen recently with a slight tick up in the higher end vehicles that also pulled up our overall average pricing data.

Reviews and Drives

  • 2024 GMC Sierra 2500HD - TCC

  • 2024 Honda CR-V - TCC

  • Lamborghini Urus To Lose Pure V8, Go Hybrid-Only From Late 2024 - Motor1

  • Toyota GR GT3 Concept To Spawn Lexus Road Car: Official - Motor1

  • 2023 Ford Super Duty F-250 - TCC

  • 2024 Lexus TX: A Big Ol’ Lexus Named For Texas, With A Third Row As Big As Tennessee - Forbes

  • Tested: Auto Velvet Ceramic Coating - Forbes

  • 2024 Cadillac CT5 - TCC

  • 2024 Cadillac CT4 - TCC

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