OEMs begin reporting April sales, aftermarket service satisfaction, Costco discounts EVs

Hey everyone. Heads up—I sent out a newsletter this morning digging deep into the trend of rising dealership service visits, which have jumped a mind-boggling 30% since 2019. This could be a silver lining for dealers facing compressing profit margins in new car sales.

But here's the catch—

Customers are getting frustrated with long wait times and higher costs.

So, the question is…can dealerships maintain this service revenue surge while also keeping customers happy? Check out the full newsletter and let me know what you think.

—CDG

1. April auto sales highlights by OEM: Japanese, Korean brands

Top line: Import automakers have started reporting their sales numbers for April, and so far, things are a mixed bag with a couple of notable standouts. 

At a glance: U.S. vehicle sales in April are expected to decline 2.2% from this time last year, according to Cox Automotive estimates. Retail inventory is anticipated to finish around 1.8 million units in April, a 3.2% increase from March 2024 but a 40% increase year-over-year.

Brand breakdown:

Honda

• Sales for the American Honda division rose 0.4% in April. Acura sales, however, fell 20.7%. Year-over-year, total Honda Motor sales are up 15.7%. EV sales are down 27.3% month-over-month but are still outpace this time last year by 5.7%.

Subaru

• Subaru of America reported 55,863 vehicle sales for April 2024, a 9.5% increase over April 2023 (51,014). Subaru’s best-seller this month was the Forester at 17,850 units.

Toyota

• Toyota’s year-over-year sales grew by 15.2% in April, while Lexus increased by 4.8%. Toyota begins May with only a 23-days supply of new vehicles. Electrified vehicle sales jumped 56% to 77,228 units.

Mazda

• Mazda North American Operations said it sold a total of 31,125 vehicles in April, a decrease of 3.8% compared to April 2023. Sales were primarily driven by the CX-30, CX-50, and CX-90, which all had their best-ever April sales.

Hyundai/Kia

• Hyundai delivered 68,603 units in April, a 3% year-over-year decline. Its best-sellers posted double-digit declines: Tucson (16%), Santa Fe (11%), and Elantra (24%). EV sales have grown 26% from April 2023. Kia sales are down 4% from this time last year. 

Key takeaways: Hyundai Motor had the second-largest MSRP increases from 2019 to 2023. Though most of their brands' offerings are still thousands below the average new vehicle price of around $47,000, the massive MSRP increases are finally catching up to them. 

Toyota is on a roll thanks to the surge in hybrid demand, which is vastly outpacing EV growth. However, Toyota is not alone in its success as Subaru and Honda also saw considerable growth in new vehicle sales so far in 2024. We’ll have to wait and see how the domestic automakers stack up against the competition.

2. Satisfaction with aftermarket service providers rises

Big picture: The battle for market share between franchise dealership service lanes and aftermarket quick lube, tire, and brake centers is a tale as old as time. And new data suggests that the aftermarket is stepping up its game.

Zooming in: A recent survey shows customer satisfaction with aftermarket service providers has rebounded so far. All three segments (full-service repair, tire replacement, and quick oil change) showed improvement. 

This jump is attributed to better service advisors, improved customer service, faster turnaround times, and the convenience of walk-up appointments. But a key factor driving more customers to the aftermarket is lower perceived costs.

Here are the top aftermarket service providers:

Key quote: “This is a key opportunity for aftermarket providers to not only compete with franchised dealers on price, but also to add customer value with a quicker and easier service experience,” said Leonard Martin, director of automotive retail at J.D. Power.

Why it matters: Dealerships are losing ground in the service lane, dropping from 35% to 30% of all service visits in the U.S. (2021 vs 2023). Aftermarket/general repair shops became the preferred choice for 33% of car owners, up from 32% in 2021, and passing dealerships for the first time.

The other side of the coin: Despite the rise in customer satisfaction for aftermarket service providers, dealers still have the upper hand when it comes to trust. 

The survey shows that car owners are more confident in the capabilities of dealership technicians compared to aftermarket providers. This makes sense, given that technicians typically have better pay and more quality education, but more is needed to offset higher costs and longer wait times in the fixed ops department.

3. Costco partners with major OEMs to offer thousands off EVs

At a glance: The Costco Auto Program has shared the latest deals on new car purchases and leases from Chevrolet, Cadillac, Polestar, and Volvo. Among a handful of SUVs, the discounts are mainly on EV models.

Here are the offers: 

Chevrolet: $1,000 Costco membership discount. Plus, all available incentives for which the member qualifies on the 2024 Chevrolet Blazer EV and 2024 Equinox EV.

Cadillac: $1,000 Costco membership discount. Plus, all available incentives for which the member qualifies on the new Cadillac Lyriq.

Polestar: $2,000 Costco membership discount. Plus, all available incentives for which the member qualifies on the luxury Polestar 2 EV.

Volvo: $1,000 Costco membership discount. Plus, all available incentives for which the member qualifies on the 2024 Volvo XC90, XC60, XC40, XC60 Plug-In Hybrid, XC90 Plug-In Hybrid, C40 Recharge, and XC40 Recharge.

Of note: To be eligible, car buyers must have started their Costco memberships by April 30, 2024, and take delivery of the vehicle by July 31, 2024. 

How the Costco Auto Program works.

Costco partners with major automakers to offer pre-negotiated pricing on various models. While Costco doesn't sell cars directly or hold an inventory of vehicles, members can find participating dealers through their program to potentially streamline the car buying experience and avoid haggling. 

Why it matters: Costco's discounts on EVs could translate to lower prices for consumers compared to traditional dealer negotiations, but not always. These incentives could also help dealers move excess EV inventory and free up production capacity for automakers…in theory.

• Ford is recalling 242,669 units of its 2022-2024 Maverick vehicles over a rear tail light failure.
  

• Carvana reported a record first-quarter net income of $49 million, compared to a $286 million loss this time last year.
  

• Tesla’s HR chief exits the company.
  

• The 2024 Toyota Tacoma debuts an in-dash, heat-resistant Bluetooth speaker that doubles as a standalone device.
  

• Cadillac backs off on all-electric goal, hinting gas-powered cars may stay past 2030.

We’ve got tons of great jobs hitting the CDG Job Board right now. Here are some standouts for anyone looking for their next move.

• OPENLANE is looking for tons of new talent—they’re hiring market sales managers across the country. In Green Bay, Chicago, and Orlando to name a few.

• Feel at home in the dealership? Tom Whiteside Chrysler Dodge Jeep Ram, near Columbus, OH, is hiring a sales rep

• Coming from the world of marketing? Automotive Marketing Gurus is looking for a new marketing director (remote).

Looking to hire? Add your roles today—it’s 100% free.

Thanks for reading. Hope to see you again tomorrow morning.

— CDG