Public dealer profits slip, Hertz reels from EV losses, how car buyers feel about online sales

Hey everyone. A trio of economic reports caught my eye this morning — and it could mean big things for auto lending. Unemployment rose to 4.3% last month, construction spending decreased, and manufacturing is struggling too.

Does it mean we’re headed to a recession…not necessarily.

But, interest rate cuts are probably coming sooner than we expect.

— CDG

1. Public dealer groups see profitability headwinds in Q2

Public dealership groups enjoyed a sales surge in Q2, but are grappling with shrinking profit margins.

Driving the news: While elevated vehicle prices boosted revenue in recent quarters, increased inventory and financially weakened consumers expose the impact of rising operational costs.

As a result, these larger dealership groups are facing increasing pressure to control expenses … Read more

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2. EV depreciation burn intensifies for Hertz

After committing to add 100,000 Teslas to its fleet in 2021, Hertz is facing plummeting EV resale values and has incurred huge depreciation losses in its Q2 report.

As the rental giant offloads thousands of these Teslas at steep discounts, the company is racing to recover from this costly miscalculation … Read more

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3. How important is online retailing to American car buyers?

Online car buying is gaining traction, but don't count out dealerships just yet.

The intrigue: While consumers increasingly research vehicles online, the majority still prefer an in-person purchase.

Digital sales goals are falling short as customers crave the traditional car-buying experience, especially for a high-ticket item like a car … Read more

• Nearly 50 million cars could face a recall for deadly airbags.

• The Fed has left interest rates and overall monetary policy unchanged this week.

• EVs are holding strong, but U.S. elections may rock the boat.

• Best states to find affordable electric cars.

• GM changes its performance bonus rating system for salaried employees.

Thanks for reading everyone.

— CDG