Good morning! Welcome to The Morning Shift, your roundup of the auto news you crave, all in one place every weekday morning. Here are the important stories you need to know.
1st Gear: Dealership Turnover Is High
Everyone has a dealership horror story, or a tale about a terrible salesperson who sent them running out the door screaming obscenities. But it’s still a tough racket, and unless you own the place it’s generally not a job anyone probably wants to do for years on end.
That’s reflected in a new study from the National Automobile Dealers Association, which according to Automotive News indicates the three-year employee retention rate at dealerships hit an all-time low last year.
The median tenure for car dealership employees has steadily declined since 2011 when NADA started its annual work force study.
Then, it was about 3.8 years. Last year, it was 2.4 years. In comparison, the median work force tenure in the nonfarm private sector has held steady at 4.1 years since 2011, the study said.
The study called that decline an “alarming trend,” saying it represents a drain on the industry of talent and cumulative work experience. The result, the study said, is “reduced productivity, reduced median and average earnings, and reduced dealership profitability.”
Indeed, productivity, measured as monthly gross profit per employee, rose just 0.4 percent to $8,446 per employee in 2015. That compares with a 3 percent rise in 2014.
Turnover for other positions the study looked at — general manager, sales manager, finance and insurance manager, service manager, service adviser, service technician, parts manager and parts consultant — all stood below the 40 percent average for the U.S. nonfarm private sector.
More sales go through dealerships’ business development centers, [Jim Appleton, president of the New Jersey Coalition of Automotive Retailers] said. Therefore, dealers “find they’re using fewer sales consultants than in the past per sale. Still, can we really be pleased going from the 80 percentile to the 70s in turnover? That’s just a horrendous situation,” he said.
2nd Gear: Best Buds
Pardon all the links to stock prices in this paragraph, but Reuters highlights the increased level of partnerships between rival automakers to combat what they see as a threat from emerging tech companies from Silicon Valley. Where they used to be competitors, they are now working together:
Alarmed by the threat posed by Silicon Valley firms to their businesses in developing autonomous driving systems, it was evident at the Paris Motor Show this week that carmakers are seeking to fight back by cooperating in areas of technology development where previously they might have tried to compete.
Three big carmakers - BMW (BMWG.DE), Daimler (DAIGn.DE) and VW’s (VOWG_p.DE) Audi - announced earlier this week they would launch new traffic monitoring services next year which give drivers a view of road conditions along their entire route, based on video data collected by their jointly-owned navigation mapping services firm HERE from sensors incorporated in other cars (reut.rs/2dabC1B).
It’s unfamiliar territory for carmakers who are unaccustomed to cooperating as they battle for distinctive features that will help drive sales of their latest model vehicles.
“This is how the automotive industry may be able to fight off the threat that Apple (AAPL.O) and particularly Google (GOOGL.O) represent to their brands as digital services become more and more important,” technology investment analyst Richard Windsor said.
At least you can argue that Apple probably isn’t going to be a threat to actual carmaking anytime soon.
3rd Gear: Toyota Gets Ready To Dump Diesel
This isn’t a huge surprise given how big Toyota is on hybrids and hydrogen (LOL), but the automaking giant seems poised to begin phasing out diesels from its lineup eventually. That should be very interesting to watch, especially in the truck and SUV markets abroad. Via Reuters:
Toyota (7203.T) has decided to drop diesel engines from its new C-HR compact in the wake of Volkswagen’s (VOWG_p.DE) emissions scandal and will probably do the same for future model renewals, the carmaker’s second-ranking global executive said on Thursday.
The Japanese automaker decided “within the last six to 12 months” not to offer a diesel version of the car, unveiled at the Paris auto show, because demand for the powertrain technology is falling sharply, Executive Vice President Didier Leroy told Reuters in an interview.
If faced with a renewal decision today for other models up to and including the larger Auris compact, a Toyota staple, “we would probably do the same thing”, Leroy added.
4th Gear: Lyft Gets The Bolt First, Maybe?
Here’s an interesting case of not being on the same page when you do corporate partnerships. Via The Detroit Free Press:
General Motors will deliver the first Chevrolet Bolt EVs to Lyft, an executive at the San Francisco ride-sharing service said today.
“Drivers on the Lyft platform will be receiving Bolts to drive first,” said Emily Castor, Lyft’s director of transportation. General Motors invested $500 million in Lyft earlier this year. Castor spoke at the World Mobility Leadership Forum at Metro Airport.
But GM didn’t confirm that.
“We will be delivering the Bolt EV to our retail customers and to Lyft before the end of the year,” said GM spokesman Vijay Iyer. “There are no further details to share on our distribution strategy at this time.”
Get it together!
5th Gear: The Paris Motor Show!
The Paris Motor Show is in full swing and it’s all about the electric future of things. And one very crazy Honda Civic. Our man David Tracy is on the scene and he’ll be bringing you some good interviews, live coverage and more. Here’s what we have from the show so far.
Reverse: I Had No Idea There Was That Much Intrigue Around His Death