Cox Automotive Briefing
Last week, the Cox Automotive company mentioned that it is in the process of furloughing over 12,500 of its personnel globally due to the impact of the COVID-19 pandemic. With regard to the statements on matters related to its business, the Cox Automotive industry insights team mentioned that they have been anticipating digital retailing to change the game in the automotive retail space. On innovating, an article mentioned that Cox Automotive has released "Thriving in the New Normal," a guide for dealers and OEMs in the U.S. to survive the pandemic.
- On May 7, Cox Automotive announced that it is in the process of furloughing over 12,500 of its personnel globally as the COVID-19 pandemic starts to wreak havoc on its operations. The furloughed employees account for 38% of the company's manpower. Ten thousand of them are based in the U.S. The process will start on May 17 and is seen to last for 16 weeks. These employees will still keep their employment status in the company and can still avail of the company's healthcare benefits.
- On May 7, the company also announced that it will slash the salaries of its senior executives. Vice Presidents and above will see their salaries cut by 15%, while for the executive leadership team, it will be 25%. On May 7, Cox Automotive President and Chief Executive Sandy Schwartz, CEO Alex Taylor, and other top executives have volunteered to give up their full base salaries while the COVID-19 pandemic is still ongoing.
Cox Automotive Statements on Matters Related to its Business
- On May 6, the Cox Automotive industry insights team mentioned that for some time now, they have been anticipating digital retailing to change the game in the automotive retail space. With the onset of the COVID-19 pandemic, the automotive industry is now experiencing an accelerated transition of its retailing process to a more digital model. The insight team mentioned that the increasing adoption of digital and touchless processes will have a long-term impact on various automotive processes aside from vehicle sales workflows.
- On May 7, a report from the company mentioned that the prices of wholesale used vehicles dropped by 11.41% month-over-month in April. This has pulled down the Manheim Used Vehicle Value Index (MUVVI) to 125.8, a reduction of 9.2% versus the previous year. The index is also the lowest value in three years.
- Commenting on the low inventory volume in the automotive industry on May 6, Cox Automotive Senior Economist Charlie Chesbrough said that inventory levels rely on the vehicle sales trendline. He also said that inventory may be sufficient if purchase levels will stay low during the summer. However, he mentioned that stocks may be depleted once they start buying again in May and June.
Negative Economic Impact on the Company
- On May 7, the company mentioned that plunging numbers in wholesale vehicle dealings have forced the closing of physical Manheim auctions. Manheim is one of the brands of Cox Automotive. According to Cox Automotive CEO and President Sandy Schwartz, he is expecting a sluggish recovery for the automotive industry which will also impact the company's revenue growth.
- According to a May 7 report, the COVID-19 pandemic has put a big dent on the global automotive sales and production. Consumers are also spending much less on automotive-related products. Some states also declared that car dealerships should remain shuttered to prevent the spread of the virus. Given this situation, Mr. Schwartz mentioned that they don't know yet when and how they can get back 80% of the company's business again.
Cox Automotive Innovation
- On May 8, an article mentioned that Cox Automotive has released "Thriving in the New Normal," a guide for dealers and OEMs in the U.S. Along with other practical recommendations on how automotive businesses can survive in the current pandemic environment, Cox Automotive gave some suggestions to dealerships on how to create touchless retail solutions. The touchless solutions involve enhancing all their online sites and ensuring that all the details of their operations, products, and services can be found easily on their virtual shopfronts. As part of the touchless campaign, dealerships are also urged to highlight their cars and the features on their online channels such as social media pages and other related websites. Other recommendations that are part of the touchless solution include increased usage of digital retailing tools, paperless contract signing, enhanced digital client communication, leveraging technology to manage fleets, and improved test drives and delivery processes.
- On May 6, Cox Automotive mentioned that its new valuations and appraisals platform called eVA can be used in the part-exchange process. The platform can integrate vehicle valuations with an appraisal tool that links the online to the physical store customer touchpoint. Once deployed into a dealer’s website, a customer can look for their new car, have their existing car assessed, then integrate that into the new transaction as a part-exchange.