Cox Automotive Competitor Briefings

Part
01
of six
Part
01

Cox Automotive Briefing

Cox Automotive has not communicated about itself or any of its plans to innovate in the past eight days. However, the company identified declining consumer sentiments and the fragile future of the automobile industry as major concerns.

Company Communication

  • The company did not make any announcement regarding itself, its operations, or the COVID-19 pandemic in the past week. Its last official press statement was released on May 1, 2020, and it focused on its approach towards keeping its customers and partners safe.
  • On May 22, Manheim, a subsidiary of Cox Automotive, announced a minor corporate restructuring plan to combine the Dealer Auction and the Passenger and Commercial Vehicle Dealer divisions of the company. The company appointed Scott Allen to lead the newly combined divisions.

Company Sponsored Articles and Reports

  • On May 18, Cox Automotive released a report discussing the economic impact of the current pandemic on the automobile industry. The report focused on the loss of jobs in the US and predicted a steady improvement in sales for the auto industry.
  • On May 20, the company released an article highlighting the recent improvement in consumer interest and preference for online vehicle shopping. According to the article, signs of purchase intent for new vehicles increased 30 percent year-on-year in May. The market is also expected to continue on its path to recovery, improving from the sales dip of 50 percent reported in April to only 31 percent in May.
  • On May 21, Cox Automotive published a competitive landscape analysis of the luxury automobile market. The study showed that BMW remains the preferred luxury brand in the US for the third year running, while Audi takes second place. Tesla Autos broke into the top five for the first time in its history.

Recent Economic Impact

  • Cox Automotive, in its latest operating report published on May 19, stated that it remains concerned about declining consumer sentiment across the United States. According to the report, consumer sentiments fell 1.2 percent in mid-May compared to the previous week, indicating that consumers do not feel hopeful about the economy.
  • Also, there was a slight improvement in the overall sales of 56 auto markets across the country in the past week, while 76 auto markets, representing the majority of the market, suffered a decline.
  • The CEO of Cox Automotive, on May 22, stated that its dealers have recovered from selling only 20 percent of their usual volume in the height of the pandemic to selling about 80 percent of their usual volume in mid-May. However, the company expects future vehicle sales to be lower on average compared to the volumes recorded before the pandemic.

Company Innovation

  • The company did not make any official announcements regarding its plans for innovation in the past week. A search for statements by the company or its employees through third-party resources, such as MotorTrend and MotorWeek, also proved abortive. After an exhaustive search, we have concluded that Cox Automotive did not announce any new plans in the last eight days.
Part
02
of six
Part
02

Carvana Briefing

Despite the effects of the global COVID-19 pandemic, Carvana continues to expand their distribution channels and locations in order to offer "as-soon-as-next-day" delivery of vehicles. The company announced a sale of five million shares of Class A common stock. Additionally, Carvana is running a promotion through the end of May 2020 to encourage the purchase of vehicles. The following report outlines statements and news releases from Carvana, along with economic impacts on the company and new innovations and changes to their business operations.

Statements

  • Carvana published the "Introduction to Carvana" in May 2020 to provide forward-looking statements reflecting what Carvana expects and projects concerning its finances, plans, objectives, business, and future performance. They make it clear that no one should place undue reliance on the forward-looking statements and that there is no assurance these statements will actually materialize. Among the key highlights of the document is that the current digital economy is transforming car buying with 97% of customer purchases involving online research. The company also has 24 vending machines currently operational where customers can buy and pick up a car. The company claims this provides a unique experience for customers to share on social media.

Signs of Recent Economic Impact

Company Innovation

Part
03
of six
Part
03

Carfax Briefing

Beyond a news release about starting to provide digital assets for top-rated service shops, Carfax didn't provide information on its business, COVID-19, innovations, or economic impact on the company in the last eight days. All the other updates from the company have been published on social media. Below, we included an overview of the news release, along with additional findings and our research strategy.

Findings

Innovations

  • The only relevant information about Carfax from the last eight days is a news release from May 20, titled "Verified Customer Ratings Used to Name CARFAX Top-Rated Service Shops of 2019."
  • The press release mentions an innovation. According to it, starting last week, the company started to provide digital assets to its top-rated service shops, so they could enhance their online presence.
  • The company selected top-rated shops based on reviews by the Carfax Car Care members. The program has 10 million subscribers.
  • On average, top-rated service shops are rated 4.77/5.0.

Additional Findings

  • On May 19, Auto Remarketing published an article about an upcoming Carfax Insiders Webinar.
  • The webinar, dedicated to the company's history-based value pricing tool, took place on May 21.
  • The registration was free.
  • A brief statement from Carfax said that the webinar was "an inside look at the only pricing tool based on vehicle history."
  • The article also provided context around the webinar series, which discuss industry topics that may be relevant to car dealers.
  • Also, on May 22, Tribune Ledger News published an article about a decision made by the Holly Springs City Council regarding the sales of alcoholic drinks.
  • The article mentioned that the council approved a request for the local police department to enroll in the Carfax For Police program, which was mentioned in the previous research.

Research Strategy

We started our research by looking through the news releases by Carfax, Carfax Canada, and IHS Markit (Carfax's owner). However, outside of the one release described in the first section, we didn't find any relevant information.

Next, we looked through the company's social media profiles. However, updates on Facebook, LinkedIn, and Twitter didn't provide any statements that would answer the question. Please note that we searched through multiple profiles (such as CarfaxInc, Carfax for Dealers, Carfax Careers on Twitter). While the Carfax for Dealers Twitter page had several COVID-19-related tweets, they were promotional content for the dealers to take interest in certain services by Carfax.

We also did a news search on the websites of press release distributors, as well as in automotive, business, and local and national news media. We presented our findings in the "Additional Findings" section since they don't directly answer the question.
Part
04
of six
Part
04

Car AutoNation Briefing

AutoNation has indicated that business decreased drastically during the early days of the COVID-19 outbreak, but is beginning to recover as the company instills new safety protocols and increases their digital capabilities.

Communication

Three statements published in the past month that indicates how business is progressing at AutoNation during the COVID-19 outbreak are presented below.
  • In an article published May 22, 2020, the following quote was included from AutoNation CEO Mike Jackson: "The Silverado is the vehicle in the most demand relative to the supply we have.... If they can restart the pickup truck plants first, I’ll be standing here in line saying ‘send me all you can get.'"
  • On May 22, 2020, AutoNation CEO Mike Jackson agreed that the Coronavirus outbreak has furthered the trend towards online vehicle purchasing. He stated: "For digital, this whole disruptive period with corona is an inflection point from which there's no turning back."
  • Additionally, AutoNation returned their PPP loan, after the government announced that due to the company's size, they would not forgive any part of the funding.

Economic Impact

Two economic impacts for AutoNation within the last eight days (from May 17th — May 24th) are presented below.
  • On May 19th, 2020, AutoNation issued a press release announcing "the pricing of $500 million aggregate principal amount of senior unsecured notes due 2030 at 4.750% (the "notes"). The notes will be issued at 99.479% of the aggregate principal amount, representing a yield to maturity of 4.816%. The offering is expected to close on May 22, 2020, subject to customary closing conditions." The proceeds of this offer will be used for general corporate expenses, including "reducing borrowings under its commercial paper program and/or its revolving credit facility and, in the longer term, repaying its 3.350% senior unsecured notes due 2021."
  • On May 21st, CNBC published a TV interview with AutoNation CEO Mike Jackson. He stated that even with shelter-in-place orders in effect, AutoNation shares were only down 4%. In the early days of the outbreak, Jackson stated that AutoNation sales decreased 50% in a matter of days. The company furloughed 7,000 employees and cut pay for those high-level employees still working. They also suspended all capital spending that was not absolutely necessary. He also stated that in the final 10 days of April, auto sales were stronger than they had been earlier on in the Coronavirus outbreak, with sales only down 25% of what they normally would be.

Innovation

  • In his interview with CNBC, AutoNation CEO Mike Jackson discussed new safety protocols that the company implemented in response to the COVID-19 outbreak. This included new masks for all employees provided every day, new pens for every customer, and increased personal space for customers. They have also announced a new sanitizing process for customer vehicles that must be serviced, after the servicing is complete, so the vehicle is returned to the customer completely sanitized.

Research Strategy

In order to find business statements, economic impacts, and innovations the research team reviewed AutoNation's corporate press releases and business updates, corporate Twitter account and the Twitter account of their CEO, Mike Jackson, and looked for third party media published about the company, hoping the media articles would include quotes from AutoNational executive leaders.
Part
05
of six
Part
05

Car Gurus Briefing

Although they have not released any formal press releases in the past week, Car Gurus appears to leveraging towards a comeback. With an upgraded stock status and key recommendations for dealers, Car Gurus appears to be heading towards a potential small-scale comeback.

Research Strategy

Although initial efforts sought to locate items specific to COVID-19, the pandemic is playing less of a direct role in current news. Press releases for the period in question could be easily located, but other news and information were bound behind paywalls. Publicly available information from third-party sites specific to the financial and automotive industries were selected in order to provide a thorough perspective on Car Gurus.
Part
06
of six
Part
06

Car Buyer Behavior Changes 5/17 - 5/24

Purchasing a car earlier than originally planned and browsing for more expensive vehicles than before the COVID-19 pandemic are some changes in consumer behavior regarding vehicle purchases reported between May 17 and May 24. Meanwhile, terms such as "USAA car buying" and "used cars" are among the top online searches related to car buying.

Earlier Car Purchasing

  • According to a survey performed by Cars.com, 33% of those who participated were planning on taking advantage of Memorial Day deals to purchase a new car.
  • However, it was found that this was an acceleration in the purchasing process, as 62% of these individuals were going to buy a car sooner than they had originally planned.
  • According to the survey, 53% of the participants cited a desire for something new as their reason to buy a car, while 35% cited the great deals of the holiday, and 21% cited car issues such as accidents.
  • This survey was performed between May 14 and May 20 and it collected 983 responses.

Increase in Purchases of More Expensive Vehicles

  • According to a TrueCar report published on May 19, 2020, there has been an increase in the purchase of sports vehicles as well as large vehicles.
  • It has been estimated that buyers are interested in new vehicles that are, on average, $800 more expensive than the vehicles they were interested in before the COVID-19 pandemic.
  • In addition, when it comes to used vehicles, interest has increased in vehicles $850 more expensive than those sold before the pandemic.
  • This corresponds with reports showing that the 2020 Chevy Corvette, a sports vehicle that costs almost $60,000, was almost sold out by May 20, 2020.
  • Furthermore, sales of larger vehicles such as SUVs are expected to continue rising.
  • Similarly, a report published earlier in May by IPSOS, observed that affluent consumers would be interested in satiating their pent-up demand for expensive items such as cars.
  • Another factor that could influence this is a more personal sales system. Affluent buyers interested in high-end brands could have increased access to test drives, with all the necessary safety measures.

Continued Interest in Online Purchases

  • Online revenue for car buying was increasing before the pandemic, reaching an all-time high as lockdown measures were put in place.
  • This preference for online sales seems to be focused more on online searching over online purchasing, as the large amount of money that a car represents can be intimidating for an online purchase.
  • Dealerships have adapted to the needs of consumers, which can be seen in the preparations for Memorial Day sales. Aside from great deals, car dealers are offering online transactions as an option for buyers.
  • In addition, vehicle deliveries have also increased. While some buyers choose to do part of the transaction online but they finalize the purchase at the dealership, others welcome their new vehicle from the comfort of their homes.
  • Companies leading in their offer of cars online are Tesla and Toyota. Numerous retailers believe online might be the new normal in car sales.

Steady Growth of Electric Car Sales

  • According to a Bloomberg report, although general car sales are expected to decrease by 23% in 2020, sales of electric vehicles would lower by 18%.
  • This means that consumers continue to be interested in adopting fuel-efficient technologies. Therefore, electric car vehicle sales are expected to increase in the long-term.
  • According to the same Bloomberg report, published on May 19, 2020, this means that there will also be significant growth in charging stations for these vehicles around the world.
  • Despite the current crisis, it is expected that sales of electric vehicles will continue to grow throughout the years.
  • In the context of COVID-19, pollution is believed to worsen the severity of the pandemic overall, which could be another driver for the rise in electric vehicle sales.
  • According to a report released on May 18, 2020, Tesla has seen increased growth in 2020 despite the pandemic. This is one of the largest companies manufacturing electric cars.

Top Search Queries/Topics

  • USAA Car Buying
    • This is a service promoted by TrueCar, which provides a fixed quote, with the participation of different dealerships, which allows for an easier selection process.
  • Used Car
    • This term relates to car purchases as numerous buyers look into buying a used car instead of a new one for different reasons, mainly economic.
  • Car Dealership
    • Purchasing a vehicle often takes place through a dealership, whether buyers are interested in a new or a used car or in performing an online or an in-person purchase.
  • Tax
    • The term tax as a common search topic related to buying a car comes from the fact that these purchases often include a considerable tax, which is usually included as part of the down payment.
  • Lease
    • Numerous people choose to lease a car instead of purchasing it. Furthermore, car purchases often take place after a lease expires.
Sources
Sources

From Part 01
From Part 05
From Part 06