Cox Automotive Briefing
What Cox Automotive is currently communicating about itself, the signs of a negative economic impact on the company, and how it is currently innovating includes the company's focus on re-opening its business, a decline in automotive unit sales forecast, and a revamp of its digital landscape.
- According to an article published by Cox Automotive on May 28, 2020, the company highlights the results of a study conducted in the assessment of the short-term and long-term changes impacting the automotive industry following the COVID-19 crisis. Vanessa Ton, the senior industry intelligence manager at Cox Automotive noted that the company does not anticipate to see a shift in customer tastes and preferences for vehicles, but instead a change in their selection of pricing, cost of vehicle ownership, and monthly payments.
- In an article by Reporter Newspapers published on May 28, 2020, following the Return to the Perimeter speaker series, Chris Kirk, the senior director, internal controls and governance, at Cox Automotive highlighted that the company has not experienced a decrease in productivity since the company's employees shifted to working remotely. The senior director noted this, in response to the notable reduction in the number of employees at its Perimeter Center campuses, from 6,000 to 100 during the COVID-19 crisis.
- The senior director also noted that the company's focus has been shifting in the past four to six weeks to figuring out the process of reopening its offices with 55,000 employees spread across various locations both locally and globally. Chris also highlighted that the company has been setting up guidelines about measures to be followed at its facilities, such as social distancing and personal protective equipment in the aftermath of reopening its business.
Negative Economic Impact Signs
- According to the US auto sales forecast report published by Cox Automotive on May 28, 2020, the company indicates anticipating a decline in annual unit sales based on the rate of sales in May 2020 compared to May 2019. According to the company, the May 2020 rate of sales is signaling eventual annual closing sales amounting to 11.4M units in the general automotive industry, which is a sharp decline compared to 17.4M unit sales made in May 2019. The company however notes that this is an improvement from April that recorded a historically low sales forecast amounting to 8.6M units. Additionally, Cox Automotive indicates that the new light-vehicle sales volume in May is expected to finish near 1.05M units, down 33% compared to May 2019, but up 49% from April.
- In the forecast report, the company also indicated facing a negative demand shock and a negative supply shock in the automotive industry as a whole due to vehicle factories being mostly closed since late March and have only begun to reopen. The company noted that this signified low levels of new-vehicle inventory giving customers less choice, especially with popular vehicles such as pickup trucks and SUVs. The company also noted that with the gradual recovery of sales, inventory levels are anticipated to further go down causing some brands to face serious shortages, potentially delaying customer purchases, and causing them to switch brands, or move into the used-vehicle market.
- According to an article by Wards Auto published on May 27, 2020, featuring Sandy Schwartz, the president and CEO of Cox Automotive, the company is considering shifting its auction business to online-only platforms, following the COVID-19 crisis that led to the furlough of its 8,500 workers. Manheim, the company's vehicle re-marketing and auction brand, which began its all-digital migration about 10 years ago and had moved about 50% of its sales online by 2019, made an abrupt move to close about 80 of its auctions in the US and Puerto Rico, following the epidemic, and is now considering going 100% digital. The CEO indicated that digital auctions are better for the company, quicker to execute, and more safe for all stakeholders.
- The company is also revamping the digital landscape for its online shopping sites, including Autotrader.com and KBB.com. According to the May 28 US auto sales forecast report, the volume of online communication sent to the company's dealerships increased by 150%. At the start of the COVID-19 crisis, Cox Automotive had about 1,000 Autotrader dealers with accomplished digital tools. The company has now developed its digital platforms to cater for 10,000 dealers.