Ford’s Farley Predicts Consolidation, Sandberg Says ‘Goodbye’, Used Cars Get Softer

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The key word for this Thursday’s show is ‘transition’. From Ford CEO, Jim Farley’s recent talk, to a massive leadership move for Meta, to Used Car indicators; we are moving from one thing to the next. To us, this smells a lot like opportunity. 

• Ford CEO Jim Farley predicts substantial consolidation in just about ever area
  • “Speaking at the Bernstein Strategic Decisions Conference, Farley predicted that dealership groups, suppliers, electric vehicle startups and traditional automakers could merge, fall out of the market or form new joint ventures as the transition to EVs changes the industry.”
  • Says smaller automakers won’t be able to keep afloat with the amount of money they are investing. The market isn’t big enough
  • Predicts more mergers than partnerships, says partnerships are very hard. Ford has current joint venture w/ VW he didn’t mention. Also they have pulled out of Rivian partnership as well as a potential one w Mahindra
  • Take away: As dealers and industry partners, let’s show ‘em what real collaboration looks like.
• 14 year COO of Meta, Sheryl Sandberg stepping down from COO role
  • “I really feel like the next generation of leaders are ready,” Ms Sandberg said in an interview. “It’s been a long and great partnership with Mark, I really believe in the company, and I’m staying on the board.
  • Sandberg will remain on the board
  • Joining FB when Zuck was only 23 years old, Sandberg is credited with building out the company’s ad platform…remember 2008?
  • At 52 years old, she says she will be focusing on her foundation and women’s issues and is not sure yet what else
  •  Sandberg received 35.1M in 2021 and owns and estimated 1.6 million FB shares and has a net worth of about $277 million
• Latest TrueCar report indicates softening demand and lower prices for Used Cars
  • "This month we're continuing to see a struggle for supply among the industry however we're also now starting to see signs of demand adjusting. Higher interest rates combined with higher fuel prices present a headwind to demand cooling off, which may explain why average used list prices are decreasing, down 1.6% in May versus April 2022," said Nick Woolard, Lead Industry Analyst at TrueCar. 
  • More vehicles being marked down over the same period last year. Over half of used cars received a markdowns
  • Average transaction price is projected to be up 14% from a year ago and comparable to April 2022
  • Used vehicle sales for May 2022 are expected to reach 3.1 million, down 19% from a year ago and down 8% from April 2022.
  • The average interest rate on new vehicles is 5.1% compared to April 2022 at 4.8% and the average interest rate on used vehicles is 8%.
  • The average loan term on a new vehicle for May 2022 is about 71 months and the average loan term on a used vehicle is also about 71 months.

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