Volvo Plans Direct, TikTok v Hyundai/Kia, & Breaking Down Consumer Pricing

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When hump day rolls around and it drops us in the middle of the month, we have to talk about some controversy, naturally. Leading off this morning are Volvo’s plans for a direct to consumer model, followed by Hyundai and Kia battling TikTok and the release of the consumer pricing index.

• Volvo’s European plans for direct to consumer sales has US dealers prepping for defensive measures with the automaker.
  • Volvo’s new CEO, Jim Rowan, argued the disconnect between the OEM and consumer in pre- and post- sale environments goes against his experience in the consumer electronics industry.
  • “Dealer associations in at least two states — Virginia and California — sent Volvo letters warning that the strategy might violate the automaker's dealer agreements or state laws meant to prevent automakers from competing with their franchises.”
  • Plans are to use the UK as a proving ground and learning environment for the brand
• Following the TikTok trend of stolen Kia and Hyundai vehicles, the automaker is set to provide a software update to mitigate the risk to owners.
  • Way back on Nov. 23, we talked about how a St. Louis dealership was installing $200 bluetooth repeaters to prevent theft.
  • Hyundai’s free software patch will be available on 1M out of the 4M affected vehicles, and include an anti-theft sticker to deter attack, a longer alarm, and the need for a physical key to start the vehicle.
  • “Hyundai is committed to ensuring the quality and integrity of our products through continuous improvement and is pleased to provide affected customers with an additional theft deterrent through this software upgrade,” said Randy Parker, CEO, Hyundai Motor America. “We have prioritized the upgrade’s availability for owners and lessees of our highest selling vehicles and those most targeted by thieves in order for dealers to service them first.”
  • Hyundai expects to have a fix for the other 3M vulnerable vehicles in June.
• The consumer price index was released yesterday, showing slowing inflation, and markets stayed stable despite growth in major index categories like food and energy.
  • The average of all items was up 6.4%, with eggs taking the top spot up over 70% YOY.
  • Vehicles took an 11.6% dip, which we know in the industry, which is a line item attached to only a small subset of the population, in contrast to the other items.
  • Worth noting is the fact that common household items are the largest factors to consider in the impact of inflation on consumers in lower income brackets.
  • “It’s clear that the Federal Reserve has more to do in order to continue to slow down inflation,” said Eugenio Aleman, chief economist at Raymond James.

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