GearCity News: April 2020

 

Dr. John G. Black Dead (follow-up)

Health at this time was in question due to the lack of information. Data on the subject was not widely known, and many markets were reacting to events that took place in the months leading up to the events. Families have taken steps to view these events in different ways due to the lack of understanding of what took place. Raising questions of how Dr. John G. Black ended up at the son’s home and why this death took place after their arrival.

Pensions

The mutual pension funds have contributed to the economic downturn in 2020. This uncertainty was compounded in part by the health events taking place. The combination of concerns in the market resulted in consideration of interest rate stabilization, needed to establish confidence in the pension fund.

Policy

Policy changes may have contributed to the market uncertainty through information overload during this time. The new way of life, or seeing life, leads to the possibilities of eternalizing some, if not all, of the events presented to them through these changes. For some, this could be life-altering, and new vehicle purchases are affected.

Inventory

This month sparks trouble for the automotive industry, led by EGAG taking on the expense of 36,696 vehicles being stored at their manufacturing facility in Frankfurt, Germany. After further investigation, it turns out they are not alone in the series of events that has a deepening undertone.

Included in this investigation, in addition to EGAG, are as follows:

·        Farzzanti

·        Qaro

·        Farragut

·        ANC

·        Rebel Zhango

·        Chunglee

·        U Motors

Most have over 10,000 vehicles in storage, which is above the industry standard that takes into consideration new model introductions, face-lifts, and newer generations of existing models.

EGAG:

-affecting the European Union, Russia, North Africa, the Middle East, and Brazil.

ANC:

-affecting Northern South America, Mexico, Canada, and the United States.

Farragut: 

-affecting the upper China region of Asia.

Farzzanti:

-affecting Ukraine, Russia, Germany, France, the United Kingdom, Finland, Ireland, Poland, Italy, Morocco, Algeria, Israel, and Saudi Arabia.

Qaro:

-affecting the western United States.

Rebel Zhango:

-affecting Japan, China, the Philippines, and Malaysia.

Chunglee:

-affecting parts of Europe, the Middle East, China, Japan, Malaysia, and the Philippines.

U Motors:

-affecting mainly China but does touch on Japan.

Why was this inventory concern important? Inventory is considered a liability at times due to revenue spent on background manufacturing; that results in a vehicle. Each day this vehicle sits on the lot, it is costing the manufacturer revenue, thus creating an expense that is on top of the expense of storage. This storage, if not strategically corrected, becomes an uncontrolled expense explained to avoid investor concerns.

What does this mean for the auto industry? Customers now have more choice and better bargaining power due to automakers adjusting prices to keep revenues high to cover normal expenses. However, when new products that were scheduled prior to the events are introduced, customers may decide to choose the less expensive used vehicle or a new last-year's design model at a reduced price.