By Jeff Sanford
Toronto, Ontario -- February 11, 2016 -- It's that time again, when we look back on the week just passed. Our collection this week includes a US legislator who doesn't want repairers to charge more than the national average, BMW's partnership with Alpina to create vehicles that could be described as "highest-end" and a British custom builder who is revamping the past with his "Automatron."
- Fix Auto has just announced its 100th franchise location in the US. Fix Auto USA is based in San Diego, California.
- Have US auto sales peaked? Not according to General Motors. Auto sales in North America are at record highs. And while some suggest sales will slide from here—many of the sales have been a result of advances of sub-prime loans—during GM's earnings presentation on February 3, CFO Chuck Stevens suggested that sales are on a plateau that will last for several years.
"The bears argue the industry in the US has peaked and is ready to roll over,” said Stevens in the call. “They often cite the fact that the US auto industry is in its seventh year of expansion, [automaker profit] margins are as good as they get, and a recession is right around the corner, really more akin to a scenario that we saw in 2007 ... On the other hand, a number of people, including GM, believe the industry is plateauing with many years of strong performance ahead, similar to the 2000 to 2007 time frame after the industry peaked in 2000." He cited several solid reasons to think this might be the case. "We believe that industry fundamentals, such as the age of the vehicle fleet, firm used car pricing, credit availability, and low fuel prices remain supportive [of a continued strong market].”
- A metal and mining consultancy, CRU, released an outlook on the aluminum market titled: The North American Can Stock Market—The Lull Before the Storm? The report has nothing to do with the stock market. The report is talking about the supply of aluminum stock for pop cans. According to CRU the market is currently well supplied, but that could change. The concern is mostly because of the increased use of the metal in automobiles, and further increases projected for the future. Auto body sheet has higher margins than pop cans, so the industry has already seen a shift in capacity out of can stock and into ABS.
According to the report, “ ... we do see moderate delays from automotive OEMs in implementing further significant widespread conversions, compared to the rush of announcements witnessed in the last few years, but this will be temporary and CRU expects strong growth over the next decade as automakers switch to the light metal. Discussions between the mills and automotive OEMs are on-going and even without another headline mass volume shift in a vehicle structure to aluminum, the growth in ABS for closures panels will be huge throughout the rest of this decade ... the ABS market in North America will be in excess of 1 million tonnes in volume by the end of the decade, compared to only 126,000 tonnes in 2014.”
- Mississippi State Senator Videt Carmichael, R-Meridian, recently introduced a bill into that state's legislature that would prevent shops from charging a labour rate higher than the national average. Currently, Mississippi Code 83-11-501 states: “No insurer may require as a condition of payment of a claim that repairs to a damaged vehicle, including glass repairs or replacements, must be made by a particular contractor or motor vehicle repair shop.” Carmichael’s proposed Senate Bill 2187 would add the following language into the law: “In no event shall a motor vehicle repair shop charge labour rates above the average national rate charged for like-kind work, without the express approval of the Commissioner of Insurance.”
- Collision repair centre owner Tony Diciano was called to testify in the Tim Bosma case last week. Bosma was an Ontario man who disappeared the night of May 6, 2013 after taking two strangers on a test drive of a black pickup truck he was trying to sell. His body was found more than a week later burned beyond recognition. One of the men accused of killing Bosma placed an urgent order to have a black pickup truck painted red just days after the man went missing. Diciano testified that one of the accused, Dellen Millard, called him on May 8, 2013, “wanting a rush job on the work and offering to drop off the truck the next day,” according to a media report. When asked if he wanted the interior repainted as well Millard said “he had already stripped it down and to leave it black” Diciano told the court. Before the work could be done Millard left a message with the shop’s manager to cancel the order. Diciano went on to say that Millard was a longtime customer and “had never before requested that kind of work or with such a quick turnaround,” according to the report. “That is the first time,” said Diciano.
- The lack of snow this year hasn't been great for business. But hey, at least you're not driving a snow plow. A recent article in the Toronto Star interviewed one such unfortunate soul. According to the article, “With just two snowfalls so far that mobilized the city’s snow clearing fleet, and both in December, the drivers of sand and salt trucks, and especially plow drivers, have barely worked this winter.” Most of the operators of Toronto’s fleet of 200 sand and salt trucks and 600 road plows are employed by 47 private contractors hired by the city, according to the article. They are paid a small weekly standby fee to wait for snow. But they earn real money only when they’re working, which means “just about everybody is on subsistence pay this winter.” According to their source, “Last time I worked was in late December, and only for three hours...the only reason I even got three hours is because I came in on my own and slept in my car, waiting/hoping to go out...I’m really stressed out. Yes, lack of snow has really hurt my bottom line. Car insurance is killing me. I am between a rock and a very hard place.”
- Uni-Select reported fourth quarter and annual financial results for 2015 this week. The company declared it generated $259.2 million in sales in Q4, up 2.6 percent. Its fourth quarter net earnings were up 22.7 percent to $13.9 million, while earnings per share came in at $0.65, up 20.4 percent. Nevertheless, for the year 2015 the company has registered a net loss of $40.2 million, or $1.88 per share. The company carried out 16 acquisitions this year as the company goes about its stated goal of growing through acquisition. They're keeping busy, that's for sure.
- Bosch has developed a computer-assisted gas pedal that can help you save 7 percent on your gas costs. It works sort of like your cell phone, except under your foot instead of in your hand. It can vibrate in a number of different ways to let you know when to brake and when to accelerate to maximize fuel efficiency.
- In case your Beemer wasn't fancy enough the German carmaker has partnered with high-end custom shop Alpina to offer an even higher end BMW. The engine delivers 600 horsepower and kicks out 494 lb-ft of torque at just 2,000 rpm. Rev it up to 3,00 rpm and you’ll boost that up to 590 lb-ft. The suspension and chassis are also upgraded, and they didn’t skimp on upgrading the interior either. No news yet on what the price will be, but we’re guessing it’s going to be very, very high.
- Ever heard of “steampunk?” If you’re not familiar with it, you won’t go too far wrong by thinking of a computer made of brass and powered by coal. It’s basically neo-19th century, if that makes any sense. Long story short, a British custom car builder has built the “Automatron,” a steampunk car. The vehicle is equipped with all the usual hallmarks of steampunk, including great big cranks, switches and rivets. You can check it out in the video below.