New VW Brand to the US, Super Cheap Lease, Vroom Wound Down

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It’s the fourth Friday in March with one still to go as we talk about a new EV brand entering the US market. We also discuss the surprising cheapest lease in America right now, as well as a smooth stop for online retailer Vroom. 

Show Notes with links:

• There’s going to be yet another new EV brand in town as Volkswagen Group's sporty, electric vehicle-focused Cupra brand is set to enter the U.S. by the end of the decade, debuting with two utility vehicles and leveraging VW Group's Mexican assembly plants for production.
  • Cupra plans to introduce an electric Formentor crossover and a larger, unnamed electric crossover SUV to the U.S., using a new distribution model the company didn’t articulate
  • In 2023, Cupra's sales surged by 51%, with Germany as its largest market, yet it eyes the U.S. for a bigger global footprint.
  • Focused on "young, progressive customers," Cupra will target selected states, especially on the East and West coasts and the Sun Belt, using a novel distribution model.
  • Current vehicles include the Tavascan, Born, Formentor, Leon, Leon Sportstourer, and Ateca
  • Cupra CEO Wayne Griffiths, emphasized readiness and market fit for their U.S. venture saying"We know it's always been a matter of being well prepared and doing it right if you go to the U.S.
    
    
    
• Hyundai's Ioniq 6 SE is now America's cheapest lease deal, offering a no-money-down lease for just $239 per month for 12k miles per year
  • Hyundai has rolled out an unadvertised lease offer to dealers for the 2024 Ioniq 6 SE, making it available until April 1, 2024.
  • Comparatively, the Ioniq 6 SE's effective cost of $249 a month undercuts the lease cost of vehicles like the 2024 Toyota Corolla LE in Southern California by over $100 monthly.
  • While the offer applies to a 24-month lease with a 12,000-mile annual limit, it requires only the first month’s payment upfront
  • Cost of ownership may still have a few surprises for lessees as lessees as insurance costs for Ionic 6 might be higher than expected
    
    
    
• It looks like our friends at Vroom are coasting to a stop as they navigate the final lap of their ecommerce operations. Vroom's journey through the used-car retail market is drawing to a close, with the company anticipating a complete wind down by the end of Q1.
  • Vroom has successfully sold off nearly all its used vehicle inventory as part of its strategy to wind down ecommerce operations and exit the used-car retail sector.
  • Following the sell-off, Vroom has cleared its floorplan facility debt with Ally, boasting about $94 million in cash reserves as of February's end.
  • The company is reducing its workforce to align with its scaled-down activities.
  • CEO Tom Shortt expressed pride in the team's professionalism during this transition, focusing on an efficient and cost-effecti

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we're talking about a new VWbrand to the US. Yes. Another
brand, super cheap lease androoms wind down.

Kyle Mountsier (00:33):
The people really weren't super cheap
lease.

Paul J Daly (00:37):
I liked that cheap lease.

Kyle Mountsier (00:38):
Like there's a good there's a commercial
alongside that like we got asuper cheap please would

Paul J Daly (00:43):
you please?
cheaply? That's it. I can seeit. I feel it. I mean, yeah,

Kyle Mountsier (00:52):
I can feel it.
You know, we're always thinkingwe're always thinking like how
you gonna create something, youknow,

Paul J Daly (00:57):
always that that meme with Eddie Murphy who's
like, yeah, so it's always italways is it kind of always
relevant. It's one of thosememes that will be fully
timeless forever and ever. Hey,next week, we are premiering
episode three of our more thancars Docu series, we have been
talking about this. I don'tthink as much as we should have

(01:18):
been. We shouldn't have beenputting it all over social
media. But it's time becausethere's so much going on. Right
with the soda kind of thing. Sonext Wednesday. Is it Wednesday?
I just said Wednesday, March 27

Kyle Mountsier (01:29):
pm Eastern, I believe?

Paul J Daly (01:31):
Yes. Correct. The best way to get to this is I
mean, I know we have a LinkedInevent set up and if you don't
follow us on LinkedIn, you showwe put out a lot of fun stuff
there a lot of greatconversation. What is it upon
more than more than cars.tv?

Kyle Mountsier (01:45):
Yeah, well, we have we'll have the episode and
the link to the YouTube the linkto the LinkedIn live all that.
Or you can go to our asoto.comwebsite like we're putting it
everywhere because

Paul J Daly (01:56):
okay, it's always fun to be part of the live
stream because we're gonna havelike usually a little guest
little intro, we'll roll theepisode. People are in the
comments, having a good time.
We'll be there in the comments,having a good time. And Episode
Three is so much fun. We're atthe West, her group, Buffalo,
New York and we shot it it was alittle warmer out so so

Kyle Mountsier (02:14):
Oh, and I were a little tan. You know, I

Paul J Daly (02:17):
was surprised at how nice it is in upstate New
York. Right when we when westarted the day off we went to
we went to an amazing fair wewere at a movie theater, we are
in all kinds of dealerships.
There's a little love storygoing on in there. So it's it's
a lot of a lot of a lot of goodpeople in dealership stuff going
on there. So please join us forthe premiere Wednesday, upcoming
Wednesday on the 27th at 1pm.

(02:39):
Eastern, and also can't gottasay soda cons coming 53 days
away. We're releasing a lot ofsession sessions and speakers
today. We locked a few moreyesterday and we're excited like
now comes the onslaught of allthe reasons you need to come
because we're talking aboutcritical issues like expenses,
affordability, EVS coming, howto get your culture right how to

(03:00):
keep your salespeople that usedto make a ton of money and now
they make less because themarket is what the market is all
these important things thatyou're working through all great
reasons to either come yourselfor tell your dealer that you
really shouldn't go so you cancome back. You know, we'll give
you a money back guarantee ifyou don't get at least the
admission price. I mean, that'skind of him it's kind of
impossible, because it's not areally expensive Vega. Alright

(03:23):
talking about some news today.
Let's do it. This is a fun oneso like we don't have enough
Evie brands but there's going tobe yet another Evie brand in
town as Volkswagen Group sportyelectric vehicle first, Cooper
I've never heard of this until Isaw this article today is set to
enter the US by the end of thedecade the logo looks something
like it's out of a Transformersmovie. debuting with two utility
vehicles leveraging VW isMexican assembly plant for

(03:46):
production. Cooper up plans tointroduce the Formentor that
sounds like a transformer andcrossover and a larger unnamed
electric crossover to the USwith utilizing this is
interesting a new distributionmodel that they're not
specifying right now.

Kyle Mountsier (04:06):
If I'm an if I'm a VW dealer I'm like scow coupe
bruh Yeah, distribution that youlike yeah. I'll do it. Oh,
there's a thing.

Paul J Daly (04:18):
I know I know. I have a feeling it's gonna be a
regional distribution modelthat's just my guess. In 2023
their sales surged by 51% inGermany its largest market and
now it's looking to expand it toa more global footprint with the
US kind of leading that chargeit's focused on quote young
progressive customers so they'regoing to select target states to

(04:39):
to like focus their advertisingin here the vehicles current
vehicles to have a scan bornFormentor Lian Lian sports
store, and the A Teca. So Imean, like they're going all in
on like, let's just make it hardto understand. And yeah,

Kyle Mountsier (04:58):
like hard to even say what is the is even
mean what is a Lyon? What is anAttica? Site though remember the
old Aztec? It's

Paul J Daly (05:07):
nothing like that that's the trigger triggering
moment. But if you go to theirsite the vehicles are actually
really cool looking. They havelooks like they partnered with
like some younger influencersthat have this Metaverse
experience thing. So like, Idon't know if they're like, a
few years back or a few yearsahead. I can't tell yet. But who
knows? I don't know. But atleast this is coming with, you

(05:30):
know, a little momentum and acompany behind it.

Kyle Mountsier (05:33):
Yeah, I mean, gotta check out the website
because it is just kind of aninch. Like you wouldn't expect
it's unexpected from anautomaker. You know, whether or
not it makes it all the waythrough to the end of the
decade, like they're saying,we'll see. But I think it's
like,

Paul J Daly (05:50):
it could be like a Scion could have a run like
Scion did.

Kyle Mountsier (05:54):
That's, that's so cold blooded, though.

Paul J Daly (05:56):
Why? I was like, I

Kyle Mountsier (05:58):
don't have a good run kind of like sigh on I
mean,

Paul J Daly (06:01):
a silent saying I had a great run. And then now
it's just a history lesson. Butyeah, is it cooper.com See up
Ra.

Kyle Mountsier (06:10):
Yes. CPRA. We'll check it out. Cooper official,
right.

Paul J Daly (06:15):
Someone had confused with Cooper. Right. Oh,
man. I don't know how we'regoing to transition can have

Kyle Mountsier (06:22):
a history lesson. Oh,

Paul J Daly (06:24):
I don't know what segue lesson. All right. If you
had to guess what the cheapestlease in America right now is
what would you guess Kyle? Youcan't guess because you probably
saw the show notes. It'sHyundai's Ionic six S E. It's
now America's cheapest leaseoffering a get this no money
down. And 239 a month for a12,000 mile a year lease on

(06:48):
really slick EV. Right this isso they rolled out it's an
unadvertised. The Steelers havegotten this kind of like memo
bulletin that they can offerthis. It's not in any
advertising. And it's the 2024ionic six s e available only
until April 1. So you got a weekto get it comparatively. A
Toyota Corolla LE is $100 moreobvious $100 cheaper than a

(07:13):
Corolla? 20. And it's only a 24month lease. Yeah, and it's only
a 24 month lease. So I mean, for

Kyle Mountsier (07:22):
the person that's trying to figure out
whether or not they want anEevee This is a super easy way
to get in, you know, entry intothe brand of Eevee. And I mean,
everybody's raging about this orionic six, or eight car

Paul J Daly (07:36):
239 a month. I feel like I haven't seen a number
like that in a long time. Right.
So hey, go there. It's worthnoting though, you know, started
there's some people saying likeyou need to really consider cost
of ownership because there havebeen a few insurance surprises
when people want to insure theirEevee I don't know how the the
the Hyundai on i Six is kind oflike insurances out. But I mean,

(07:57):
I feel like the insurance couldeasily be $100 more a month than
you thought. I don't know. Idon't know.

Kyle Mountsier (08:08):
I'm just happy to see lower lease prices
because the market is going topush that every for everyone.
And we need leases to be back inthe market for now and for three
years for at least three years.
Right just to have the used carmarket not be so volatile in the
next two or three years. So whatwere

Paul J Daly (08:24):
we talking to was it was a Brian benstock We run
with yesterday. It's all Yeah,about how Honda's just getting
crushed right now.

Kyle Mountsier (08:31):
It's not just Honda two, it's a lot of
manufacturers that right now aregoing to be crushed because they
don't have CPO vehicles comingback into the market from lease
returns. From the last two andthree years when leases were
basically non existent. Nomanufacturer was pushing
incentives toward them. New Carinventory wasn't available. And

(08:51):
like this is something Iremember talking about, you
know, Jonathan smoke was talkingabout two years ago, when we
didn't have a lot of leases,saying watch out for two or
three years from now, when wedon't have the used car
inventory we're expecting,right? And we've seen used car
inventory increase over the pastyear, but we're gonna see
another wave of it. And so beingsavvy with your use cars

(09:13):
understanding, not just havingCPAs in your market or how to
get those CPAs not from theauction or not from the
manufacturer. So it's going tobe super important. Yeah. Yeah,

Paul J Daly (09:24):
you know what, so every time we've ended a store
today, I'm trying to think sohard of a segue, as they rolled
so easily in the beginning ofthis this week, like literally
on Monday, you bumped that threesegways in a row and then
Tuesday was the same Wednesdaywas okay yes, I

Kyle Mountsier (09:40):
feel so bad.
It's like we're trailing on aFriday. No,

Paul J Daly (09:43):
no, not really.

Kyle Mountsier (09:44):
There's so much that we're just kind of winding
down speaking of winding down ohwe did there we really needed
that. We needed that bad. Itlooks like our friends at zoom
are final li coasting to a stopas they navigate the final lap
of their e commerce operations.
Their journey through the usecar retail market is drawing to

(10:06):
the close. After announcingearly in q1 that they were
shutting their doors, they havesuccessfully now sold all of
their used car inventory as partof its strategy to get rid of
the E commerce version portionof their business. Now, having
cleared its floorplan facilitydebt with Ally, they now have

(10:26):
$94 million in cash reserves asof February's end, which is
nuts. They are working to aligntheir workforce with their
scaled down activities.
Obviously, they have a roomactually hosts to other entities
United Auto credit, a financerand car story, SAS product

(10:48):
available to dealers primarily,but also kind of a third party
marketplace, just to re enhancestakeholder value in the
company. So they're not goingdown as a company. It's just
that they got rid of the Ecommerce business altogether to
free up cash and, you know, gettheir operations tight. So yeah,

Paul J Daly (11:09):
and they had a great experience with, you know,
on the sad news that theyweren't closing, so many room
employees join the sodacommunity, when we like kind of
posted the listing of all theemployees and tried to say, Hey,
how can we find them a place andI know, we both know, there are
now many room employees, formerroom employees that are nestled

(11:29):
tight inside some of the greatauto dealer groups. And so, you
know, like there's a silverlining to this for us, in that
we, you know, we're able to keepand kind of like fully integrate
some really great people as aresult of this in a room. You
know, companies, companies comeback swinging, right, like
they're building now. They havetech, who knows, like a couple

(11:51):
years from now room could buildlike some kind of crazy staple
tech to the auto industry back.
Yep. And they got they got acouple of bucks. It's not like

Kyle Mountsier (11:58):
they sold off the IP or the technology. Right?
So they're on a shelf. We'll seewhat happens.

Paul J Daly (12:03):
Don't don't count him out. Folks. Don't count him
out. Well, whatever you aredoing today, we're not going to
count you out. You have aFriday, fourth Friday. You have
a fourth Saturday, tomorrow andthen you have a fifth Friday and
fifth Saturday next week. So westill have a lot to go on this
month. We'll talk to you soon.