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AutoPacific Status in the Pandemic

Still Pedal to the Metal in Auto Research and Analysis

As a pre-amble, I thought it would be a good idea to give AutoPacific’s friends, acquaintances and clients a heads-up on our status.  We also earnestly hope that everyone is safe and healthy in this challenging time.  Being healthy, of course, is the most important thing right now.

AutoPacific is up and running as usual.  Two years ago, we sold the Automotive Futures Center in Tustin and began working from our homes.  The stay at home directives have not really made our work life any different.  Our New Vehicle Satisfaction Study is in the field and we are expecting results in a few weeks.  Our person-to-person field research – product clinics and focus groups have been put on hold.  A clinic scheduled for late March was pushed back to late summer, if then.  We have been fielding online surveys, interviews and focus groups.  Working with our clients, we have developed techniques to help them determine the dynamics of the market and also ways to accomplish virtual product clinics.

In April, we completed the latest of our bi-monthly Fuel Price Impact Surveys.  We have been fielding these since 2005.  In this latest edition we included a battery of questions on the impact of COVID-19 on the respondents and the impact on their vehicle-buying decisions.  A second, deeper, COVID Impact survey is being fielded this week.

Industry Analysis has the pedal to the metal as usual trying to keep tabs on changes to product launch timing caused by manufacturer and plant shutdowns.  Of course, Ed Kim is pulling his hair out trying to develop a USA Sales Forecast for the 2020 and 2021 calendar years.  I am afraid that his 98% accuracy rate for the past ten years is in jeopardy.  We were forecasting just short of 17,000,000 units in the first quarter 2020 forecast in January.  With March and April absolute disasters and more challenges looming, sales promise to be dismal.  Who knows how long it will take for the supply chain and assembly plants to get up to speed?  Who knows how social distancing and cleanliness requirements will change plant operations?

Even more challenging for the forecast is that it is done by vehicle line and bodystyle.  So each product needs to be analyzed one by one.

I have asked some of our folks to bring us up to date on what they are doing.  Some descriptions are terse, others paint a picture of how we are going in the pandemic.

George Peterson, President, North Tustin, California:  My recent challenge has been the government stimulus Paycheck Protection Program.  We missed the first wave because we don’t have a huge finance department like Ruth’s Chris, Shake Shack, the Los Angeles Lakers, etc.  The government ran out of money before our bank could process AutoPacific’s application.  It blows my mind that a “small business” is defined as less than 500 employees.  And it turns out that even companies with thousands of employees found ways to get around that limit.  I thought PPP was designed to help main street and the tiny guys.  Oh, well.  The good news is that AutoPacific’s PPP loan was approved by the SBA and now we are funded.  AutoPacific’s staff is still on-line.  No one has been laid off.  No salaries cut.  We are lucky in that regard.

My wife and I are truly the luckiest people on earth (except for our 401ks and IRAs).  We live on a hilltop (altitude 450 feet) – the street is called Panorama View – so you get the picture.  There are 46 other homes on the hill.  There is one way up and one way down, so very little traffic now except for Amazon deliveries.  The Irvine Spectrum is to the left and Santa Catalina Island is to the right.  Directly in front is John Wayne Airport (SNA) about twelve miles away.  We have a large porch running the length of the house facing the view so we spend a lot of time out there under a huge California Coral Tree reading books and monitoring the news on iPads.  Cocktails are at 5PM when the rockers move into the shade.  The spookiest thing right now is the dearth of air traffic.  We are directly under the approach pattern to the airport and with air traffic down so much it is eerily quiet.  A lot of people bitch about airplane noise, but I have lived under airports my entire life.  Jacksonville NAS, DTW, SNA.

We finally have N95 masks and gloves so a trip to Costco can be a real treat.  The Costco manager posts what her store is receiving each day.   I have come to understand that KS means Kirkland Signature.

Now, for the personal stories of the staff:

Dan Hall, Vice President, San Clemente, California:  With the new vehicle satisfaction study in the field, we are working hard to gauge consumer reactions to their new vehicles. In addition, we are gathering and analyzing data on consumer behavior as it relates to the pandemic; how it has affected vehicle purchase and service behaviors recently and in the future

Some clients have asked us to design research projects that take into consideration social distancing. From 100% online to a “social distanced” version of a traditional clinic.  These requests from our customers have been a great challenge and giving us the opportunity to think outside of our traditional methods.  What were once considered game stoppers, may now become new standard techniques. When compared to our old activities, we may find that these new solutions can provide similar results, and perhaps even reduce costs.

I like the good old days when a trip to the supermarket was a task rather than an opportunity to get out and have fun!

Ed Kim, Vice President – Industry Analysis – Lakewood, California:  COVID-19 lockdown or not, automakers are still hard at work developing future products, and AutoPacific’s Vice President of Industry Analysis, Ed Kim, has not let off the throttle in assisting key OEM clients with several major future product consulting projects.

In addition, Ed has also been hard at work wrapping his head around the short and long term effects of COVID-19 on U.S. auto sales over the next five years. He and his team have just wrapped up their latest sales forecast update through 2025, which will be delivered to AutoPacific’s sales forecast clients shortly.

Ed and his team have also completed the implementation of a new secure backend for the eAutoPacific.com web portal for AutoPacific’s industry analysis services, which includes the company’s competitive intelligence and sales forecasting activities.

Ed has also been continuing to road test the latest new vehicles. In recent weeks, time spent with the Cadillac CT6 with Super Cruise semi-autonomous highway drive tech and a full month in Audi’s new e-tron electric crossover have been particularly enlightening, providing key insights into the state of autonomous drive and battery electric drive technologies.

Outside of work, Ed has been doubling as a homeschool teacher for his daughter as all students in California have been “distance learning” remotely at home. After tending to his work and his daughter’s schooling, he has been unwinding by increasing his running speed and distance, sampling the latest craft beers, tinkering on his classic 1983 Mercedes-Benz 300D, and taking plenty of safe and socially distanced family drives to avoid getting too stir crazy at home.

 Carol Runkle, Forecast Manager, Hendersonville, North Carolina:  Life is pretty much the same – workwise.  Thrashing away at building the Q2 forecast and keeping up with the changes in the industry.

Have a Facebook Portal, courtesy of my son-in-law making it possible to have tea parties with my granddaughters and play the occasional game with them.  Currently, Twister is the favorite.  I call out the hand/foot instruction and watch them crash to the floor.  We tried CandyLand, but I think they cheat when they move my piece on the board.

Got into bread making early on – Italian olive bread is the best – but yeast is now unavailable.  Turns out that a whole lot of other people decided that bread making was the appropriate thing to do and sales of yeast increased by 400%.  Manufacturers see the post-holiday season as their slow time, so shortages are upon us pioneer-types.  It takes about one to two months to “grow” more and I refuse to put up with the process of developing and maintaining sourdough starter.

Down here in North Carolina, spring is truly here.  In Michigan, spring lasted about a day and a half.  Here in the Blue Ridge Mountains the rhododendrons, dogwoods and azaleas abound and saw my first hummingbird.

All is good.

Paul Waatti, Manager, Industry Analysis:  As I’m still working from home like I have been for nine years, most of the day-to-day for work at AutoPacific hasn’t changed a whole lot except that I have a new co-worker to share the home office with – my wife (who is five months pregnant). Our 18-month old son keeps us on our toes during the workday as we trade off “baby duty” multiple times during the day when we have calls/video chats or simply need focused work time. Managing our son (and trying to stay sane while doing so) with no outside help from time-to-time has been the biggest challenge for the arrangement, especially since he is recently down to just one two-hour nap (if we’re lucky) a day.

We have kept to our daily family dinner (with no screens allowed) and walk afterwards. We enjoy cooking together, so we have continued to do so most days of the week like usual. We do miss going out to eat a couple times per week when we don’t feel like cooking and cleaning up – take out will have to suffice for the time being. Now that the weather has turned here in Southeast Michigan we are enjoying getting out to our local parks and enjoying the outdoors. We have even been doing some “picnic” take out dinners in a nearby park.

Being that my wife is pregnant and doesn’t want any unnecessary exposure, any and all errands seem to fall onto my task list, which isn’t always convenient but does give me an excuse to get into the driver’s seat of whatever car I’m testing for the week. Despite a few cancellations in the early days of quarantine, press fleet schedules have been full. Currently testing a Mercedes-Benz Sprinter 3500XD – a massive dual rear wheel, high-roof, turbodiesel variant with a lift kit. I used it over the weekend to haul eleven six-foot arborvitaes (they fit standing upright) and 40 bags of mulch. Perfect timing to test some hauling capabilities but now back hurts from digging!

The industry analysis team’s workload hasn’t really been whittled despite the fact that there isn’t the usual onslaught of news that is typical of this time of year with auto shows and new product launches. It’s been quite the task keeping up with the delays and cancellations associated with the fallout on the backend of the COVID-19 pandemic. There’s a lot of noise out there right now and things are changing very quickly.

We’re seeing more “leaks” (whether they’re real leaks or initiated by certain OEMs is unknown) and some of our sources are being more open and specific about tips. We’ve also been (inordinately) busy ironing out wrinkles with IT in our new back-end of eautopacific.com and integrating our subscriber database on the site with our mailing list database for our email client.

I happened to start gutting our master bathroom for a full-scale renovation just prior to the culmination of the alarming changes we have seen to our everyday life. It’s been quite the task trying to avoid multiple trips to the big box store or the corner hardware and instead sourcing construction materials and tools through online sources. Delays in shipping have been a factor in staying on track. Chipping away on nights and weekends for the foreseeable future, but not until the spring yard work is complete!

Robby DeGraff, Product Analyst, Shorewood, Wisconsin:  Even during this rather different and weird time, I’ve been diligently tracking any and all model changes announced by automakers, as well as sifting through bits of intel and product development rumors so that our eAutoPacific services (primarily the North American Competitive Battleground) are kept updated constantly around-the-clock. Thankfully, our local fleet providers are following strict sanitation efforts and still delivering test vehicles. This continues to be a key positive event each week I can look forward to. I’ve found it very recharging to get behind the wheel of today’s latest and greatest offerings from manufacturers, and go on long drives in order to gather impressions for our AutoPacific’s ‘On the Road’ reviews. I’ve also been posting on AutoPacific’s Facebook page in an effort to broaden our company’s reach footprint and engagement on social media. Additionally, I’ve made it a point to schedule a photo-shoot with each test vehicle I’ve had the keys to. One of my ongoing goals is to better my automotive photography skills and editing in Adobe Photoshop, so I can provide high-quality images for our clients to reference and use. It’s been fun to participate in a few online video meetings organized by manufacturers and the Midwest Automotive Media Association (MAMA) of which I’m a member. Last week I was able to learn all about FCA’s Uconnect 5 via Google Hangouts, and last month Hyundai shipped me two Lou Malnati’s frozen pizzas that I enjoyed while watching a product rundown of the new Sonata Hybrid! I’m grateful we as an industry are adapting to the way we do things.

Off the clock, I’ve been strictly adhering our state’s guidelines to remain at home and practice ‘social distancing’…all of which have been proven to stop the spread of this deadly virus. Apart from occasionally checking-in on my elderly parents who live just up the road, I’ve been staying home in our cozy apartment with my girlfriend Brenna. She’s also now teaching entirely online and using our living room as her classroom, which is five feet away from my desk. Needless to say, we’ll likely be searching for a much bigger apartment with a much larger kitchen as her cooking skills have skyrocketed recently (I’ve been eating like a rockstar haha). As expected, sheltering-in-place and quarantining can result in heavy feelings of isolation. To combat that, I’ve been diving into my hobbies to stay positive. Currently, I’m chapters deep in a fascinating book about the early roots of the National Park Service’s efforts to manage wildlife in national park prosperities. I’ve also been  been writing on my own travel blog, planning future backpacking trips, chatting with our friends on Zoom, going for walks around the neighborhood, and attempting to work on my beloved project car: A bright red 2001 Chevrolet Camaro.

An important message I keep reminding myself of and encouraging others to consider, is to remember that this COVID-19 pandemic isn’t completely stopping our lives…rather it’s just changing how we do things.

This will pass, and until then, we need to remain confident, alert, and connected to the people we love. Please, take a moment each day to reach out to someone you care about and see how they’re doing.

 Deborah Grieb, Research Manager, Columbia, South Carolina:  AutoPacific behind-the-scenes work continues with website updates and data analysis to support AP Insights issues that keep our clients informed. Additionally, we have been working on pilot proposals for alternative methods of research using online surveys, focus groups and other methods of remote consumer interaction.

This is the perfect season for outdoor life in South Carolina – not too hot yet. Our beaches are slowly reopening and our public parks reopened last week. My daughter and I had a wonderful day trip to Myrtle Beach on Sunday – it was crowded, but still socially distant (it’s a big beach!).  We’re also planning to purchase kayaks for use on our local all-sports lake this week. We spend our time playing family games, taking the dogs to the park, bike riding and walking.

We own a casual dining restaurant in the middle of our planned community.  With South Carolina loosening restrictions we have been serving take-out while folks dine on the patio.  Soon we should be able to open up at about 50% capacity.  One thing I have observed… South Carolinians don’t wear facemasks very much.  Maybe 25% are diligently wearing masks.  Almost no one at Loews was wearing one the last time I was there.

Mary Beth Martin, Project Manager, Orange, California:  My work time is consumed with our 2020 New Vehicle Satisfaction Study. It is currently in the field and many new vehicle owners are responding on how they feel about their new vehicle. Results from this study should be available this summer.

As I have worked from home for the last 20 years my work week has not changed that much due to Covid-19. What has changed in my work environment. Instead of being home alone I now have a husband working from home. Our two adult children have moved back home because they do not want to live in their small apartments all by themselves. One daughter has been furloughed from Disney. Our other daughter is an emergency department nurse who continues to work at Children’s Hospital of Orange County. After each shift she is tested for the Covid-19 antibodies and continues to be virus free.

For the last 30 days I think I have cooked more meals at home than in the last 12 months. Also, dishes, and more dishes. I say a little prayer each time I start my 15 year old dishwasher to keep on going. So far I have not gained the dreaded Covid-19 pounds, but my clothes are tighter. My daughters now have me doing a Couch to 5k training workout 3 days a week with a 5k planned in September. I have also been doing a few Peloton videos with my daughters. Maybe by the end of this I will be in better shape than when it started.

I am not a hoarder, but I had 1 ½ rolls of paper towels when the lockdown started. Then the search started, no paper towels were to be found. However, we had toilet paper. I was ready to barter toilet paper for paper towels when my daughter found hand towels restaurants put in their bathrooms. We ordered a case at the same time my husband found rolls of paper towels at a grocery store. Then I found them again and just had to buy them. Now I have to stop myself from purchasing more. So if anyone needs paper towels I have extra to give.

Thank goodness I had a stack of books I have been meaning to read, the stack is half as tall right now.  I have learned how to Zoom. For the last two weekends we have ventured outside with bike rides in Newport Beach. We gathered with friends Friday night on their driveway, with everyone bringing their own drinks, snacks and chairs – social distancing.

What am I looking forward to the most – dining in a restaurant and leaving the dirty dishes behind.

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