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Welcome to Wednesday as we cover the full restoration of CDKs DMS. We also talk about the big surge in hybrid loyalty, as well as a major insurance ultimatum set by State Farm to the State of California. 

Show Notes with links

"We are ahead of the anticipated schedule, and as of this morning, substantially all dealer connections are live on the Dealer Management System," are words we’re sure that felt great for CDK to say and for Dealers to hear as the company announced significant progress in restoring its DMS services to Dealers across the country

• The reboot is ahead of schedule as the company’s target restoration date was July 3 or 4, with most dealer connections live as of July 2 after the June 19 ransomware attack impacted over 15,000 CDK customers in North America.
• Dealer Todd Szott, dealer partner at Szott Auto Group in metro Detroit and president of the Detroit Auto Dealers Association confirmed his stores are back online and processing transactions smoothly.
• Despite challenges, Szott’s team exceeded their sales goal, selling over 500 vehicles in June.
• CDK has not disclosed if the cyberattacks involved the theft of sensitive customer information, and the company has declined to comment on reports of paying a ransom.
• On July 1, four dealerships and two consumers filed a federal lawsuit alleging compromised private information and business harm, with other related lawsuits pending.

Customer loyalty to hybrid vehicles reached a record high in the first quarter while demand for electric vehicles remained flat. This marks the seventh consecutive quarter that hybrid loyalty has increased.

• 42% of hybrid owners who returned to the market in the first quarter purchased another conventional or plug-in hybrid, according to S&P Global Mobility.
• Sales of conventional hybrids more than doubled in the quarter compared with a year earlier, with plug-in hybrid sales rising 59%, according to Cox Automotive.
• Conventional and plug-in hybrids made up about 11 percent of light-vehicle sales, a record high. In contrast, EV share was relatively flat at 7.2 percent, down from 7.3 percent in the first quarter of 2023.
• "Cost is one of the biggest drivers of hybrid sales," said Thomas Libby of S&P. "Many hybrids have sticker prices under $30,000, while the average transaction price for an EV exceeds $57,000."
• John Iacono of BRAM Auto Group noted that "[Hybrids] take care of their sensitivity to the environment, but yet doesn't alter their lifestyle,"

State Farm, California’s largest insurer, has threatened to leave the state unless California’s Department of Insurance approves significant rate hikes for home insurance. 

• State Farm requested home insurance rate increases of 30% for homeowners, 36% for condo owners, and 52% for renters.
• If these demands are not met, State Farm will cease providing coverage in the state.
• Other insurers like Alls

Join Paul J Daly and Kyle Mountsier every morning for the Automotive State of the Union podcast as they connect the dots across car dealerships, retail trends, emerging tech like AI, and cultural shifts—bringing clarity, speed, and people-first insight to automotive leaders navigating a rapidly changing industry.

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