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

The Automotive Troublemaker w/ Paul J Daly and Kyle Mountsier

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-effective wind-down process. Vroom now aims to leverage its remaining entities, United Auto Credit and CarStory, to enhance stakeholder value.

Hosts: Paul J Daly and Kyle Mountsier
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