These are the people at a car dealership who help you figure out how to pay for your car, whether through loans, leases, or insurance plans.
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VW Delays investments amid financial doubts, and VW and Rivian look to sell EV tech to other automakers. Plus, Tim Yaoich of Carlton joins the show to talk about the challenges dealerships face today when it comes to accurately quoting lease payments.
Ultimately, precision in the lease payment calculation is really not optional, it's foundational to the profitability and compliant operations.
Let's run through all the news you need to know to keep up in the auto industry. Mitsubishi seems confident it can turn around U.S. sales and jump into new segments.
In a letter to dealers, North America's CEO, Mark Chaffin, hinted at a strategic shift that could bring the brand back into sedance and possibly expand into pickups and vans. He told retailers that the move would significantly strengthen Mitsubishi's U.S. business
and reaffirmed that North America remains a priority, even after recent sales declines. Dealers say they've seen early product concepts including a midsize crossover that could sit above the outlander.
Mitsubishi also plans to launch an all-electric small crossover next summer. A Mitsubishi spokesperson declined to comment more on this story in a minute. Volkswagen is tapping the brakes on its next big investment plan.
Germany's build newspaper reports that VW's supervisory board has postponed approval on its multi-billion euro spending package.
That move delays decisions on new models and factory upgrades across nearly 100 global plants. The automaker reportedly faces an 11 billion euro funding gap for 2026 as tariffs, weak demand and higher costs weigh on its finances.
The delay could also stall plans for a potential Audi plan in the U.S., which VW CEO Oliver Bloom has said would require government support to move forward. VW's board may revisit the investment plan in December, but sources tell build the talks could stretch well into the spring.
And as Volkswagen pauses its investment plan, it's still betting big on its partnership with Rivian. The two automakers say their joint venture, RV Tech, is making progress on a new EV and software platform that could eventually be sold to other car makers.
Rivian's software chief, Wasim Ben Said, told reporters, quote, we are solving a problem for the larger automotive industry that could become an opportunity for others as well.
VW is investing up to $5.8 billion in the project. A major move as it looks to cut cost and sharpen its EV technology.
Joining me now to talk more about Mitsubishi's planned comeback is Ervash Kakaria, who covers the automaker and others for us at automotive news.
Ervash, welcome back to Daily Drive.
Good to be back.
So Ervash Mitsubishi's U.S. lineup has been shrinking for years. How big of a turnaround are they actually planning here and what's driving this renewed confidence?
So as you said, Mitsubishi has a very limited lineup. They have three models effectively. And they're saying that by 2030 they would nearly double the lineup, essentially adding four more models.
Delos have been told about this plan for years and the plan has continuously shifted. Several dealers that I spoke with, you know, were wondering about the brand's commitment to the U.S.
and whether any of these plans were going to materialize or if it was just vaporware.
But last week Mitsubishi finally took about a dozen nine dealers, nine U.S. dealers to Japan and showed them the product that's coming.
In a letter to the dealers yesterday or rather this morning, Mitsubishi North America CEO basically said that, you know,
we understand that there's been some concern about our future roadmap. But as we showed your leadership, I eat the dealer board.
We do have these products. They aren't just imaginary and they will come to stores and, you know, help you help significantly increase sales and profitability because that's something that the brand has really been challenged with.
Dealer profitability is about half of what it was since the start of the pandemic and sales last year basically fell 38%.
So they really, the dealers really need new product and Mitsubishi says it's finally here.
You write that Mitsubishi continues to explore joint projects with Nissan, including future pickups and electrified crossovers.
Now how realistic is that and could it finally give Mitsubishi a competitive edge in the U.S. again?
Right. So Nissan and Mitsubishi are alliance partners. They've been for quite a while. They are exploring a pickup truck.
The problem is Mitsubishi has trucks outside of the U.S. But since they don't have any manufacturing capacity in the U.S., they pretty much are shut out from the U.S.
because they'd have to pay the chicken tax or a 25% tariff on imported trucks.
But obviously Nissan has the as the frontier pickup and they are designing a new generation of the frontier, which is going to be a hybrid.
So they have said early last year, they said that they were exploring or considering doing a joint development of a similar truck for Mitsubishi.
I spoke to one of my Nissan sources yesterday, senior sources, and he said that that land is still on the table, but it hasn't been decided on yet.
So I think the truck idea is a little more far-fetched. More realistic is the development of a crossover.
It would be basically a hybrid crossover, which Nissan is already developing for the Nissan Infinity Brands. It would be built in Canton.
So it's in all likelihood, it would be produced by Nissan in Canton and they would have a version for Mitsubishi.
Perfect. Erbas, thank you so much for joining me.
Thank you.
Coming up, Tim Yowlich of Carlton joins the show to talk about growing challenges around lease calculations in dealership F&I offices.
That's next on Daily Drive.
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Welcome back to Daily Drive. I'm Kellen Walker.
Even the smallest lease payment calculation can cause problems for dealerships and for customers.
Tim Yowlich is vice president of business development at software company Carlton.
He spoke with automotive news senior retail editor Dan Shine about how dealerships can better train their sales and FNI teams to understand the nuances of lease payment structures and avoid common errors.
Tim, thanks so much for joining me again on the FNI Friday edition of Daily Drive.
Thanks, Dan. I see you again.
You too. So leasing is after a while is kind of finally, you know, because affordability issues leasing is kind of becoming back and vogue a little bit.
We keep seeing leasing percentages, you know, inching up a recorder.
But with that comes, you know, some some issues. And let's put you here to talk about that you kind of call the precision trap.
So I want to talk a little bit about that and how calculated errors and you know, and lease payments things like that can really lead to a whole host of issues.
So what are the specific challenges that dealerships are facing when it comes to accurately quoting lease payments and how are those, you know, evolved with rising vehicle prices.
Well, dealerships are increasingly relying on leasing as a way to manage consumer payments amid the elevated vehicle prices that we're seeing today.
And leasing is currently running at an all time high just under 25% compared to finance purchases.
This shift has made lease payment accuracy a high stakes issue. Unlike traditional loans, lease payments are driven by a complex mix of variables like capitalize costs residual value rent charge and tax structures.
Even a small error in the payment calculation can cascade across the life of the lease affecting profitability compliance and customer trust.
As lease penetration grows, dealerships must adopt technology capable of handling this complexity with precision.
So can you give me an example or two of how an inaccurate lease payment has affected a dealership profitability or customer satisfaction?
Absolutely. So maybe like a high level a miscalculated lease payment say off by just a dollar can result in incorrect depreciation values,
flawed residual estimates and misapplied taxes and fees. These errors not only erode profit margins but also introduce risk to regulatory noncompliance.
For dealers, this can mean absorbing unexpected costs facing audit issues or dealing with customer disputes over payment discrepancies.
The emphasis here is that such errors are not trivial.
They multiply over time and can undermine the integrity of the entire transaction as well as the institution conducting the transaction.
It's a snowball effect there.
What should dealership leaders in the eye office look for when they're evaluating lease calculation technology, especially when you're talking about balancing compliance speed customer experience?
The good question dealerships should prioritize their systems that can handle three critical areas with precision.
The first one would be cap cost reduction sequencing we call this CCR in the industry.
The technology must must be able to apply down payments, trade ins and rebates in the correct order as this affects tax treatment and disclosure.
An improper handling can really over or understate a monthly payment.
Second, fee and insurance integration. Systems should manage flat and percentage based fees, calculate their basis and apply state-specific tax rules where required.
And finally, tax complexity. The engine must be able to support multiple tax methodologies such as monthly use tax, which we see most commonly in many states or a tax on the sale price.
I think Texas is a good example there. Tax on total payments. There are several states in the Northeast that do this and tax on depreciation.
So these are all complicated areas and you need to be able to track whether these taxes are paid either upfront or capitalized as part of the lease payment as there are rules and how the tax treatment is applied.
And a robust system managing these three areas properly ensures compliance, transparency and a smooth customer experience.
Yeah, I would imagine Tim that, you know, like I said, at least he kind of was really was down in the, you know, in the gutter a little bit there was this.
People weren't really doing it now. Like I said, it's becoming much more preferable for a lot of folks is to kind of deal with high vehicle sticker prices.
And I'm just guessing that some dealership personnel just aren't used to handling these many, you know, leases. So I know sometimes the answer is always like train more train train.
So what can dealerships do to better train their sales enough? I teams to understand the nuances of, you know, lease payment structures, you know, to avoid these kind of common errors.
Well, training should focus on the granular mechanics of lease calculations, especially the impact of CCR sequencing and tax treatment.
Teams need to understand how different payment computations interact like how rebates, trade ins and cash down affect the capitalized cost and the taxable basis.
Additionally, staff should be familiar with how insular products and insurance fees are calculated and disclosed.
It's a good idea to discuss these areas with your integrated lending partners as well to ensure that there's alignment between the two systems or multiple systems when moving the transaction back and forth.
And investing in training that demystifies these elements and aligning the dealerships technology platforms is key to reducing those errors and improving the deal integrity.
So before that you go to what are the most common misconceptions that dealerships still have about lease payment calculations and what steps can they take to correct them?
Well, one major misconception is that lease payments are simple or secondary to the sale price. In reality, the lease payment is the centerpiece of the transaction and requires meticulous calculations.
Another is understanding the complexity of state-specific tax rules and fee structures. To correct these, dealerships should adopt technology that enforces compliance and transparency, regulatory update these systems to reflect the regulatory changes and provide ongoing education to staff on the mechanics of a lease and the compliance risks.
Ultimately, precision in the lease payment calculation is really not optional. It's foundational to the profitability and compliant operations.
That's really interesting stuff to me. I just kind of assumed maybe like a lot of other people to do that.
At least he was just almost the same as saying I'm financing the vehicle, but there's a lot more that goes into it. And as far as you talk about different states and the different rules in the state, as we get into more of this kind of digital people buying vehicles online, I think people are maybe more commonly buying vehicles out of state.
And so then you really, I think that's kind of what I'm sure would put the different state regulations more in question.
So it's interesting. Again, I didn't think there was that much involved to go with it.
Absolutely. There's some might see that there's maybe a little less regulations around the leasing side, which makes it that much more risky and complex to manage, because everybody has their own way of doing things.
Right. We can sense it.
Tim, I really appreciate you shedding the light on this and lighting us with this issue. Great talk with you again.
Always a pleasure Dan. Thanks for having me on the program.
That's daily drive for today. I'm Kellan Walker.
Thanks to automotive news executive producer Jake Nier, as well as Aaron Irvash Kakaria for his reporting for today's podcast.
You can get the latest news on F&I, manufacturing investments, and everything happening in the auto industry at autonews.com.
Come back over the weekend for a weekend drive edition of the show, our own Omari Gardener and Greg Lason talk about Toyota's massive investment in North America this week, and the latest on trade between the US and Canada.
This is their 11th factory in the US. They really believe in building up here in the United States because they sell so many vehicles here.
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About this episode
Mitsubishi is aiming for a U.S. comeback by expanding its lineup and entering new segments like pickups and electric crossovers, as discussed by North America's CEO Mark Chaffin. Meanwhile, Tim Yowlich from Carlton highlights the complexities of lease payment calculations that dealerships face, emphasizing the need for precision to ensure profitability and compliance. With leasing gaining popularity again, dealerships must train their teams to navigate the intricacies of lease structures and state-specific regulations to avoid costly errors.
Mitsubishi seems confident it can turn around U.S. sales and jump into new segments. Volkswagen delays investments amid financial doubts. Plus, Tim Yalich of Carleton discusses the challenges dealerships face to quote accurate lease payments these days.
