About James Albertine
James Albertine, Senior Vice President of Corporate Development & Procurement at Penske, commented on the auto industry in September 2019. Discussing General Motors, Albertine said he found it "hard to see how" then-President Trump could "legally" remove GM's subsidies, noting that any such action "would take probably sometime" and would face appeals. He described GM's decision to pull out of car production as "many years in the making" and "a when decision," adding that Ford had already made a similar choice. Albertine stated that the move was "in the best interest of GM" and that a lot of autonomous vehicle development "remains in the United States."
In a separate appearance, Albertine said that while auto stocks and valuations suggested a recession, from "the front lines" he did not feel that way, citing "very strong activities" and new SUV and truck products selling "extraordinarily well at record transaction prices." He noted that credit was "widely available" and that the industry did not feel "anywhere near a recession." Albertine also observed that people unable to rationalize a monthly payment for a new vehicle were transitioning to late-model used vehicles, which he said was not a suggestion of a "precipice of a major decline."
Source: AI-verified profile updated from James Albertine's recent appearances.
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Transcript (6 segments)
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Interviewer0:00
We want to get to one sector that might already be in recession. It's the auto industry. James Albertine joins us. My Little One Auto Group's strategy vice-president. He joins us on the phone. Jamie, great to have you with us. Walk us through your view on whether the sector you cover is already there.
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James Albertine0:14
Great, thanks for having me, and good morning everyone. I'm going to tell you this: since my sort of transition from my analytical Wall Street role to being more on the front lines of our automotive group, I think we're in a recession when you look at auto stocks and valuations. But I don't feel that way from sitting on the front lines at a leadership level. We're seeing a lot of very strong activity, not a lot of discussion. Certainly from an analytical perspective, we're looking very closely at tariff discussions and trade, and the potential to have to pass through those price implications in the form of higher transaction prices at the dealer level. But to this point, new products on the SUV and the truck side are selling extraordinarily well at record transaction prices. Credit is widely available. It just doesn't feel as though we're anywhere near a recession, again, from the front lines, although these stocks do seem to be pricing that in.
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Interviewer1:10
A couple of things we're going to hit there. One is the access to credit. We'll get to that in a moment. Walk me through what is happening with inventories and what you see in the auto intervention trades at the moment, Jamie.
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James Albertine1:18
Yeah, I look, I think there are the usual suspects but then to carry higher inventories, the Chryslers of the world and Nissans of the world are still doing that. Broadly, we're seeing reasonably rational inventory levels. I would even go so far as to say that we don't have enough inventory for the higher demand products on the SUV and the truck side. On the car side, there has been a lower demand, maybe sometimes a little faster, but it's sort of a steady decline and transition from cars to crossover utility vehicles. So you could argue that any amount of car inventory might be too much, considering that now seems to be more of a pronounced negative trend. But broadly, if you take all that into account, it does feel relatively rational at this stage.
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Interviewer2:05
Just a final question for you. On any given morning on Wall Street, there's always this one data point or chart that gets flipped around on the email and it's a catalyst for conversation. Latest is auto delinquencies, and it's not just subprime. There's a little bit of evidence it's starting to bleed into prime as well. Jamie, what are you seeing? In terms of access to credit, would you say it's still good, but the data I'm looking at says delinquencies are starting to pick up?
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James Albertine2:30
Yeah, well, if you take a step back, the two things that we have to balance are: one, what I mentioned earlier about record high transaction prices, and two, we are in a rising rate environment. We got away with having higher and higher transaction prices when rates were close to zero. Now they're going up. So you're naturally seeing some delinquencies. But broadly, where people aren't able to rationalize a monthly payment for a new vehicle or a new lease, we're seeing them transition to a late model used vehicle. So I don't think that's a suggestion that we're on the precipice of a major decline. I just think we're somewhere in the plateauing stage of the new vehicle market. People are making rational decisions around monthly payments and transitioning between a two or three-year old used vehicle versus a brand new, record expensive, record high price new vehicle.
