Dealer News

Aussies Confirm: Pontiac G8 is a Flop

I’m a bit gun-shy after mistakenly accusing NBC of pulling the SNL sketch pillorying the Big 2.8’s Congressional bailout begging from YouTube for ad revenue-related reasons. So I’m not going to raise the specter of conspiracy for a 404 message on The Australian newspaper. I’m sure the story on the Pontiac G8 disappeared due to technical reasons. Or something. Thankfully, one of our B&B cut and pasted the piece into an email. “Holden Exports Facing Stop Sign” contemplates the prospect of GM axing Pontiac as part of its pursuit of bailout billions. “The Holden-built Pontiac G8 is part of the problem, as it is struggling to find buyers. Just 13,000 have been bought since shipments began at the beginning of the year, and inventory levels exceed 11,000 cars — or 283 days’ supply — the third-worst for any GM model, according to specialist US website Automotive News. Potential Pontiac G8 buyers must now factor in an uncertain future for the brand. ‘It’s a challenging business environment for carmakers around the world,’ said a spokesman for GM Holden, Jonathan Rose. ‘We’re very proud of our export program.’ He denied Holden was adding to Pontiac’s woes, and said export shipments were continuing… The company expected US demand for Pontiac G8s to boost exports, but recently announced plans to shut its factory for 25 days in the first quarter next year, in addition to its four-week Christmas holiday closure.”

Posted in Dealer News | News Blog | Overseas | 38 comments

GM: You’ll Get Your Incentive When You Order More Inventory

We thought things were bad when General Motors announced it was delaying incentive payments to dealers by two weeks (ten more days, hang tight guys). As usual, it gets worse. We now hear from Automotive News [sub] that GM is using its November Re-Consensus Dealer Cash Program to dump more inventory on its hapless dealers. An undisclosed formula determines eligibility for GM’s dealer incentive program, the gist of which is the less inventory you have, the more you have to order to receive incentive cash. Seems fair, right? Don’t worry, it’s not. Forbes reports that Detroit dealers are actually carrying historically low inventories, but that “days on hand” is what’s killing them. And now those (relatively) low inventory numbers are what GM is using to foist their cars on the dealers. A Montana dealer with a 365-day supply was asked to take only one Malibu sedan and one Silverado to get $3,000 dealer cash on his 2008 and 2009 models of the Traverse crossover, Tahoe and Suburban SUVs, and Impala sedan and $2,000 on Cobalt compact cars. But if you have less than 365 days worth of inventory (and in this market, who knows how long it will take to actually work through that much) you are going to be ordering more cars to get the cash… or watch your sales go to another dealer who does.

Automotive News [sub req'd] »

Posted in Dealer News | Incentives | News Blog | 12 comments

Desperate Hummer H3 Prices Still Too High

With things, erm, being as they are right now (economy in the toilet, SUVs being hugely unpopular, nobody buying cars, GM on the verge of evaporating and floating to China), Hummers are about as desirable as herpes. Although the Red Tag sale price of the H3 5-cylinder is floating around $26,000, there’s still a sub-basement. Some highlights from around the sales (or no sales) on FleaBay, Swapalease, and AutoTrader:

–2009 Hummer H3 - $22,985.00 - 13 miles - Optimistically want a 100% cash payment. eBay Motors

–2008 Hummer H3 Alpha - V8 engine - $34,900 - 1854 miles - Oh come on. eBay Motors

–2008 Hummer H3 - $322/month - 4000 miles so far, 30 months remaining, 28500 miles remaining. Swapalease

–2008 Hummer H3 - $18,717 - 15,048 miles - Listed as new - might never have been titled. Autotrader

–2008 Hummer H3 - $22,291 - 4143 miles - stick shift is actually marginally cool. Autotrader

–2009 Hummer H3 - $21,995 - Brand new - classic “one at this price.” Team Chevrolet Hummer, Pasadena

Posted in Dealer News | News Blog | Sales | 14 comments

Ford Pricing PLU$ Explained

Ford recently announced Employee Pricing PLU$, with the PLU$ for any rebate. As Ford employees get any rebates the general public gets, these aren’t really extra. Every 2008 and 2009 is included except for the hybrid SUVs and the new F-150. Of course, with Jet-gate and all, is anyone paying attention? In case someone is actually buying a Ford, Mercury (yes, they’re still around), or Lincoln this month or next, TrueDelta has supplied thetruthaboutcars.com with a close (within $25) approximation of the employee prices. The catch is the usual one: lower rebates. For example, the Ford Fusion rebate has been reduced from $3,500 to $2,500. One oddity: the rebate is $1,000 higher on the V6 Escape than on the four-cylinder Escape. Since Ford actually charges under a grand for the V6 at employee prices, Ford essentially will pay you $108 for the 69 extra horspower. Now, that’s a plus.

Posted in Dealer News | News Blog | 6 comments

Edmunds confused by J.D. Power Sales Satisfaction results

J.D. Power has released its latest Sales Satisfaction Index Study results. And once again, some people are confused by what this survey measures. Edmunds: “In an unusual twist, many Asian brands — including Honda, Toyota, Scion, Subaru, Suzuki, Hyundai and Mazda — ranked below the industry-average customer satisfaction score in the study, despite gaining market share over domestic vehicles.” Shock! Horror! How can customer satisfaction with the triumphant Japanese be below average? Because this survey has nothing to do with the car, and everything to do with the dealer. As in past years, the differences between the scores is small. Nearly every mainstream brand falls within 20 points of the average on a 1,000-point scale; the difference between the top and the bottom is less than 1,000 points. The most surprising result– also not news– the average car dealer scores 857 out of 1,000. Think of it this way: if car dealers are so good, and the average level of satisfaction is so high, then why do most people prefer root canal surgery to visiting a car dealer? [ED: By the same token, why doesn't Anita Lienert read TTAC?]

[Michael Karesh runs TrueDelta, a TTAC data provider]

Posted in Dealer News | News Blog | 12 comments

NADA: No, This Is About Us

The Chair of the National Automotive Dealers Association, Annette Sykora, sought to distance her fellow dealers from the less likable elements of the industry (OEM CEOs, Gettelfinger) who preceded her in testimony before the House Financial Services Committee today. Calling dealers “the face of the industry,” Sykora advocated for what she termed “the unique role of dealers, most of whom are independent businesspeople who have invested their own money in their stores,” according to Automotive News [sub]. More pressingly, she has a tiny little problem with the proposed $25b bailout legislation, namely the provision calling on automakers to “rationalize” their operations, including “manufacturing work force, suppliers and dealerships.” “Dealership reduction is not necessarily the equivalent of dealership rationalization or dealership optimization,” said Sykora, echoing the subtly (or not) self-interested tone of UAW boss Ron Gettelfinger. The dealer’s wheeler-dealer went on to suggest that sales-boosting clunker-culling programs and SBA loans to dealers would be nice. And not for the first time. We get it. Nobody wants to do what it takes to make the D3 competitive, let alone save the taxpayer a buck. That much is clear. But how do any of these public displays of short-sighted self-interest make taxpayers any more likely to fork over $25b?

Automotive News [sub] »

Posted in Dealer News | News Blog | 11 comments

Bailout Watch 205: GM Blackmails Dealers

Detroit’s slow-mo meltdown has been rife with tipping points for years now. As bad decisions piled upon bad luck, we’ve seen the signs become increasingly ominous. The light at the end of the tunnel has become so faint now that each new misstep comes hard on the heels of the previous one, each taking on ever more existential significance. Perhaps though, we have reached a new low in the news coming out of GM today, as Automotive News [sub] reports that GM will delay incentive payments of $302.4m to its dealers for two weeks. If this decision was made based on GM’s liquidity crisis, it means that GM can’t come up with $300m until December 11: A stuffed stocking of not good. On the other hand, if it’s another twisted ploy to generate political support for a bailout, it’s some inspired stuff. Based on the letter (after the jump) sent by GM VP of Marketing Mark LaNeve, it’s looking like a little of both. After all, blackmail has always been a crime of desperation. (more…)

Automotive News [sub req'd] »

Posted in Bailout Watch | Dealer News | Incentives | News Blog | 34 comments

In Fact it’s a Gas!

Dallas Morning News »

Posted in Dealer News | News Blog | 40 comments

Volkswagen to Dealers: Build Or Die. Again.

Red – or make that white alert! Volkswagen is planning another attack on the profitability of its dealers. They need to build yet another round of brand new showrooms. In 1995, VeeDub introduced the new architecture for their worldwide dealer network. First, a prototype was built on the grounds of the Volkswagen plant in Wolfsburg. (Embarrassingly, without some necessary permits, an oversight that was quickly fixed.) Then, “one of the largest construction projects in Volkswagen’s history was started” (says so in a book that documented that gigantic project). More than 10k VeeDub dealerships worldwide had to follow the architectural edict from Wolfsburg: “build or die.” Many dealers did both; they couldn’t stomach the high costs associated with the glass and marble palaces, and vanished. Not to be outdone, Audi started their own, totally different concept, throwing dealers further in the poorhouse, and delighting the construction trade worldwide. Now, after more than 10 years of hard work, threats and scores of dealers who made the ultimate sacrifice by bleeding to death on the altar of Corporate Identity, most VeeDub dealers, from Wolfsburg to Winnipeg, from Bratislava to Boise, Idaho, look alike. All, except one…

(more…)

Posted in Dealer News | Design | News Blog | 20 comments

Retired Auto Execs: Distort New Car Market or Bailout Bucks are a Bridge to Nowhere

Unless you must have a car now, if you’re considering a domestic car or even a U.S.-built car, wait. Many of the proposed legislative measures to “save” the domestic auto industry will cut car prices by thousands of dollars. If you buy a car now, you could pay thousands more than you will later. Automotive News [sub] reports on the most ambitious federal consumer bailout proposal yet. “Retired Chrysler President Hal Sperlich has written a position paper with Don Runkle, former vice chairman of Delphi Corp., calling for a $3,000 government cash incentive on the purchase of a Detroit 3 vehicle.” Chrysler and Delphi execs? You’re kidding, right? Nope. An incentive like this would be unfair in so many ways that it boggles the mind. And yet it’s such a bone-headed proposal that it– or something like it– could happen anyway. And the guys make an excellent point: for GM and Ford to survive (I wrote off Chrysler when Cerberus bought them), auto sales cannot continue at their current level. “In an interview today, Sperlich and Runkle said that without consumer incentives, the Detroit 3 will merely burn through any government loans they receive within a few months. ‘It will be a bridge loan to nowhere unless there are incentives to spur demand,’ Runkle said.” To boost auto sales in the current economy, actual purchase prices are going to have to come down. A lot. And if even one manufacturer cuts prices, the others will have to follow. So, if you don’t want to pay too much for a new car, wait.

Automotive News [sub] »

Posted in Dealer News | New Cars | News Blog | 23 comments