A dealer attending Toyota’s U.S. dealer meeting in Atlanta earlier this month has told the Automotive News that the automaker is now letting its dealers drop underperforming Scion franchises without any penalties. Those dealers that keep their Scion stores open will likely get two new products that were teased at the convention. Toyota Senior Vice President Bob Carter declined comment though he hinted at changes, “We’re not ready to go public with that yet.” Toyota Division General Manager Bill Fay recently told WardsAuto that Scion “has a few too many stores.” Read More >
Category: Dealer News
FMG Holdings, which operates a number of car dealerships in western Michigan under the name of Fox Motors, had planned on spending $57 million turning an abandoned industrial site on Chicago’s North Side into a large Ford store but it has now given Chicago politicians an Oct. 1st deadline to either approve or deny their zoning application after the issue has gotten mired in local politics and injected with the issue of race. Read More >
Tesla’s Elon Musk found someone to blame for the lackluster sales of EVs, and the death of some EV makers: Car dealers, and their National Automobile Dealers Association NADA.
“The auto dealers association is definitely creating some problems for us, making it harder to get things done,” Musk said at Tesla’s shareholder meeting with Reuters taking notes. Tesla wants to sell its cars directly to consumers, which is against the law in most states. Attempts to have the law changed “met stiff resistance from dealer groups around the country,” Reuters says. Musk keeps trying. Read More >
In a world where many alleged car buying services are little more than bounty hunters that feed willing buyers to the sharks, TrueCar stood out for truly identifying dealers with the lowest price. This is about to change. Earlier in the year, one of the dearest wishes of some car dealers and OEMs nearly came true: TrueCar, the Santa Monica company that empowered customers by giving them heretofore top-secret pricing information, was under fire from OEMs, dealers, and state regulators. Losing thousands of dealers in a matter of weeks, the company nearly went out of business.
“It was a near death experience, absolutely. The company almost died,” says Scott Painter, TrueCar’s CEO in an interview with Thetruthaboutcars. Read More >
Five years ago, car dealers throughout the country were hit hard by carmageddon. Now, they are about to get hit again where it really hurts: In the workshop, where the real money is being made. The auto sales collapse of 2008 winds its way through the years like a diet through an anaconda. While showrooms were empty five years ago, now it’s the service bays that are deserted. Read More >
A man bought a new pickup. A few days after he had driven off the dealer lot, he received a phone call. There were a few changes, please bring paperwork and truck back to the dealer. At the dealer, the man was told that the financing had fallen through. The man jumped over the desk, grabbed the sales manager by the throat and started strangling him. Police were called, and the man was taken away in handcuffs.
In 1992, the Ritz-Carlton chain won the Baldrige Quality Award for its excellence in customer service. Their idea was to write all customer preferences down, to feed them in a database and to henceforth deliver as expected.
Twenty years ago, I pointed this out to Volkswagen. I was VW’s customer service guru at the time and thought it was a swell idea. Volkswagen enthusiastically adopted the program. It was a failure, what do you expect from a company that retains me as a guru. Also, VW did not want to spend the money on a database. Instead, the Ritz-Carlton ended up running the hotel at Volkswagen’s Autostadt, and giving the occasional seminar to car dealers who still roll their eyes over the “gottverdammte Unsinn.”
Twenty years later, “Ford draws on luxury hotel experience for Lincoln overhaul,” writes Reuters, reporting that “in the plan to overhaul its luxury Lincoln brand, Ford Motor Co is embarking on a new approach, leaving behind the routine ideas of the auto industry and instead taking cues from the likes of high-end boutique hotels.”
Before that happens, Ford is reducing its dealer network to boutique size. Read More >
Once a month, TrueCar publishes what they think are the best deals of the month. They also give you the best day to get those deals: TrueCar “is forecasting that Saturday, January 28 will be the best day of the month to purchase a vehicle with an average discount of 8.19 percent.”
Wouldn’t it be just awful if the best day would be, say, Friday the 20th, and now they tell us? Anyway, here is the list of the best cash, finance and lease deals. Read More >
Some car dealers are missing the bad old times when Detroit was preoccupied with problems at home. Carmakers again have the bandwidth to look at “the channel,” and some don’t like what they see. Suddenly, dealers find themselves at the receiving end of harsh criticism. Both Chrysler and GM dealers are receiving a derriere chewing. Read More >
Allegedly, GM wants to replace Opel and Vauxhall with Chevrolet in Europe, and turn the bow tie into a true global brand. Apparently, it wants to do this with a severely pruned-down dealer network. Chevy dealers in Germany watch every courier coming through the door with trepidation: Every fifth Chevy dealer in Germany will be handed a letter that tells him that his contract is being terminated, says Germany’s kfz-Betrieb.
As reason, insufficient sales are given. Uwe Heyman, a lawyer who manages the council of Opel and Chevrolet dealers in Germany, thinks the reason is likewise insufficient: Read More >
With a tough negotiating session with its traditional employers now complete, the United Auto Workers are turning their focus back to the year’s primary goal: organizing the transplant factories. 2011 was supposed to be the year in which the UAW took down “at least one” foreign-owned auto plant, with the union’s boss even going as far as to say
If we don’t organize the transnationals, I don’t think there is a long-term future for the UAW
But as we found, the UAW is not welcome in the South, where most of the transplant factories are found. And with Honda, Hyundai, Toyota and VW all rejecting the UAW’s advances in some form or another, the union’s options are fairly limited. So instead of taking on the factories directly, the UAW is bringing back a questionable tactic from the days when it was misleadingly bashing Toyota for “abandoning” the NUMMI factory: they are taking the fight to dealerships.
In hopes of escaping Chevrolet’s recent past as what he calls a “truck funded, Midwestern and Southern” business, GM’s Mark Reuss is leading a revamp of Chevy’s Southern California retail environment in order to establish a stronger presence in that key market. Now that Chevy offers higher-quality, more-efficient cars that can compete in the SoCal market, Reuss and company say it’s time to focus on the retail experience. The GM North American boss tells the LA Times
We are really going to have a go at California. This is not some half-baked plan. We will be putting a serious amount of money into this.
Serious money is good… but money alone won’t change the culture of a car dealer that’s always played second fiddle to import brands. So, how will GM tackle cultural shortcomings at its SoCal dealerships? Let’s just say that, for all the apparent seriousness with which this issue is being tackled, GM has come up with a Mickey Mouse plan… literally.
In addition to being a representative from Pennsylvania, Republican Mike Kelly is also a Chevrolet dealer whose family has sold Chevys since 1953. But in recent hearings on government fuel economy ratings, he laid into his brand’s green halo car, the Chevy Volt with surprising zeal. Or, not-so-surprising, when you realize that he decided to run for congress in the wake of the bailout-era dealer cull.
I’m a Chevrolet dealer… we have a Chevy Volt on the lot, it’s been there now for four weeks. We’ve had one person come in to look at it, just to see what it actually looks like… Here’s a car that costs $45,763. I can stock that car for probably a year and then have to sell it at some ridiculous price. By the way, I just received some additional information from Chevrolet: in addition to the $7,500 [federal] tax credit, Pennsylvania is going to throw another $3,500 to anybody foolish enough to buy one of these cars, somehow giving them $11,000 of taxpayer money to buy this Volt.
When you look at this, it makes absolutely no sense. I can stock a Chevy Cruze, which is about a $17,500 car and turns every 30 to 40 days out of inventory… or I can have a Volt, which never turns and creates nothing for me on the lot except interest costs… So a lot of these things that we’re seeing going on have a tremendous economic impact on people who are being asked to stock them and sell them. There is no market for this car. I do have some friends who have sold them, and they’re mostly to people who have an academic interest in it, or municipalities who are asking to buy these cars.
With dealers like that, who needs competitors? Seriously, Kelly even says he fired the guy who ordered a Volt for his dealership… which he then counts against the Volt’s job creation record. Hit the jump for the rest of his quote.
Read More >
With Chrysler, Dodge, Ram and Jeep brands consolidating into single dealerships as part of Chrysler’s “Project Genesis” dealer overhaul, CEO Sergio Marchionne is voting overlapping models off the island, starting with Dodge’s Grand Caravan and Avenger. Automotive New [sub] quotes Marchionne saying
We cannot have the same type of vehicle in the showroom because the consumer is not stupid. We’re not going to create the confusion and conflict in the showroom.
Dodge’s minivan (which outsells its Chrysler T&C sibling, albeit at lower margins) and midsized sedan will be replaced in 2013 by a single crossover, based on the next-generation minivan platform. A compact crossover, based on a Fiat platform, will replace the Avenger “after 2014.” Oh, and the subcompact is definitely off. In other words, you can pretty much forget the product plans unveiled two years ago at Chrysler’s five year business plan.
Three years ago I suggested that Detroit win back car buyers by doing something no one seemed to be doing: provide customer care deserving of the name. In a similar vein, Steve Lang recently asked readers whether manufacturers or the government should do more when a model commonly suffers from an expensive problem. Well, according to an article in Automotive News this week GM has strongly encouraged its dealers to pick up the tab on more out-of-warranty repairs to reward and create loyalty.
According to the article, the bottleneck hasn’t been GM—the customer care money has been there, but dealers have been too tight with it because of fears that GM would punish them if they spent it. Why did dealers have these fears in the first place? The article doesn’t say. The important thing isn’t how these fears came to exist, but that they’re currently unwarranted. One dealer calls the new “open pocketbook” approach to keeping customers happy a “seismic shift.” Problem solved?