This week’s Ur-Turn comes from David Ruggles, a noted industry figure, prolific TTAC commenter and author of the Autos and Economics blog.
In my 44 years in the auto industry there have been a couple of continuing themes I have observed. First, there is never ending change. Second, consumers are uncomfortable with the negotiating process required when buying a vehicle. These days vendors to auto dealers are trying to sell dealers on the concept that “transparency” is the key to success in selling cars.
In a push to get younger consumers into dealerships, Lincoln has undertaken a crash rebranding program. Ford is pushing dealers to upgrade facilities, as well as retraining sales staff in the lingo of “progressive luxury.” Chic furniture and flatscreens are some of the stereotypical dealership improvements that Lincoln hopes to persuade dealers to implement. But there’s one initiative that’s certainly out of the ordinary: the creation of a Lincoln-specific scent, to be wafted through dealerships.
A proposed law that would have eliminated Tesla’s ability to sell cars in New York state has died on the vine, after lawmakers adjourned their legislative session without taking any action on the bill.
There comes a time when the prices for used cars at the auto auctions go the way of an exuberant bubble.
A small army of consumers get their tax refunds. The car lots wake up from their winter slumber, and values for vehicles go the netheregions of the human imagination.
I sell cars during this time, not buy them. In the last three months of every year I will usually buy a lot to avoid the tax time market prices. Sometimes as many as 12 vehicles in a day. But when tax season comes, I buy a chosen few and sell them by the dozen.
Then, after the buying frenzy begins to ever slowly ebb, there will be a welcome break in those hedonistic valuations. Where instead of winding up $1000 to $1500 behind the selling price, I wind up second to another bidder. Almost always to a guy who has been buying cars for a long time. Today was that day.
Are you a Fiat dealer looking for an Alfa Romeo franchise? Well, better hope you’re doing solid volumes and are making your customers happy.
I got my 2007 9-3 serviced at the Falls Church, VA Saab dealership. My question: They had new (2011) 9-5s for $20,000 off the sticker price. Almost half off. Are they a good deal? Would you buy one? (Read More…)
Last week, a Massachusetts judge sided with Tesla regarding factory-owned stores, in a suit brought by Massachusetts State Automobile Dealers Association and an assortment of dealers. Barring an appeal, the ruling essentially clears the way for Tesla to operate their own outlets – some of which are in non-traditional venues like shopping malls – and offer an online reservation system for vehicles.
Morning phone rings at the car lot…
Random Stranger: Hi there, like, I have this friend you know and he told me that you finance vehicles, and his name is Emmanuel and aahhh, like I was wondering, well, uh, do you have any Toyotas and like, do you, ummm… finance vehicles you know?
Me: I’m sorry. Who is this?
Over a year after the last domestic car dealership left San Francisco, Ford is hoping to gain a foothold in the Bay Area again with a series of “pop-up” showrooms.
“Pop-up” shops are short-term retail spaces located in trendy areas – often times, the temporary nature of the store is also a way to have some presence in an area where a long-term rental agreement would be too expensive. And in a market like San Fransico, where rents are sky high and local consumers are firmly in the “import camp”, a pop-up showroom might not be such a bad idea.
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…)
Well, we knew it would happen. Some dealers are already starting to ask for markups on the Subaru BRZ. And some people are dumb enough to pay them.
Ed Dowdall, a 70-year-old San Jose area resident with a rare form of dementia that causes wildly unstable cognitive functioning and hallucinations, walked into a dealer and traded in his 2008 Nissan Altima Hybrid for a Nissan Murano CrossCabriolet, which retailed for $62,000. A series of protests and complaints from Dowdall’s wife led to the dealer taking back the car and voiding the sale.
With the Toyota 86 set to go on sale in a couple of weeks (the first production models are set to leave the line on Friday), Toyota’s Japanese sales outlets will have separate spaces to sell the new sports car - and in some cases, stand alone sales facilities, similar to the Chrysler/Fiat arrangement in America.
For years now the Chinese automakers have been the bête noir of the global car industry, inspiring equal parts fear and contempt in boardrooms and editorial meetings from Detroit to Stuttgart. In an industry built on scale, China’s huge population and rapid growth can not be ignored as one scans the horizon for dark horse competitors. And yet no Chinese automaker has yet been able to get even a firm toehold in the market China recently passed as the world’s largest: the United States.
Certainly many have tried, as the last decade is littered with companies who have tried to import Chinese vehicles, only to go out of business or radically rethink their strategy (think Zap for the former and Miles/CODA for the latter). Others, like BYD (or India’s Mahindra), have teased America endlessly with big promises of low costs and high efficiency, only to delay launch dates endlessly. In short, a huge gulf has emerged between overblown fears of developing world (particularly Chinese) auto imports and the ability of Chinese automakers to actually deliver anything. No wonder then, that we found what appears to be the first legitimate attempt at importing Chinese cars to the US quite by accident…
A lot of people have little or no respect for car dealerships. In fact, on the TTAC forums, I frequently hear the word “stealership” so much, that I’m herewith petitioning the Oxford English Dictionary to officially put it in our lexicon. I recall the story of a friend on mine who had trouble with a Honda dealership in the UK. His mother bought a brand new Honda Civic and in the final month before the 3 year warranty ran out, the alternator gave up. The mother wasn’t angry that such a failing had happened, she just wanted it fixed. But the dealership had other ideas. They weren’t convinced that it was the alternator and they couldn’t look at it until next month. The mother told her son (my friend) this story and the son though it was a bit of a coincidence that the dealership couldn’t look at the car until next month, which happened to be the month that the car came out of warranty. The son bypassed the dealership and wrote a very strongly worded letter to Honda UK (It could have been “extremely worded”. In the first draft, he threatened to run over their testes with a steam roller). Strangely, a week later, the mother received a phone from the dealership saying that they could look at her car, fix whatever needed to be fixed and throw in a free service. Now that’s a story with a happy ending. Now let’s try one a bit more turbulent, and this one comes from the land of the “stealership”, the United States. (Read More…)