Bloomberg’s op-ed “Detroit Fights Innovation — Again” is not about the Detroit Three of GM, Ford and Fiat Chrysler [merger consummated Oct 12th] or even manufacturers, but about Michigan and (indirectly) automotive dealers. It makes the very tenuous claim that a ruling blocking Tesla from running company stores (which is in fact in line with existing state law) is tacit protectionism that represents a step backward. Indeed, the article implies that the restriction is ultimately aimed at preventing a Chinese invasion. In fact the policy is misguided because history shows that there’s no need to fear factory stores, at least as long as they’re not set up by a car company so as to undermine their own existing dealers.
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.