Imagine that you owned a successful business. For many of you reading this today (including me), you don’t have to imagine, because you’ve done it. If you owned anything from a lemonade stand to a global airline, you’d have a pretty good idea of your costs and profits. You’d know which advertising sources worked best for your business. You’d strive to know where your customers came from. You’d have a system for hiring and training employees.
You’d do all of this and more, because you must have all of your ducks lined up in pretty little rows to be successful.
Well, that is unless you’re a car dealer. In that case, you may have no idea about any part of how your business works and still make money hand over fist.
Don’t believe me? Over the next several weeks, I’ll prove it to you. Today we’ll start with a simple concept that befuddles most dealers: online merchandising.
Every year, Pied Piper Management sends phony car buyers into dealerships to rank how much deal-landing prowess their salespeople can muster.
This year’s dealership effectiveness rankings put a number of high-end automakers at the top, but the industry’s most innovative company sits at the very bottom for the second year in a row. According to Pied Piper’s Prospect Satisfaction Index, Tesla Motors ranks last by a mile.
Why does an automaker that builds fast vehicles have so little hustle in the sales department? (Read More…)
Electric automaker Tesla Motors has collected more than 400,000 deposits from customers for its 2018 Model 3 sedan, despite having little more than rough renderings of the car to show prospects. This is a remarkable achievement that speaks to its groundbreaking products and the cult-like following of Tesla CEO Elon Musk.
People standing in line to put down deposits and then be willing to wait for a hot car is not without precedent. I sold Honda automobiles during the 1980s and the similarities to today’s Teslamania is striking.
Memo to Musk: If you can indeed increase your production five-fold in two years, I am sure you will move 400,000 Model 3s, but most of them won’t go to today’s deposit holders.
Allow me to explain. The scene was Benson Honda in San Antonio. The year was 1984 … (Read More…)
It’s D-Day, so what better time to dish details on Cadillac’s secretive Project Pinnacle?
The luxury automaker plans to completely revamp how its dealers interact with customers — a strategy that even changes how its salespeople dress, according to a draft document obtained by Automotive News.
Under Project Pinnacle — the brainchild of brand president Johan de Nysschen — U.S. dealers will be grouped into five tiers based on expected sales. When the operation kicks off on October 1, car shoppers can expect a higher-end experience at their local Caddy dealership. Get ready to be coddled. (Read More…)
Spending hours or days negotiating for a vehicle can be a taxing experience, so reaching an agreeable price feels like a big accomplishment for car shoppers. It seems reasonable to let your guard down and relax as you enter the F&I office to finish up the paperwork, but that can lead to a big mistake.
The finance manager or clerk will start going over the paperwork, representing the car as sold and financed while showing you a specific rate. You skim through the mountain of paperwork and quickly sign all of the forms so you can drive off in your new car.
At this point, most people are brimming with excitement — they show off the car to their friends and family and share pictures on social media — but that jubilation can quickly be deflated with a call from the dealer telling you that the financing has fallen through and you don’t own the car after all. (Read More…)
After a short rally in the price of oil, WTI and brent crude prices have plateaued over the last week ahead of an OPEC meeting Thursday, and increased oil production from Iraq beginning next month.
That, Porsche leaked the new Panamera, and women are more likely to buy vehicles on their own after the jump.
I worked at a Ford dealer in Silicon Valley from 1994 to 1999. It was a transitional time in the car business; a time when old-school car guys told war stories about back-lot portables stocked with sales incentives, while young consumers arrived with astonishingly accurate invoice and holdback information. We packed payments, sold $79 undercoat for $1,500, and occasionally found customers smarter than us.
By 1999, more than 40 percent of Americans were online and the Internet was democratizing information everywhere. If someone asked me then if the retail auto environment would be different 17 years hence, I would have emphatically responded yes.
I would have been wrong.
The car business and the customer experience are all but identical. The biggest change is perhaps the relocation of the smoking area.
The Napleton Automotive Group of Illinois tread a well-worn path to its lawyers yesterday, this time filing a suit against Volkswagen for damaging its business model.
Three Volkswagen dealerships owned by Napelton filed the suit, which seeks class-action status, alleging the automaker’s diesel emissions scandal amounts to “criminal racketeering,” Automotive News has reported.
Volkswagen dealers in the U.S. have formed a go-to team tasked with drawing compensation out of the automaker while avoiding a looming barrage of dealer lawsuits.
The five-member committee was formed at a dealers-only meeting held yesterday at the National Automobile Dealers Association convention in Las Vegas, one day before U.S. dealers were expected to meet with top Volkswagen brass, Automotive News has reported.
The move is designed to head off a potential slew of lawsuits from U.S. dealers seeking reparations for sunk costs and lost revenue stemming from the automaker’s expansion push and subsequent diesel emissions scandal.
Light vehicle sales haven’t peaked in the U.S., but the way they’re being sold is putting automakers in some financial peril.
That warning was delivered by Thomas King, vice-president of the Power Information Network, ahead of this weekend’s National Automobile Dealers Association, Wards Auto reports.
Speaking at the J.D. Power Automotive Summit, King said retail sales of cars and light trucks will rise this year and next, even after a very healthy 2015. Last year saw 14.2 million units reach customers, with volume projected to hit 14.7 million in 2017.
Despite moving more vehicles and rising MRSPs, automakers risk forgoing the financial benefits due to incentives and a growing trend towards leasing.