The Truth About Cars » service http://www.thetruthaboutcars.com The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. Tue, 05 Aug 2014 21:18:09 +0000 en-US hourly 1 http://wordpress.org/?v=3.9.1 The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars no The Truth About Cars editors@ttac.com editors@ttac.com (The Truth About Cars) 2006-2009 The Truth About Cars The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars » service http://www.thetruthaboutcars.com/wp-content/themes/ttac-theme/images/logo.gif http://www.thetruthaboutcars.com Piston Slap: Double A (Beep! Beep!) Em, Cee, Oh… (Part II) http://www.thetruthaboutcars.com/2014/06/piston-slap-double-a-beep-beep-em-cee-oh-part-ii/ http://www.thetruthaboutcars.com/2014/06/piston-slap-double-a-beep-beep-em-cee-oh-part-ii/#comments Mon, 30 Jun 2014 12:06:29 +0000 http://www.thetruthaboutcars.com/?p=855409 TTAC commentator M0L0TOV has an update for us: Hey Sajeev, I figured I’d send you an update so people would know what happened to my situation. Well, I went ahead and tried to contact AAMCO. First I tried contacting them via their website but almost a week had passed and no response. So I contact […]

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TTAC commentator M0L0TOV has an update for us:

Hey Sajeev,

I figured I’d send you an update so people would know what happened to my situation. Well, I went ahead and tried to contact AAMCO. First I tried contacting them via their website but almost a week had passed and no response. So I contact them via their Facebook page, the next day I got a response with a phone number, name, and e-mail address of somebody at corporate to contact. I sent them an e-mail, I got a call from the owner of the Aamco where I had originally taken my car within ten minutes.

He stated he was notified by the customer service department and we had a disagreement. He offered to not charge me for the labor and I would pay for the part. I was perfectly fine with paying for the part, I wasn’t looking for a free ride. I thought their offer was fair because it would have been replaced when the work was originally being done. I picked up my car today and paid $214.00 and I get a 90 day warranty. So yes, the system works. I appreciate everybody’s advice on this matter and I was able to force their hand.

Thanks for all your help Sajeev and the rest of the TTAC readers!

Sajeev answers:

Behold the power of social media.

BEHOLD IT RIGHT NOW!

Between what you experienced, my firsthand experiences (disclosure: social media is my full time gig) and “little” things like the Arab Spring or whatever makes people love Justin Bieber, there’s no doubt social media is a powerful tool for customer service.  Or a service for powerful tools…but I digress.

The system works, with pleases me immensely.  So kudos to AAMCO for doing the right thing, once they heard about it.  And doing it rather quickly: it’s rare ’round these Piston Slap bloggy parts when a company interacts with one of us and does the right thing. So let’s relish this moment of (seemingly) good karma.

Happy Monday to you, Dear Reader.

Send your queries to sajeev@thetruthaboutcars.com. Spare no details and ask for a speedy resolution if you’re in a hurry…but be realistic, and use your make/model specific forums instead of TTAC for more timely advice.

 

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Piston Slap: Double A (Beep! Beep!) Em, Cee, Oh… http://www.thetruthaboutcars.com/2014/06/piston-slap-double-a-beep-beep-em-cee-oh/ http://www.thetruthaboutcars.com/2014/06/piston-slap-double-a-beep-beep-em-cee-oh/#comments Mon, 09 Jun 2014 12:37:53 +0000 http://www.thetruthaboutcars.com/?p=840217 TTAC commentator M0L0TOV writes: Greetings All-Knowing Sajeev, I am looking for some insight on an ongoing issue with my workhorse. I have a 2003 Ford Focus ZX-5 with 160,000 miles. A little bit over a year ago, I had Aamco rebuild the automatic transmission on my car for the tune of $2500. Apparently, my car […]

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TTAC commentator M0L0TOV writes:

Greetings All-Knowing Sajeev,

I am looking for some insight on an ongoing issue with my workhorse. I have a 2003 Ford Focus ZX-5 with 160,000 miles. A little bit over a year ago, I had Aamco rebuild the automatic transmission on my car for the tune of $2500. Apparently, my car seems to have an appetite for transmissions, I’m on #4 now (original, warranty, junkyard, Aamco).

Lately, I noticed my car was leaving large puddles of fluid on the driveway, I checked underneath it, and saw fluid was accumulating around the transmission pan. I took my vehicle to my mechanic and he showed me what had happened. It looks like whoever worked on the transmission last (Aamco) had attempted to seal a crack in the transmission housing with silicone. From my understanding, silicone will not stand up very well to the heat and corrosive properties of ATF.

I passed by Aamco and they inspected my car, they acknowledged they had attempted a repair during the install. The owner of this Aamco franchise advised me that I would need a new transmission case and with parts and installation would cost me over $800.00. I’m a bit pissed because if they knew it was cracked, while the transmission was out, this part could have been replaced, now I have to go through a similar procedure to get this done again.

I really don’t feel like spending $800.00+ to get this done considering the age and wear on the vehicle. Should I:

  1. Try one of those additives that claims to fix leaks.
  2. Drain the transmission, clean the area, add JB Weld, and hope for the best.
  3. Have the crack welded.
  4. Try to find somebody else to do the job cheaper.
  5. Listened to my father and avoided Aamco.

I’m mechanically inclined but my skills are not advanced nor do I have the space and room to do this job myself. Besides the transmission issues, the car hasn’t given me any issues, the engine runs strong. I do have a little bit of sentimental value for the car since it was my first “new” car I ever got. I do I.T. work which requires a lot of driving and the car gets decent mileage.

P.S. Driving my Dodge Magnum R/T is not an option since it would eat me out of house and home gas wise.

Sajeev Answers:

This isn’t the first time I’ve heard of problems with an AAMCO transmission franchise.  Or, heck, any franchised service shop.  Even worse, this is the second time I heard about a rebuilder cracking a transmission case.

What is the right move? Franchise owner eats the bill and hopes you remain a happy customer. If this only happens via running it up the AAMCO channel, so be it.  Hit up their Twitter or Facebook accounts and ask the store owner for his regional manager.   If it’s not too late, go do that.

If AAMCO doesn’t care, well, you are SOL.   There are plenty of reputable rebuilders that dropship refreshed unit to a recommended installer, complete with a good warranty. I’ve heard good things about Jasper and the B&B previously agreed.  Or get one from the junkyard and hope for the best, again. I’ve personally had a great Ford AOD rebuilt from a franchise shop, but I interviewed them, inspected their shop and asked them detailed questions about their AOD-skills. They passed the test and that made me happy.

Since you do like the car, I suggest getting a quality rebuild.  And if there’s a local shop with a good reputation and extensive knowledge of Ford specific transmission issues, give it another shot. Because the aftermarket usually fixes all the weak spots in transmissions, combine that with an aftermarket ATF cooler and you’ll be set for many years to come.

Send your queries to sajeev@thetruthaboutcars.com. Spare no details and ask for a speedy resolution if you’re in a hurry…but be realistic, and use your make/model specific forums instead of TTAC for more timely advice. 

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GM Throws In Free Scheduled Service http://www.thetruthaboutcars.com/2013/06/gm-throws-in-free-scheduled-service/ http://www.thetruthaboutcars.com/2013/06/gm-throws-in-free-scheduled-service/#comments Thu, 06 Jun 2013 15:50:50 +0000 http://www.thetruthaboutcars.com/?p=491071 A free-maintenance program introduced earlier this year to get its full-size pickups moving was expanded across the entire 2014 line.  For most 2014 vehicles, Chevrolet, Buick and GMC dealers will complete an oil and filter change, four-wheel tire rotation, and conduct a 27-point vehicle inspection based on what’s called for in the vehicle’s maintenance plan. […]

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Picture courtesy motorstown.com

A free-maintenance program introduced earlier this year to get its full-size pickups moving was expanded across the entire 2014 line.  For most 2014 vehicles, Chevrolet, Buick and GMC dealers will complete an oil and filter change, four-wheel tire rotation, and conduct a 27-point vehicle inspection based on what’s called for in the vehicle’s maintenance plan.

According to GM CEO Dan Akerson, this plan sells more cars:

“We know that customers who service their vehicles at our dealerships are much more likely to purchase another GM product down the road. It’s all the more important to bring customers to our service facilities for routine maintenance to further enhance the quality and reliability of their GM vehicles.”

Dealers will tell Akerson that such programs are a great way to sell lucrative service, whether it’s paid by the customer or by the company under warranty. Once that car is on the lift, a good service writer will always find something that needs attention, “now that the car’s here, might as well.”

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The Mortal Sins Of The Auto Business http://www.thetruthaboutcars.com/2013/01/the-mortal-sins-of-the-auto-business/ http://www.thetruthaboutcars.com/2013/01/the-mortal-sins-of-the-auto-business/#comments Mon, 21 Jan 2013 18:41:10 +0000 http://www.thetruthaboutcars.com/?p=474582 Automortal Sins will be an infrequent series about the true sins in the auto business. It won’t be the sins which some bloggers regard huge. We won’t blame lapses in styling, branding, we won’t lambast OEMs for abandoning sports cars in favor of appliances. Building the wrong car once in a while is a minor […]

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Die, sucker!

Automortal Sins will be an infrequent series about the true sins in the auto business. It won’t be the sins which some bloggers regard huge. We won’t blame lapses in styling, branding, we won’t lambast OEMs for abandoning sports cars in favor of appliances. Building the wrong car once in a while is a minor iniquity compared to the huge, most egregious, and definitely mortal sins committed by automakers every day, without the smallest amount of remorse. Here is the first one:

Automortal Sin #1:Forget Service, and to keep it holy

Flouting the importance of customer service is the auto business equivalent of adultery and the coveting of thy neighbor’s wife: It’s bad, it’s potentially deadly, and everybody is doing it. It is not the touchy-feely reasons of good customer relations that make great service all-important for an automaker, it’s hard cash.  Service, not cars, is the prime moneymaker in the auto business. Don’t pay attention to service, and you will develop huge pains in your bottom line.

At a big European OEM I had been intimately familiar with, in a good year, the profit contribution of new cars  was 33 percent.. Another 33 percent came from parts sales. And yet another 33 percent came from financial services.  Customer service in a wider sense brought most of the company’s profit – in a good year. In a bad year, the non-new car profits kept the company alive and paid for the loss in the new car business.

At the dealer level, matters are even more extreme.  New cars often are a loss leader for a dealer. How do you think a dealer can offer you a car below his cost and survive?  Sure, his true cost may be a little lower than he lets on, but the real reason is in the back: Servicing cars is a goldmine. Dealers earn double on each service job:  They can charge $100 or more for an hour. They pay maybe $20 an hour to the mechanic when there is business, and nothing when there is none.  They sell you parts with obscene mark-ups. A set of brake pads, or a rotor, for which you pay from $50 on upwards, costs $5 at the factory in China. Little plastic parts that are unique to your car are better than selling drugs or pornography. Nobody else makes them, so your friendly carmaker lists them at sometimes hundreds of dollars, and often they cost pennies to make. If I would be President, and if I would need a new area of responsibility for an unemployed DEA after a lost war on drugs, this would be it.

You probably are thinking now: This may be true where this Kraut is from, but this is America. Nobody is left starving here, even car dealers. According to NADA, that is America’s National Automobile Dealers Association, new car dealers lost money on every new car sale between the year 2006 and 2010. In 2011, the average dealer finally managed to eke out a tiny profit on his new car sales, but only when counting profits from F&I, which finally start flowing. Pure new car sales remain a loss leader.

Ironically enough, a new car dealer makes much more money selling used cars, and he did so in all years except in 2008.

Where the true money is made on a consistent basis is in the service department. NADA says that in 2011, a dealer’s average profit margin on service and parts sales was 46 percent. 46 percent!!! Both to dealer and OEM, service is a lifeline during good and bad times. We know how car sales fluctuated since in the past 20 years.  Service and parts sales are relatively steady and hovered at around $80 billion for all NADA dealers since the year 2000.

Of course, once the warranty is over, the fleeced customers tend to flee their dealer as if he has the plague. They end up at Meineke or Pep Boys who look cheap compared to the franchised dealers. Trust me, they still make a lot of money, even if they sell you the $5 brake pad at the cut-rate price of $49.50 instead of $55.

If the franchised dealer could hold the customer a little longer, dealer and OEM would make an excrementload more money. I am able to tell you how much, but I won’t. I had access to these numbers back when. They were confidential – and huge. Just consider this:

The average cost of a service job goes up with age. Keeping a customer in the shop of a franchised dealer means increased  service profits, and usually it means a new car sale at the end. Customers who fled to Pep Boys can also be very reluctant to come back to buy a new car. What is done to keep them? Nada.

OEMs spend obscene amounts of money on marketing their new cars, dealers spend wicked amounts of money on advertising theirs,  both throw away immense sums on incentives. All to sell a product that brings very little profit, or all too often no profit at all. There is a money printing machine called service, but this is regularly left devoid of ink and paper.

GM committed a lot of nasty sins. Here are two of the most egregious:

  1. To lose control of GMAC. Financial Services were the last true profit center for GM, and they let slip it away .
  2. To kill Mr. Goodwrench, and to replace the icon with meaningless Certified Chevrolet etc. Service.

GM is not alone with the stupidity. When times get tough, most OEMs happily scuttle what little market support they gave to their parts and financial service ventures and use it to prop up their doomed car sales. This can be an especially deadly sin. Especially in tough times, the service money keeps both company and dealers alive. When people stop buying new cars, they spend more for repairs. Something that is sadly all too often ignored in the industry. Look at the blue NADA chart above. Want to feel like a real car executive? Say the chart doesn’t matter. Speaking of Detroit: Ford quietly has been better and more proactive in this department. Maybe because old Henry once said that he would give the Model T away for free if he would be given an exclusive on parts sales.

Ignoring the money made from customer service is one of the most egregious automortal sins in the universe. Why is this sin committed as a matter of daily routine? Nobody knows. As one auto executive told me after a few beers: “We all have sinned and fall short of the glory of  God. Barkeep! Two more.”

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Watch Out: Your Dealer Is In Trouble, And He Needs Your Money http://www.thetruthaboutcars.com/2012/05/watch-out-your-dealers-is-in-trouble-and-he-needs-your-money/ http://www.thetruthaboutcars.com/2012/05/watch-out-your-dealers-is-in-trouble-and-he-needs-your-money/#comments Mon, 21 May 2012 15:41:28 +0000 http://www.thetruthaboutcars.com/?p=445380 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 […]

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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.

Says a J.D. Power and Associates study quoted by Automotive News [sub]:

“The number of vehicles in operation that are 5 years old and newer will dip to 63 million this year, forecast to be the low point of the industry’s downturn and recovery, according to J.D. Power and Associates. Late-model vehicles traditionally represent the sweet spot for repair and maintenance work for dealership service departments.”

Why will this be more painful than empty showrooms? In 2011, the service and parts business represented 13 percent of overall sales for the typical dealership but contributed 72 percent of dealership operating profits, according to the National Automobile Dealers Association (NADA). Used car sales often contribute one third of the profits, new car sales often are loss leaders.

Dealer workshops would have no problem surviving the trough if they would have held on to owners of older vehicles. The servicing of older vehicles can be the most profitable part of the business, new vehicles on the other hand need less and less service. However, owners of older vehicles typically give dealer workshops wide berth.

If your car is out of warranty and still being serviced by a dealer, watch for serious upselling. They need your money more than ever.

 

 

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Pulled Plug Story Infuriates Saab Faithfuls http://www.thetruthaboutcars.com/2012/01/pulled-plug-story-infuriates-saab-faithfuls/ http://www.thetruthaboutcars.com/2012/01/pulled-plug-story-infuriates-saab-faithfuls/#comments Wed, 25 Jan 2012 10:35:34 +0000 http://www.thetruthaboutcars.com/?p=428008 The story on Saab pulling the plug on the diagnostic computer, and hence on repairs that need that access, ruffled a lot of feathers.  The Church of St. Victor is so angry at the apostate article that it broke its self-imposed code of silence and mentions TTAC by name. Delusional as they are, they believe […]

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The story on Saab pulling the plug on the diagnostic computer, and hence on repairs that need that access, ruffled a lot of feathers.  The Church of St. Victor is so angry at the apostate article that it broke its self-imposed code of silence and mentions TTAC by name. Delusional as they are, they believe that their links send us traffic. Selfless as we are, we probably have done more to Saabsunited’s fame than any other site. Ingrates as they are, they call our story

“the most stupid article I have ever seen! This website has no clue how things work and this is why we never refer to them… I’m making a one time side-step from that policy!”

In their rage, they overlooked a small detail …

The source of this story is no other than Martin Jaenicke. Herr Jaenicke happens to be the chief of Saab’s dealer council in Germany, he speaks for all remaining 80 Saab dealers in Germany. Yesterday, Jaenicke  gave an interview to Germany’s Kfz-Betrieb. If you have an auto workshop in Germany, you have a subscription to Kfz-Betrieb. Mr Jaenicke told the magazine’s news chief Jens Rehberg, that

“many customers sell their Saab now, because they worry about the parts supply. Saab workshops are faced with many imponderabilities that need to be clarified as soon as possible.Currently, workshops can only perform very limited repairs, because online access necessary for work on on-board computers has been switched off. At the successor company in Sweden, which is taking care of these processes, the necessary systems need yet to be installed.”

We may not have a clue how things work at Saab, but we sure hope that the head of the dealer council does. In talking to some contacts, we pick up ruminations that the switched-off computer may have something to do with pressuring dealers into signing a new contract. Investigating …

If you believe certain accounts, heroic Saab employees selflessly bought their own toilet paper in a last ditch operation to defend crumbling Saab.

Jaenicke has a more sober perspective:

“The remaining contacts at Saab, when confronted by me with these and other matters, appear to be unable to cope at the moment.”

Even more damning, Jaenicke likes the receivers – Swedish lawyers, not selfless Saab employees – better than the old hands at Saab:

“With the receivers and Saab Parts AB, we finally found contacts who at least think they are competent.”

As for the bankruptcy, the dealer chief thinks it should have been declared much earlier:

“A year ago it was already evident that there is not enough money, even if the lines could be started again.”

Meanwhile over at the faithful, all is peachy. Says the latest missive to the flock:

“There are also some other really big spare-parts news that I would LOVE to reveal to you right now, but I’m not allowed to so keep your shirt on, keep driving those great Saab’s and don’t worry, your life with a Saab will not be a problem! =).”

 

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This Is What A Year’s Supply Of Saabs Looks Like http://www.thetruthaboutcars.com/2011/08/this-is-what-a-years-supply-of-saabs-looks-like/ http://www.thetruthaboutcars.com/2011/08/this-is-what-a-years-supply-of-saabs-looks-like/#comments Mon, 22 Aug 2011 17:19:05 +0000 http://www.thetruthaboutcars.com/?p=408252 Portland’s 82nd Avenue is one of those streets that exists in nearly every American city. Unofficially demarcating Portland proper (“the right side of the tracks”) from the extensive working-class suburbs that bleed into Gresham (“the wrong side of the tracks”), “Shady-Second” is home to a vast strip of wall-to-wall buy-here-pay-here lots, used-car hustlers, and small […]

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Portland’s 82nd Avenue is one of those streets that exists in nearly every American city. Unofficially demarcating Portland proper (“the right side of the tracks”) from the extensive working-class suburbs that bleed into Gresham (“the wrong side of the tracks”), “Shady-Second” is home to a vast strip of wall-to-wall buy-here-pay-here lots, used-car hustlers, and small repair shops that line both sides of the road from Sandy Boulevard all the way down to Division. Like every other used-car strip in every other town in America, it’s where folks go when they need a car and don’t have much money to spend. Unlike most other low-cost car Meccas, however, 82nd Avenue is also home to Oregon’s last remaining Saab dealership. And it’s something of a symbol of the hell that Saab dealers are going through right now.

Though I drive past it with some regularity (I live closer to “the tracks” than it’s fashionable to admit), today marked the first time I ever visited Garry Small Saab. Not because I haven’t been intrigued by the struggles of the few remaining Saab dealers, mind you, but because it’s hard to get any blogger out from behind his computer to chase a story. But when Automotive News [sub] quoted Mr Small in a piece today entitled Steady drip of bad news wears on Saab dealers, I knew I had to stop by. Though I’m extremely pessimistic about Saab’s chances of survival, and I’ve been highly critical of Victor Muller’s leadership, I feel nothing but sympathy for the dealers who are left to carry on the ground war. Anyone left in the Saab game after two years of a living PR nightmare has my complete sympathy and respect.

It’s certainly not hard to feel for Mr Small’s dilemma. Having bit his tongue around the media (to the best of my knowledge) for the last several years, Mr Small’s quote to AN [sub] betrays no sign of bitterness or anger; the facts simply speak for themselves.

Garry Small, owner of Garry Small Saab in Portland, Ore., has sold 15 new Saabs this year — but none since June. He has 14 in stock at his Saab-exclusive store.

“Sales have been absolutely flat,” he said. “At this rate of sales, we’ve got a two-year supply, you might say.”

Like other Saab dealers, Small has boosted used-car volume and relies more heavily on service operations.

“There’s no problem with parts and service,” he said. “That’s what’s keeping the doors open.”

By the beginning of June of this year, AN [sub] calculated Saab’s average inventory at a 248 days (prompting us to wonder why Saab was so concerned about restarting production). Based on his current selling rate, however, that number appears to have nearly tripled for Mr Small, whose 14 in-stock new Saabs account for something like a 700-day supply. Small doesn’t appear to be angry or bitter about the experience: after all, he hasn’t had problems with service the way some other Saab dealers have, with one telling AN [sub] that he had to wait 187 days for a 9-7x replacement hood. And because Portland is the kind of city that bought quite a few Saabs before “the troubles” (but wasn’t far enough in love with the brand to inspire hordes of specialty shops ala Volvo, Mercedes and Subaru), there’s plenty of service business to keep things afloat. But when 14 cars makes up a two-year supply, that service business just won’t last forever.

When I showed up at Small Saab this morning, finding it nestled between a buy-here-pay-here lot featuring English and Spanish signage and a used RV business, I didn’t see 14 new Saabs. In fact my first impression was of the used cars out front, which included a few 9-3s, a 9-5 and a 9-7x, as well as a New Beetle, Acura RDX and other entry-premium used vehicles. But on the North side of the building, lined up in a row, were six brand-new Saabs, mostly 9-5s, waiting for buyers. Evidently Mr Small wants to keep his visible stock to a roughly one-year supply. Opposite the new Saabs, though, was a seemingly endless row of 9-3s of every variety, reflecting the morning sun. With several hundred-thousand dollars of used Saab stock on hand, I was suddenly very curious about the level of demand for the brand’s used models. And though Small mentioned that service was his major earner, the service drop-off point held only a 9-5 wagon and, curiously, a TR6 and MGB (which are apparently part of the dealership’s used-car inventory). If anything can keep a service bay open, it’s a pair of British sportscars… but was that really keeping Oregon’s last Saab dealer above water? [Ed: please note that this is what we in the business call a "rhetorical question"]

Sadly, Mr Small was not in to answer my questions. After handing the friendly desk attendant my card, I was treated to a long, quizzical look. “We’re actually a fairly good-sized blog,” I explain, “and I saw Mr Small quoted in Automotive News… is there any chance I could ask a few questions?” An eyebrow moved, barely perceptibly. “Oh I know who you are,” I was told. “We’ve read TTAC. Unfortunately, Mr Small won’t be in until tomorrow.”

I left a card, and encouraged my somewhat stand-offish liason to pass it along to Mr Small, explaining that I sympathized with his plight and simply wanted to give him a chance to tell the world the truth about what it’s been like to be a Saab dealer over the last several years. As I drove away, I knew there was a good chance he wouldn’t call back. After all, if you’ve hung onto a Saab franchise for this long, why give up now?

The answer to that question, it seems, can be found in Sweden. Last week, we heard one of Sweden’s largest Saab dealers lambast the company, telling the press

For me, it is important to be proud of the brands that we have in our halls. Saab does not deliver cars they promised, they do not pay wages to their employees, nor debts to their suppliers while the owners pick out big money. It does not feel right for a [my] car dealers.

And now SvD.se reports that another major Swedish dealer has removed the Saabs from his ten showrooms, explaining

We have taken a time out and removed the show cars. It is sad, but there is no reason to work with selling cars that no one knows if or when they can be delivered

And it’s not just Sweden anymore: the AN [sub] story that quoted Small noted that eight of Saab’s 204 US dealers have closed their new car franchises, and quotes another dealer as saying he wishes he could drop out of the Saab game:

“I’d like to sell my Saab franchise, but it has almost no value right now,” said the dealer, who asked not to be identified. “To go from a top 10 dealer to crickets in the showroom — it’s a sign.”

Finally, the alternative to switching to used cars or trying to pick up a new franchise is also clear: the Albany Times-Union reports that

Fred Carl’s New Salem Garage Inc. has filed for Chapter 7 liquidation in Albany bankruptcy court, listing $1.63 million in liabilities and $254,000 in assets.

The Colonie Saab dealership closed Aug. 12 after more than a half-century in business… The decline in sales is reflected in New Salem Garage’s own financial performance. Its sales fell from $6.2 million in 2009 to $2.7 million last year and just $1 million through early August of this year.

With debt collectors closing in on Saab and freezing at least one of its accounts, workers complaining that they’ve received no guarantee that their next paycheck will arrive on time, and dealers dropping like flies, there’s nothing to gloat about here. The long, messy, highly public collapse of Saab is nothing short of a tragedy. But for precisely this reason it can’t be ignored or whitewashed. Anyone interested in the car business needs to look closely at Saab’s example as a warning sign that this business is merciless, and no place for unfounded optimism. And I really do hope Mr Small decides to give me a call and share his perspective… after all, there’s no better way to learn from history than to hear from the guys manning the front lines.
Saaabdealer saabdealer1 saabdealer2 One year's supply of Saabs... (courtesy: Edward Niedermeyer) saabdealer4 Zemanta Related Posts Thumbnail

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The Autobiography Of BS©: How I Failed To Make Volkswagen Lots Of Money http://www.thetruthaboutcars.com/2011/07/the-autobiography-of-bs%c2%a9-how-i-failed-to-make-volkswagen-lots-of-money/ http://www.thetruthaboutcars.com/2011/07/the-autobiography-of-bs%c2%a9-how-i-failed-to-make-volkswagen-lots-of-money/#comments Wed, 20 Jul 2011 11:53:05 +0000 http://www.thetruthaboutcars.com/?p=403654 Volkswagen just sold one of my inventions, and I didn’t get a dime for it. Volkswagen didn’t get rich on the sale either. After more than 20 years of trying not too hard, Volkswagen is getting out of the non-OEM service business and  sells its Stop + Go chain of quick-fit shops to the management. […]

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Volkswagen just sold one of my inventions, and I didn’t get a dime for it. Volkswagen didn’t get rich on the sale either. After more than 20 years of trying not too hard, Volkswagen is getting out of the non-OEM service business and  sells its Stop + Go chain of quick-fit shops to the management.

“It was supposed to be an all-out assault on the non-OEM service business,” writes Automobilwoche [sub] in an eulogy. The attack ended in defeat.

In the eighties, I was supposed to start a campaign to “re-capture lost service customers” for Volkswagen and Audi dealers. According to the data, customers were deserting the dealers in droves as their cars came out of warranty.  Hold your comments about bad VW dealers. All brands have that problem, much to the delight of Pep Boys, AutoZone, Meinecke, and Jiffy Lube.

“Gentlemen,” I said in a presentation, “there is nothing to recapture. Most of the Volkswagen and Audi drivers have never been in a dealership.” If someone buys a car used, the service bays at the branded dealer are usually avoided at all costs. Half of Germany’s cars are older than eight years, and those cars come into a dealership only in a dire emergency. Those customers go elsewhere. “And if you want them, you need to build an elsewhere.”

“No glass and marble. Something that says low price and professional quality. And no Volkswagen logos.”

The idea was accepted. Stop + Go was born.  A lot of red. A lot of green. We opened a pilot store in Berlin and one in Cologne. Hundreds of these shops were to follow. International roll-out. The competition was shaking in its service booths.

More than 20 years later, the number of Stop + Go stores still stands at 24. It quickly became clear that Volkswagen wants to make a lot of money selling original parts, but they didn’t want to make the investment to develop successful pilot stores, core to any franchise strategy. A mid-term refresh of the Polo probably received more marketing support than Stop + Go in 20 years. It’s not that there wasn’t enough money. There was money for corporate identity, expensive architectural concepts, there were at least three expensive re-launches. At the last  re-org, the matter was elevated to the Volkswagen Group level, and the manager reported directly to the board.  All for naught.  The mascot (lots of red and green) I had created is now in the German Werbefiguren-Museum.

It’s a shame. Selling parts often contributes a third of a manufacturer’s profits. Especially in lean times, it can keep the company afloat. Apparently, Volkswagen does not need the money.

 

 

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Best Buy Eyes EVs http://www.thetruthaboutcars.com/2011/05/best-buy-eyes-evs/ http://www.thetruthaboutcars.com/2011/05/best-buy-eyes-evs/#comments Mon, 09 May 2011 15:25:30 +0000 http://www.thetruthaboutcars.com/?p=394333 Electronics retailer Best Buy raised a few eyebrows when it began selling Brammo electric motorcycles alongside its flatscreens and Xboxes a few years back. Two years after that agreement was announced, however, Brammos are sold at only three West Coats Best Buys (one here in Portland, OR, two in California) and Brammo is expanding its […]

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Electronics retailer Best Buy raised a few eyebrows when it began selling Brammo electric motorcycles alongside its flatscreens and Xboxes a few years back. Two years after that agreement was announced, however, Brammos are sold at only three West Coats Best Buys (one here in Portland, OR, two in California) and Brammo is expanding its own dealership network independently of the big box chain. Was Best Buy’s Brammo experiment a disappointment? If so, it’s not stopping the retailer from pursuing other electric vehicle opportunities, as Best Buy’s mobility and transportation honcho Chad Bell tells Automotive News [sub] that it’s talking to electric car firms about a possible retail deal.

We are having conversations with some of the startups. I would say the conversations are going well. We are very excited about several partnerships that we can’t talk about yet. We probably get more traffic in a weekend than some of these dealers do in a month. The benefits for a small automaker trying to cobble together a sales and service network are obvious.

And despite the emphasis on startups and his use of the term “cobble together,” Bell insists that electric mobility is a long-term strategy for Best Buy.
According to Bell, even business opportunities like contracts for special EV customer training for dealerships are a possibility. But the shape of EV dealership experiences is still unclear, as (for example) Tesla has insisted that it doesn’t need a widespread dealer network because EVs need “next to no maintenance.” But clearly EVs aren’t fundamentally different from gas-powered cars in their needs for a service network. For example Tesla has not been able to deploy a multi-speed EV transmission on its Roadster (in fact, Brammo just announced what appears to be the first geared electric vehicle), and even its single-speed Roadster needs a $1,000 annual “tune up.” As geared EVs become more common, their maintenance and service needs will likely increase, and doing without dealers will become less of an option. Whether Best Buy and its “Geek Squad” can step into that breach (let alone actually sellelectric cars) remains very much to be seen.

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Mr Goodwrench, RIP http://www.thetruthaboutcars.com/2010/11/mr-goodwrench-rip/ http://www.thetruthaboutcars.com/2010/11/mr-goodwrench-rip/#comments Mon, 08 Nov 2010 22:18:32 +0000 http://www.thetruthaboutcars.com/?p=371857 Born in 1977, Mr Goodwrench was a marketing brand used to sell GM parts and service at franchised dealers. Now, after 33 years in service to The General, Mr Goodwrench is passing on to join Pontiac, Oldsmobile and HUMMER in GM’s crowded brand graveyard. Automotive News [sub] reports that GM marketing chief Joel Ewanick wants […]

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Born in 1977, Mr Goodwrench was a marketing brand used to sell GM parts and service at franchised dealers. Now, after 33 years in service to The General, Mr Goodwrench is passing on to join Pontiac, Oldsmobile and HUMMER in GM’s crowded brand graveyard. Automotive News [sub] reports that

GM marketing chief Joel Ewanick wants the vehicle brands, not corporate, to be the stars of GM, and that includes service and repairs
Ewanick has made it clear that he intends to continue the post-bankruptcy trend of shifting emphasis away from GM as a corporate brand and towards GM’s four vehicle brands. As an umbrella brand for service and parts for all of GM’s brands, Mr Goodwrench can be considered the latest victim of GM’s corporate restructuring. But Goodwrench was in failing health before Ewanick’s brandicide spree, and even embodying the brand as the satirist Steven Colbert didn’t convince GM’s US dealers to emphasize the Goodwrench service brand. GM won’t officially comment on Mr Goodwrench’s condition, but the brand is expected to survive in the Canadian market, where it allegedly continues to enjoy consumer cachet.

In order to honor the passing of this past-its-prime symbol of GM’s decidedly mediocre service reputation, we’ve assembled a few Mr Goodwrench ads below the fold.

Once upon a time Mr Goodwrench knew that “it’s not your car, it’s your freedom.” More recently, the reality has become something more along the lines of “it’s not your car, it’s a way to inflate dealership profits.”

In the late 80s, Mr Goodwrench delivered some of its most inspirational (or vomit-inducing, depending on your perspective) advertising based on the very same message. But Reagan-campaign-ad-style shots and a strong tagline wasn’t enough to prevent the hollowing out of Mr Goodwrench’s raison d’brand. After all, by ’89, GM was having its lunch eaten on the issue of reliability, and talking about service merely served to remind consumers of GM’s deficits in this regard.

Which helps explain why “Keep That Great GM Feeling” was never going to last as Mr Goodwrench’s slogan…

This ad had it all… the myth of Mr Goodwrench’s omnipresence, his knowledge of GM cars, and his grimy-handed, blue-collar charm (and anonymity). On the other hand, if your 1986 Chevette ever actually had its engine fully stripped by Goodwrench’s “hands that care,” chances are you’d be lining up for a Toyota or Honda the next time round.

This very decent Canadian ad proves why Goodwrench will probably survive in the great white North. Everyone’s scared of independent service shops, and Mr Goodwrench plays on those fears with “hands of skill.” Meanwhile, back in the US of A…

Er… yeah. Rest in peace, brand buddy.

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Cadillac Wants To Provide Ritzy Service On The Cheap http://www.thetruthaboutcars.com/2010/04/cadillac-wants-to-provide-ritzy-service-on-the-cheap/ http://www.thetruthaboutcars.com/2010/04/cadillac-wants-to-provide-ritzy-service-on-the-cheap/#comments Sat, 03 Apr 2010 11:39:41 +0000 http://www.thetruthaboutcars.com/?p=351382 Cadillac contracted the services of the Ritz-Carlton to train Cadillac dealers to provide 5-star service. The Ritz Carlton, first recipient of the Baldridge award in 1999, has a side business in training other companies to provide quality service. Don Butler, Cadillac’s marketing VP, said to Automotive News [sub] that the program will emphasize customer treatment […]

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Cadillac contracted the services of the Ritz-Carlton to train Cadillac dealers to provide 5-star service. The Ritz Carlton, first recipient of the Baldridge award in 1999, has a side business in training other companies to provide quality service.

Don Butler, Cadillac’s marketing VP, said to Automotive News [sub] that the program will emphasize customer treatment rather than facilities. For instance, he said, a dealership employee might take an umbrella and walk a customer out to his or her car when it’s raining. “It’s simple,” Butler said. “It’s the things that don’t cost a lot of money.” If he would only know.

Ritz Carlton’s fabled customer service rests on two pillars:

One, a huge database that collects customers’ wishes and preferences. If you order a pillow filled with bricks in one Ritz Carlton, be prepared to be told at check-in in the next one: “Of course, the pillow is just as you expect it. I personally selected the bricks.”

Two, personnel at the Ritz will be selected according to their enthusiasm for delivering quality service. As a high ranking Ritz Carlton manager once told me: “Selecting people who love to serve our guests is much easier than trying to train people who have no idea of the concept.”

About 10 years ago, we tried the same as Cadillac and hired the Ritz Carlton to train Volkswagen dealer personnel. Nobody wanted to pay for the database. Nobody allowed the Ritz to fire all sales and service people and hire new ones. You know how that worked out. At least something good came from it: The hotel at Volkswagen’s Autostadt in Wolfsburg is a Ritz Carlton.

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