Tony Horton, the creator and lead trainer for the P90X series, has a frequent saying about not letting your ego get in the way of your success. Don’t use 25-pound dumbbells for an exercise when you really need to use 15s, etc. It can be tough, especially at the beginning (when you’re not terribly strong yet), and you’re using weights that look more like they belong in a Richard Simmons workout than a P90X workout, but it’s the only way to build up enough strength and get the results you want.
About five weeks ago, I realized that I was terribly out of shape. Well, that’s not really true. I had known that I was out of shape for much longer than that, but I hadn’t actually done anything about it. With the traveling for business and the parenting and the soccer coaching and the socializing, I had taken my concerns about my physical fitness and placed them in the bottom of a locked filing cabinet stuck in a disused lavatory with a sign on the door saying “Beware of the Leopard.”
So it wasn’t until five weeks ago that I decided to take action and throw the old P90X3 discs back in the Blu-ray player and get my ass moving. Good news is that I’m down double digits in weight, my resting heart rate is down about 11 beats a minute, and I’m on the path back to being physically fit again. This is, of course, completely uninteresting to you, but there’s a point coming up here in a second.
I drove my loaner Lotus Evora 400 down to Atlanta Motorsports Park for an SCCA “Track Night in America” this week, and I’ll have a full write-up of whether or not it’s a good idea to drive 700 miles in one day for a track session next week, as well as the rest of my impressions of the car. However, today I want to talk about what I saw in the Intermediate session. It wasn’t good.
Unfortunately, I knew this whole Ford “kill all the cars” was coming a few weeks ago. While visiting a dealer, I had a conversation with a regional Ford rep who told me the company’s plan was “Mustang, Focus Active, and Trucks, Baby!” for 2020 and beyond. So it’s easy for me to say I saw it coming, but, more importantly, I can also say that I knew why it was coming.
It’s not Mark Fields’ fault. It’s not even Jim Hackett’s fault, really. Do I think he’s the second coming? No. Do I think he’s going to run the company into the ground? Of course not.
No, at the end of the day, the only person that can be held responsible for the death of Ford’s passenger cars is You. Not me. You.
“See that sign over there?” The weathered, weary general manager of the dealer I was visiting that day pointed in the direction of a shiny, silver and red beacon with the word “FIAT” in bold capital letters. He spat the still-burning cigarette out of his mouth and stomped on it in disgust. “Cost me $27,000. They gave me the franchise for free, but they made me pay for that damn sign.”
“How many Fiats have you sold since you put it up?” The exasperated look he shot me after I asked that question told me that perhaps I shouldn’t have ventured into that territory.
“One. One freaking car. I’d have to sell about 40 of the damn things just to pay for the sign, much less make any money.” He gestured toward the line of Fiat 500Xs that were crowding his lot. “You wanna take a couple with ya? I’ll make you a hell of a deal.”
Even though I’m actually rather fond of the little crossover, I’m not fond enough to actually buy one. Apparently, nobody else is either. And that’s a problem for FCA dealers.
Earlier this week, I found myself behind the wheel of a Hyundai Kona SE, doing some test driving on behalf of a dear friend of mine who recently acquired her license and had yet to acquire the accompanying insurance.
“This car feels like despair,” I said to her as we rumbled harshly over some bumps in the urban streets of Miami. Everywhere I looked, I found reasons to be depressed. The steering wheel was of the most severe and slippery plastic material. When I pressed the accelerator, there was a ghastly noise accompanied by a complete lack of actual forward motion. The stereo was of such poor quality that I just turned it off. “No me gusta.”
The salesperson in the backseat was not pleased with my reaction to the car. “Well, you know, this is the base model. I could show you an Ultimate model if you want some more features. It has the better motor, a nicer steering wheel, more speakers. Of course, we only have one of those in stock.”
And therein lies the problem with most modern car reviews, including ones that I’ve personally written. The cars the OEMs have the automotive press reviewing are not the cars the dealers are stocking, and they definitely are not the cars people are buying.
It seems like only last year that the star of the New York International Auto Show was an 840 horsepower, zero you-know-whats-given, single-seated rocketship that did a 9 second 1/4 mile and literally lit things on fire. That’s probably because it was last year. This year, I found myself enthralled by … an in-car audio system.
That’s right — the very best part of the 2018 NYIAS was enjoying Art Pepper and Bonnie Raitt on the ELS surround sound system in the Acura RDX A-Spec (no kidding, it’s freakin’ amazing and it’s worth buying the RDX just because of it).
Yes, there was a yellow Porsche thing and there was a very Lamborghini Orange Corvette, but there was little else for this journosaur to get excited about other than the fact Honda ordered some extra wine for their social hour (see pic at the top, featuring my security detail: our own Bozi Tatarevic), due in no small part to the fact that I drank six glasses of red wine all by myself in less than 60 minutes.
So rather than do what every other autoblog on the planet does, I’m not gonna give you my greatest hits of the auto show. Rather, I’m going to tell you what should have premiered on this year’s show circuit.
My friends, I spoke to you last week about the dangers of freedom-hating wackadoodles who want to take away your right to own and drive your own car. Some of you agreed with me, others didn’t. Such is the nature of an op-ed. I was pleased to see that only a couple of you tried to no-platform me — either I’m getting less offensive in my old age or you’re getting more tolerant, and both of those are good things.
But today I am here to warn you of a more subtle threat to your driving-related joy, and it’s coming from a rather unsuspected source — the very manufacturers of the cars we love so much. Well, no, that’s not exactly right. It’s actually coming from you. The economic factors presented by the buying behavior of the general public are eventually going to make it impossible for automakers to deliver the cars that enthusiasts want to buy.
I’m not just talking about silly “Save the Manuals” nonsense. I’m talking about being able to buy a lightweight car. I’m talking about buying a car that will allow you to get yourself into trouble without kicking in the traction control. They won’t be dead — at least, not yet. But there’s no denying that cheap, fun cars are very, very close to being a thing of the past.
Here is who should have the right to get around in a giant hunk of metal traveling at speeds that will instantly kill a pedestrian, such that tens of thousands die every year and no one notices or cares: no one. No one deserves that right.
— David Klion (@DavidKlion) March 6, 2018
Oh, my friends. We knew this day was coming, didn’t we? In a society where all it takes for a cause to be popular is a tweetstorm, David Klion has decided that nobody should have the right to drive a car. Who’s David Klion, you may ask, and why should we care what he thinks? Well, he’s a freelance columnist (hey, so am I) and he lives in Brooklyn (I was born near there!) and he used to work for Al Jazeera America (okay, I would never do that) and he occasionally gets to write op-eds for the New York Times (like Ed Niedermeyer!). And, holy shit, I actually predicted this way back in 2016.
So while I may not particularly care what Mr. Klion thinks, it’s important to realize he represents the opinion of a significant number of people just like himself — people who are scraping by to make a living in ever-growing urban centers, who probably can’t afford a car and probably don’t have a driver’s license, and have seen how the power of a few malcontents on social media can affect significant social change in these United States of America.
In other words, they’re very, very dangerous. And in order to show you how dangerous they are, I’m gonna have to talk about the third rail of American politics at the moment: The Bill of Rights.
Over the years, every single time I’ve written about dealers and questionable business practices, the feedback from readers is invariably the same — kill the dealer model. Nuke it from orbit. We would all rather deal directly with the manufacturer than some slimeball franchisee. We want to order cars exactly the way we want them, down to the color and trim, and we want them delivered directly to us without the hassle of spending the day at the dealer saying “NO” to Tru-Coat.
Well, I should clarify — not all readers feel this way. Any reader who works for (or has previously worked for) a dealer will tell us all that we need the protection from OEMs that franchise agreements provide the customer. They tell us that competition in the marketplace is good for the consumer, and that it helps the local economy to have franchises around America.
But what would really happen if OEMs got their way and were able to sell directly to the consumer? What if all the dealers disappeared tomorrow? Would you be happy with the result? Or would it damage the customer? Who would benefit, and who would suffer under such a model? Let’s look at it objectively.
To be honest, I would have rather had anything else on the lot, and I do mean anything. However, when I arrived at Fort Lauderdale-Hollywood International Airport, National Car Rental was a bit short on cars on the ol’ Emerald Aisle. There was a line of people about ten deep waiting for cars to be brought up from the overflow lot, and I had a meeting to get to. So I did what anybody else (who rents 40 cars and spends about $10,000 annually with National) would do — I walked over to the “upgrade” area, hopped into the least expensive “luxury” car available, and drove it to the exit booth.
“I won’t be paying any extra for this,” I explained to the booth attendant, “because a Mercedes-Benz CLA 250 is not an upgrade.”
Three days and a couple hundred miles later, I realize how prescient I’d been at the time. I would have rather had a Chevrolet Impala, a Dodge Charger, or even a Nissan Altima over the Hungarian Baby Benz. Here’s why.
It pains me greatly, dear readers, to say what I’m about to say. Those of you who regularly follow my writing know how I lean when it comes to politics. However, given the current state of the auto dealership world, I have no choice. I gotta admit it — I agree with Elizabeth Warren on something.
Good ol’ P…er, Senator Warren and I both agree that there needs to be more oversight of the automotive lending business. Part of my day job is to educate new automotive advertising sales representatives about the car sales industry, and when I get to the part of the day where I tell them about how the Finance and Insurance office works, I always give them the following warning:
“Guys, if you don’t know about how car loans work, you’re about to get very, very angry.”
So I’ll give you the same warning, friends. I’m going to share about the predatory lending practices that go on behind the scenes, and I’ll tell you what I think should be done to stop it.
In 2017, car dealers across the country experienced something they hadn’t experienced in a decade — a year without sales growth. The decline was ever so slight, thanks largely to a couple of bad hombres named Irma and Harvey, but it was a bit of a challenge for dealers who were used to consistent improvement year-over-year since the Great Recession. As such, dealers and automakers are more concerned than ever about consumer shopping behavior, because all of the predictions for 2018 indicate a continued decline for new car sales in the U.S.
Dealers are no longer content simply to throw their inventory up on a third-party listing site, hoping to win your click. They’ve paid millions of dollars to collect unstructured data, track your online behavior, and enter your name into customer relationship management systems.
Today, I’m going to walk you through the way that the industry thinks you shop for cars, and you can tell me if they’re right.
I’m not ashamed to admit it — I’ve got a total mancrush on Juan Pablo Montoya, and if you care even a little bit about racing, you should too. Not only does JPM have the most impressive and diverse resume of any modern day racer (7 wins in Formula One, including the Monaco GP, multiple wins in the Indy 500 and 24 Hours of Daytona, multiple NASCAR road course wins), but the way he’s gone about it has been exactly the way all of us weekend racing warriors wish we could do it.
He’s been just as likely to win a race as he has been to give the chrome horn to a competitor who crossed him. If Montoya were on your bumper in an Oldsmobile Alero, you’d be nervous that he’d either fly by you or put you into the wall. My friend Sam Smith says that he’s one of the last, true, IDGAF dudes in racing, and a unique talent, and he’s right.
I had the chance to flag JPM down for a few minutes in the media center at the Rolex 24 this weekend (more on that experience tomorrow), where he was the anchor driver for the #6 Acura ARX-05 Daytona Prototype car. I don’t often find myself nervous around another grown man, but I was a bit starstruck for this conversation. Apologies in advance that it kinda goes everywhere. (Disclosure — Acura invited me to the Rolex 24 for the weekend, and provided flights, hotels, meals, and tickets to the race.)
“We’re dirty, yeah, but so are the dealers. We’re all dirty in this business.”
The petite, honest-faced young lady sitting across from me at my lunch table doesn’t look like a predator. To be fair, she isn’t. She just works for a company that’s one of the biggest subprime lenders in the country, with offices in several states. By the time a dealer calls them for a loan, they’ve already tried every traditional bank and credit union in their Rolodex.
And in exchange for a delicious burrito, she agreed to meet with me and pull back the kimono on the subprime auto lending business in the United States, a business which many in the financial sector believe to be the next big bubble.
I have a lot of questions, and she’s more than willing to answer them. I ask what sorts of credit scores they’ll approve.
“We can pretty much approve any credit score. I just approved a 413 beacon score the other day. Of course, it was a 25 percent loan. Credit is really just one piece of the puzzle,” Elizabeth* (not her real name) explains to me. “Sure, we pull TransUnion and Equifax, but we’re also looking at their obligations versus their verifiable income. Medical bills don’t count. It’s just rent plus whatever else is on their credit report.”
“Sure,” I say. “That makes sense.”
“Of course,” she continues between small bites of burrito, “if they’ve just stopped paying a bill, something other than another car loan, we don’t count that bill as part of their monthly obligations. Nobody pays student loans. They’ll have like five or six loans and won’t have paid a damn dime in months. So we don’t worry about those.”
Hang on. It gets weirder. And better.
For over a decade now, Kia has slowly but surely been moving toward doing the impossible —transitioning the brand image from “ subprime, budget, shady, and non-desirable” to “a slightly Buick-ized version of Hyundai.” In order to do this, Kia dealers have always relied on the one factor in their favor, which is the ability to sell on price. While the MSRPs on Kias aren’t too far off the competition, the stores have historically dumped new inventory at prices well below the sticker. Looking at an Altima? Why not try this Optima at $3,000 off instead?
Of course, when you operate this way, it makes it difficult for salespeople and managers to make any money, since there’s little to no profit in the deal. For over a decade, Kia has offered sales staff what’s known in the business as a “spin” every time they sell a new car — they can call into a number or log on to a website and enter a VIN-specific code for a “spin” and a chance to win a bonus that ranges from $25-500 per car. If you sell Kias for a living, this is likely how you’ve been paying your bills for as long as you can remember.
According to sources within Kia dealerships, a little over a month ago, without warning, Kia stopped its OEM incentive program for management. Then, for October, again without warning, Kia stopped the spin program for sales people, also with no explanation. Rumor has it this decision comes from the new VP of Sales for Kia Motors America, Bill Peffer, who came to Kia from a dealership group in the Pacific Northwest. Dealers tell me that they’ve repeatedly e-mailed their corporate contacts for explanation, but none is expected.
Other than a sharp increase in the mortgage foreclosure rate for Kia dealer employees, what does this mean for Kia in the States?
The Fiesta ST was the greatest car to ever be sold in the United States of America. So, naturally, Ford has decided to stop selling it here.
Boom. How’s that for an opener, y’all? I mean, I can just picture the keyboard warriors reading those sentences and fumbling their bag of Cheetos while running to Reddit to say that ol’ Bark is off his rocker again.
“He should be fired — not just from TTAC, but from the entire internet! Has he forgotten about the 1994 Camry, for Hillary’s sake?”
As Aaron Rodgers would say, “R-E-L-A-X.” I’m going to take a moment to explain to you why the greatest mistake I ever made was returning my 2015 Fiesta ST at the end of my lease.
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- Sgeffe Any PR position seems to require a Marketing degree (which I hope is a Bachelor of Science degree, but I digress! ;-) )And as I've opined before, all a Marketing degree really consists of is a degree in shoveling bovine excrement!
- Dwford Ford. They have over committed to EVs with the cancellation of all sedans as well as the recent cancellations of most of their gas crossovers. Too soon. GM has a whole new lineup of gas crossovers coming, while also introducing new EVs: the correct strategy.
- The Oracle The Chinese team needs a new name other than something you’d find on Amazon for a cheap product.
- FreedMike Smart idea. EVs are a far easier sell to someone who can charge them at home.
- Dwford This is just going to become part of selling EVs. Automakers need to make it as simple as possible to buy an EV. And the process of hiring an electrician etc is a barrier many people will not want to deal with.