#DealerNews

On Saturday, Nissan’s North American dealerships found themselves with a problem. A power outage at the automaker’s data center in Denver disabled a system dealers use to order vehicles, procure parts, check on recall statuses, obtain rebate information, and file warranty claims. As a result, the manufacturer’s communications in the U.S., Canada, and Mexico were disrupted. “Some of our dealer business applications have run in a reduced capacity using manual processing,” Nissan said on Wednesday.

Dealers were not pleased.

It’s no secret that Volvo dealers aren’t keen on the factory subscription plan. Last December, the California New Car Dealers Association even asked the manufacturer to end Care By Volvo on the grounds that it was taking business away from storefronts. The automaker responded by saying the service had proven popular with consumers, attracting new customers to the brand while reassuring dealers that version 2.0 of the subscription plan had been approved by the Volvo Retailer Advisory Board and would give shops more to do.

Rather than take the wait-and-see approach, the California New Car Dealers Association petitioned the state’s New Motor Vehicle Board. Last week, the group unanimously voted to direct the state’s DMV to investigate Care by Volvo and four claims that the service violates provisions of the California vehicle code — potentially leading to disciplinary actions.

We’re not singling out the good people of Erie, Pennsylvania, but it’s possible some General Motors dealers in that city may feel a pressing need for extra cash. On Tuesday, a grand jury indicted the owner of Lakeside Chevrolet-Buick and a former finance manager on charges of fraud.

You’ll recall a few years ago when another GM dealer in the city saw its owner and general manager indicted in a phony loan scheme. In the most recent case, the owner formerly held the title of president of the National Independent Automobile Dealers Association, and the indictments flowed following accusations of phoney sales reports and unpaid floorplan loans.

With the American public growing less inclined to visit car dealerships, Ford Motor Company is toying with an interesting solution — setting up shop in your local mall. The concept will be similar to the storefront Jake and Elwood crash through in The Blues Brothers after noticing “ the new Oldsmobiles are in early this year.” It’ll be small, limited to a couple of showroom models, and will serve as a satellite for local dealerships.

However, shopping malls aren’t nearly as popular as they were in the 1980s. Back then, people actually left the house to do their shopping. But there’s still hope. Many malls are rebranding themselves as shopping centers and focusing more on experiential services and the kind of goods you wouldn’t want to purchase sight unseen. The rest continue to wither on the vine.

Due to weakening new-vehicle sales, the United States was staring down the barrel of near-record inventories a couple of months ago. Encouraged by the factory to ensure their lots were filled with the latest wares, dealers have watched their margins evaporate as employees and customers drowned in the sea of metal parked out front.

While still uncomfortably high, U.S. inventories started creeping back down in May. By the end of the month, the number of vehicles waiting to be adopted fell below 4 million for the first time since the beginning of 2019.

With Audi’s TT slated to be replaced, eventually, by an all-electric model that doesn’t skimp on the performance thrills, the vehicle needs a send-off special edition. Starting June 5th, such a model will be available. However, the vehicle appears to be more of a way for Audi to test an online-only shopping model than a celebration of the outgoing TT.

Limited to 99 examples, the Audi TT Quantum Gray Edition will be sold exclusively in German using the company’s “initial pilot project for online direct sales.”

The last couple of weeks (and, um, stories) have been awash in negative press and bad vibes for Nissan. Fortunately, mother nature stepped in to help one Florida dealership restore the cosmic balance by having a family of ducks move in.

A few months ago, a nest of ducklings hatched outside Sutherlin Nissan Orlando. They decided to stick around, creating an interesting incentive for customers. While we doubt the company would implement new dealer conditions that mandate an on-site petting zoo, it could be a novel solution to its sales woes. After all, promoting dogs worked extremely well for Subaru. Maybe Nissan can become the duck brand.

When you give your car over to the dealership for repairs, you’re trusting them to fix it. You’re also trusting them not to take your pride and joy out for a Sunday drive so they can teach a co-worker how to drive stick. We figured this went without saying but a video was posted to YouTube last week showcasing exactly that.

A customer affected by Ford’s head gasket recall on the Focus RS had the good sense to install a dash cam before taking it into Hawk Ford of Oak Lawn, Illinois, resulting in eleven minutes of two men discussing all the odd noises the car makes as they clumsily pilot it around a residential area.

Despite the poor sound quality of the clip, some of those noises are audible and likely to cause minor physical comfort among highly sympathetic types.

Unlike components used in new vehicle assembly, the finished product is not shipped to the customer in a just-in-time manner. There’s usually a healthy amount of dealer-ready vehicles on hand, though recent months has seen inventories slide into obesity. Extended downtime and shift cuts at assembly plants are one result of a bloated supply made worse by falling U.S. sales (Fiat Chrysler’s Windsor Assembly is just the latest victim), but autoworkers aren’t the only ones bearing the brunt.

Figures from the beginning of April shows the inventory problem is only getting worse, with pressure growing on the dealers tasked with selling these vehicles.

U.S. light-vehicle dealers reported an operating loss for the first time since the National Automobile Dealers Association (NADA) began collecting data in 2009. While everyone continues reporting pretax net profits, concerns are beginning to swell around their dependency on factory incentives, which are not included in operating tabulations.

NADA’s analysis of 2019’s first-quarter auto sales shows that incentive spending is down compared to the same period a year ago. The group expects above-average discipline from automakers in terms of incentive spending throughout the year. According to J.D. Power, average incentive spending per unit was down $119 to $3,821 through March 2019 — with the brunt of that going toward trucks. However, if sales remain low, spending may creep back up to help clear out languishing inventories.

Dealers got an early look at a prototype build of the upcoming Ford Bronco. Gathered in Palm Beach, FL at the behest of the automaker, dealers were asked to hand over their phones in order to avoid any leaks. Fortunately, their memories were sufficient in giving us a better idea as to what to expect come 2020.

While the event’s focus stayed on the Bronco and some of its more-interesting features, Ford also shared its plan to develop a family of off-road vehicles to complement the model. Introductory vehicles include the Bronco, its smaller counterpart, and a little unibody pickup to slot beneath the Ranger.

On Thursday, Tesla announced it will finally begin delivering the Model 3’s long-awaited base trim to the public through direct online sales. By eliminating storefronts, the automaker believes it can reduce costs — helping to get that pesky profit situation under control.

Unfortunately, reports have emerged that claim those employees had no idea their jobs were on the line. Meanwhile, the company’s share price took a hit in the wake of the announcement, causing its stock to drop significantly. Since last Thursday, more than $8 billion disappeared from Tesla’s market capitalization.

Dearest TTAC readers,

I’ve come to know you incredibly well over the last seven years. I realize that what I’m about to tell you is somewhat akin to waving a dripping piece of red meat in front of a starving, caged tiger. But, like Bane, I am here for you, the people, and I’m willing to suffer abuse at your hands because the truth will ultimately set you free.

I also know that because much of my source material for this blog post was given to me anonymously and confidentially by one of the most influential dealers in the country, you’ll scream something like “I WANT TO SEE YOUR DATA,” but such is life, guys. I can’t show his numbers to you. I’ve substituted some data from the National Auto Dealer Association’s Mid-Year report for 2018 (the final 2018 report isn’t available just yet). You’ll see the correlation.

Now, let’s get into the meat waving bit, shall we. Breathe deeply, and jump in with me as I tell you this:

In 2019, car dealers are happier than ever to sell you a used car instead of a new one. This could make buying used a bad proposition. Here’s why.

When I was a lad, there were two family-owned and operated dealerships within walking distance of my home. Upon reaching driving age, one had already closed while the other began adding storefronts in different towns. It now has three locations, ensuring a meaty inheritance and lifelong job security for several members of my graduating class.

It’s the nature of the free market and a familiar story. According to an assessment from the National Automobile Dealers Association, singular showrooms have gone from 7,514 strong to just 4,904 between 2008 and 2018. That’s a 35-percent decline, whereas the number of dealers with 10 or more stores increased 62 percent over the same period.

Jaguar hopes U.S. buyers fling some woo its way this month, and it’s flinging bundles of cash at dealers to make it happen.

As the British brand is reportedly incentivizing its U.S. dealers to go above and beyond to break sales targets in the early part of 2018, savvy customers stand a good chance of finding a bargain.