By on August 7, 2019

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.  (Read More…)

By on June 21, 2019

If there’s one thing I loved about spending time in the offices of General Managers and dealership principals, it was hearing about the harebrained schemes they had to bring customers into the dealership. GMs see an average of 80 or more vendors every single month — there’s always a new piece of software, a new way to buy inventory, even a new way to wash the windows. Invariably, due to some combination of pressure to meet unrealistic sales goals and the attractiveness of the sales rep, managers would fall for something that would make me shake my rather large head in disbelief.

The tough part was always maintaining a straight face when they told me about their plans. One of my fondest memories was listening to a GM explain that he had canceled all of his third party advertisers and ordered two Wacky Waving Inflatable Arm Flailing Tubemen. I wasn’t entirely surprised to see that the store was out of business 90 days later.

But one of my all-time, tried and true favorites is the “gypsy sale.” Click the jump to see our friend Greg’s question about these direct mail pieces and whether or not they actually work. (Read More…)

By on June 17, 2019

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.  (Read More…)

By on May 23, 2019

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.  (Read More…)

By on April 29, 2019

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. (Read More…)

By on February 28, 2019

2017 Toyota Camry XLE side, Image: © 2017 Sajeev Mehta/The Truth About Cars

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.

(Read More…)

By on January 28, 2019

lincoln navigator grille badge lincoln logo

Last year, Ford announced its intent to develop a rewards program aimed at keeping customers engaged — while also making it worth their while to stick with the brand for their next purchase. While customer rewards are old hat, regardless of industry, automakers are busy devising new ways of using the venerable marketing theory to improve customer retention. It’s an urgent gambit, given today’s cooling market.

General Motors launched its “My GM Rewards” loyalty program in 2018, using a points-based system to reward customers who use OnStar’s new services, purchase a new vehicle, or service an older one. Those points can then be redeemed, knocking some cash off a subsequent GM purchase. Meanwhile, Honda previewed “Dream Drive” at the recent Consumer Electronics Show — a concept with its own redeemable points system (one that incorporates some potentially unsettling gamification within the app).

While Ford’s FordPass-based efforts appeared similar, it wasn’t until this month’s North American Dealers Association (NADA) meeting that the automaker was willing to flesh it out.  (Read More…)

By on January 25, 2019

Cox Automotive, in conjunction with Automotive News, just released its Retail Brand Scorecards Study for 2018. The survey is interesting in that it ranks the perceived value of automakers by assessing how desirable they are to dealerships via an A-through-F grading system. Though, as engaging as it might be to look at these traits from a highly specific viewpoint (how dealerships see you in relation to specific manufacturers), we’re not sure how useful the average consumer will find them. Dealers and industry geeks, however, may want to take notice.

“This study represents a comprehensive review of brands from a unique perspective — how well they support the success of dealers,” said Cox Automotive Chief Economist Jonathan Smoke. “As we assembled the data and began to see how the brands performed differently, we started looking at the results as grades in high school, where the most well-rounded and high-achieving students are those who perform well across a wide range of disciplines. With that scorecard framework, we found a clear set of brands that are honor-roll worthy, as they are in essence the hardest-working, most successful students.”  (Read More…)

By on January 25, 2019

2018 Mitsubishi Outlander PHEV - Image: Mitsubishi

Mitsubishi Motors burned up the newswires today in its haste to celebrate the opening of a new dealership in Cartersville, Georgia — which isn’t something you see every day. While hard to imagine for an OEM like Ford or GM, the press release fits with Mitsubishi’s short-term goal: a dealer network expansion in the U.S. and Canada, and greater dealer visibility.

We rag on Mitsubishi a lot; in many cases rightly so (why do your driver’s seats wobble?), but the brand that courted death earlier this decade just wrapped up its best sales year since 2006. When you’re small, you celebrate the little things. (Read More…)

By on January 9, 2019

On January 6th, local law enforcement reported that four kids enjoyed a night of destructive mayhem at a Houston-area CarMax dealership located in the 16100 block of the North Freeway. According to local reports, police were responding to a call where four young males were caught on video surveillance breaking into multiple vehicles. However, things got really interesting after officials learned the cars weren’t being stolen, but rather used to intentionally mangle other vehicles on the lot just for the thrill.

Police claim approximately $800,000 in damages after the group managed to intentionally wreck nearly two dozen automobiles. While none of the suspects’ names have been released, it’s probably safe to assume rowdy teens — mankind’s greatest foe — are to blame.  (Read More…)

By on December 13, 2018

lincoln navigator grille badge lincoln logo

This time last year, Lincoln was busy promoting its Experience Centers — storefronts that promote the brand and its products, but don’t serve as active dealerships. Then, in August, it asked around 80 Ford/Lincoln dealerships to commit to building separate Lincoln-only facilities by July. It was an attempt to elevate the premium brand by making it appear more exclusive, akin to what Cadillac attempted with Project Pinnacle and what Hyundai Group wants to achieve with Genesis.

Unfortunately, all of these programs garnered a “mixed response” from dealers. Many complained that the cost of building a separate showroom for higher-end models is prohibitively expensive. That has also been the case with Lincoln. The California New Car Dealers Association even wrote Ford Motor Co. last month, asking it not to punish storefronts that fail to divide their facilities, and it looks as though the automaker has acquiesced.  (Read More…)

By on November 18, 2018

High-end sports cars are much more likely to endure the onslaught of time that inevitably forces most automobiles into the junkyard. Why such vehicles might not all serve as pampered automotive “investments” for wealthy individuals, most are still well cared for and subject to fewer harsh winters and daily commutes than their mainstream counterparts.

Porsche claims that over 70 percent of all vehicles it has ever manufactured are still in operation today and the majority of those cars reside in the United States, not Europe. As a result, the automaker wants to expand its Porsche Classic operations in the region — helping owners keep their vintage machines in pristine condition while earning dealerships some side cash in the process.  (Read More…)

By on November 12, 2018

https://www.flickr.com/photos/autohistorian/25516489743/

Dealership advisory firm Presidio Group has painted a very bleak picture for its clients. With analysts predicting a downturn in auto sales, the company recommends dealers establish a robust 20-year plan that will enable them to perform in the new climate or get out of the business entirely.

Brodie Cobb, founder of Presidio Group, cites a glut of studies claiming dealerships will struggle as manufacturers shift into mobility companies and alternative modes of transportation are more broadly encouraged.

“We’re not particularly pleased that the world is changing the way it is. We would rather have it stay the same, because owning dealerships is a very nice return and profitable business that we enjoy very much,” Cobb told Automotive News in an interview. “So when we talk about this, it hurts us, too. We, too, need to understand the future, form a plan and not just put our head in the sand and hope it goes away.” (Read More…)

By on November 8, 2018

Remember this saga? Earlier this year we told you about All Pro Nissan, yet another entrant into the “Dealers Behaving Badly” file. At the time, the stores – owned by a couple of ex-NFL linebackers and a veteran of the auto industry – were being examined for all kinds of financial chicanery ranging from floorplan irregularities to missing cars.

At the time, it was reported that All Pro Nissan was open but unable to sell or lease vehicles due to “restructuring.” Now, it appears the lights have been turned off for good.

(Read More…)

By on August 28, 2018

dealership

Serious question: What kind of experience do you need in order to write credibly about the automobile? If you were to ask some of the autojourno Boomers, they might tell you that the minimum requirement would be the career path followed by my time-and-again boss, Larry Webster: engineering degree, followed immediately by a magazine employment history that starts at “road warrior” and ends at “E-I-C of the most solvent color rag in the business”.

Some people would say that my boon companion Sam Smith did it right: college degree, time as a professional BMW mechanic, many years as a self-funded club racer in concert with his experienced and mechanically knowledgeable father. I’d like to argue for my own path: mildly successful car salesman, F&I experience with multiple captive finance firms, ground-floor experience with automotive tech and production, eighteen years of motorsports with a sack full of wins and lap records.

Ah, but these are means and not ends. They are how and not why. They detail the pathway by which expertise is acquired but they are not expertise themselves. If you read everything that Larry and Sam and I have written, you would know a major percentage of the things we know, and then you would be free to go forth and apply that knowledge to future situations. All you would need at that point would be an ability to write.

You could get by with less. LJK Setright was frequently dead wrong but I’d rather read his mistakes than labor through Csaba Csere’s researched conclusions. Gordon Baxter was not a great pilot and he was a worse driver. As a teenager, I read the work of gunwriter Jeff Cooper until I knew much of it by heart; years later, a mutual friend confessed to me that Cooper was only just competent with a .45 caliber pistol.

This is what you cannot be and still succeed, not if there is any justice in this world or the next: ignorant and proud of it, stupid yet blase about it, stilted in prose but unwilling to fix it. Which brings us to this week’s question.

(Read More…)

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