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Top Stories
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Edmunds: Oct. sales on track for 10M SAAR
With another week gone by, October sales look to be on track for Seasonally Adjusted Annualized Rate (SAAR) in the low 10 million range, according to the latest data from Edmunds.com, which issues a more detailed forecast later this week. General Motors' market share, which in the early going of the month stood at 22.4 percent, has slipped slightly to 21.7 percent in the latest Edmunds.com analysis. In terms of sales by segments, the market appears to be returning to a pre-Cash for Clunkers equilibrium between large SUVs and trucks compared with small cars.Sales of compact cars during this summer's Car Allowance Rebate Systems (CARS) program, in full swing in late July and August, soared. Market share for the segment in August shot up to 23.5 percent. Edmunds.com's analysis shows the segment falling back to 15.3 percent this month, nearly on par with the 15.9 percent before the Clunker program. Analysts late last week forecast 2010 sales may be up as much as 15 percent.
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What they are, how to implement them and how to measure your success
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FirstLook sees wholesale market continuing to soften
The Automotive Wholesale "Bull Market" peaked in mid-September and wholesale values are likely to continue to soften for the remainder of 2009 due to declining showroom traffic, lower pre-owned retail sales and an overhang of aged inventory on dealer lots according to recent study by FirstLook. The crack in the 2009 wholesale market came in the wake of the end of the "Cash for Clunkers" program, which was feared to have pulled existing demand forward instead of stimulating dramatic new demand, according to the analysis.
[FULL STORY]
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Honda raises forecast, avoids loss for first half
Japanese government incentives for green cars and strong sales in China helped Honda Motor Co. avoid red ink for the first half and raise its full year profit forecast, The Associated Press reports. Japan's No. 2 automaker said Tuesday it now expects a net profit for the fiscal year ending March of 155 billion yen ($1.7 billion), nearly four times its initial outlook for a 40 billion yen profit. Hit by a strong yen and weak global auto market, net profit for the July-September quarter fell 56.2 percent from a year earlier to 54.0 billion yen ($587.0 million) but was better than expected. For the first half, the automaker booked a net profit of 61.5 billion yen compared with its earlier projection for a 10 billion yen loss. "The numbers were surprising," said Yoshihiro Okumura, auto analyst with Chiba-gin Asset Management. "The better vehicle sales numbers are producing results."
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Chrysler dealerships at risk in dispute over financing
A conflict between Chrysler Financial and GMAC is threatening about 40 otherwise viable Chrysler, Jeep and Dodge dealerships with loss of financing and possibly foreclosure, according to the National Automobile Dealers Association, the Detroit Free Press reports. As part of Chrysler Group LLC's bankruptcy restructuring, the U.S. Treasury agreed to guarantee floor plan loans until Nov. 15, while GMAC absorbed the wholesale financing operations previously serviced by Chrysler Financial. GMAC has informed dealers it needs more collateral. The value of the cars ordered is not enough. For some dealers, the only way to raise the additional collateral is to draw on their mortgages. But Chrysler Financial, which holds the mortgages on some of these dealerships, has refused to relinquish its stake in those properties. Even if dealers chose to sell their stores in this market they would get considerably less than they owe on the mortgages.
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Voices on the economy: Determined dealer fights GM closure
In the five months since General Motors Corp. announced plans to close as many as 1,200 dealerships across the country, one local man has been putting up a fight, the St. Cloud Times reports. Doug Hawkinson is general manager of Koronis Motors in Paynesville, one of a few Central Minnesota dealers to lose the contract that allows it to market GM products. While many dealerships are closing and major auto companies are struggling — GM filed for Chapter 11 bankruptcy protection in June — the independently owned Koronis Motors has been holding steady, Hawkinson said. He remains adamant the 60-year-old dealership will stay open — even if it has to sell foreign cars instead of the Chevys and Buicks he’s been offering.
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Consulting firm charges GM $23M
A consulting firm is charging General Motors' bankruptcy estate more than $23 million for three months' work leading up to and following one of the largest corporate bankruptcy filings in U.S. history, The Detroit News reports. According to a quarterly report filed Thursday in U.S. Bankruptcy Court, crisis management firm AP Services LLC charged GM and its bankruptcy estate $23 million for about 90 days work and expenses that included airfare, hotels, meals, rental cars and other expenses. U.S. bankruptcy Court records give the most detailed look at costs related to GM's bankruptcy case and offers insight into the number of people needed to prepare GM to be dismantled and liquidated. AP Services, headed by Al Koch, who doubles as the chief restructuring officer of GM's bankruptcy estate, had a team of 153 people working on GM's bankruptcy case, and several charged $835 an hour in June. Tim Yost, a Koch spokesman, declined comment Friday.
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Ford workers at 3 factories vote down concessions
Ford Motor Co. workers at three factories with more than 5,600 employees rejected concessions that the United Auto Workers granted to the carmaker’s U.S. competitors, union officials said, Bloomberg News reports. Workers casting ballots at a Livonia, Michigan, transmission plant voted 52 percent against the accord yesterday, while 92 percent of union voters rejected the deal at the Ford Escape factory in Claycomo, Missouri. Members at a Plymouth, Michigan, parts factory voted it down on Oct. 23, a person familiar with the results said. Ford, the only major U.S. automaker to avoid bankruptcy, seeks concessions as U.S. industry sales have fallen every month except August since 2007. UAW Vice President Bob King visited the Claycomo plant near Kansas City yesterday to promote the accord calling for a six-year ban on strikes over wages and benefits and a pay freeze for new hires, according to Gary Walkowicz, a UAW Local 600 official in Dearborn, Michigan.
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International auto group, like NADA, supports one fuel standard
Michael J. Stanton, President and CEO of the Association of International Automobile Manufacturers, Inc. (AIAM) testified at a hearing Monday in support of a comprehensive and harmonized national approach to reducing greenhouse gas (GHG) emissions while improving fuel economy standards for cars and light trucks. National Automobile Dealers Association leaders earlier also testified that they support the single standard.
[FULL STORY]
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Some gas-guzzling vehicles enjoy sales surge
This month, gas prices are almost a dollar lower per gallon than they were a year ago. But experts say they will climb significantly the moment any sort of economic recovery occurs, Forbes.com reports. And thanks to that prolonged dip in fuel costs (oil prices have remained between $65 and $80 a barrel for 10 straight weeks), sales of compact and subcompact cars have plunged. Yet limited-edition cars like the $105,000, 470-horsepower Jaguar XJL Supercharged Neiman Marcus Edition, which gets a combined 17 miles per gallon, are selling out in a matter of minutes in special online sales. Fans of the Ford F-Series trucks and Chevrolet Suburban are taking advantage of the reprieve as well, especially as the end-of-2009 sales season draws to a close. Each of those vehicles reported sales increases of more than 3 percent over September of last year.
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Forecast: U.S. will lag in natural gas vehicle sales
Natural gas vehicles (NGV) on the road worldwide are forecast to hit 17 million units by 2015, up from 9.7 million in 2008 according to a new Pike Research report. The top five markets for NGVs are currently Pakistan, Argentina, Brazil, Iran, and India. Pike Research anticipates India will be the fastest-growing NGV market. Despite this growth the U.S.NGV market is expected to remain dominated by fleet sales to government and commercial customers (89% of sales in 2015). Pike expects forecasts 31,347 vehicles (including conversions) sold in 2015.
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More Dealer News
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Omaha man accused of stealing parts from employer
An Omaha, Nebraska, man has been accused of embezzling from the auto dealership where he had worked by ordering parts and auctioning them off on eBay, The Associated Press reports. James Norwood has been charged in Douglas County with theft, punishable by up to 20 years in prison. Authorities say the 55-year-old Norwood would create fictitious orders for local auto body shops and later cancel the orders so the auto body shops weren't billed. Investigators say Norwood would set aside the parts as they came in to Old Mill Toyota, where he worked, and later auction them off on eBay. Investigators say the dealership has lost $282,590 to the scheme since January 2005. Norwood's attorney, Michael Fitzpatrick of Omaha, says his client maintains his innocence.
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Nissan goes to court in effort to cut ties with Columbus auto dealer Rob Doll
BMW of North America sues Levin BMW
Dealers nudge into market with low-priced Chinese car
Driving Forward: After Cash for Clunkers, auto dealers restock
Buy a car and get pampered at new GM dealership
How auto giant Denny Hecker's empire crumbled
Brothers buy LeMay dealership
Kia of Orange Park seems to be in driver's seat
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Dave Anderson Quote of the Week
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You can go fast by yourself but you can go far with others.
-- Dave Anderson, Learn to Lead, Inc.
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In Dealer magazine
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General Motors’ re-emergence means a new incentive program
by Richard N. Sox, Jr.,
.jpg?i=110209132202) Most General Motors dealers are hearing the rumors about a new incentive program General Motors may roll out as early as October 1, 2009. Several of our General Motors dealers have learned that this “conformance-based” program has been given the name Essential Brand Elements or “EBE.” ...The flaw in GM’s new program is the same as in all similar programs, including Added Value, and that is the blanket requirements to have a facility with certain image detail, specific square footage in each department, a certain number of parking spaces, and a baseline minimum acreage for the dealership site will never be a “one-size fits all” prospect. There will always be dealers, and in this economic climate likely many more dealers, who cannot justify the expenditure required to meet the program guidelines. In other cases, there will be dealers who, due solely to their location in a metro market, cannot expand their facility to a contiguous parcel or move to an entirely new location in order to meet the square footage, parking, and overall acreage requirements. On the other hand, there will also be dealers who haven’t remodeled their dealerships in a number of years and, all else being equal, will determine that the required facility upgrade will be a good business decision. The dealers who do not comply with the EBE requirements, regardless of whether compliance was even possible, will be placed at a competitive disadvantage by not receiving incentive monies. Read more
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Dealers had more questions…we have more answers
by Roger Beery
I want to start by again thanking those readers who have sent in their insurance and risk management questions since.jpg?i=110209132202) my last article. As a result, I’ll stick one more time to the question and answer format. The majority of questions since my last article have dealt with the state of the dealership insurance market and in particular, the position some insurers have been taking with Chrysler and GM dealers since their respective bankruptcies. The questions have come not only from dealers, but also from associations and other magazines. Surprisingly, the general state of the dealership insurance market is quite healthy and vigorous. At the beginning of the year we saw some dealership insurers try to push prices higher in hopes the rest of the competition might see it as an opportunity to follow suit. It didn’t happen. Prices and coverages for the most part have remained competitive in most parts of the country. Property coverage near the gulf and east coasts remains challenging, but we are even seeing some slight improvement there. Read more
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