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Wednesday, September 30, 2009
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Issue 41
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VOLUME 3
ISSUE 41
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News and Industry Trends
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Toyota to recall 3.8 million vehicles
Toyota Motor Corp. will recall more than 3.8 million Lexus and Toyota vehicles, its largest ever U.S. safety recall, after drivers reported that floor mats slid forward and in some cases jammed the accelerator pedal, the company and the U.S. government said Tuesday, The Detroit News reports. Transportation Secretary Ray LaHood and Toyota officials urged owners of seven vehicle lines, including Toyota's best-selling Camry sedan, its Tundra truck and three premium Lexus models, to immediately remove driver-side floor mats, particularly if they are not secured. "This is an urgent matter," LaHood said in a statement. "For everyone's sake, we strongly urge owners of these vehicles to remove mats or other obstacles that could lead to unintended acceleration." The impetus for the safety advisory, which will be followed by a recall, appears to be a crash in San Diego last month that killed four people riding in a Lexus ES 350. The National Highway Traffic Safety Administration, which sent investigators to review the wreckage, was preparing to open an investigation into the issue if Toyota hadn't agreed to the recall.
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Greasing Fixed Operations by Learning the Nuts and Bolts of e-Commerce
Six key e-Commerce elements to improve and get ahead in today’s market
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Web 2.0: Solving the Mystery and Improving your Web Results
How to differentiate your dealership from the competition online
More info on the Digital Dealer Conference
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Going up: Used-car prices climb
Here's one economic indicator that's flashing green: used-car prices., The Wall Street Journal reports. Prices for second-hand cars took a hit late last year, along with the prices of many other assets. But since the start of this year, a combination of tight supplies of both new and used vehicles and higher demand from a frugal public have pushed average used-car prices to the highest levels in years, industry watchers say. Demand seems particularly strong for used SUVs, analysts say, reflecting lower gas prices. That should be good news if you are selling or trading in a well-tended used vehicle over the next couple of years. It might not be so welcome if you are trying to buy one. One widely followed measure of used-car prices, the 14-year-old Manheim Used Vehicle Value Index, will likely hit a record when data for September are released in early October, says Tom Webb, chief economist for Manheim Consulting, a subsidiary of Cox Enterprises Inc.
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.jpg?i=100609150802) Read the October issue of Dealer magazine before it comes out in print. Click Here
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GM's top electric car exec quits
Bob Kruse, who recently led a critical Chevrolet Volt team and devised the automaker's long-term electric vehicle strategy, has resigned months before the vehicle's debut, The Detroit News reports. The News said Kruse's resignation is effective today. It comes at a crucial time for General Motors Co., which is banking on the Volt to change public perceptions of the company and also help meet stringent new fuel rules. Kruse, 50, executive director of global vehicle engineering for hybrids, electric vehicles and batteries since early 2008, left to start his own consulting company, E V Consulting LLC. He will provide automotive and vehicle electrification expertise for companies looking to seize a piece of more than $1.3 billion in federal grants available to Detroit's Big Three automakers and the state.
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'Clunkers' wreaks havoc on used car market
For most automotive dealers around the country, there's no denying Cash for Clunkers has been a huge success, Aftermarket Business reports. "Cash for Clunkers opened up the floodgates to a market that was stubbornly locked," says Brian Benstock, vice president and general manager of Paragon Honda & Acura in Queens, N.Y. "Our business has doubled." After closing down the program on Aug. 25, the Department of Transportation reported approximately 700,000 people had been recipients of the offered rebates. By early August, the government had issued rebates for more than 245,000 vehicles, and an additional $2 billion in funding was approved to cover 500,000 more. Clunkers, however, has wreaked havoc on the used car market. Because the engines in the vehicles being turned in must be disabled and the cars crushed, the program has not only removed otherwise usable cars from the used vehicle market, but also deprived aftermarket repairers of valuable salvage parts. "We're selling 7 million fewer cars this year than last year, so you're losing seven million trade-in opportunities," Benstock says. "Now you have Cash for Clunkers, which does nothing to address that problem, and that has taken the older vehicles off the market."
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GM to stop auctioning new cars on EBay
The hammer has fallen on General Motors Co.'s experiment with EBay Inc., The Los Angeles Times reports. The automaker said Tuesday that it would halt sales of new vehicles on the auction site today, just six weeks after the first new car went up for bid. Neither the automaker nor the online auctioneer would reveal sales results, but car dealers said the program accounted for very few purchases and failed to fulfill its promise of upending the way cars are bought and sold."It was not a successful program, unfortunately," said Peter Welch, president of the California New Car Dealers Assn., whose membership includes 225 General Motors dealers that participated in the EBay sales. "I'm not sure whether their motivation was to sell cars or just create buzz." GM and EBay said the program, which was limited to California, was useful in helping determine whether auctions would work on a nationwide basis. The online auctions were credited with generating 1.5 million page views and 15,000 sales leads for dealers.
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Carfax offers Manhiem integration
Carfax announced Monday that Manheim customers will now have integrated access to Carfax Auction Quick Check and Vehicle History Reports via Manheim.com. Reports are now available on the site’s 24/7 “Bid or Buy Now” tool, OVE.com. Access for users of Simulcast, Manheim.com’s LIVE bidding tool, will follow sometime next month. Dealers researching vehicles online with Manheim now have access to Carfax information with a single mouse click.
[FULL STORY]
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CarMax 2Q profit soars
Car dealership chain CarMax Inc. said Tuesday its fiscal second-quarter profit surged on higher sales and a one-time gain related to its auto financing business, The Associated Press reports. The results topped Wall Street estimates and its shares jumped nearly 10 percent, briefly rising to a 52-week high. The Richmond, Va.-based company that predominantly sells used vehicles said it earned $103 million, or 46 cents per share, for the three months ended Aug. 31, compared with $14 million, or 6 cents per share, a year ago. The results included a net gain of 10 cents per share related to its financing division. Sales rose 13 percent to $2.08 billion from $1.84 billion in the same period last year. Sales at stores open at least a year rose 8 percent during the quarter. Analysts surveyed by Thomson Reuters, on average, expected a profit of 18 cents per share on $1.77 billion in revenue.
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NADAguides.com to provide daily CPO incentive updates
NADAguides.com announced Thursday that it has launched a Certified Pre-Owned car incentives and rebates tool at its Web site to help online car shoppers find the best deals on certified pre-owned vehicles. The new tool, which NADA called the first of its kind for online sites, organizes manufacturer incentives and rebates for certified pre-owned cars, updates the information daily and is region-specific.
[FULL STORY]
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Don’t Just Manage It…Run it with Velocity
Strategies for moving the needle in today’s used car marketplace
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How Does Your Online Advertising Measure Up?
Tools and techniques that will empower you to take control of the effectiveness of your online advertising
More info on the Digital Dealer Conference
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Hyundai taps Carfax for CPO program
Hyundai Motor America today named Carfax as the official vehicle history report provider for its Certified Pre-Owned (CPO) program. Hyundai pre-owned vehicle shoppers get a no-cost Carfax Vehicle History Report with every Hyundai CPO vehicle.
[FULL STORY]
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In Dealer magazine
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If I had to do it all over again, I would own the roach coach
by Tim Deese
Looking back over my career and having had the opportunity of starting out as a salesperson, working up through.jpg?i=100609150802) each management chair of the dealership, and all the way to owning two of my own new car franchises; looking across not only the opportunities within the dealership, but of all the vendors that supplied us, if I had my choice, I would definitely choose the roach coach. It's the most profitable return on investment. Let's analyze and compare the dealership to the roach coach, exactly what they do and the profit structure there within. First, roach coach owners have the opportunity to order their demonstrator equipped any way they would like it. The government does not charge them for any mileage they put on their company vehicle for personal use. They have the opportunity to deal with any manufacturer they choose, negotiating the best price of the product they possibly can. Then they make a fair determination of what they feel is a reasonable markup. Then they analyze. Who are my customers? Where do I set up shop? How do I advertise and promote my product? Their location is simple. It is your dealership. Their clientele is your personnel on your time clock, while he is being paid for his product. He has his prices posted on your property on his demonstrator to your employees who are on your time clock. Read more
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Dealer Pre-Owned
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Information in this newsletter is provided by both proprietary and public sources.Dealer Communications makes no claims as to the accuracy of information provided by third party providers.
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