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.
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Cost cutting, 'Clunkers' help auto retailers avoid losses
Two of the nation's largest auto-dealer networks delivered third-quarter profits on Tuesday as deep cost cutting and debt restructuring helped offset weak sales, The Wall Street Journal reports. Better-than-expected financial results were reported by Group 1 Auto Inc. (GPI) and Sonic Automotive Inc. Dealership chains are racing to slash costs, reduce inventory and restructure debt. Unlike auto manufacturers, retailers have the advantage of used-vehicle sales and profitable parts and service departments, which continue to perform when the new vehicle market slumps. Group 1 reported third-quarter earnings of $18.3 million, compared with a prior-year loss of $21.8 million. Sonic reported a $15.6 million profit compared to a $27 million year-ago loss. Both companies also benefited from the federal government's "Cash for Clunkers" program and from tax gains that compared favorably from a year ago. (Group 1 reported sales of used cars fell 2.9%; Sonic's used vehicle volume was up 25% and total used vehicle revenue was up over 18% for the third quarter of 2009 compared to the third quarter of 2008.)
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GMAC in talks with feds for more aid
GMAC Financial Services is in talks with the Treasury Department for a third injection of taxpayer aid as the auto lender faces a November deadline to raise the $11.5-billion capital cushion mandated by results of the government’s “stress test” earlier this year, the Detroit Free Press reports. A Treasury Department spokesman confirmed Tuesday that GMAC is in discussions about securing additional government help. Of the 19 banks that underwent the government’s stress tests, 10 were determined to be undercapitalized. GMAC is the only one of those to not have been able to raise all of its necessary capital from investors. Citing unnamed people familiar with the matter, the Wall Street Journal reported on its Web site late Tuesday that the U.S. government could hand over another $2.8 billion to $5.6 billion to Detroit-based GMAC. The move would make GMAC the only U.S. company to receive three rounds of bailout aid.
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Dale Pollak presents new paradigm for managing online success
There is a lack of understanding of the metrics that measure if a store’s used vehicles online merchandising is hitting the mark, according to author and industry expert Dale Pollak.
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NADA: Dealer satisfaction with system providers drops
New research from the National Automobile Dealers Association's Information Technology Committee shows that dealership satisfaction with Dealer System Provider (DSP) vendors declined significantly from the 2007 survey. DSP vendors develop and support dealership computer systems that assist dealers in managing their operations.
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Study: Auto industry a spam magnet
If you've had the unsettling sense that your store or group is a big target for spammers, you're not alone. A new study by Panda Security found that the automotive industry and its employees are targeted with more spam and malware-laden e-mails than any other sector, InternetNews.com reports. The three-month study conducted by the cloud-based security software firm from July to September analyzed more than 503 million messages sent to 867 companies in 11 different industries located in 22 different countries. The automotive industry was spammed at the highest rate, according to Panda Security researchers, with a ratio of 99.89. In other words, just 0.11 percent -- or a little more than one in a 1,000 e-mails -- was a legitimate e-mail and not a come-on for Viagra or porn sites. Ranking next behind the automotive industry -- which includes manufactures, dealers, parts suppliers and other automotive services -- were the electronics sector and government institutions at ratios of 99.78 and 99.60, respectively. See more details inside.
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Manheim creates group to target customer satisfaction
As part of what it calls its efforts to "drive increased consistency and convenience for its customers," Manheim announced this week the creation of a new "Operational Excellence" group. The organization will be led by David Young, group vice president. Young will report to Jim McKnight, Manheim’s strategic execution officer.
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Four additional auto auctions accepting AuctionACCESS
AutoTec recently announced that AuctionACCESS dealer registration system has added four more wholesale auctions to its long list of participating locations: Encheres d'Automobiles St-Pierre L'tee (ESP) in Quebec, Canada; ADESA Miami in Opa Locka, Florida; Premier's Las Vegas Auction in North Las Vegas, Nevada; and Sanford Auto Dealers Exchange in Sanford, Florida.
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AutoNation to Acquire Honda and Acura Dealerships
AutoNation, Inc. announced that it has signed agreements to acquire Valley Honda and Valley Acura in Spokane, Washington. The stores will be renamed AppleWay Honda and AppleWay Acura after the completion of the transaction, which is expected to take place by the end of 2009, and they will become the 9th and 10th new vehicle franchises owned by AutoNation in Spokane. The two stores together generated approximately $38 million of sales in fiscal 2008. Terms were not disclosed. The transaction is subject to manufacturer approval.
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Well, I wonder why we had to wait until somebody yanked our franchise to decide to open a business that sells four times more current to six-year-old vehicles in our market than any new car franchise no matter how hot their product is.It’s interesting that Pep Boys, BJ’s, and Wal-Mart and K-Mart service centers can gross more per RO than we can, when we have all the factory-trained technicians, service writers and proper equipment to service this department. And we have all the tools to cosmetically recondition these pre-owned vehicles. These are vehicles that are actually being reconditioned properly both mechanically and cosmetically; with salespeople who are trained on product knowledge, that enthusiastically show the product that we put on our showrooms and rotate on the front lines. We pay attention closely to what we need to stock, what sells, and take an active role in advertising what seems to be hot buttons in the marketplace, building storybooks on these vehicles, and actually making them appealing to the public. Wow! What a transition! Isn’t it absolutely unbelievable that this opportunity presented itself? 
