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News and Industry Features
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The bright side of auto ad sales?
When Linda Gray, the general manager of several Montana television stations, heard about the impending Chrysler and General Motors dealer closings in her state, she figured it was another blow to her business, The New York Times reports. So Ms. Gray has been surprised to find the closings have not hurt her advertising too much. “Auto is definitely down, but it isn’t down as much as we expected it to be,” said Ms. Gray, the president and general manager of Max Media of Montana. “We weren’t so much affected by the closures.” The situation is not as bad as it could be because the strong dealers, usually the biggest advertisers, largely kept their franchises. And many of the dealers who lost their Chrysler and G.M. lines were not shutting their doors — they were selling used cars, or continuing to sell other brands. Local media are finding a chrome lining to the dealership closures.
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Survey: CFOs see economic recovery within two years
Chief financial officers' confidence in the U.S. economy saw signs of improvement for the first time in over two years, but revealed declined optimism toward their own companies, according to the most recent survey of CFOs conducted by Financial Executives International (FEI) and Baruch College's Zicklin School of Business. While CFOs are taking a cautious approach in regard to capital spending and hiring, they see light at the end of the tunnel, forecasting an end to the current recession by 2011.
[FULL STORY]
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Vehicle transaction prices falls again
The difference between the price the manufacturer thinks buyers should pay for a car and the price consumers are actually paying for vehicles is getting bigger, Auto Loan Daily reports. This is good news for car shoppers and bad news for dealers. In May, transaction prices were 77.28% of the average MSRP, according to CNW Research. During the same month in 2008, vehicle transaction prices were 80.17% of the MSRP. To give you an idea of how much it has dropped, in 2006, vehicle buyers were paying 83 to 84% of the MSRP. CNW Research attributes the falling transaction prices to car buying incentives and dealers adding more of their own money to close deals.
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Ford gets an advantage by not asking for bailout
Ford could be gaining ground with consumers who appreciate the fact that Ford has not resorted to a federal bailout to keep itself in business, BNET Auto reports this week. CNW Marketing Research reported the results of surveys starting in December 2008. The results showed an increase in the percentage of consumers who indicated they were more favorably inclined to consider buying a Ford, because Ford didn’t ask for or receive federal assistance. In December, that group made up 19.6 percent of the respondents. In February it was 27 percent, and in May 38 percent, CNW said.
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General Motors, Chrysler on different roads in new ads
Both Chrysler and General Motors are coping with bankruptcy, but neither one mentions the "B" word in their new ad campaigns. While Chrysler's ads tout the sheer appeal of its cars, GM's are more humble and apologetic. Both companies' ads focus more on their cars than their corporate troubles, Cleveland.com reports. Which is exactly the right approach, said Pat O'Brien Sr., owner and president of Pat O'Brien dealerships in Westlake, Medina and Willoughby Hills. Rather than blaming others for their problems, GM is saying "they need to get on with it, because they want people to know how great their vehicles are," he said. "We're doing our advertising pretty much along the same lines: 'Come on down and take a look. We're building great cars.'
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Group 1 reduces Ford Credit floor plan financing
Group 1 Automotive Inc. Tuesday said that it has reduced the borrowing capacity under its credit arrangement with Ford Motor Credit Company for floorplan financing to $150 million, from $300 million, with no change to the terms or pricing. This evergreen facility provides financing for new vehicle inventory manufactured by Ford Motor Company and its affiliates.
[FULL STORY]
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Study: Fuel rules are good for Big 3
Critics not so sure
Domestic automakers have habitually underestimated consumer demand for fuel-efficient cars, and higher gas-mileage standards are actually good for Detroit's bottom line, a pair of University of Michigan researchers say in a report released Monday, The Detroit News reports. The report from U-M's Transportation Research Institute prompted criticism from those who say federal mileage requirements hamper the domestic industry's ability to compete. But authors Walter McManus and Ron Kleinbaum, both former General Motors Corp. employees, say the industry has the efficiency effect backward. "Story after story frames the issue of a struggling industry that will not survive tough fuel economy standards," they write. "However, there is substantial evidence that the domestic auto industry has ignored customers' demands for fuel economy, and has consistently undervalued the impact of fuel economy on their profit potential."
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Dealer.com doubles 2009 R&D investment
Dealer.com, the Burlington, Vermont, provider of online marketing solutions for the automotive industry, this week announced that the company has increased research and development (R&D) spending by more than 100% for 2009. "In a time of great challenges for the industry, Dealer.com has increased the commitment to keeping their clients two to four years ahead of the competition by investing at this level, at this crucial time," according to the company statement. As the rate of change in technology and Internet marketing best practices continues to accelerate, Dealer.com said that continuously increasing R&D investment is the key to staying at the forefront of technology.
[FULL STORY]
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Chrome Systems launches 'smart buyer pricing'
Chrome Systems Inc., a subsidiary of DealerTrack Holdings, Inc. said it has launched ALG Smart Buyer Pricing, which provides actual prices new vehicles are selling for on a regional and local basis. The new solution is driven by transactional data, regional information, and rebate and incentive data provided by Chrome’s sister company, Automotive Lease Guide (alg), Inc. and is meant to represent the discount a consumer can expect to receive off total MSRP for any given new vehicle after an average amount of negotiation, including all cash incentives and other non-finance discounts provided by the dealer.
[FULL STORY]
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In Digital Dealer
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Winning online
by Tom Mohr
Here is a stark but simple fact: the marketplace offers fewer active buyers than are needed to sustain the current dealer community. A Darwinian fight for survival is underway; an alarming percentage of dealers will go out of business in the next 12 months. Those that emerge will do so because they possess key traits that provide a persistent competitive edge. How can a dealer leap into this evolutionary winner’s circle? The answer to this life-and-death question is hidden behind another: where do dealers have the greatest opportunity to impact a buyer’s choice of dealership? This is key. If you know the moment of truth—the moment when the customer is most open to a dealer’s courting rituals—you gain a distinct advantage over competitors. By closely observing the steps a consumer goes through to buy a car, the point of maximum influence becomes clear. Read more
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ARCHIVE
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Issue 45
June 17, 2009
Vol. 1
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Issue 44
June 10, 2009
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Issue 43
June 3, 2009
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Issue 42
May 27, 2009
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Issue 41
May 20, 2009
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Issue 40
May 13, 2009
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Issue 39
May 6, 2009
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Issue 38
April 29, 2009
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Issue 37
April 22, 2009
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Issue 36
April 15, 2009
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Issue 35
April 8, 2009
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Issue 34
April 1, 2009
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Issue 33
March 25, 2009
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Issue 32
March 18, 2009
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Issue 31
March 11, 2009
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Issue 30
March 4, 2009
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Issue 29
February 25, 2009
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Issue 28
February 18, 2009
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Issue 27
February 11, 2009
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Issue 26
February 4, 2009
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