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News and Industry Features
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GM asks judge to void 38 dealer contracts
General Motors asked a federal judge Tuesday morning to reject contracts with 38 dealers who did not accept wind-down agreements or new contracts, The Detroit News reports.The bankrupt automaker for the first time identified the dealerships, including Harbortown Auto Inc. in Ontonagon in the Upper Peninsula, which did not go along with a restructuring plan aimed at thinning GM's retail ranks.GM asked U.S. Bankruptcy Judge Robert Gerber to reject the dealer agreements effective Friday. "A leaner, more profitable dealer network with higher annual vehicle sales per dealership is essential to reducing GM's staggering dealer support costs and a critical component of helping to ensure the viability of New GM," GM lawyer Joseph Smolinsky wrote in a court filing.A hearing on the matter is scheduled for Aug. 3.
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Surviving dealers woo customers left in the lurch
For more than 35 years, Jerry Wyatt was a loyal customer of Bobby Archer, a Houston-area Chrysler dealer, The Wall Street Journal reports. Wyatt bought 30 vehicles from the dealer, and neither rebates nor new models ever lured him to shop elsewhere. But now Archer's three dealerships have closed as part of the consolidation of Chrysler Group LLC's retail network, and Wyatt says he is so upset he may switch to a different car maker. "I just don't believe that Chrysler showed any sensitivity to the customers," says Wyatt, a 62-year-old city councilman in Missouri City, Texas. Across the country, hundreds of car dealers have closed their doors amid slumping sales, and hundreds more will wind down this year because of the bankruptcy reorganizations of Chrysler and General Motors Corp. The upheaval means that many car owners are seen as up for grabs -- six million of them, according to R.L. Polk & Co., an auto-industry market researcher. As a result, surviving dealers are scrambling to win over as many as they can. Wyatt has already received a postcard from Finnegan Dodge offering oil changes for $9.99 on Fridays.
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Save the Date
Several weeks ago, Jack Fitzgerald, Alan Spitzer, and Tamara C. Darvish worked to form the Committee to Restore Dealer Rights. The primary focus of this committee is to secure passage of the Bipartisan Automobile Dealer Economic Rights Restoration Act of 2009, which now carries 202 Congressional Cosponsors and 10 Senators. The committee was formed in the wake of the Chrysler and GM bankruptcies to protect the rights of thousands of terminated auto dealerships and customers and communities they serve. As the process of the Bankruptcy hearings for Chrysler and GM progressed, and both Manufacturers initiated new Dealer Agreements for the “move forward” dealers, it became more than obvious that all Dealers, whether “rejected” or “move forward” were is dire need of this exact legislation that House introduced as HR2743 and the Senate as S1304, says Darvish, of the DARCARS Automotive Group and Washington Director – NADA Member – Committee to Restore Dealer Rights. Read her letter to dealers and details of the July 14 event in support of the legislation inside.
[FULL STORY]
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Industry takes aim at plan for Financial Protection Agency
Business and trade-group lobbyists are beating a path to Capitol Hill this week for the first major battle over the Obama administration's efforts to overhaul the financial regulatory system, The Washington Post reports. A coalition of business representatives -- including National Auto Dealers Association -- who are skeptical about a proposed Consumer Financial Protection Agency, has met repeatedly in recent weeks to hone their argument that a new regulator could cause more harm than good and to strategize about which members of Congress might be sympathetic to their cause. These opponents of a new agency have begun visiting members of the House Financial Services Committee, which plans to take up the proposal in the coming weeks, and are putting a top priority on centrist Democrats, according to people familiar with the meetings. "It's your basic shoe-leather lobbying," said Bill Himpler, executive vice president for government affairs of the American Financial Services Association, the trade group for the consumer credit industry. "This has become front burner -- the number-one issue of our association, at least for the foreseeable future."
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Ad spending expected to fall more than 10 percent in '09
Ad spending for TV, radio, magazines, newspapers, outdoors and the Internet is expected to fall 10.6 percent in the United States this year, to $154 billion, the lowest level in six years, according to ZenithOptimedia, a unit of French advertising conglomerate Publicis Groupe, The Associated Press reports. U.S. ad spending for newspapers is expected to fall most steeply, down 20 percent to $35.2 billion this year as advertisers increasingly migrate to free or lower-cost alternatives online. TV ad revenue is projected to decline 8 percent, to $53.3 billion, and radio by 14.4 percent, to $16.5 billion. ZenithOptimedia said Monday that global ad spending shows signs of reaching bottom as some sectors held up better than expected during the second quarter. But it also slashed its 2009 spending estimate for a second time this year, and now expects a mild recovery next year and a stronger rebound in 2011. As expected, ad spending worldwide fell steeply in finance, automotive and business travel. But sectors such as retail and consumer goods have performed better than projected.
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To succeed, new G.M. must win fans quickly
After racing through the bankruptcy process, General Motors needs to move just as fast to win back wary consumers with new and better products, The New York Times reports. G.M. appears poised to exit bankruptcy as soon as Thursday, when it is expected to complete the sale of its best assets to a newly formed company that will be smaller and unencumbered by huge debts and liabilities. But G.M. executives do not have the luxury of time to rebuild consumer confidence or reverse the company’s steadily shrinking market share. “This is sink-or-swim time for G.M.,” said Rebecca Lindland, an analyst with IHS Global Insight. “Now is the time to execute, and there’s a short window in which to do it.”
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Hyundai's rising American star
Taking market share with incentives and discounts is easy. Holding onto it without them is the difficult task ahead for Hyundai Motor, The Wall Street Journal notes in a story this week. The company's slice of the U.S. auto market is growing -- having risen from 2.5% in October to 4.4% in June -- with savvy marketing and improvements in quality and style luring cost-conscious American consumers.For now, that's a rising share of a declining market, albeit the world's biggest by value. Hyundai Motor's Equus is unveiled in Seoul on March 11. The company's market share in the U.S. is growing. To build on those gains and ride the U.S. auto-market recovery, Hyundai has to raise its brand value. Herein lies the challenge: The company's dependence on incentives and bulk fleet sales are hurting resale value, which matters to U.S. consumers who tend to change cars relatively quickly.Incentives to U.S. car buyers rose more than 40% in the first five months of 2009 to an average $2,900 per car sold, Nomura says. Meanwhile, bulk sales account for as much as 15% of the company's annual sales in the U.S.
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International Education Corp. acquires American Auto Institute
International Education Corporation Tuesday announced that it has acquired American Auto Institute for cash. Headquartered in Cerritos, California, American Auto Institute has unique transportation education programs that prepare students for entry-level careers in the automotive industry. Terms of the deal were not disclosed.
[FULL STORY]
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Hispanic TV advertising rises 3% in 2008
Despite auto, dealer ad decline
Spanish-language TV advertising posted a slim 3% gain in 2008 versus 2007, per a new Nielsen study, which was about average across how other media performed a year ago, MediaPost reports. Looking at the top 10 categories, however, TV advertising among Spanish-language TV programmers performed much better: an 8% gain to $2.906.1 billion. Of the bigger categories, pharmaceuticals posted a 32% gain to $663.4 million, which took the lead as the biggest TV ad group over a fast-declining automotive segment. Direct-response advertising also turned upward, 21% to $218 million. Satellite communication services rose 124% to $135.7 million. But Spanish-language TV programmers were not immune from overall TV marketer issues. For example, automotive spending was down 20% to $530.1 million. Automotive dealers were down as well -- 25% -- to $126.9 million.
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CityTwist partners with Aspen Marketing on e-mail campaigns
Boca Raton, Fla.-based CityTwist, a geo-targeted e-mail marketing company, announced it has formed a partnership with Aspen Marketing Services, the largest privately-held marketing services agency in the United States, to provide geo-targeted e-mail advertising campaigns for its automotive clients.
[FULL STORY]
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ActivEngage releases latest Live Chat business software
ActivEngage, the company that provides proactive live chat with business intelligence for dealer Web sites, announced the latest release of its proprietary live chat software and services. The company said the new enhancements were made based on direct feedback from dealers, consumer trends and the latest advancements in technology. The new version was designed to enable even more personalized communication with consumers, enhanced efficiency in lead management and advanced, consolidated reporting. Expanded capabilities let dealers collect more customer intelligence from site visitors to guide communication, both during and after chat sessions, and move even more shoppers through the sales cycle, according to the company.
[FULL STORY]
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Dealer Advocate
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I have relocated my cheese
by Jim Ziegler
A few years back Spencer Johnson wrote the best-selling book, Who Moved My Cheese? The book was about .jpg?i=071009152206) accepting change and moving on. It was about adapting to whatever comes at you, like when you’re rolling along, fat, happy and comfortable, and then suddenly without warning your ‘cheese’ disappears.Like the rats in the maze in Johnson’s book, I think we’ve all had to make some quick moves with fancy footwork in recent months. And, it’s been a painful journey for all of us…some more than others. We’re all desperately trying to get our cheese back…maybe some new cheese. I assume if you’re reading this, whatever has happened hasn’t killed you yet. A few weeks ago I was driving to the Philadelphia airport after attending an automotive Internet sales seminar with Sean Bradley where I was a student. A billboard on the side of the road caught my attention. It was for Charles Schwab Investment Company. The billboard said: “I did everything right. Then everything went wrong. DO SOMETHING ABOUT IT.” What an epiphany! So many of us never saw it coming…it is the perfect storm. Usually, when something in life goes wrong, you can look back and see the mistakes you made that caused it. This time there was nothing in our power that could have changed the outcome. A terrible tsunami usually gives no warning.
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ARCHIVE
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Issue 26
July 1, 2009
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Issue 47
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June 24, 2009
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Issue 45
June 17, 2009
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June 10, 2009
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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 28
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