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News and Industry Features
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GM plans a return to car leasing
General Motors Co. and its financing affiliate GMAC Inc. are eyeing an Aug. 1 return to the auto-leasing market, according to people familiar with the matter, after massive government bailout packages allowed both companies to get back on their feet, The Wall Street Journal reports. GM and Chrysler Group LLC pulled out of leasing in August 2008 amid a steady decline in vehicle resale values, a sales slump and troubles at their respective lending affiliates. At the time, leasing represented about 20% of GM's new-car business in the U.S. and was causing losses for GM and other car makers. Many of their key competitors, including Ford Motor Co., Daimler AG and Toyota Motor Corp., scaled back leasing but didn't pull out of the business completely.In a recent conference call with analysts and reporters, GM said many of the company's former lease customers have decided to purchase vehicles instead from GM, or chose to buy a used car or defect to another auto maker.
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‘Cash-For-Clunkers’ plan attracts 16,000 auto dealers...
Almost 16,000 U.S. auto dealers have applied to participate in the “cash-for-clunkers” vehicle trade-in program, or about 80 percent of the nation’s new- vehicle retailers, Transportation Secretary Ray LaHood said, Bloomberg reports. The government is trying to help jump-start slumping auto sales through the program, giving consumers new-vehicle credits of as much as $4,500 for turning in older cars. “We’re very excited about the tremendous interest in this program,” LaHood said today at a news conference to outline the program. “We think it’s going to turn into a good news story for many communities that have been hit hard by the recession.” The Transportation Department has processed 15,893 dealer applications, LaHood said. The law took effect on July 1, and the U.S. published rules for the program July 24. LaHood said his agency has received 45,000 phone calls from people asking about the program.
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Study: Americans are open to buying vehicles from China, India
Newly released research shows 15 % of new car buyers in the United States say they would consider purchasing their next vehicle from China, and 11 % would consider buying a car from India, without knowing specific brands or vehicles. This compares with 16 % who said they would consider a vehicle from Korea, which has been marketing vehicles in the U. S. since the 1980s.
[FULL STORY]
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Analyst: Domestics need leasing to compete with imports
When the domestic auto business was booming before the 2008 crash, leasing provided much of the lift, accounting for about one-in-five new vehicle transactions, writes Gerson Lehrman Group analyst Jack Sayer this week. But in June, leasing sank to its lowest rate in more than a decade: about one in 10 sales. Read Sayer's full analysis
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Rockefeller study into car dealership closures
Sen. Jay Rockefeller, D-W.Va., is asking for an independent study about why General Motors and Chrysler decided to close more than 2,000 automobile dealerships across the nation, The Charleston Gazette reports. On Thursday, Rockefeller wrote to Neil Barofsky, a special inspector general for the Troubled Asset Relief Program, stating, "taxpayers deserve a thorough review of these decisions." Both auto manufacturers will receive more than $24 billion in tax dollars to save their financially troubled companies. On June 3, Rockefeller held a hearing about auto dealer closings before the Senate Committee on Commerce, Science and Transportation, which he chairs. "Based on the testimony before the committee," Rockefeller wrote, "it is clear that there is substantial confusion, even among dealers themselves, as to how GM and Chrysler selected dealerships for termination and what benefits, if any, the companies will incur by eliminating dealerships."
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Obama administration rips auto dealer relief efforts
The White House on Wednesday blasted growing, bipartisan congressional efforts to aid closed auto dealers but stopped short of threatening a veto, The Washington Times reports. An amendment to put dealers back in business survived a challenge in the House Rules Committee on Tuesday and is to be voted on as part of the financial services appropriations bill this week. The Obama administration said reversing dealer closings would set a "dangerous precedent, potentially raising legal concerns, to intervene into a closed judicial bankruptcy proceeding on behalf of one particular group at this point." The statement is consistent with the administration's position during the bankruptcies of General Motors Corp. and Chrysler LLC, in which the automakers shed more than 3,000 dealerships. Nonetheless, battle lines are being drawn as a number of high-ranking congressional Democrats back a measure opposed by a president of their own party.
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July numbers signal encouraging sales trend
U.S. auto sales have gathered pace this month, bolstering expectations that the auto market is starting to recover from 25-year lows in the first half of the year, The Detroit News reports. Several forecasters predict that the annualized selling rate for July will exceed 10 million vehicles for the first time this year.That pace is likely to increase after the government's $1 billion cash-for-clunkers incentive program goes into effect on Monday. Online auto research site Edmunds.com predicts that sales in July will total 950,000 cars and light trucks. While that would be 16.3 percent lower than last July's sales, it would represent an increase in the annualized selling rate to nearly 10.5 million vehicles from less than 10 million in each of the first six months of 2009. Edmunds analyst Jesse Toprak attributes part of the improvement to traditional summer sales.
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Polk introduces 'clunkers' marketing list solution
R. L. Polk & Co. has introduced a new complement to its 'Cash for Clunkers' marketing list solution that enables automotive manufacturers, dealers and advertising agencies to identify and market to consumers eligible for the recently signed Consumer Assistance to Recycle and Save (CARS) program, the company said.
[FULL STORY]
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Company says streaming ads can draw consumers to dealers
Shortly after 2008's hurricane season ravaged the refineries of the Gulf States, gasoline prices tipped $5.00 a gallon the first time in our nation's history. Since then, blue chips in the automotive industry have been scrambling for new advertising strategies in a technology-geared but unpredictable economy.
[FULL STORY]
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Dealer Advocate
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Shattered paradigms
by Jim Ziegler
A.jpg?i=080309111536) paradigm is a basic truth – a belief that defines your perception of reality. When that truth suddenly shifts and is no longer valid, you’re thrown into a state of confusion and disbelief. “This cannot possibly be happening.” But then, we begin searching for a new paradigm. We find ourselves desperately trying to sort out what is the new reality. As the new paradigms rapidly reshape and transform, we instinctively begin to realize this might not be the way it settles in the end. So here we are cautiously watching, waiting and listening to see what the shape of things to come is going to be. Until all of this settles and moves into the past, none of us can really make valid future plans and commit to a direction. It is rebounding already. Consumers are cautiously returning to the showrooms and sales are happening again…oh, not what it was, but certainly, it’s better than it has been. My best prediction is that nothing is going to really accelerate sales until after all of the media coverage and the bankruptcies fade into history. It makes no sense to me, none of it. Of course, the arbitrary number of dealers that had to be eliminated was ordered by President Obama’s Automotive Task Force, not the manufacturers, but as far back as when Daimler owned Chrysler there was open talk of eliminating half of its dealers. Read more
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ARCHIVE
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Issue 50
July 22, 2009
Vol. 1
Issue 50
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Issue 49
July 15, 2009
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Issue 48
July 8, 2009
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Issue 47
July 1, 2009
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Issue 46
June 24, 2009
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Issue 45
June 17, 2009
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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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