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News and Industry Features
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Sales rise to highest level of the year
'Clunker' incentive rocks
Automakers issued their sales reports Monday, raising hope that the sagging auto industry is headed for a recovery, although some analysts cautioned that a turnaround would still be slow, The Washington Post reports. The uptick comes as Congress considers whether to provide up to $2 billion more for trade-in incentives to keep the effort going. Ford said its sales were up 2.4 percent over the same period a year ago, its first monthly increase in two years. The automaker attributed much of the gain to the Cash for Clunkers program, which allows consumers to receive rebates for turning in older cars for more fuel-efficient models. George Pipas, sales analyst for Ford, said the automaker thought it was going to fall short of last year's July sales level until the government's stimulus kicked in. "Cash for clunkers put us over the top," Pipas said. Subaru said it also benefited from the trade-in program, as sales were up 34 percent. Chrysler, General Motors and other major automakers did not show gains, but interest in the rebates appeared to have eased their losses as well. Sales slid 9.4 percent for Chrysler, 11.4 percent for Toyota, 17 percent for Honda, 19.4 percent for General Motors, 1.4 percent for Volkswagen and 25 percent for Nissan.
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Ford sees sales momentum after incentive plans end
Auto retailers have been waiting for this. Ford Motor Co. is seeing worldwide sales momentum that could keep rolling after various government stimulus packages have ended, a senior executive said Tuesday, Dow Jones reports. Joe Hinrichs, Ford's vice president of global manufacturing and labor, said this could lead to a ramp-up of auto production, although Ford will take some time to assess the strength of the market. Along with other auto makers, Ford has seen North American sales skyrocket in recent weeks as consumers buy into the "cash for clunkers" program. "We weren't surprised at the success of the U.S. program," he said in an interview, noting that similar programs have been successful in other countries. Hinrichs said some consumers may have been planning to buy new cars anyway, "but it might have taken a year or two."
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Game back on for car dealers, advertisers
The soft advertising market also got a big shot in the arm from the government's so-called "cash for clunkers" program. But there was a little drama involved too. After hours of confusion about whether the Cash for Clunkers program had run out of money, it was game on again Friday for car dealers, TV stations and newspapers, who had worried that one of the few bright spots for their industries would end after just one week, Associated Press reported. Dealers around the country pondered Friday whether to pull ads for the program, which was supposed to have run until November or until the $1 billion initially set aside ran out. The deal — which gives up to $4,500 for trade-ins if they meet certain conditions — saw so many sales in its first week that the funds were already dwindling. But the U.S. House moved to approve an additional $2 billion for the program later Friday. While that scenario played out, there was confusion around the country for shoppers, dealers and advertisers. In Victor, N.Y., Kitty Van Bortel said she was caught in limbo about whether to pull the plug on rebates at the Ford and Subaru dealerships she owns."Honestly, in all my years in the car business, I have never seen such a mess. It's just unbelievable," she said Friday morning, saying she was locked into her advertising for the weekend, no matter the outcome.
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Kia launches 'Go Hamster Go!' on Facebook
Kia Motors America (KMA) Tuesday let loose the paw-tapping, music-loving hamsters seen in its recent advertising campaign and unveiled its "Go Hamster Go!" Facebook application to try to get momentum for its all-new 2010 Kia Soul urban passenger vehicle. Go Hamster Go! marks Kia Motors' first-ever augmented reality game and first Facebook application. The application is available now on the Kia Soul Facebook Page, www.facebook.com/kiasoul, through the 'Go Hamster Go!' tab.
[FULL STORY]
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GM can reject 33 dealers who refused wind-down deals
General Motors Corp. won court approval to reject contracts with 33 dealerships that didn’t accept wind-down agreements from the reorganized automaker, Bloomberg reports. U.S. Bankruptcy Judge Robert Gerber in Manhattan granted the company’s request to void the contracts. GM filed a motion last month seeking to cut off a total of 38 dealers. In a hearing today, Gerber allowed it to reject all of the dealers who didn’t object to the company request and some that did. The judge’s ruling didn’t apply to two dealers, Everett Chevrolet in Everett, Washington, and Forrest Chevrolet-Cadillac in Cleburne, Texas. Gerber said Detroit-based GM must provide those dealers with more information on why they were rejected. Three dealers reached settlements with GM prior to today’s hearing in Manhattan federal court. Gerber said his decision followed closely one by U.S. Bankruptcy Judge Arthur Gonzalez, also in Manhattan. Gonzalez allowed Chrysler LLC to reject dealer contracts in its bankruptcy, now known as Old CarCo LLC.
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GM Board 'tweaked' product plan, wants faster launches
General Motors Co.'s board of directors, in its first meeting since the auto maker's bankruptcy, told company managers to speed up vehicle launches and "tweak" product plans, Dow Jones reports. GM Chairman Ed Whitacre said GM must refocus on the product side of its business if the company is to achieve a goal of winning back market share. "We might reallocate more funds toward products," he said Wednesday in an interview with reporters. "Our cash position is very good and we have some flexibility. I don't think we'll have constraint on capital spending for some time." Last year, GM indefinitely delayed plans for a new line of full-size pickup trucks, which had long the company's top priority. Whitacre said GM must get out of downsizing mode and go on the offensive in the U.S. market. Regaining market share lost over the years is a top priority, and bringing vehicles to market more quickly will help achieve that goal, he said. GM still plans to go ahead with the Chevrolet Volt electric vehicle, a big-budget attempt to create a new type of green car to respond to Toyota's iconic Prius. But, Whitacre said, GM will study whether the car makes economic sense as it progresses.
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Four of top ‘clunkers’ model purchases are foreign
Four of the top five models sold so far under the U.S. “cash for clunkers” program, aimed at boosting the auto industry, are made by foreign automakers, according to Transportation Department data, Bloomberg reports. Ford Motor Co.’s Focus was the top seller, followed by Toyota Motor Corp.’s Corolla, Honda Motor Co.’s Civic and Toyota’s Prius and Camry, data from the department showed today. Initial clunkers legislation sponsored by Representative Betty Sutton, an Ohio Democrat, would have barred discounts for new vehicles manufactured overseas and offered higher payments for cars and trucks produced in the U.S. than for those made in Canada and Mexico. The “Buy American” provision was dropped from the final legislation because of opposition from foreign automakers and free-trade advocates who said it would conflict with U.S. obligations to the World Trade Organization. “The share of cars sold to date under this program is actually larger than the traditional market share” for the U.S. automakers, White House Press Secretary Robert Gibbs told reporters today. Providing tax incentives only for U.S. companies “would have caused some legal and trade problems,” he said.
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Report: Communications growth ahead – but not for everyone
Look for US communications industry spending to grow to $1 trillion by 2013, says Veronis Suhler Stevenson (VSS) in its annual Communications Industry Forecast, following a 1% decline in 2009. But not every media sector is expected to grow, RBR.com reports. VSS Managing Director Jim Rutherfurd told RBR that both broadcast television and broadcast radio are expected to see continued revenue shrinkage over the next five years. “Sorry to say, that is true,” he said. “I think we see continued erosion of broadcast TV and broadcast radio even after the recession ends. This is not just a recession story,” Rutherfurd said. That’s due in part to the permanent contraction of the automotive industry, particularly at the local dealer level, but also because of the growth of media alternatives. To be sure, radio and TV are claiming some of the ad spending on their Internet and mobile platforms, but not enough to offset the decline in their traditional broadcast spot business.
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AutoUSA's new classified listing service connects by phone
AutoUSA announced the launch of a new service that allows consumers shopping online for a vehicle to immediately contact dealers by phone when viewing a classified vehicle listing. The new phone lead service is part of AutoUSA’s used car inventory lead program, and available for vehicle listings on sites such as kbb.com, AOL Autos and Overstock.com.
[FULL STORY]
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Leadership
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Create workplace energy from the inside out!
by Dave Anderson
Too  many dealerships are languishing in the malaise of the industry downturn. Their workplaces don’t have the energy to power a toy boat in a bathtub. Sadly, the leaders of these organizations have become immobilized by bad news. They drift from day to day spending more time looking over their shoulders rather than charting a course for what lies ahead. These leaders have totally surrendered the culture of their organization to the whims of external conditions and wait impatiently for something to happen “out there” that will create some energy “in here”. As they wring their hands waiting for good news to jumpstart their momentum, they unknowingly forfeit their right to lead and become a ceremonial leader at best, sitting in the big office and sporting a fancy title but adding value to no one and impacting nothing. Read more
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