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News and Industry Features
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CBS CEO sees ‘encouraging signs’ from auto sector
CBS Corp. Chief Executive Officer Les Moonves sees “encouraging signs” from the automobile industry, a major advertiser for the broadcaster, Bloomberg News reports. “The automobile sector is going to come back in spades,” Moonves said today in an interview on Bloomberg television. “Advertising is coming back.” An increase in spending by automakers would be a boon for CBS, after television ad sales slumped 13 percent in the second quarter. General Motors Co. slashed ad spending 26 percent to $773.1 million in the first half of 2009, TNS Media Intelligence, a New York based researcher, said last week. Two- thirds of CBS revenue comes from advertising, Moonves said. Spending increases by Toyota Motor Corp. and GM will be “extremely positive,” Moonves said. “Automotive is extremely important, probably the No. 1 sector” for TV and radio stations at the New York-based company, Moonves said. Detroit-based GM will “substantially” increase ad spending through 2011 and overtake competitors’ spending, Chairman Ed Whitacre said this month. He didn’t give details about the size of the current or future budgets.
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Don’t Just Manage It…Run it with Velocity
Strategies for moving the needle in today’s used car marketplace
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How Does Your Online Advertising Measure Up?
Tools and techniques that will empower you to take control of the effectiveness of your online advertising
More info on the Digital Dealer Conference
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CarMax 2Q profit soars
Car dealership chain CarMax Inc. said Tuesday its fiscal second-quarter profit surged on higher sales and a one-time gain related to its auto financing business, The Associated Press reports. The results topped Wall Street estimates and its shares jumped nearly 10 percent, briefly rising to a 52-week high. The Richmond, Va.-based company that predominantly sells used vehicles said it earned $103 million, or 46 cents per share, for the three months ended Aug. 31, compared with $14 million, or 6 cents per share, a year ago. The results included a net gain of 10 cents per share related to its financing division. Sales rose 13 percent to $2.08 billion from $1.84 billion in the same period last year. Sales at stores open at least a year rose 8 percent during the quarter. Analysts surveyed by Thomson Reuters, on average, expected a profit of 18 cents per share on $1.77 billion in revenue.
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Plan now for a big finish
Special to Dealer magazine
by Jim Boldebook
You’ve still got time to make the end of 2009 the best it can possibly be. Everything is lining up to generate great returns.jpg?i=092809121653) in the 4th quarter. The government CARS program took a lot of junk off the road, and fortunately, according to the latest numbers, most of it with under 34 year old buyers. Not the strongest traditional demo for our marketplace. That answers the question: ‘did we ‘buy a lot of business forward?’ No we did not. There is still enormous pent up demand, record high mileage on vehicles, record aging of vehicles on the road, record numbers of vehicles with debt retired, a higher personal savings rate in the past six months than in the past five years. More cars needing repairs. More drivers yearning for a ‘new ride’.
[FULL STORY]
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Ex-auto sales manager gets probation in fraud scheme
The general sales manager of a once-booming shoreline auto dealership escaped a prison sentence Monday after helping federal authorities make a case against the dealership for luring low-income car buyers with deals that often proved to be too good to be true, The Hartford Courant reports. Senior U.S. District Judge Ellen Bree Burns fined Louis Pierro of suburban New York $6,000 and sentenced him to two years of probation for participating in a wide-ranging fraud scheme at Shoreline Mitsubishi of Branford that involved the creation of misleading sales contracts and the submission of phony credit applications to its principal lender, Mitsubishi Motors Credit of America. Pierro pleaded guilty to conspiring to commit wire fraud in 2005 after agreeing to cooperate with authorities against his former colleagues at the dealership, which ceased operation in 2003. Seven other dealership employees, prosecuted previously, were sentenced to up to five years in prison. In 2000, prosecutors said the dealership's management decided to reverse lagging sales by aggressively marketing itself as a business at which buyers with bad credit could obtain new cars. Prosecutors said "lower-income/bad credit customers" flocked to the dealership and sales grew "dramatically" to more than 100 cars a month. FBI, state and local investigators who worked on the case said that the sales volume "was due, in large part, to fraud."
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Ford promotes Taurus with Microsoft tags
Ford Motor and Microsoft are teaming up to market the auto maker’s redesigned Taurus sedan, The Wall Street Journal .jpg?i=092809121653) reports. Ford and Microsoft first teamed up a few years ago to launch the Sync telematics system, which enables drivers to hook Bluetooth entertainment and communications devices into the car. Now, Ford is using a technology from Microsoft — known as tags — in its print advertising materials in order to give potential car buyers a more interactive introduction to the car. Looking very much like a bar code found on most consumer products, the black and white tags are integrated into the design of an ad and can be photographed by anyone carrying a camera-equipped smart phone, such as Apple’s iPhone, or Research In Motion’s BlackBerry. Once the image has been downloaded, it then links a consumer to a company-designed Web site. In Ford’s case, the tags lead smart-phone users to a site featuring six different video clips explaining the Taurus’s technology, ranging from a demonstration of a cruise-control system that adapts to the speed of the vehicle in front of the car, to a system that automatically detects objects in a driver’s blind spot. Photo: A print ad for Ford’s Taurus Sho includes a bar code that, when scanned with a smart phone, connects to a microsite with more information. Credit: Ford
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GM's Whitacre no Iacocca, ad world says
When it comes to businessmen as pitchmen, not everybody can be Lee Iacocca, notes The Associated Press in a story Tuesday. General Motors Co. has bet that its new chairman, Ed Whitacre, can successfully kick off its "May the best car win" campaign, which puts the struggling automaker's vehicles up against competitors and hopes to coax reluctant buyers by offering a 60-day money-back guarantee. The advertising world has been abuzz about the ads. Its verdict? Well, he's no Iacocca. Experts say Whitacre, the former CEO and chairman of telecommunications giant AT&T who became GM's chairman in July, has some serious challenges as public face of the company — starting with the fact that not that many people know who he is. Some even say the ad starring the 67-year-old Whitacre hurts the Detroit automaker's efforts to freshen up its image and woo younger buyers. In the ad, which started airing last week, begins a long-awaited overhaul of GM's roughly $2 billion per year in advertising, now that the automaker has emerged from bankruptcy. The company's board, including Whitacre — and even the government's auto task force — recognized that GM was in need of an image makeover. The company needs to attract skeptical customers and improve sales to pay back the billions in aid it received from the government.
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Comerica sees rebound for U.S. auto sales in 2010
U.S. auto sales may backslide in the fourth quarter of 2009, but the seasonally adjusted annual sales rate should slowly recover throughout 2010, according to Dana Johnson, chief economist for Comerica Bank, reports bnet.com. Next year, U.S. auto sales should top 13 million cars and trucks, Johnson said in an analysis for investors earlier this week, recapping the last year since financial markets collapsed. “Looking ahead, improving credit availability likely will support a stronger rebound than the consensus is now forecasting. To be sure, spending vast amounts of money to rescue our financial institutions has been hugely unpopular. But, in fact, it has been money well spent,” he said. The credit crisis last fall turned what was already a sharp downturn in U.S. auto sales, driven by high gas prices, into a disaster that drove Chrysler and General Motors into bankruptcy. Separately, Fed Chairman Ben Bernanke said in a speech at the Brookings Institution last week that the U.S. recession is “very likely over,” but Bernanke said it may not feel that way to consumers for a while, because the recovery will be slow.
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Hummer plans headquarters in Michigan
Hummer LLC plans to locate its new headquarters in Michigan once General Motors Co.'s sale of the sport-utility vehicle maker to China's Sichuan Tengzhong Heavy Industrial Machinery is finalized, Hummer spokesman Nick Richards said, The Wall Street Journal reports. The new headquarters, expected to be located at a refurbished site in either Detroit or a northern suburb of the city, promises to provide a modest lift to a Michigan economy that has been battered by the rapid decline of the U.S. auto industry and other economic pressures. Hummer also considered sites in Tennessee and South Carolina, but Michigan pushed hard to keep Hummer in the state as part of its drive to remain at the center of the global auto industry. Because Hummer has been run from Detroit as a division of GM, the brand has had very few employees exclusively devoted to running it. Many of its employees have transferred from assignment to assignment within the GM universe, spending stints at Hummer in addition to other GM brands. It is unclear how many of Hummer's employees will be new hires, and how many will transfer from GM. Because Tengzhong has no experience in the light-vehicle industry, Hummer's viability will be heavily dependent on work done in the U.S. Hummer is committing to spend $9.4 million for the facility over five years.
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'Clunkers' convinced some to buy before they had intended
Cars.com survey
According to a new Cars.com survey, 30 percent of consumers who purchased a new car during the recent Cash for Clunkers program had no intentions of buying a car, but said they bought one because the government program was too good to pass up.
[FULL STORY]
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Digital Dining on Leftover Leads
How to squeeze more juice out of your DMS system
More info on the Digital Dealer Conference
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Data Mining Made Easy
How to find and use customer data
More info on the Digital Dealer Conference
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Leadership
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The cascading consequences of unethical leadership
by Dave Anderson
In .jpg?i=092809121653) 1982, seven people mysteriously died after using Tylenol. The product’s maker, Johnson & Johnson, assumed responsibility, cooperated with authorities and promptly removed millions of bottles from stores worldwide. When asked by reporters how they were able to decide so quickly to recall all Tylenol at the cost of hundreds of millions of dollars, CEO James E. Burke replied, “When you decide up front what you stand for, it’s easy to make big decisions.” Johnson & Johnson’s subsequent recovery is a textbook case in corporate ethics as well as one of the greatest public relations victories in history. The Tylenol story is a shining example of how ethical leadership atop an organization builds customer goodwill, elevates employee morale, instills trust and enhances brand value. To examine the antithesis of ethical leadership, you needn’t look farther than the Chrysler Corporation’s ultimate sucker punch resulting in the double cross and termination of 789 dealers. Following are four conclusions I’ve drawn from this ethical nightmare and its cascading negative impact on our industry. Read more
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ARCHIVE
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Issue 6
September 16, 2009
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September 9, 2009
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August 26, 2009
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Issue 52
August 5, 2009
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Issue 51
July 29, 2009
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Issue 50
July 22, 2009
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July 15, 2009
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July 8, 2009
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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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