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Tuesday, April 15, 2008 RSSSEND TO A FRIENDPRINT
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At a Glance...
Top Stories
Poll: Dealers Scrounge for Cuts
Cultivating New Fuel: Auto Dealer's Pump Shows One Way to Change Gas Habits
Chrysler and Nissan Agree to a Vehicle-Building Pact
Ford Cutting North American Engineering Costs
Economy's Fate Hinges On Shoppers' Stamina
NADA Update
Openings Remain for May Dealer Academy Classes
Lenovo Offers NADA Members Discount on Thinkpad Notebooks
STAR Answers Dealers' Questions About DMS Vendors
Top Stories
Poll: Dealers Scrounge for Cuts

Retailers slash costs by cutting staff, inventory, vendors and advertising
Bob Ryan, a Chevrolet and Cadillac dealer in suburban Minneapolis, kept his dealership profitable during a dismal first quarter. It wasn't easy. He ordered fewer new vehicles, especially trucks, from General Motors. He didn't fill job vacancies. He cut other spending. Without such economies, Ryan says, he'd be in the red now. Ryan predicts "things will get better" as car buyers take advantage of lower interest rates generated by Federal Reserve Board rate cuts. Meanwhile, he adds, "We have to scrutinize every expense — we need to pay attention." He's not alone. An Automotive News survey of dealers suggests that as dealership profits and new-vehicle sales slump, retailers are examining every aspect of their operations with an eye to slashing costs. Other cost-cutting measures dealers say they are taking ... Making dealerships more energy-efficient ... Brian DeCook, new- and used-car director at Mercedes-Benz of Tucson in Arizona, says his dealership is weathering the economic storm better than many other retailers. The dealership is hiring employees and spending more on TV and radio ads, while many other stores are cutting back.
Source: Automotive News (Subscription required.)

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Cultivating New Fuel: Auto Dealer's Pump Shows One Way to Change Gas Habits

Charles Martin has no problem selling Chevrolet pickups and Hummer SUVs to truck-loving Texans. But despite a steady flow of customers, a frustrating reality nagged the Dallas-area auto dealer: Even though many of the trucks Martin sells can burn corn-based E-85 ethanol instead of gasoline, his customers found it almost impossible to find E-85 pumps around town. Fed up, Martin opened a little gas station of his own at his dealership; it provides ethanol, along with biodiesel and gasoline. Customers flocked to ... the station's opening day ... And within a few days, nearly three dozen dealers from around the country called or flew in to check out his operation.  It's the type of nontraditional approach that GM and others think has the potential to transform the way millions of Americans gas up, be it with ethanol or hydrogen or an electric plug. One of the automaker's top executives in charge of infrastructure issues says the gas station of the future may very well resemble the one in Dallas -- independently owned with a variety of fuels. "We need to accelerate the rate at which these fuels are available, and if you look at real estate in a different way, the possibilities are limitless," said Mary Beth Stanek, GM's director of environment and energy. Stanek sees a future not only with gas stations, but with stores that give themselves titles such as "energy hub" or "green retailer." Consumers would go there to plug in, fuel up or recharge. The dealership spent about $500,000 to install nine pumps that dispense E-85, biodiesel and gasoline with up to 10 percent ethanol, the type of fuel sold at most gas stations. Gasoline so far is outselling ethanol by about two to one, Martin said.
Source: The Detroit News

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Chrysler and Nissan Agree to a Vehicle-Building Pact

DETROIT — Chrysler and Nissan Motor of Japan said Monday that they had agreed to build vehicles for each other in a deal that could signal closer cooperation in the future. Chrysler, which is based in Auburn Hills, Mich., and has been cutting truck production as demand falls for less fuel-efficient vehicles, will make a full-size pickup based on the Dodge Ram for Nissan at a factory in Saltillo, Mexico. In turn, Nissan will assemble a small car for Chrysler in Oppama, Japan. Both vehicles will be sold in North America, though Chrysler plans to sell the car in Europe and other markets, too. Officials from both automakers said the deal was limited to these two products, but analysts say Chrysler and Nissan could eventually join forces in many areas of their operations to become more competitive. Nissan has expressed an interest in having a North American partner join its alliance with the French carmaker Renault, since talks with General Motors in 2006 were called off, and Chrysler is eager to expand its footprint outside North America. “Forging the right tactical partnerships is critical to the long-term success of Chrysler,” said Thomas W. LaSorda, Chrysler’s president and vice chairman. “Nissan has a proven track record in these win-win product exchanges with multiple manufacturers around the world.” Chrysler said the deal with Nissan did not affect its plans to import small cars built by a Chinese automaker, Chery, though it has not said when that will occur.
Source: The New York Times (Registration required.)

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Ford Cutting North American Engineering Costs

DETROIT -- Ford Motor Co. expects to cut its engineering costs in North America by 30 percent under its broad plan to cut complexity and improve global sourcing of materials and development, the automaker's product development chief said at a conference on Monday. Derrick Kuzak declined to specify the dollar amount the automaker expected to save on engineering by 2009 over its 2006 expenses under the global effort, but did say some of it would be reinvested and some put to the profit line. Ford has been restructuring its operations with an emphasis on taking out complexity, and where possible adopting global plans for vehicle platforms and purchasing. Ford, which posted losses of $2.7 billion in 2007 and $12.6 billion in 2006, has been cutting the complexity in its cars and trucks to focus on the combinations customers want the most, which also has reduced frustrations among car dealers. Kuzak also said a significant part of the fleets from automakers will have to become electric over the next decades as the industry aims to meet rising fuel economy standards. "If you go out 30 years, then by our numbers and how far fuel economy has to be improved and CO2 reduced, you do need to have plug-in hybrids, electric vehicles or hydrogen, not the 10 percent (of the fleet) they were talking about, but a significant proportion," Kuzak said.
Source: Reuters

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Economy's Fate Hinges On Shoppers' Stamina

Their houses are less valuable, credit is harder to get and goods are more expensive. It is shaping up to be a hard year for American consumers. New data released by the Commerce Department yesterday give an indication of how sales are holding up at retailers, early evidence of how the downturn is playing out among Americans. Much of the data was unsurprising: In the first three months of the year, sales at auto dealers were down 2.5 percent compared with the same period of 2007, and sales at furniture dealers were down 5.9 percent. Those reflect consumers pulling back on big-ticket items. Sales rose 6.6 percent at grocery stores and 22.2 percent at gas stations, reflecting higher prices there... "What makes a recession a recession is ultimately the fact that people expect tomorrow to be worse than today," said Marc E. Babej, a partner in Reason, a New York marketing consultancy. "The common denominator in what people will look for is how to get the most bang for their buck. That means trying to get better value and more pleasure out of each dollar you spend."
Source: The Washington Post (Registration required.)

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NADA Update
Openings Remain for May Dealer Academy Classes

A few seats remain open for the Dealer Candidate Academy (DCA) for successors and the General Dealership Management (GDM) classes, which are scheduled to start next month at the NADA Dealer Academy.

The DCA class begins on May 5, and the GDM class begins on May 19. All classes will take place at NADA headquarters in McLean, Va.

The Dealer Academy program comprises six one-week class sessions - one week every other month - with each session focusing on a different area of dealership operations. The initial session focuses on financial management, the next two on fixed operations (parts and service), the following two on variable operations (new and used), and the final session on overall dealership management.

For more information or to enroll, call (800) 252-6232, #5, or (703) 821-7216 (in Canada).

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Lenovo Offers NADA Members Discount on Thinkpad Notebooks

NADA members can save three ways during the month of April:

  • Instant savings with discounted Web pricing
  • Save even more with your NADA discount
  • Extra savings with eCoupon USXSAVE4SPRING at checkout

To take advantage of these savings, visit www.nada.org/ProductsServices/Technology, click on "PC Purchase Program" (member log-in required), then click on Lenovo, or call 800-426-7235. Enter eCoupon USXSAVE4SPRING at checkout for your cumulative discount. Free ground shipping is offered on all Web orders! Visit the Web site often for special limited-time eCoupons.

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STAR Answers Dealers' Questions About DMS Vendors
Standards for Technology in Automotive Retail (STAR) has developed new guidelines when dealers are evaluating Dealer Management Systems Dealer Management System vendors. Visit STAR's Dealer Infrastructure Guidelines (DIG) publication.  To learn what issues to consider when choosing a network provider, click here.
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Quotable
 
"There are no gimmes in this business anymore. You've got to be watching your nickels and dimes."

-- Pat Hoban, a Nissan dealer in Atlanta, referring to dealers coping with a tough economy, Automotive News, April 14

"We're already selling these cars, we should provide consumers a way to get the fuel. There's nowhere nearby for consumers to get ethanol. It's a pretty incredible opportunity for us."

    -- Marc Heitz, owner of Marc Heitz Chevrolet in Norman, Okla., referring to dealerships selling both E85 vehicles and alternative fuel, The Detroit News, April 15

"Forging the right tactical partnerships is critical to the long-term success of Chrysler. Nissan has a proven track record in these win-win product exchanges with multiple manufacturers around the world."

    -- Thomas W. LaSorda, Chrysler’s president and vice chairman, The New York Times, April 15

Video Reports
 
Students Learn About Automotive Careers at the DC Auto Show. 

 Students learn about automotive careers. 

 NADA/USA Today Innovation Award Goes to "Green" Dealership in Vermont.
 NADA Convention Heads to New Orleans in 2009.
 NADA Foundation Contributes to Canine Companions for Independence.
 2008 Convention Highlights

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