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At a Glance...
Top Stories
New CAFE Rules Affect Makers Differently
Condensing Chrysler
Chrysler Offers 'Employee' Discounts to Dealer Staff
Demand for Small Cars, Crossovers Soar Along With Gas Prices
Opinion: Big S.U.V.ís Drink Less
Ford Gives Dealers More Co-op Money
Area's Ford Dealers Foresee a Shiny Future
Earnings Will Drop This Year, Honda Says
Retailers Dangle Discounts to Lure Tax-rebate Checks
Fed Likely to Cut U.S. Rates, Could Signal Pause
Pennsylvania Site of Cellulosic Ethanol Pilot Plant
NADA Update
Girl Scouts Promote Automotive Careers
Survey of NADA Members Shows Commitment to Community
NADA Joins with AutoTrader.com for Seminar Series
NADA to Members: Beware of Subpoena Email Scam
Dell Deals Available to NADA Members for Limited Time
Top Stories
New CAFE Rules Affect Makers Differently

WASHINGTON — Mercedes' cars would have to achieve better average fuel economy than Toyota's. BMW's light trucks would have to get 4 mpg more than those built by General Motors. These are among the startling outcomes projected for the 2015 model year under proposed federal fuel economy regulations. Under the new rules, the relative increase is highest for the smallest vehicles. Vehicles are measured by their footprint — roughly the area bounded by the wheels.  The effects of the rules would vary dramatically among automakers. The winners are companies such as General Motors, Toyota and Chrysler — mass-market manufacturers with broad product portfolios. The losers are independent luxury brands such as Porsche, BMW and Mercedes. Regulators based the new standards on their projections of the number of cars and trucks of different sizes that the industry will produce by 2015. The National Highway Traffic Safety Administration developed the rules. The agency's plan creates two sliding scales of fuel economy targets for cars and trucks of different sizes. Each automaker is assigned its own separate fuel-economy standards for cars and trucks, based on the number of vehicles of each footprint size that it sells. The most extreme example is Porsche Cars North America Inc. Regulators must adopt final rules by April 1, 2009.
Source: Automotive News (Subscription required.)

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Condensing Chrysler

Dealer shakeout in Boston sets stage for further reductions as automaker tries to cut number of stores
At the Boston Harbor Hotel ... Chrysler executives held a meeting last August with area car dealers to unveil early parts of a strategy that was still taking shape. The plan: A renewed attempt to cut the number of dealerships to match the company's declining sales. The U.S. auto industry has shuttered dozens of factories over the years and shed tens of thousands of jobs. But dealerships have been particularly difficult to downsize, so Chrysler was stepping up its efforts. And greater Boston is at the forefront. The new plan would later be expanded and renamed Project Genesis, Chrysler LLC's ambitious strategy to scale back its franchise network by calling on dealers to work among themselves to consolidate quickly before new corporate plans go into effect to slim down the automaker's product lineup, likely leaving single-brand dealerships with little product to sell. In Boston, the number of dealerships has gone from 23 to 14 in the past six months ... In Boston and elsewhere, dealers list several common issues that stand in the way of consolidating quicker -- from the high price of land to the tough credit market to longtime dealers' reluctance to change or quit. In rolling out Project Genesis in February, Chrysler executives pointed to Boston as an example of what needs to occur. Early work there has provided some lessons, such as the importance of straight talk about what lies ahead for other metro and secondary markets facing similar efforts. Chrysler has 3,521 dealerships -- down 64 from the end of 2007. According to the automaker, about 57 percent of the dealerships sell all three brands. In the past four years, Chrysler had consolidated 250 dealerships into three-brand dealers, the company has said. About 110 remain as single-brand dealers. In its stepped-up effort, Chrysler faces countless dealers across the country that are family owned with long traditions in the business, adding varying levels of complexity to the idea of change.
Source: Detroit Free Press

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Chrysler Offers 'Employee' Discounts to Dealer Staff

Chrysler LLC, the third-largest U.S. automaker, is offering workers at its highest-rated dealerships "employee" discounts on new vehicles for six weeks. Under the program that began two days ago, employees at franchised dealers will pay $750 less than the invoice price through June 2, the Auburn Hills, Michigan-based automaker said in a message sent to dealers yesterday and forwarded by Stuart Schorr, a company spokesman. The announcement followed management meetings with dealers in Naples, Florida, this week. The incentive may help boost sales at the company's 3,600 Dodge, Jeep and Chrysler dealers, who are being encouraged to consolidate while the company's U.S. sales fell 16 percent through March. The offer applies to stores with the automaker's "Five Star" accreditation. Employees at dealerships without that rating will be able to buy cars at 1 percent below invoice, the memo said.
Source: Bloomberg

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Demand for Small Cars, Crossovers Soar Along With Gas Prices

DETROIT -- Scott Piechocinski roamed the rows of a CarMax dealership in Charlotte, N.C., on a recent afternoon, searching for something small to replace his son's ... sport utility vehicle. He's not alone: As gas prices marched higher and now top $3.50 per gallon across the nation, car buyers across the country increasingly are abandoning SUVs and pickups in favor of smaller crossovers and cars. The trend also is showing up globally and could rival the industry upheaval that followed the last big oil price shock in 1980. That earthquake caught Detroit automakers lacking in fuel-efficient models buyers were demanding and set the stage for the rise of Asian competitors such as Toyota and Honda Motor Co. Sales of large SUVs plummeted 28 percent in the first quarter this year, while subcompact sales rose 32 percent, according to Autodata Corp. The trend away from SUVs started well before gas prices began climbing in 2005, in part because of the introduction of "crossover" vehicles - those with SUV styling but built on the more nimble and fuel efficient car chassis. Small cars are now the largest segment of the U.S. auto market, accounting for 18 percent of new car sales. Last year U.S. consumers bought a record 2.8 million of them, and with sales up 4 percent in the first quarter this year, the record almost surely will be shattered.
Source: Associated Press

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Opinion: Big S.U.V.ís Drink Less
by Bob Knoll

It would take a magician of considerable skill to turn a large, thirsty S.U.V. into a gas-sipping hybrid, but General Motors has tried to pull just such a big green bunny out of its hat. For 2008, the company’s engineers have installed an innovative hybrid system in a couple of the company’s larger sport utilities, the Chevrolet Tahoe and GMC Yukon, and plan to add the system to other models, including the Cadillac Escalade and full-size pickups, in the coming months. The technology itself, which began with a clean sheet of paper, is impressive. It is called a two-mode hybrid system because it offers two types of operation, one intended for city driving and one for the highway. Based on the hybrid-drive technology in big G.M. buses, the two-mode was jointly developed by G.M., BMW and the formerly co-joined DaimlerChrysler. All four companies ... will be using two-mode technology in future vehicles. G.M. was first to market with the Tahoe and Yukon hybrids, which do manage to be greener without much degradation of their heavy-duty characteristics. They can haul a big boat or trailer and accommodate, in theory, up to nine passengers. G.M. explains its approach — to start offering the system in some of its largest passenger vehicles — by noting that mileage gains in such thirsty models can save the most gallons of fuel (and the most dollars at the pump). In contrast, the gains from a hybrid powertrain are relatively smaller in a relatively small, efficient car like a Honda Civic.
Source: The New York Times (Registration required.)

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Ford Gives Dealers More Co-op Money

DETROIT — Ford Motor Co. is paying dealerships to boost local advertising. Beginning with vehicles purchased in April, the automaker's new Tier 3 cooperative advertising program gives Ford, Lincoln and Mercury dealerships an extra half of a percentage point of each vehicle's wholesale price. The new co-op money will be available for dealerships to spend beginning in May, a Ford spokesman said. Dealers requested the subsidy, and Ford executives agreed after noticing that dealerships had cut back local advertising sharply. Vinje Dahl, a fourth-generation Ford dealer in Davenport, Iowa, welcomed the new program. Dahl has trimmed newspaper advertising and diverted that money to other marketing efforts. "It's a good thing," Dahl said of the co-op program. "It's Ford's money — they've kind of realized what works in Davenport, Iowa, isn't quite the same as the Castro district in San Francisco." Local advertising can be effective at improving favorable vehicle opinion, particularly in small towns and smaller metropolitan markets ...
Source: Automotive News (Subscription required.)

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Area's Ford Dealers Foresee a Shiny Future

It's been a long time since the proud Ford brand was at the top of American car buyers' shopping lists, but some Fort Worth area dealers say they're seeing signs that a brighter future is in the offing. Since U.S. auto sales peaked in 2002, Ford has steadily lost market share. Sales declined 13.6 percent in 2007, leaving Ford with just 14.2 percent of the market behind General Motors and Toyota. But several local Ford dealers say that they believe that the worst is behind for the Ford brand and that a turnaround is in the offing. For the first time in a long time, dealers say they're beginning to see new cars that consumers like and can be sold without huge discounts and incentives. They're hearing about new products, still two and three years down the road, that they hope will put them on equal footing with a revived GM, Toyota and Honda. Just as important as good products, dealers say, is that Ford leadership under the direction of President and CEO Alan Mulally has a sound long-term vision for the company. "They have a plan where they're trying to go," says Charlie Gilchrist, owner of SouthWest Ford in Hudson Oaks, near Weatherford. Gilchrist is chairman of Ford's National Dealer Council, representing the nation's 3,500 Ford dealers. The new ad campaign, he said, aims to challenge consumer perceptions about Ford and urge them to give the company's vehicles a tryout when they shop for a new car or truck.
Source: Fort Worth Star-Telegram

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Earnings Will Drop This Year, Honda Says

Weak U.S. sales, dollar's fall, higher material costs cited as 4th-quarter profits plunge.
Honda Motor Co. predicted a drop in earnings for the fiscal year that began April 1 because of the weakness in the U.S. auto market, its biggest source of profit, and unfavorable currency rates. Honda, Japan's second-largest automaker, reported a record $6 billion profit for the year that ended March 31, but the effects of the deterioration in demand in North America took a toll on its January-March, or fourth-quarter, results. Its fourth-quarter profit slid 86 percent to $254 million after Honda also set aside an $800 million provision to cover possible tax debts in China and Japan. Operating income, which does not reflect the tax charge, was down 33 percent at $1.7 billion on sales of $30.5 billion. Toyota Motor Corp. is scheduled to report annual results on May 8 and Nissan Motor Co. on May 13.
Source: The Detroit News

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Retailers Dangle Discounts to Lure Tax-rebate Checks

With many consumers about to receive tax rebates worth hundreds of dollars, a handful of retail chains are dangling discounts and promotions to try to get people to spend their checks in the companies' stores. As consumer spending slows, these retailers have hit on a marketing pitch: We'll make your tax rebate go further. The tax rebates — ranging from $300 to $600, or up to $1,200 for married couples who file jointly — will be available to some direct-deposit taxpayers as early as [today], though checks by mail will take longer. Many parents will receive an additional $300 per child. Wal-Mart, the largest U.S. retailer, says it plans to announce a tax-rebate-related program within a few days. 
Source: USA TODAY

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Fed Likely to Cut U.S. Rates, Could Signal Pause

CHICAGO -- The U.S. Federal Reserve is expected to put an exclamation point on its string of interest-rate cuts with a small reduction this week and may signal that its rate-cutting cycle is done for now. Rising global inflation and the Fed's hope that a blend of monetary and fiscal stimulus will shore up the anemic U.S. economy suggest the central bank is ready to pause in the sharp easing cycle it kicked off in mid-September. Fed Chairman Ben Bernanke and his colleagues have lowered benchmark overnight lending rates 3 full percentage points to 2.25 percent over that span. Policy-makers meeting on Tuesday and Wednesday look set to lower them by a slim quarter point and then step aside to see whether their handiwork has the desired effect in spurring an economy socked by a housing slump and credit market disarray. U.S. economic data has been generally weak since the Fed's March 18 policy meeting, with reports showing a third straight monthly drop in employment, plunging consumer confidence and soft retail spending.
Source: Reuters

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Pennsylvania Site of Cellulosic Ethanol Pilot Plant

Pennsylvania gets the nod from partners General Motors Corp. and Coskata Inc. for a new cellulosic ethanol plant that will produce the fuel for testing by the auto maker later this year. The pilot plant will be located at the Westinghouse Plasma Center in Madison, PA, current site of a pilot-plant gasifier ... Gasification is the first step in Coskata’s process to make ethanol out of almost any renewable source, the fuels supplier says. The plant is expected to produce 40,000 gallons ... of cellulosic ethanol for testing by GM at its Milford, MI, proving grounds.
Source: WardsAuto.com

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NADA Update
Girl Scouts Promote Automotive Careers

Fast-Track to Automotive Careers: A Girl’s Guide is a 12-page booklet about automotive careers produced by the Girl Scouts of the USA with funding from the Department of Labor. In it, AskPatty.com founder Jody Devere says, “Dealerships want to hire more women, but they just aren’t applying for the jobs. Go visit a dealer! They hire a lot of young people and many jobs don’t require a four-year degree.” Consider inviting local Girl Scouts to your next career event, visit a troop meeting to make a career presentation or give a copy of an NADA career video, Take the Ride of Your Life or From Trucks to Bucks to a local troop.

For more information about Girl Scouts of the USA’s automotive programming, e-mail Lesley Williams at lwilliams@girlscouts.org. To order NADA’s career videos, visit www.nada.org/mecatalog.

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Survey of NADA Members Shows Commitment to Community

Even as U.S. auto sales continue to drop, dealers across the country are still highly supportive of charitable events in their local communities. A March 2008 survey of NADA dealers indicated that 82 percent of the 479 respondents sponsor charitable golf tournaments by offering hole-in-one prizes, most often a new vehicle.

NADA’s hole-in-one insurance program, ACECO, scored well on the survey. It was cited as being one of the least expensive and most convenient programs available. NADA's hole-in-one insurance program is available only to NADA members. As spring arrives, there is no better time to generate greater community awareness and new sales. Go to www.acecoinsurance.com to obtain a free quote.

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NADA Joins with AutoTrader.com for Seminar Series

New in May, NADA is joining with AutoTrader.com to offer a special 8-week virtual seminar series, Automotive Internet Marketing: A Traditional Approach to Non-Traditional Media. The series covers a variety of relevant Web-related topics, including building a Web site, advertising online and tracking Web traffic.

Each workshop is designed to provide new information about the changing online marketplace and presents a specific step to developing an Internet marketing plan.

The following virtual seminars are included in this series:

  • The 21st-Century Dealership
    –David Kain, Kain Automotive; May 21
  • Maximizing Your Web site’s Potential
    –Dean Evans, Dealer.com; May 28
  • Search Engine Optimization and Search Engine Marketing
    –Adrian Madland, Google; June 4
  • Online Advertising
    –Jaime Lomas, AdReady, Inc.; June 11
  • Direct/Targeted Advertising
    –Bruce O’Brien, @utoRevenue; June 18
  • Lead Management
    –Jennifer Suzuki, e-Dealer Solutions, Inc.; June 25
  • Tracking and Measurement for Success
    –Howard Polirer, AutoTrader.com; July 2
  • Evolving with the Marketplace
    –Chip Perry, AutoTrader.com and Kevin Fossett, NADA; July 9

Participants can access the archives for every seminar, including any seminars missed, for up to six months. To learn more about this series, visit www.nada.org/InternetMarketing or call 1-888-667-0482.

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NADA to Members: Beware of Subpoena Email Scam

NADA is warning its members to be aware of a recent e-mail "phishing" scam that involves an email with an official-looking subpoena sent from subpoena@uscourts.com requesting your appearance in front of a grand jury. This is not a legitimate message and should not be opened. Once opened, it asks the recipient to click a link and download the case history and associated information. DO NOT CLICK ON SUCH LINKS. If you do, you will have downloaded "malware" which may crash your computer and do untold amounts of damage to your system both now and potentially in the future. Be advised that federal courts do not effect service of subpoenas via e-mail. If you have any doubts about a subpoena, call the clerk of court or an attorney.

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Dell Deals Available to NADA Members for Limited Time
Dell is offering NADA members discounts from 17 percent to 40 percent on select desktops, laptops and printers, and most include free shipping. These discounts will be available for a limited time only. Call 1-888-506-3355 or go to www.nada.org/ProductsServices/PC+Purchase+Program (member login required) and click on the Dell link to take advantage of this offer. NOTE: To receive the NADA discount you MUST call 1-888-506-3355.
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Quotable
 
"Gas prices are important because they've accelerated these shifts, but the shifts were going to happen anyway. SUVs were not going to roam the Earth in this decade as they did in the 90s."

    -- George Pipas, Ford's top sales analyst, referring to increased demand for small cars and crossovers, Associated Press, April 26


It was almost revolutionary for Ford to consult with its local dealers on what its advertising message should be.

    -- Charlie Gilchrist, owner of SouthWest Ford in Hudson Oaks, Texas and chairman of Ford's National Dealer Council, says dealers played a role in helping Ford's marketing and advertising departments develop the new "Drive One" advertising campaign, Fort Worth Star-Telegram, April 26
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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