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Wednesday, May 28, 2008 RSSSEND TO A FRIENDPRINT
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At a Glance...
Top Stories
Diesels [Still] Equal Savings
Luxury Vehicles Dominate Total Quality Survey
Opinion: Auto Makers Can Find Opportunity in $4 Gasoline
Chrysler Sends Mystery Shoppers to Dealerships
GM Hastens Truck Production Cuts
Ford to Slash Up to 12 Percent of Salaried Jobs
Maybe Tata, Jaguar/Land Rover is Not Such an Odd Couple
Fiat Says Talks are Wide Open in Partner Search
NADA Update
Ballots for New NADA Director from Georgia due June 13
NADA Provides Guidance on Reaching Subprime Customers
NADA's Consulting Tosses Dealers a Lifeline
STAR Answers Dealers' Questions on Safeguarding Customer Information
Lenovo ThinkPad Notebooks Start at Just $459
Top Stories
Diesels [Still] Equal Savings

With the price of diesel fuel pushing $5 a gallon, many Americans might not think this is the best time to buy a diesel car or sport-utility vehicle. But they'd be mistaken. ...even though the price of a gallon of diesel has climbed more than 20 percent in the past 12 months, diesel cars still offer better gas mileage -- and savings -- than regular cars. That's because diesel engines are much more efficient than gas engines, delivering up to 25 to 30 percent more miles per gallon. That's good news for German import brands like Audi, BMW, Mercedes-Benz and Volkswagen,  who are launching a wave of new clean-diesel cars in the U.S. starting this fall and into 2009 and beyond. Domestic and Asian manufacturers also have plans to offer more diesels in the U.S. market. But the timing of these new diesels isn't very auspicious. The sharp rise in diesel fuel has cut deeply into the diesel cost advantage in miles per gallon. There is real concern that unless refineries start producing more diesel, the prices will escalate beyond the point that a diesel can offer any cost benefit.
Source:  BusinessWeek Online

Luxury Vehicles Dominate Total Quality Survey

DETROIT — Luxury brands once again dominated an annual U.S. automobile quality survey taken this year by a California research company, but total quality dropped for the first time in four years, the company said. BMW led all brands in the survey by San Diego-based Strategic Vision, followed closely by Hummer, Mercedes-Benz, Audi, Infiniti, Lexus, Land Rover, Cadillac, Lincoln and Volkswagen. VW, which includes Audi, led all corporations with a total quality index score of 892 out of 1,000 possible points. General Motors finished second as a corporation at 867, followed by Ford Motor and Honda, which tied for third at 862. Toyota finished fifth, at the industry average of 860. VW, GM and Ford were the only corporations showing improvement in this year's survey. To get the rankings, Strategic Vision calculated the index based on survey questions about reliability, vehicle characteristics, dealership experience, styling, interior and exterior design and their overall perception of initial quality, said Alexander Edwards, president of the company's automotive division.
Source:  The Associated Press

Opinion: Auto Makers Can Find Opportunity in $4 Gasoline
by James Stewart, a columnist for SmartMoney magazine and SmartMoney.com

Ford Motor said last week that it had seen a precipitous drop in the sale of new trucks and SUVs during the first two weeks of May. That coincides with the most recent surge in oil prices, to more than $130 a barrel, and gas prices in New York of more than $4 a gallon. It's also consistent with my sense that people around here have stopped waiting for energy costs to return to "normal." Short-term measures have been exhausted, and they're starting to face the long-term future of high oil prices. This is all terrible news for the auto industry. Or is it? Among other things, my neighbors are talking about trading in those trucks and SUVs for small, fuel-efficient cars. Or, more frequently, keeping the trucks but driving them only when needed and adding a fuel-efficient vehicle for everyday use. This got me thinking: Imagine if all, or nearly all, of those SUVs you see on the highway were replaced with more fuel-efficient cars. For auto makers that still depend on the large-vehicle market for most of their profits, the situation is grim. But longer term, this seems like an opportunity for the auto industry, especially for those producers nimble enough to respond to this remarkable shift in consumer demand.
Source:  The Wall Street Journal (Subscription required.)

Chrysler Sends Mystery Shoppers to Dealerships

DETROIT — Chrysler LLC wants to find out how well its dealership salespeople know their way around the company's vehicles. So the automaker is sending hundreds of mystery shoppers into the field to evaluate them. Salespeople who pass the test with flying colors can win as much as $1,000 in a drawing. Chrysler claims the program can be a motivational tool and can focus its sales force on promoting the virtues of its vehicles, rather than deals. Mystery shopper programs have supporters and detractors. Chrysler CEO Bob Nardelli is a believer and became a mystery shopper himself when he was chairman of Home Depot Inc. But critics say mystery shoppers can be easily identified by experienced salespeople and can alienate sales personnel if not handled carefully. The "Chrysler Multi-Million Dollar Mystery Shop Challenge" began May 12 and will run through December. During that time, the automaker will conduct more than 20,000 mystery shopper visits, roughly one for every sales consultant at every dealership.
Source:  Automotive News (Subscription required.)

GM Hastens Truck Production Cuts

Slump in demand for pickups will cause shifts at Flint and Pontiac plants to be eliminated
DETROIT -- Slumping demand for pickup trucks has forced General Motors Corp. to speed up production cuts at two Michigan factories that had been closed due to a strike at a parts supply company. GM spokesman Tony Sapienza said Tuesday that when the factories come back on line, one shift will be cut at the Pontiac and Flint assembly plants. Before the strike at American Axle & Manufacturing Holdings Inc., the Flint plant was running three shifts and Pontiac running two. "It's market demand," Sapienza said. The announcement came as GM shares dropped to their lowest level since October 1981. GM shares fell as low as $16.87 on Tuesday but closed at $17.42, down 18 cents. Citigroup downgraded the stock from "buy" to "hold" on concerns about reduced earnings power and the company burning up cash.
Source:  The Associated Press

Ford to Slash Up to 12 Percent of Salaried Jobs

Involuntary layoffs planned as sales slump; Rising gas, steel prices stall turnaround
Ford Motor Co. will cut its U.S. salaried work force by between 10 percent and 12 percent in an effort to jump-start a turnaround plan stalling in the face of rising gasoline and raw materials prices. And this time, it won't be voluntary. That was the sobering message delivered to senior employees in Ford's sales, marketing and service division during a "town hall" meeting with Vice President Jim Farley on Friday morning. He told his team that Ford is struggling to cope with "a structural change to our economy," and said "we need to act fast" to keep the company's restructuring effort from failing. Farley said the company also is taking a hard look at the merit increases it usually gives salaried employees in July.
Source:  The Detroit News

Maybe Tata, Jaguar/Land Rover is Not Such an Odd Couple

From this modest, wood-paneled office, [Chairman of Tata's burgeoning motor division Ravi] Kant is overseeing the most audacious double-play the auto industry has seen in years: Launching the world's cheapest car, the Tata Nano, and taking over luxury brands Jaguar/Land Rover from Ford Motor. Although the Jaguar deal won't close until June and Nano production begins later this year, Kant already has issued a clear directive: Keep these vehicle lines separate and distinct. "Each is going to chart its own future and own course," he says. "The conflict would come if we were to try to put them together." Tata's catapult into the news took many Americans by surprise. And with regard to Jaguar, some have questioned whether an Indian company almost unknown in North America is the best steward for one of the world's best-known car brands. "We are talking about perception and image," said shareholder activist Evelyn Y. Davis at Ford's annual shareholder meeting earlier this month. "Tata sells cars that are $2,500. How could the board sell us out to people like that, who sell cars like that?" In fact, Tata Motors has built vehicles for more than 50 years and is part of a $28.8 billion international conglomerate with businesses that range from luxury hotels to iron and steel to cosmetics. The company is highly respected by Indians, who regard the Tata family as Americans regard the Fords.
Source:  USA Today

Fiat Says Talks are Wide Open in Partner Search

Fiat SpA says it is determined to start production of its Alfa Romeo brand by 2011 in North America and is in talks to determine exactly where and with which fellow automaker as a partner. "The [negotiating] table is open with everybody," Chief Executive Sergio Marchionne was quoted as telling journalists after a ceremony at Turin's Polytechnic University to receive an honorary degree. "We're discussing everything with everyone," the Italian news agencies ANSA and Apcom quoted him as saying. While Fiat has made plain its eagerness to produce cars for Alfa Romeo, its sportier line, in North America, it hasn't said which potential partner it is trying to work out a deal with. Nor has it publicly identified a city -- or even a country, implying that manufacturing plants in Canada, Mexico and the U.S. are all possibilities. "We must begin producing vehicles in North America by the end of 2010, beginning of 2011," ANSA quoted Mr. Marchionne as saying.
Source:  The Associated Press

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NADA Update
Ballots for New NADA Director from Georgia due June 13

Ballots for nominating dealers to serve as the NADA director from Georgia have been mailed to members in that state. Nomination ballots must be returned postmarked by Friday, June 13. If two or more nominees receive at least 10 percent of the votes and agree to seek election, ballots will be mailed Friday, July 11 to be returned postmarked by Friday, August 1. The candidate elected will take office immediately to serve the remaining term which expires February 2010.

NADA Provides Guidance on Reaching Subprime Customers

Damaged credit can happen to anyone. As many as three out of five auto consumers suffer from damaged credit. Dealers could be leaving a great deal of money on the table—perhaps hundreds of thousands of dollars a year in additional gross profit—if they ignore the subprime market.
 
That’s where a special finance operation comes in. Call it subprime, non-prime, secondary or special finance—this large and growing segment of the market needs dealers who are prepared to sell credit-challenged customers the vehicles they need at prices they can afford.

NADA Management Education’s new DVD, Creating a Special Finance Operation: Doing it Right, shows dealers how to be prepared. The four-segment training video, plus an information-packed study guide, is available for $169. Go to www.nada.org/specialfinance to see a preview, log in and order.

NADA's Consulting Tosses Dealers a Lifeline

NADA’s Lifeline Dealership Consulting provides dealers with an objective evaluation and advice on operations and performance. NADA 20 Group and NADA Dealer Academy consultants work with dealership management personnel to achieve specific goals determined by a telephone interview or a site visit.

On site, a NADA consultant would meet with department managers to develop remedial action plans. The consultant also provides managers with various tools to assist performance measurement and tracking, and develops a written report with recommendations for improvement.

"We consider NADA’s Lifeline Dealership Consulting an investment in our dealership," said Frankie Korschun, general manager of Frema Motors Inc. in Goldsboro, N.C. "I would highly recommend the program to anyone who needs an outside point of view." For more information, call NADA's Lifeline Dealership Consulting at 1-800-248-6232, ext. 4745.

STAR Answers Dealers' Questions on Safeguarding Customer Information

 

Standards for Technology in Automotive Retail (STAR) has developed new guidelines to help dealers with Safeguarding Customer Information. Visit STAR's Dealer Infrastructure Guidelines (DIG) publication for more information. To learn what is recommended for Safeguarding Customer Information, click here.

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Quotable
 
"Imagine if all, or nearly all, of those SUVs you see on the highway were replaced with more fuel-efficient cars. ...this seems like an opportunity for the auto industry, especially for those producers nimble enough to respond to this remarkable shift in consumer demand."

    -- James Stewart, a columnist for SmartMoney magazine and SmartMoney.com, The Wall Street Journal, May 28
Video Reports
 
NADA's Annual Industry Relations' Symposium Brings Dealers and Automakers Together
NADA's 2008 Industry Relations Symposium.
Field of Dreams: Auto dealers show their commitment to New Orleans.  NADA Chief Economist Paul Taylor delivers '08 sales forecast. 

NADA returns to New Orleans for its 92nd annual convention.  

Click here for more NADA TV video reports.
 
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