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At a Glance...
Top Stories
Auto Woes Worsen
GM May Reassign Workers from Trucks to Cars
Ford Lowers Sales Goal
Ford to Announce Production of New Global Car
Toyota Denies Decision on Prius in US
Chrysler Hybrids May Grow Faster
Norway's Think to Produce, Sell Smart Electric Cars in U.S.
NADA Update
Shop the NADA Expo Floor - Online
NADA Provides Guidance on Reaching Subprime Customers
Ballots for New NADA Director from Georgia due June 13
NADA's Consulting Tosses Dealers a Lifeline
STAR Answers Dealers' Questions on Safeguarding Customer Information
Lenovo ThinkPad Notebooks Start at Just $459
Top Stories
Auto Woes Worsen

After years of restructurings, more cuts needed; $4 a gallon gas is the game changer
Six weeks ago, Detroit's automakers appeared to be on course in their turnaround efforts despite a steep downturn in auto sales. But now, with gas at $4 a gallon and many consumers shunning fuel-thirsty pickups and SUVs, the Big Three are revising their strategies to cope with what appears to be a third oil shock, similar to the crises of the 1970s. While all automakers and parts suppliers are struggling in this climate -- even Toyota Motor Corp. has forecast a drop in annual earnings -- Detroit's automakers are most vulnerable to shifts away from vehicles that are traditionally their top sellers and top money-makers. Three years ago, large pickups accounted for 15.2 percent of U.S. light vehicle sales, and compact cars accounted for 15.7 percent. Today, compact cars represent 20 percent of the total and the pickups' share of the market has slipped below 10 percent. "Part of what they're dealing with is a cyclical downturn in the economy, and part of what they're dealing with is a lasting change in the kinds of vehicles that people want to buy," said Dana Johnson, chief economist at Comerica Bank. "The U.S. auto market appears to be headed to a rerun of the late 1970s, where the energy crisis, along with CAFE requirements, sparked a sharp shift to smaller cars," Lehman Brothers analyst Brian Johnson wrote in a report. "There is a strange similarity today to what happened in 1973, and was repeated in 1980," said Gerald Meyers, former chairman of American Motors Corp. and now business professor at the University of Michigan. "I recall Jeep suddenly going dead in 1973. Dealers said overnight 'we have no traffic.'"
Source:  The Detroit News

GM May Reassign Workers from Trucks to Cars

DETROIT -- General Motors Corp. will furlough entire shifts of workers at some truck factories and may move them to nearby car plants as it restructures to adjust to a rapidly changing U.S. market brought on by $4 per gallon gasoline. GM Chairman and Chief Executive Rick Wagoner and top managers are finalizing additional restructuring moves and likely will announce details at the automaker's annual meeting on Tuesday in Wilmington, Del., two people familiar with the plan told The Associated Press. One said production cuts were part of the plan. Neither would give details. Key to the plan are the 19,000 hourly workers who signed up to leave the company by July 1 through buyout and early retirement offers. GM on Thursday announced the number of takers in the latest round of offers, which amounts to a quarter of the company's U.S. hourly work force. But the automaker may add a third shift to its Lordstown, Ohio, assembly plant near Youngstown, where it makes the Chevrolet Cobalt and Pontiac G5 small cars, another person familiar with GM's production plans said Thursday. Cobalt sales were up 17 percent through April, while G5 sales were down slightly. Silverado pickup sales were down 21 percent in first four months of the year. One of the people familiar with GM's restructuring moves said there should be little change in GM's product plan because the company already was moving to bring more cars and crossover vehicles to market.
Source:  The New York Times

Ford Lowers Sales Goal

Ford Motor Co. has abandoned its objective of selling 13 percent of the retail cars and trucks sold in America. George Pipas, Ford's top sales analyst, disclosed the change during a Thursday interview with the Free Press about the automaker's market share. He said the 13 percent goal had "become inoperable" in the current market conditions. The disclosure comes a week after Ford revealed that it would miss its 2009 profit goal, slash production of its trucks and SUVs and intensify its turnaround effort, a move that could cause 10 percent or more of the company's 24,300 salaried workers to be involuntarily laid off. While Ford is trying to more quickly bring to market those more popular models -- such as the Ford Focus compact -- pickups and SUVs still make up a substantial portion of Ford's total sales. The F-Series, for example, represented one-fourth of the company's total sales through April. R.L. Polk & Co., which obtains actual vehicle registrations, reported Thursday that Ford's share of the retail light-vehicle market, which excludes sales of heavy- and medium-duty trucks, was 12.6 percent in the first three months of the year. During the same period a year ago, Ford's share was 12.9 percent. That makes Ford the steadiest performer so far this year among Detroit's automakers.
Source:  Detroit Free Press

Ford to Announce Production of New Global Car

DETROIT – Ford Motor Co. will announce Friday that it will build its new global car, the Fiesta, in Mexico for future sale in the U.S. market, according to a person familiar with the plan. It was not immediately clear whether Ford can move up production to meet shifting consumer demand in the U.S. away from trucks and sports-utility vehicles and toward fuel-efficient passengers. "We are very excited about bringing the Fiesta to North America in 2010," spokesman Mark Truby said. "We will have more to say about our production plans soon." The new Fiesta, which is based on the sleek Verve hatchback Ford has presented at auto shows, is a key piece of Chief Executive Alan Mulally's drive to unify Ford's global operations around "world cars" that share most of their components and can be built and sold with few changes in North America, Europe and Asia.
Source:  The Wall Street Journal (Subscription required.)

Toyota Denies Decision on Prius in US

TOKYO -- Toyota said Friday that nothing had been decided yet on using its California joint venture plant with General Motors to produce its Prius hybrid -- a move that would mark the first North American plant for the hit "green" car. Major daily Tokyo Shimbun reported Friday that Toyota Motor Corp. was in talks with General Motors Corp. about producing the Prius, now made in only Japan and China, at a joint venture plant in Fremont, California. The newspaper, which did not cite sources as is common in Japanese media reports, said that adding another production plant will help boost Toyota hybrid sales. Toyota is hoping to sell 1 million hybrids a year sometime after 2010. Toyota took a decade before recently reaching cumulative sales of 1 million for the Prius, the world's first mass produced gas-electric hybrid.
Source:  The Associated Press

Chrysler Hybrids May Grow Faster

Chrysler LLC, which is launching its first hybrid vehicles this year, is already looking at the possibility of expanding its offerings into other vehicles, an executive for the automaker said Thursday. "Where our competitors are putting hybrid engines are where we feel that there is an opportunity for us to capitalize," said Mike Accavitti, Dodge Brand director. "Our guys are looking at it. We have to focus our resources, though, on the things we have going on right now. Stay tuned." Asked if the recently launched Dodge Journey SUV could see a hybrid engine in the future, he indicated that they're looking at that option and noted that they've also heard interest in a hybrid version of the Dodge Avenger midsize sedan. Chrysler's entrance into the hybrid market is expected to occur this summer with the 2009 Chrysler Aspen and Dodge Durango Hemi Hybrid SUVs. Chrysler also has said it plans to sell the redesigned Dodge Ram with an optional hybrid beginning in 2010.
Source:  Detroit Free Press

Norway's Think to Produce, Sell Smart Electric Cars in U.S.

DETROIT – Norway's Think Global AS, with backing from U.S. venture capital investors, plans to produce and sell a small all-electric car in the U.S. that could go as far as 110 miles when fully charged – fresh evidence that the race to woo American consumers with electric cars is heating up and drawing interest from the same investors that helped build Silicon Valley. The Oslo-based electric carmaker, which recently set up a U.S. office in Menlo Park, Calif., is trying to determine what geographical areas to focus its sales activities on, with an aim to launch the car – the Think City – in 2009. Think, a Ford Motor Co. unit until the U.S. auto maker sold it to a Norwegian company in 2003, is also searching for a site in the U.S. and Mexico to assemble the car. Jan-Olaf Willums, Think Global chief executive officer, said Think plans to sell the City, to be priced less than $25,000, in densely populated cities because of the car's limited range. Mr. Willums declined to estimate U.S. demand for the City car, but Ray Lane, managing partner of venture-capital firm Kleiner Perkins, Caufield and Byers, which has invested in Think, believes Think could eventually sell as many as 30,000 to 50,000 City cars a year in the U.S. once production ramps up and a sales network for the model is fully established.
Source:  The Wall Street Journal (Subscription required.)

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NADA Update
Shop the NADA Expo Floor - Online

The 2008 NADA Convention & Expo is over, but the virtual exhibit floor is open 24/7 with our new online exhibit directory. Browse more than 700 exhibitors and search by company name or category of interest. Click here for direct access to the 2008 NADA Exhibit Directory.

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.

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'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.

Lenovo ThinkPad Notebooks Start at Just $459

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Visit www.nada.org/ProductsServices/Technology and click on "PC Purchase Program" (member log-in required), click www.lenovo.com/shop/deals/nada or call 800-426-7235, Option 1, Ext. 4838 to take advantage of these savings. Enter eCoupon USXDADSGRADS at checkout. Free ground shipping is available on all Web orders. This offer ends June 16, 2008. Visit the Web site often for special limited-time eCoupons.

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Quotable
 
"There is a strange similarity today to what happened in 1973, and was repeated in 1980. I recall Jeep suddenly going dead in 1973. Dealers said overnight 'we have no traffic.'"

   
-- Gerald Meyers, former chairman of American Motors Corp. and now business professor at the University of Michigan, The Detroit News, May 30


"Part of what they're dealing with is a cyclical downturn in the economy, and part of what they're dealing with is a lasting change in the kinds of vehicles that people want to buy." 

    -- Dana Johnson, chief economist at Comerica Bank, referring to the consumer shift toward smaller vehicles, The Detroit News, May 30


"We consider NADA's Lifeline Dealership Consulting an investment in our dealership."

    -- Frankie Korschun, general manager of Frema Motors Inc. in Goldsboro, N.C., NADA Newswire
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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