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Monday, July 7, 2008 RSSSEND TO A FRIENDPRINT
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At a Glance...
Top Stories
CAUGHT FLAT-FOOTED
Supply Woes Stall Hybrid SUVs
GM Weighs More Layoffs, Sale of Brands
New Cars Will Skimp on Fuel But Not On Amenities
GM Feeling the Beat? It May Bring Mini Chevrolet to U.S.
Mahindra Bullish on U.S.
Toyota to Add Solar Panels to Some Prius Hybrids
Opinion: It's a Panic -- But Don't Panic
NADA Update
NADA Offers Consumer Tips to Avoid Flooded Vehicles
Runoff Election to be Held for NADA Director from N. Calif.
Applications for NADA's Executive Education Program due July 16
NADA and EPA to Recognize Energy Star Efficient Dealerships
Nomination Ballots for NADA Director from Kansas due July 18
STAR Answers Dealers' Questions About Wireless Networks
Lenovo Offers NADA Members Savings on ThinkPad Notebooks
Top Stories
CAUGHT FLAT-FOOTED

As car buyers flee bigger engines, dealers scream for 4-bangers
June's horrible U.S. sales numbers would have been better if automakers had enough four-cylinder engines to meet demand. Rising gasoline prices have pushed new-vehicle buyers back to four-bangers to a degree not seen since the last energy crisis in the early 1980s. More than half of all new cars and trucks purchased in June had four-cylinder engines... For consumers, the availability of a four-cylinder engine is at least as important as the size of the vehicle, says Jim Farley, Ford Motor Co.'s group vice president of marketing and communications. All the major automakers are shifting production away from sixes and to fours. GM, Ford, Toyota, Honda, Nissan and Hyundai all confirmed they are scrambling to produce more four-cylinder engines. 
Source: Automotive News (Subscription required.)

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Supply Woes Stall Hybrid SUVs

Carmakers are unsure how to meet demand as high gas prices drive up interest in fuel efficiency
Hybrid SUVs are hard to come by across the country -- for a number of reasons. Ford Motor Co., which featured its Ford Escape Hybrid in TV ads alongside a singing Kermit [the Frog], can't seem to pump out enough of the compact SUVs to meet demand. General Motors Corp. ran into troubles with the battery for last year's Saturn Vue hybrid SUVs, which has slowed production for 2008 models. The short supply is a frustration for dealers struggling with brutally slow U.S. auto sales, as well as for SUV loyalists sick of getting pinched at the pump. "There's a growing level of interest to learn more about hybrids, and I'm sitting here and I only have two of them," said Joe Serra, president of Grand Blanc-based Serra Automotive, which sells GM, Chrysler, Toyota and other brands at dealers across the country. "I'd love to be in a situation where I had two rows of the trucks and could go out and promote them." Hybrid SUVs are sitting on dealer lots anywhere from 17 to 38 days on average in an industry where a 60-day turn rate is the norm, according to data from J.D. Power and Associates' Power Information Network.
Source:  The Detroit News

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GM Weighs More Layoffs, Sale of Brands

DETROIT -- Bruised by a deep sales slump and a half-century-low in its stock price, General Motors Corp. is preparing to cut thousands more white-collar jobs and is considering whether it should sell or shutter more of its brands, people familiar with the matter said. Both moves are part of a broader re-evaluation of GM's strategy and of its ability to meet an internal projection of returning to profitability in 2010, these people said. The job cuts are likely to be approved when GM's board of directors meets in early August, these people said. The company currently sells vehicles under eight different brands, but most, including Buick, Saturn and Saab, struggle to attract buyers despite offering new models that cost GM billions of dollars to develop. The company has already decided to put its Hummer division up for sale. Discussions among top executives about the number of brands have intensified in recent weeks, and signal a potential major shift in thinking by the company -- especially by Chief Executive Rick Wagoner. As top executives review future cars and trucks earmarked for various brands, "nothing is off the table," several people said. All but Cadillac and Chevrolet, which GM considers core to its business, are undergoing close scrutiny, other people said.
Source:  The Wall Street Journal (Subscription required.)

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New Cars Will Skimp on Fuel But Not On Amenities

DETROIT — Automakers are working as fast as they can to meet a new consumer landscape: Buyers want not just fuel-efficient cars but also the same amenities they had in their hulking SUVs. It's a change from how most cars have been set up in the USA. Smaller engines meant smaller sticker prices. Automakers put four-cylinder engines in their bare-bones models. "A lot of it had to do with price points," says Eric Peterson, communications manager for Ford Motor's crossovers. Buyers who spent more wanted more power. "Now, there's more of a shift in consumer mind-set that we're reacting to. … Consumers are saying, 'I want fuel efficiency, and I want all these options as well.'" "I'm sure we're missing some business because we don't have exactly the configuration the consumer is looking for and adequate stock to satisfy" the demand, says Jim Lentz, president of Toyota Motor Sales. If gas prices stay high and demand remains strong for smaller engines, auto executives say the U.S. market will start looking more like Europe's, where what is considered a small car [in Europe] is seen as a family sedan.
Source:  USA Today

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GM Feeling the Beat? It May Bring Mini Chevrolet to U.S.

DETROIT -- General Motors is considering a Chevrolet mini car for the United States as it reworks its product lineup to cope with a dramatic shift from trucks to cars due to high gas prices, a spokesman said Thursday. GM spokesman Dee Allen said bringing the Chevrolet Beat, about the size of a Honda Fit or Toyota Yaris mini car, to the U.S. is among the options the company is studying. "It is certainly one of the things that is being looked at from a portfolio perspective," Allen said. The Beat, to be built in South Korea, will be rolled out in other global markets faster than it would be in the U.S., Allen said. He did not know when the car might be sold elsewhere or in the U.S. The car still must be engineered to meet U.S. safety and emissions standards, he said. The company has declined to put a price tag on the Beat, but Vice Chairman Bob Lutz said last year that GM mini cars ideally would start about $10,000 in the U.S. market.
Source: Associated Press

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Mahindra Bullish on U.S.

Indian Firm Believes Diesel SUVs, Pickups Can Buck Downturn
The head of Mahindra & Mahindra Ltd.'s automotive business said the Indian company remains bullish on its chances of success in the U.S. starting next year despite the collapse of the markets for pickup trucks and sport-utility vehicles, the only two product categories in which it can currently compete. Pawan Goenka, the company's automotive president, in an interview expressed mild interest in talking to General Motors Corp. about potentially purchasing the auto maker's slumping Hummer division. Mr. Goenka said that even though those two body styles have fallen out of favor -- due to their association with poor fuel economy -- Mahindra's plan to fit the vehicles solely with diesel engines will immediately put the brand on the map. Eventually, the company plans to launch crossovers and hybrid vehicles into the U.S. "If anything, the current situation makes our vehicles more desirable," he said, pointing to the recent success of smaller crossover SUVs as evidence that there is still life in the segment.
Source:  The Wall Street Journal (Subscription required.)

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Toyota to Add Solar Panels to Some Prius Hybrids

TOKYO -- Toyota Motor Corp plans to install solar panels on some Prius hybrids in its next remodeling, responding to growing demand for "green" cars amid record-high oil prices, a source briefed on the matter said on Monday. The panels, supplied by Kyocera Corp would be able to power part of the air-conditioning on high-end versions of the gasoline-electric Prius, the source said. "It's more of a symbolic gesture," said the source, who asked not to be identified. "It's very difficult to power much more than that with solar energy." Toyota is due to launch the third-generation Prius next year. But solar power is not seen as a viable solution to power cars. Solar panels are expensive due to rising silicon prices and storing energy is difficult, the source said. It was unknown how much the solar panels on the new Prius cars would cost, or how many solar-mounted versions Toyota would build. Mazda Motor Corp briefly offered a solar panel option on two car models, the Eunos 800 and Sentia, in the early 1990s to ventilate the sedans while parked on hot summer days. The expensive option was unpopular and discontinued after a few years.
Source:  Reuters

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Opinion: It's a Panic -- But Don't Panic
by Peter Brown

Face it, we're in a panic. Guys who three months ago were bragging about their Hummer are trying to trade the unsellable bad boy for a Prius or Malibu. Every auto company is trying to squeeze another mile per gallon out of its cars and trucks. Automakers are tearing up their future-product plans and reassigning engineers to design new, fuel-efficient vehicles. And they're trying to conserve cash. I've received some e-mails from dealers complaining that Automotive News has been horribly negative lately. I called one of them, a small domestic multibrand dealer, and asked him how his business was. "We're pretty much down to selling only used cars now," he said. Here's just about the only good news: This too shall pass. Like bubbles, panics never last. But they're a good time to reassess strategy and culture. The stunning run-up in the price of gasoline to more than $4 a gallon changed everything overnight — and probably in the long run, too. And some companies were caught flat-footed. While the marketplace gets flung around like a crash-test dummy, companies should avoid joining in the panic. In the short run, consumers will calm down a tad. And in the long run, some smart auto executives will figure out how to deliver what the consumer wants. A clear-eyed look at a future of expensive fuel — and a clear-eyed critique of how the corporate culture failed in this case — could lead to a brighter future.
Source:  Automotive News (Subscription required.)

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NADA Update
NADA Offers Consumer Tips to Avoid Flooded Vehicles

The record-setting floods in the Midwest have left a large number of flood-damaged vehicles. NADA urges consumers, even in unaffected areas, to remain alert to the possibility that some individuals may attempt to sell or trade flood-damaged used vehicles in the months to come. Dealers and consumers -- through awareness and education -- can make sure severely damaged vehicles remain off of the nation's roads, says Ivette Rivera, NADA executive director of legislative affairs.

NADA offers 10 inspection tips -- available online in both English and Spanish -- that may be used to detect significant water damage. While these inspection suggestions will not detect flood damage in every case, they do provide some information that may help to protect consumers from purchasing a vehicle damaged by water or flood. Mechanics at dealerships or repair shops can also be helpful in inspecting used vehicles. Along with offering tips to consumers, NADA continues to urge insurers to publicly disclose the Vehicle Identification Numbers (VINs) of flooded and totaled vehicles on a more complete and timely basis, citing safety and consumer protection concerns. For more information about NADA’s campaign to permanently red flag flooded vehicles, visit www.nada.org/tld.

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Runoff Election to be Held for NADA Director from N. Calif.

Two nominees have received at least 10 percent of the votes for the position of NADA director from Northern California forcing a runoff election. Election ballots have been mailed to members in Northern California and are to be returned postmarked by Friday, July 18. The winner, who will serve a 3-year term beginning Jan. 27, will be announced at the 2009 NADA Convention & Exposition in New Orleans.

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Applications for NADA's Executive Education Program due July 16

NADA is now accepting applications for the new Dealer Executive Education class scheduled to begin in September at Babson College. Applications must be submitted by July 16.

Babson is the leading provider of entrepreneurial executive education training in the U.S. It has been ranked No. 1 in entrepreneurship for 13 consecutive years by U.S. News & World Report. The customized six-module program focuses on leadership, management and entrepreneurship for the retail side of the automotive and truck industry. All six week-long classes are being held on campus at the Babson Executive Education Center in Wellesley, Mass., over a 16-month period.

Click here to enroll and find out more about the program or contact Dealer Academy Director Allan Jones at (703) 821-7210 or ajones@nada.org.

Click here to see why NADA's executive leadership program is No. 1 for executive education.

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NADA and EPA to Recognize Energy Star Efficient Dealerships

  

As part of NADA's Energy Stewardship Initiative, both NADA and EPA’s Energy Star program are eager to recognize dealerships that have met or exceeded the Energy Star Challenge by improving their energy efficiency by at least 10 percent.

NADA will award these “green” dealers with a certificate, a press release distributed to the dealership’s local media, and coverage on www.nada.org, as well as recognition at NADA’s annual Washington Conference in September.

If you have improved the energy efficiency of your dealership or dealerships by at least 10 percent and you can show us, please send an email to RegulatoryAffairs@nada.org. Candidates for recognition will be asked to submit their dealership’s energy information. For more on NADA’s partnership with Energy Star, visit www.nada.org/energystar.

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Nomination Ballots for NADA Director from Kansas due July 18

Ballots for nominating members to serve as the NADA director from Kansas have been mailed to members in that state. Current director Dale Willey will be leaving the board effective Jan. 26, 2009. Nomination ballots must be returned postmarked by Friday, July 18. The newly-elected director, who takes office Jan. 27, will be announced at the 2009 NADA Convention & Exposition in New Orleans.

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STAR Answers Dealers' Questions About Wireless Networks

 

Standards for Technology in Automotive Retail (STAR) has developed new guidelines to help dealers evaluate their wireless network. Visit STAR's Dealer Infrastructure Guidelines (DIG) publication. To learn "What version of wireless should I use?" click here.

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Lenovo Offers NADA Members Savings on ThinkPad Notebooks

 

NADA members can save up to $650 on ThinkPad notebooks by using the eCoupon USXSUMMERHEAT at checkout until July 29. To take advantage of the discount, visit NADA's PC Purchase Program Web site (member login required), then click on the link for Lenovo or call 1-800-426-7235, Option 1, Ext. 4838. Enter eCoupon USXSUMMERHEAT at checkout. Free ground shipping is available on all Web orders.

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Featured Video
 

Iowa Dealership Endures Extensive Flood Damage

More Video Highlights
Quotable
 
"You have dealers screaming for any type of four-cylinder product from us. We have adjusted our plants to do everything we can to supply them."

   
-- Jim Farley, Ford Motor Co.'s group vice president of marketing and communications, Automotive News, July 7


"I have been in the car business for 38 years. It is as wild a swing toward four-cylinders as I have ever seen. It is more dramatic than in the gas crunch of the early '80s."

   
-- Kent Ritchey, a big multifranchise dealer in Memphis, Tenn., whose Ford-Lincoln-Mercury store has a 10-day supply of the Focus and four-cylinder Fusion, Automotive News, July 7


"I'm sure we're missing some business because we don't have exactly the configuration the consumer is looking for and adequate stock to satisfy" the demand.

   
-- Jim Lentz, president of Toyota Motor Sales, USA Today, July 7


"There's a growing level of interest to learn more about hybrids, and I'm sitting here and I only have two of them. I'd love to be in a situation where I had two rows of the trucks and could go out and promote them."

    -- Joe Serra, president of Grand Blanc-based Serra Automotive, which sells GM, Chrysler, Toyota and other brands at dealerships across the country, The Detroit News, July 7


"While the marketplace gets flung around like a crash-test dummy, companies should avoid joining in the panic."

    -- Peter Brown, associate publisher and editorial director of Automotive News, Automotive News, (Opinion), July 7
Video Highlights
 
 

Click Here to see why NADA's executive leadership program is No. 1 for executive education.


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