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Monday, July 14, 2008 RSSSEND TO A FRIENDPRINT
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At a Glance...
Top Stories
Carmakers Can Claim Victory -- for Now
Opinion: Automakers Have Fair Beef with New Federal MPG Rules
Opinion: CAFE Standards: Stop Whining and Get to Work
Volvo Will Tighten U.S. Dealer Network
Deal Between Governors, GM to Push Biofuel Stations
Auto Dealers Add Own Sales Incentives, Deepening Their Losses on Trucks, SUVs
Dealers Treat Shoppers Better
Everybody's a Critic: How Dealers Cope with Online Reviews
Women Making Their Mark in Top Auto Dealer Positions
Chrysler Plans Electric Vehicles, Could be Ready in 3-5 Years
Reinventing the Wheel Helps Fuel Efficiency
NADA Update
NADA Hole-in-One Insurance Boosts Dealership Visibility at Low Costs
Applications for NADA's Executive Education Program due July 16
Nomination Ballots for NADA Director from Kansas due July 18
Lenovo Offers NADA Members Savings on ThinkPad Notebooks
Top Stories
Carmakers Can Claim Victory -- for Now

WASHINGTON -- Automakers scored a major victory Friday after the White House and several Cabinet agencies denounced the recommendations of career staff experts at the Environmental Protection Agency for limiting vehicle tailpipe emissions. But the victory could be temporary as the next president will have to revisit the decision of whether to regulate vehicle emissions. The presumptive presidential nominees, Republican John McCain and Democrat Barack Obama, support regulation. "The onerous command-and-control regulation contemplated in the EPA staff draft would impose crippling costs on the economy in the form of a massive hidden tax, without even ensuring that the intended overall emissions reductions occur," White House press secretary Dana Perino said. The EPA's long-delayed report came nearly 17 months after the U.S. Supreme Court ruled that the agency has the legal right to regulate emissions as a pollutant under the Clean Air Act and must decide whether tailpipe emissions endanger public health. EPA administrator Stephen Johnson called the Clean Air Act "ill-suited" to the task of regulating auto emissions. Automakers have strongly opposed efforts to allow tailpipe emissions regulations under the Clean Air Act -- in part because they could face two separate requirements and it could open the door for California and more than a dozen other states to impose their own tougher emissions standards. "An effective climate change policy must be built on an economy-wide approach that involves all stakeholders," said [Alliance of Automobile Manufacturers President,] Dave McCurdy. The automakers said the Clean Air Act "does not include all of the tools and criteria needed to address the global issue of climate change, including requirements to balance the economic effects and impacts on U.S. manufacturing jobs along with the environmental considerations."
Source:  The Detroit News

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Opinion: Automakers Have Fair Beef with New Federal MPG Rules
The Detroit News

Automakers from Detroit and other countries have a legitimate beef with the National Highway Traffic Safety Administration over recently imposed increases in fuel economy standards. NHTSA is mandating 4.5 percent annual increases in fuel efficiency between 2011-15, a target the manufacturers say will slow the roll-out of alternative fuel vehicles. The Big Three and other automakers are asking NHTSA to roll back the mandates, and it should. The automakers agreed last fall to new corporate average fuel economy (CAFE) standards... The level was tough -- a 35-miles-per-gallon fleetwide average by 2020 -- but the manufacturers believed they could meet them, with considerable effort. But the ink was barely dry on the bill Congress passed before federal agencies started upping the ante, accelerating the timetable for meeting the congressional requirements. This not only is unfair, it may very well work against the important work of developing nongasoline vehicles. And it's unnecessary. The sharp spike in gasoline prices is rapidly moving motorists out of gas guzzlers and into more fuel-stingy vehicles. That is raising the practical fleetwide fuel economy average and will give automakers the breathing space they need to develop alternative technologies. The Big Three, along with their foreign competitors, are engaged in an expensive and aggressive push to change the way America drives. And they're making progress. But forcing unreasonable deadlines on companies that are already awash in red ink and whose very survival is in doubt will not make things go any faster. Congress has placed a heavy burden on the backs of automakers. It must be careful to ensure that federal agencies don't add the straws that will break their backs.
Source:  The Detroit News

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Opinion: CAFE Standards: Stop Whining and Get to Work
Automotive News

It is distressing that some automakers are back in Washington whining about meeting new fuel economy standards at a time when their customers are demanding vehicles that exceed the regulatory mandates. The companies' complaints suggest that they have learned nothing from previous oil shocks about the long-term need to improve the fuel efficiency of their products. What a pity. The Detroit 3 would be much better off today if corporate average fuel economy standards had risen modestly — in four-year increments, say — over the past 20 years. Customer demand for larger, more powerful cars and trucks could have been blunted by regulatory mandates. Belatedly, the Bush administration and the current Congress have had the political gumption to make a start by raising fuel economy standards. Today it's stupid to whine about CAFE because the consumer is way ahead of CAFE standards. Rising gasoline prices are driving new-vehicle buyers back to four-cylinder engines to a degree the nation has not seen since the last energy crisis. There is danger in swinging the pendulum too far in the direction of small cars. One of the lessons of previous oil shocks is that consumers will adjust to higher fuel prices and want back some of the utility of bigger pickups and SUVs. In a market economy, the customer is right. But consumers are fickle. So it behooves automakers ... to use the current sales crisis as an opportunity to improve their manufacturing flexibility, as well as their product lineups. It is long past time for automakers to stop whining and work to create a better future for their customers, the nation and themselves.
Source: Automotive News (Subscription required.)

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Volvo Will Tighten U.S. Dealer Network

Volvo plans to cut its U.S. dealer network 30 percent by the end of next year. “This measure will strengthen the remaining dealers,” company spokesman Olaf Meidt told Automobilwoche, which, like Automotive News, is published by Crain Communications Inc. Volvo, which has about 355 U.S. dealers, blamed massive losses in its U.S. business for the move. Over the past five years, Volvo reportedly lost 1.1 billion euros ($1.73 billion at current exchange rates) in the U.S. market because of the weak dollar. Most Volvo models saw U.S. sales declines in 2007. Because of rising gasoline prices and a shift in buyer behavior, Volvo has discussed expanding its U.S. model offerings with smaller vehicles. The compact C30 is available.
Source: Automotive News (Subscription required.)

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Deal Between Governors, GM to Push Biofuel Stations

WASHINGTON -- General Motors Corp. and the National Governors Association will team over the next few years to boost the number of ethanol fueling stations around the country, to help build demand for the next generation of biofuels from sources other than corn. The agreement announced Sunday by Minnesota Gov. Tim Pawlenty doesn't set any specific targets for adding new stations. But the automaker said the goal was to boost the slow pace at which new pumps capable of dispensing 85 percent ethanol fuel have been added in recent years. Of about 170,000 filling stations in the United States, some 1,700 can supply E85, and most of those are in a few Midwestern states. A lack of filling stations and confusion over E85's costs have kept the fuel from gaining widespread use. While E85 prices still typically trail those of gasoline, vehicles burning ethanol see their mileage fall by up to 30 percent, and the gap between per-gallon prices doesn't always cover the reduced range. Last year's energy bill set a target for the nation to use 36 billion gallons of renewable fuels a year by 2022, with much of it coming from cellulosic ethanol. Yet several lobbying groups, including large food producers, have pressed Congress to ease the mandate, saying it was pushing up food prices. Under the agreement with the governors' association, GM will help the group find the right locations to install new pumps through tools such as vehicle registration data. The automaker said it had helped install 300 E85 pumps in 15 states over the last three years, and has taken financial stakes in two developers of next-generation ethanol.
Source:  Detroit Free Press

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Auto Dealers Add Own Sales Incentives, Deepening Their Losses on Trucks, SUVs

Some car dealers are reaching deep into their own pockets to extend auto makers' already hefty rebates and other incentives to sell pickup trucks and sports-utility vehicles. In some parts of the country, additional dealer discounts have cut prices of pickups and SUVs to 50 percent of the vehicle's original sticker prices. At Zangara Dodge in Albuquerque, N.M., a 2008 Dodge Ram pickup now sells for $15,000, down from a sticker price of about $30,000. Dealers on average more than doubled their net loss to $136 on every vehicle they sold during the first four months of 2008, compared with $61 a year ago, said Paul Taylor, chief economist for the National Automobile Dealers Association. The stats don't take into account May, June and July, where dealers were squeezed even more. The intensifying economic pressure is sure to lead more dealers to consider closing. Ford, GM and Chrysler are running programs aimed at reducing their dealership network by weeding out underperforming sites while bolstering profitability potential for those who remain. The auto makers are kicking in cash to help dealers buy out one another or exit the business.
Source:  The Wall Street Journal (Subscription required.)

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Dealers Treat Shoppers Better

Most car dealerships are treating their customers better, according to an annual satisfaction study using mystery shoppers. Acura, Jaguar, Lexus and Saturn dealerships rank highest in the 2008 Pied Piper Management Co. review, in which people were hired to pose as shoppers, visit auto dealerships, then calculate and report their findings on how they were treated. The new study shows a brand or dealership’s efforts to improve shopper treatment parallels retail-sales success. Of U.S. car brands that improved their 2008 year-to-date retail sales, eight of the top 10 brands also increased or maintained satisfaction scores from 2007 to 2008. Of the 10 car brands with the worst year-to-date sales performance, eight saw their satisfaction scores decrease from year to year. “Today’s typical auto-shopping experience is far different from the experience even five years ago, and many dealerships are changing the way they sell cars as a result,” says Pied Piper President Fran O’Hagan. Today’s shoppers arrive at a dealership already armed with facts and figures, often garnered from research, especially on the Internet. “But in the end, the dealership and sales person still play a critical role in helping shoppers turn that raw information into the best match for the shopper’s needs and desires,” O’Hagan says.
Source:  Ward's Dealer Business

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Everybody's a Critic: How Dealers Cope with Online Reviews

As Web sites that critique dealership sales and service operations proliferate, dealerships are using the reviews to improve procedures and win customers. At the same time, more dealerships are fighting back against online attacks they consider inaccurate or unfair. Shaun Weissman, business development manager of Rallye Auto Group, which owns Rallye BMW, says the review sites "give us an opportunity to see unsolicited responses about what people think about our business. We take that information to heart." A 2007 survey of more than 1,500 U.S. consumers by Cobalt, R.L. Polk & Co., and the online company Yahoo found that nearly three-fourths of vehicle owners said they likely would consult online dealership reviews and rankings for future purchases. About one-fifth of new-vehicle buyers in the survey said they changed dealerships because of online reviews they had read. "Today, the (shopping) experience is nearly as important as price," Root told Automotive News.
Source:  Automotive News (Subscription required.)

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Women Making Their Mark in Top Auto Dealer Positions

Sherrill Freeborough was a young widow with a small child who needed to find a way to support her family. Now, she's the owner of Saturn of Grand Ledge and Saturn of Okemos [Mich.]. Lisa Schuesler heard a rattle in her car and wanted to learn more about the auto service business. She now works in it, managing the service department at Freeborough's Okemos store. Deanna Criscuolo started selling cars at her father's dealership, Spartan Toyota in Lansing, when she was in college. She's now on track to someday take over the dealership with her brother, Derek. These women, and others climbing the leadership ladder at area car dealerships, didn't set out to break through the glass ceiling in an industry that's predominantly male. Yet, that's what they've done. And as women become more visible in the auto sales and service business, attitudes are starting to change. Of the nation's 21,200 new car dealerships, only 914, or 4.3 percent, are owned by women. Yet, a career in the auto business can bring great rewards to a woman willing to give it a try, said Annette Sykora. She's the owner of two car dealerships near Amarillo, Texas, and the current chairwoman of the National Automobile Dealers Association. Dealers are often looking for women workers. Many customers feel less threatened by a woman salesperson, Sykora said, and women are often skilled in carefully listening to a customer and handling disputes. "All dealers would love to have more women sales people and in management," she said. "They do appreciate the set of skills women bring to the job - these are things customers want."
Source:  Lansing State Journal

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Chrysler Plans Electric Vehicles, Could be Ready in 3-5 Years

Chrysler LLC's answer to the much-anticipated Chevrolet Volt could be three to five years away, the Free Press has learned. The Auburn Hills automaker launched a special division within the company last fall called ENVI -- pronounced like "envy" -- to bring electric-drive vehicles and related advanced-propulsion technologies to market. "ENVI is currently developing electric vehicles for the three Chrysler brands and is planning on product within three to five years," Nick Cappa, a Chrysler spokesman, told the Free Press in an e-mail. General Motors Corp. has promised a breakthrough electric-drive vehicle -- commonly referred to as a plug-in hybrid -- called the Chevy Volt by 2010. The move by Chrysler comes as some dealers quietly question why Chrysler is not stepping up efforts to bring more hybrid technology to market quicker in light of $4-a-gallon gasoline and tanking SUV and truck sales. Some dealers tell the Free Press they've been told not to expect the bulk of the automaker's lineup to have a hybrid option in the near future. Around September, Chrysler will begin to offer two hybrids: the Chrysler Aspen and Dodge Durango -- both SUVs and both priced below GM's similar models. GM and Chrysler teamed up with Mercedes-Benz and BMW to develop a two-mode hybrid system.
Source:  Detroit Free Press

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Reinventing the Wheel Helps Fuel Efficiency

Automakers put low-resistance tires, once reserved for hybrids, to wider use
Every mile to the gallon counts nowadays. That's why carmakers, looking for ways to meet consumer demands for higher-mileage vehicles, are returning to basics and using low rolling resistance tires to gain an additional mile or two per gallon. Once reserved for hybrid vehicles, these energy-saving tires are finding their way onto more models such as the 2009 Ford Escape. Advances in tire compounds have helped tiremakers create more efficient choices for consumers looking for replacements down the road. When Ford Motor Co. introduces its 2009 compact SUVs this summer, all of them will include low rolling resistance tires. Using the 16-inch Michelin Latitude Tour low rolling resistance tires on its four-cylinder 2009 Escape boosted fuel economy by 1 mile per gallon, to 21 mpg in the city and 27 mpg on the highway. Consumers, tired of putting $80 worth of gas into their tank twice a week, see fuel mileage as one of the most important factors in their next vehicle purchase.
Source:  The Detroit News

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NADA Update
NADA Hole-in-One Insurance Boosts Dealership Visibility at Low Costs

NADA Insurance announced that its hole-in-one insurance program, ACECO, continues to experience strong financial growth, despite the downturn in the automotive industry. The trend indicates that U.S. auto dealers are continuing to support charitable and invitational golf tournaments in their local communities. And, with the average hole-in-one insurance premium being just a few hundred dollars, golf tournament sponsorship is a very cost-effective way for a dealership to advertise.

"Many of our dealers are finding that golf sponsorship is a very effective advertising medium," said NADA Insurance Vice President Lin Peacock. "While wanting to scale back expenses, our dealers still want to continue to be a prominent part of their local business communities. ACECO hole-in-one insurance offers NADA dealers a way to sponsor highly visible golf tournaments — with zero risk and at very little cost."

To help dealers gain even more exposure, ACECO will provide any policyholder with a free press release template that can be filled out and sent to the local media to announce the dealership's support of the tournament. Visit www.nadainsurance.com today or call 888-828-8540 to obtain a quote for your next tournament sponsorship.

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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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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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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
 
"The onerous command-and-control regulation contemplated in the EPA staff draft would impose crippling costs on the economy in the form of a massive hidden tax, without even ensuring that the intended overall emissions reductions occur."

   
-- White House press secretary Dana Perino, The Detroit News, July 12


The Clean Air Act [is] "ill-suited" to the task of regulating auto emissions.

   
-- EPA Administrator Stephen Johnson, The Detroit News, July 12


"The Big Three, along with their foreign competitors, are engaged in an expensive and aggressive push to change the way America drives. And they're making progress. But forcing unreasonable deadlines on companies that are already awash in red ink and whose very survival is in doubt will not make things go any faster. Congress has placed a heavy burden on the backs of automakers. It must be careful to ensure that federal agencies don't add the straws that will break their backs." 

   
-- The Detroit News (Opinion), July 11


Dealers on average more than doubled their net loss to $136 on every vehicle they sold during the first four months of 2008, compared with $61 a year ago.

   
-- Paul Taylor, NADA chief economist, The Wall Street Journal, July 14 


... a career in the auto business can bring great rewards to a woman willing to give it a try.

   
-- Annette Sykora, owner of two dealerships and NADA chairman, Lansing State Journal, July 14


"Today's typical auto-shopping experience is far different from the experience even five years ago, and many dealerships are changing the way they sell cars as a result." 

    -- Pied Piper President Fran O'Hagan, Ward's Dealer Business, July 8
Video Highlights
 
 

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


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