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Inside this issue
Big 3 Find Small Cars Are Big Hit
Captive Lenders Foster Dealer, Brand Loyalty
Consumer Spending in U.S. Probably Rose on Autos
Mercedes Will Need Less Time to Make Cars, Bernhard Says
New Technology Challenges Car Dealers -- and Buyers
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Top Stories
Big 3 Find Small Cars Are Big Hit

Once an Achilles' heel of Detroit automakers, compact, subcompact market now a strength
Small cars, once the Achilles' heel of U.S. automakers, are becoming a strength. Sales of General Motors' s Chevy Cruze compact are up 10 percent this year, while Ford's Focus compact sales have soared 90 percent. Last year, GM, Ford and Chrysler Group's share of the compact and subcompact market in the U.S. rose to a four-year high of 26 percent, from 20 percent in 2010, according to researcher LMC Automotive. After losing a generation of car buyers to Japanese automakers, U.S.-based companies are building their comebacks on cars they once dismissed and discounted in favor of high-profit sport-utility vehicles. Small cars from Detroit are no longer utilitarian econoboxes. They have high style and high-tech features, such as voice-activated stereos, previously found only on bigger, more expensive models. As U.S. fuel prices return to those levels, small-car sales are rising, too. Car dealer Gordon Stewart can't keep a small car in stock at his four Chevrolet outlets and it reminds him of how models sell at his Toyota outlet.
Source: Bloomberg

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Captive Lenders Foster Dealer, Brand Loyalty

Customers who get financing from a captive finance company are more likely to be loyal to a brand and to a particular dealer, Experian Automotive says. "One of the most profitable things you can do is to get people to come back and buy another [car], instead of spending the dollars to attract somebody new," said Scott Waldron, president of Experian Automotive, during a presentation last week at the Consumer Bankers Association convention.
Source: Automotive News

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Consumer Spending in U.S. Probably Rose on Autos

Consumer spending probably climbed in February as an improving job market prompted Americans to buy more cars, economists said before a report today. Purchases rose 0.6 percent, the most in five months, after a 0.2 percent gain in January, according to the median estimate of 83 economists surveyed by Bloomberg News. Another report may show consumer sentiment held near a one-year high, restrained by higher gasoline prices. Cars last month sold at the fastest pace in four years, led by Chrysler Group LLC and a surprise gain from General Motors Co. Light-vehicle sales accelerated to a 15 million annual rate, the strongest since February 2008, according to data from Ward’s Automotive Group.
Source: Bloomberg

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Mercedes Will Need Less Time to Make Cars, Bernhard Says

Mercedes-Benz is restructuring its global production network to cut the average production time for its models to 30 hours by 2015 from 43 in 2008. "We have increased productivity by 2 percent a year over the last few years. We will be accelerating our productivity efforts," Mercedes production boss Wolfgang Bernhard said during an investor conference that was part of the automaker's plant opening [Thursday.] A key part of the restructuring is that Mercedes will halve its vehicle architectures to two by 2015 but will double its number of model variants to 30.
Source: Automotive News

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New Technology Challenges Car Dealers -- and Buyers

New cars are growing so complex — and owners manuals so voluminous — that automakers are encouraging dealers to add staff geeks or go high-tech to explain features. Lexus [announced Thursday] that it is creating two new positions at each of its 230 dealers around the country: a "vehicle delivery specialist" to show buyers how the cars work during purchase and a "vehicle technology specialist" to troubleshoot snafus after the sale. The learning gap underscores how automakers have become engaged in a tech war, seeing it as a key way to make their brand stand out. One dealer, Sewell Lexus in Dallas, recruited its tech specialist, Alex Oger, from a local Apple Store. His mission: "How to take this car that has so many capabilities" and explain features "so it's something the customer wants." He says many have a "eureka moment" when they figure out a task.
Source: USA Today

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The NADA Story

The NADA story began in 1917 when 30 auto dealers traveled to the nation’s capital to convince Congress not to impose a luxury tax on the automobile. They successfully argued that the automobile is a necessity of American life, not a luxury. From that experience was born the National Automobile Dealers Association. Today, NADA represents nearly 16,000 new-car and -truck dealerships with 32,500 franchises, both domestic and international. For more information, visit www.nada.org.

 
Quotable
"If I could get the inventory, I'd double my small-car sales tomorrow. People used to come in looking for the big SUV, but now I sell almost two cars for every truck."

   
-- Gordon Stewart, owner of Chevrolet dealerships in Florida, Georgia and Michigan and a Toyota dealership in Alabama, Bloomberg, March 29
 

 

NADA - National Automobile Dealers Association

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