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Inside this issue
Hyundai's Krafcik Encourages Tried-and-True Sales Approach
Westcott to Outline Dealers' Strategy
Ford to Help Refurbish Stores
Ford's Mark Fields on EPA Ratings: 'We're Following' the Rules
GM's Do-Better Letters Unnerve Dealers
Chrysler Says Santander Unit to Speed Financing Approvals
Look For Innovation Overdrive in the Service Drive
Astronaut Mark Kelly Inspires Dealers at NADA Convention
ADESA Auction Raises $26,000 for Canine Companions Wounded Veterans Initiative
Click here for more auto industry news at NADAFrontPage.com. .
Top Stories
Hyundai's Krafcik Encourages Tried-and-True Sales Approach

2013 NADA Conference & Exposition

Hyundai North American CEO John Krafcik wins applause from car dealers here by encouraging them to stay the course and not adapt to trendy sales methods. “It seems like every day someone is bashing the U.S. retail system as being out of touch or inefficient,” he says. “The current system works. It works. And it works really well.” Krafcik, speaking at the National Automobile Dealer Assn. convention, says auto makers shouldn't meddle too much in the day-to-day affairs of dealers, criticizing efforts by electric-vehicle maker Tesla to set up “factory stores” and Ford's recent intervention into dealer management. “The franchise system works because it's the concentrated distillation of the American free-enterprise system,” Krafcik says. “At Hyundai, we are big fans of this system and huge supporters of our retail network. Independent dealers make more money and do better with customers.” His remarks come at a time of somewhat rocky relations between dealers and auto makers over facilities investments. Prior to Krafcik's keynote, NADA Chairman Bill Underriner highlights a case of a Chevrolet dealer who sold his custom-built, lodge-themed showroom rather than comply with General Motors’ newly imposed blue-and-white motif.
Source: WardsAuto

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Westcott to Outline Dealers' Strategy

David Westcott, the incoming NADA chairman, will speak at the general session Monday afternoon and outline how the group intends to make its voice heard in Washington. Westcott, 66, sells Buick, GMC and Suzuki vehicles in Burlington, N.C. In the days leading up to the convention, he said he will focus on relationships with automakers, as outgoing Chairman Bill Underriner had. Those relationships remain patchy, he told Automotive News before the convention, with many dealers unhappy about stair-step incentives and dealership image programs. The speech today will allow Westcott to spell out NADA's Washington agenda for 2013.
Source: Automotive News

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Ford to Help Refurbish Stores

Brand offers up to $750,000 in matching funds for facilities investments

Ford brand will offer dollar-for-dollar matching funds up to $750,000 to dealers who refurbish their facilities in line with the Ford Trustmark design program, the company told dealers at its make meeting today during the National Automobile Dealers Association convention. All 3,100 Ford-brand dealers are eligible. The matching funds will cover up to half the cost of a project. The program gives dealers flexibility to design their facilities to meet local business conditions as long as they stay within Trustmark guidelines. "It is not tied to volume or customer scores," Ken Czubay, vice president of U.S. marketing, sales and service, told reporters. He declined to say how much Ford Motor Co. has budgeted for the program. Ford is emphasizing making dealerships compatible with consumers' desires for digital information.
Source: Automotive News

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Ford's Mark Fields on EPA Ratings: 'We're Following' the Rules

Ford's No. 2 executive said he's “comfortable” that the automaker is following the appropriate government procedures to certify its fuel economy ratings. “Our testing procedures are in line with the testing protocols the EPA has laid out —and importantly our customer satisfaction in the vehicles that we sell, fuel economy is very high on the list,” Ford Chief Operating Officer Mark Fields said in a brief interview. “We're quite satisfied that we're following the appropriate rules.” Fields’ comments came after Consumer Reports in December reported that in real-world driving, two Ford hybrids it tested did not meet their EPA fuel economy ratings. “I'm not familiar with the testing procedures that they have but the testing procedures that we follow are completely in line with the EPA protocols,” Fields told the Free Press outside the National Automobile Dealers Association Convention. “So I can't speak to Consumer Reports. And also our customers are telling us that they're very satisfied.”
Source: Detroit Free Press

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GM's Do-Better Letters Unnerve Dealers

Some feel unfairly branded as underachievers, fear penalties

As David Westcott steps in as chairman of the National Automobile Dealers Association, the group faces renewed concerns about performance review letters being sent to dealers by automakers. After General Motors mailed the latest round of review letters in November and December, NADA sent a Jan. 3 memo to members advising them to take a factory communication seriously and respond to it. "My understanding is GM took the dealers who had the lowest RSI [Retail Sales Index] and sent out letters to the lowest 25 percent in each state," Westcott says.
Source: Automotive News

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Chrysler Says Santander Unit to Speed Financing Approvals

Chrysler Group LLC, the U.S. carmaker forming an auto-financing venture with Banco Santander SA, said the unit wants to cut the almost four-hour industry average time it takes to approve a vehicle purchase. Chrysler Capital, the service that Santander Consumer USA Inc. will create to finance car and light-truck purchases and leases, may set up a full online approval process for customers to use before they visit a dealership, Peter Grady, Chrysler Group's vice president of dealer network development and fleet operations, said in an interview. “That's a big dissatisfier for a consumer,” Grady said of the financing approval process in an interview at the National Automobile Dealers Association convention Feb. 9 in Orlando, Florida. “It's all explainable, but it's got to change.” Chrysler may seek to cut the time in half, he said. “You've got to have those crazy, audacious goals.”
Source: Bloomberg

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Look For Innovation Overdrive in the Service Drive

The location is unknown at this point (let's get crazy and assume it's Las Vegas). The state of the industry is unclear (here's hoping it's healthy). But when the 2025 National Automobile Dealers Association convention rolls around, the vision for retail is: The big winners will have service as their middle name. As another successful convention closes, a common theme is that service has to win. Yes, product is always king. Yes, half of the convention center is now full of digital marketing companies that can improve your bottom line by 300 percent next week. But the real differentiator? “There is a lot of room for the dealership of the future to innovate on service,” NADA consultant and former McKinsey & Co. partner Glenn Mercer said this weekend during the NADA convention in Orlando. Mercer predicts that by 2025 the dealership of tomorrow will have a service absorption rate of 120 percent. For every five customers who buy a vehicle, six will come in for service. Some ideas being floated this week: Satellite service facilities, extended hours, lavish customer waiting areas and -- ready? -- driveway service calls. Dealers around the show floor agree. The answer is not bigger and bigger service departments, just innovative thinking.
Source: Automotive News

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Astronaut Mark Kelly Inspires Dealers at NADA Convention

Retired U.S. Navy pilot and astronaut Mark Kelly may have become a real life “Top Gun” hero, but the road was filled with detours and near misses. Kelly—husband of former U.S. Rep. Gabrielle “Gabby” Giffords—said poor academics and early brushes with authority kept him from excelling in life. Yet that all changed when Kelly’s mother, who worked two jobs to make ends meet, overcame physical shortcomings to join his father as a police officer. Kelly adopted her “can do” attitude and became an ambulance driver in Newark and other high-crime areas. He then joined the Navy and entered flight school. But Kelly was soon encouraged to re-consider his goals after poor flight-training performances. Instead, he doubled down and excelled, advancing to captain, flying combat missions and visiting space four times.
Source: NADAFrontPage.com

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ADESA Auction Raises $26,000 for Canine Companions Wounded Veterans Initiative

The NADA Foundation's Frank E. McCarthy Memorial Fund contributes a $10,000 grant

Auto industry consultant Joe Verde was the top bidder on a 2011 Harley-Davidson Fat Boy—auctioned at the NADA Convention and Expo on Feb. 10. The motorcycle was donated by ADESA, which runs vehicle auctions throughout North America. Verde’s winning bid of $26,000 will benefit the Wounded Veterans Initiative of Canine Companions for Independence, a cause long supported by the nation's new-car and -truck dealers. “I'm a veteran. My dad was a veteran, and my son and grandkids are all veterans,” said Verde, president of Joe Verde Sales and Management Training in San Juan Capistrano, Calif. “I appreciate everything all the men and women in the armed forces do for all of us. We thank NADA for making the grant possible.” This is second consecutive year ADESA has held a live auction at the NADA convention.
Source: NADAFrontPage.com

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Quotable
"They develop these programs as if one size fits all, in an ivory tower academic way. In the real world, where dealers live and work, the programs don't make any sense."  

   
-- Jim Appleton, president of the New Jersey Coalition of Automotive Retailers in Trenton, N.J., commenting on manufacturer dealer grading programs, Automotive News, Feb. 11
 

  

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