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Inside this issue
Tesla Reaches Deal to Keep 5 N.Y. Stores
Opinion: Tesla's Wasting Time, Energy, Money
GM, Dealers Aim to Blunt Impact of Recall
Toyota, Lexus and Buick Dealers Place First in Customer Experience
Alabama Auto Dealers Select NADART as Preferred Retirement Plan Provider
BMW Plans $1B Expansion in South Carolina
Tech Courses in Service Bays Supply Talent
Helping Others to Save Lives with CPR: Apple Honda Presents Training Unit to RFD
Click here for more auto industry news at NADAFrontPage.com. .
Top Stories
Tesla Reaches Deal to Keep 5 N.Y. Stores

Tesla Motors Inc. and New York auto dealer lobbying groups reached an agreement that allows the electric-car maker to keep its five company-owned stores in the state, New York Gov. Andrew Cuomo said Friday. “Today's agreement reaffirms New York's long-standing commitment to the dealer franchise system, while making sure New York remains a leader in spurring innovative businesses and encouraging zero emissions vehicle sales,” Cuomo said in the statement. Legislation in New York will be introduced “in the near future” to implement the agreement, said Cuomo. Mark Schienberg, president of the Greater New York Automobile Dealers Association, said dealers agreed to the compromise in part so that other provisions they are seeking in franchise legislation won't get bogged down by the Tesla dispute. He said Tesla's five New York stores will be grandfathered in under the agreement, but the company won't be allowed to open more stores. The agreement, which is expected to be adopted as early as next week, will prevent other manufacturers from opening factory stores and will tighten up the language prohibiting factory stores in New York's statute, Schienberg said. “It was a very good dialogue, and I think this works out well for dealers and consumers and opens up opportunities for Tesla,” he told Automotive News. Schienberg said he expects Tesla will eventually turn to the franchise system if and when it starts selling in large volumes. “I don't think this weakens the franchise system at all,” he said.
Source: Automotive News
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Opinion: Tesla's Wasting Time, Energy, Money
By Keith Crain, editor-in-chief of Automotive News

When I buy a product, I want a retailer nearby where I can get service and satisfaction. If there isn't a service outlet nearby, it is up to the manufacturer to make arrangements to provide service. If you care about customers, you have to be able to take care of them when they need help. That is particularly true in the automobile business, where vehicles need a lot of attention over their lifetime. For some reason, Tesla Motors CEO Elon Musk has decided to wage war with the retail business to the detriment of his customers. He seems to be more interested in his company than his customers. It would be easy for Tesla to appoint 40 or 50 dealers to serve most of its current customers. I don't understand why Musk is bouncing around the world with products here and there when he has not yet completed his distribution program here. Too many folks seem to think, erroneously, that having dealers to handle all the complications of buying and servicing a car adds to automaker cost rather than making it better and safer for the customer.

Tesla has some U.S. service centers and service vans that go to customers' houses or offices. How will that work, though, when less expensive cars arrive in a few years and the number of Teslas sold in the United States goes from an estimated 20,000 last year to a hoped-for 250,000 by the end of the decade? So far, Tesla has handled recalls by mailing replacement plug-in adapters to 29,000 customers, for example, and dispatching technicians to a few hundred customers' homes. But after the first big-repair recall, I guess Tesla will be sorry it doesn't have an independent distribution system.

The franchise system works for the manufacturer, and, more important, it works for the customer. It lets a manufacturer use capital for better things than setting up factory-owned dealerships. Musk has done a brilliant job of creating a new-vehicle line and getting the business off the ground. But eventually those around him will advise him to change his distribution system. We'll see if he's smart enough to listen.
Source: Automotive News
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GM, Dealers Aim to Blunt Impact of Recall

Customers to see loaner cars, extended service hours and sales discounts

General Motors Co. and its dealers are gearing up to blunt the impact of a global recall that now covers 2.6 million cars with defective ignition switches. GM's recall of certain Chevrolet Cobalts, Saturn Ions and other compact vehicles will bring to dealer showrooms and service bays owners of cars ripe not just for repairs, but for replacement. Many of the vehicles affected by the recall have traveled more than 100,000 miles, GM estimates. Karen Radley, owner of Radley Chevrolet in Fredericksburg, Va., said records show there are nearly 1,200 people in her area driving cars covered by the recall. "This is an opportunity to reach out to every owner on the list," she said. "We've got wonderful new product and we don't want this recall to be a black eye," she said. The dealership has had only a handful of owners, less than 10, request a rental car as an alternative, mostly because their children drive the recalled car.

Several dealers said GM has gone beyond what it typically does during a recall to head off customer gripes. The Detroit-based auto maker has provided rental cars to concerned owners to drive until their cars is fixed, and in some cases, has offered to have recalled cars picked up and towed to a dealership for the repair. For customers who don't have full-coverage insurance, a necessity for renting a car, GM has offered to pay for that, too, dealers said. "They've put more tools in our toolbox to handle these customers than ever before," said Chris Graff, general manager at Hank Graff Chevrolet in Davison, Mich.
Source: The Wall Street Journal

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Toyota, Lexus and Buick Dealers Place First in Customer Experience

Toyota, Lexus and Buick dealers place first in a three-way tie for delivering the best customer experience in the auto industry. That's according to an annual report by the Temkin Group, a consulting firm specializing in customer service. The three winning auto brands earned a 74% in the 2014 Temkin Experience Ratings. They collectively placed 59th overall out of 268 companies across 19 industries including banking, air transportation and Internet services. The study surveyed 10,000 consumers. It is Toyota's second straight year at the top of the automotive category. It is the first time for Lexus, Toyota's luxury brand, and Buick, a General Motors division. At the other end, Chrysler dealers went from an “OK” rating in 2013 to “poor” this year, finishing in the basement. Kia and Dodge also declined, both hitting near-bottom of the auto-industry rankings for the third year in a row.
Source: WardsAuto
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Alabama Auto Dealers Select NADART as Preferred Retirement Plan Provider

The Automobile Dealers Association of Alabama (ADAA) has selected NADART as a preferred partner to provide customized retirement plans to its member dealers and dealership employees. “I have personally used NADART for the past 30 years,” said Tom Dart, ADAA president. “It is an excellent service with affordable fees. I am proud to spread the word on NADART and help our members learn more about it.” NADART, the retirement plan and benefits division of NADA, works with dealer associations across the country to deliver a selection of investment and employee benefit options specifically targeted toward dealer businesses. ADAA is the 11th dealer group to select NADART as its retirement plan provider since late 2012.
Source: NADAFrontPage.com
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BMW Plans $1B Expansion in South Carolina

BMW is celebrating its 20th anniversary of building cars in the United States by investing $1 billion in its plant in South Carolina to build two of its new X-series vehicles at the facility that ushered in a wave of foreign automakers building Southern plants. The German automaker announced Friday it will create another line at the plant, producing the X7, a larger SUV with three rows of seats similar to a Cadillac Escalade. The company will also make the X4, a sportier version of the X3 coupe and plans to build a plug-in hybrid version of its smaller X5 SUV. The $1 billion will be spent through 2016 at the plant in Greer, just down Interstate 85 from Spartanburg. BWM says it will hire 800 additional workers, bringing total employment at the plant to 8,800 people. The Greer plant will make 450,000 vehicles a year by 2016, becoming the largest of the company's 28 plants around the world.
Source: Associated Press
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Tech Courses in Service Bays Supply Talent

40 high school students get valuable job training

Cam Clark knows he can recruit veteran service repair technicians from outside to work in his Airdrie, Alberta, Ford dealership. But he can never be sure what work habits, bad or good, they might bring with them. "We're in a rural-type community and techs are not always available, particularly young techs," Clark says "We can always pay more and get a tech from a Chrysler or GM store, but there's a reason they're out there looking. Selfishly, we'd rather have them drink the Ford Kool-Aid." What Clark did to solve the problem has helped not only his western Canada dealership, but the youth of Airdrie, a bedroom community of about 40,000 people north of Calgary. The booming region is dominated by ranching, agriculture and the energy industry. About 15 years ago, Clark reached an agreement with the regional school district, Rocky View Schools, to host an academy for automotive technicians inside his dealership. About 40 students in grades 10, 11 and 12 from three area high schools attend the academy every weekday to learn all aspects of auto repair. The Mechanics Training Center is housed in a separate area of Cam Clark Ford and is staffed by two teachers paid by the school district. Clark's own technicians also pitch in to share their knowledge. Clark's service department includes nine technicians he hired after they went through the program.
Source: Automotive News
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Helping Others to Save Lives with CPR: Apple Honda Presents Training Unit to RFD

Apple Honda presented a special CPR training unit to the Riverhead Fire Department at department headquarters this morning. The "Resusci Anne" CPR training unit will be used by the Riverhead Fire Department to train its members and local residents on the correct way to perform CPR, Riverhead Fire Department Chief Joseph Raynor said. The training unit, worth $5,000, was donated by the National Automobile Dealers Association Charitable Foundation. Apple Honda owner Irwin Garsten is a board member of the Greater New York Automobile Dealers Association, which administers CPR donations for the national foundation. Franchised auto dealers have donated thousands of CPR training units worth more than $2 million nationwide since 1975; more than 1 million people have been trained as a result.
Source: RiverheadLOCAL.com (Riverhead, L.I., N.Y.)
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Quotable

"The franchise system works for the manufacturer, and, more important, it works for the customer. It lets a manufacturer use capital for better things than setting up factory-owned dealerships."

      --- Keith Crain, commenting on why the dealer franchise system would benefit Tesla, Automotive News, March 31   

  

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