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March 14, 2016 FacebookTwitterFlickrRSSSEND TO A FRIENDPRINT
Inside this issue
VW Dealers' Demand: 'Stop the Insanity'
A 'Fighting Chance' for Fiat Dealers
Auto Lenders Work to Lift Borrowers Out of Subprime
GM Lifts Sales to Business Buyers
When is a Sale Not Really a Sale?
From Driving Beer Truck to Running Car Dealerships
Top Stories
VW Dealers' Demand: 'Stop the Insanity'

After enduring months of punishing blows, Volkswagen dealers in the U.S. are getting ready to strike back. It's not just the diesel emissions scandal that has them worked up, said Alan Brown, head of VW's national dealer council. Dealers are seething after having invested $1 billion in new facilities over the past 10 years to support the automaker's plans to sell 800,000 VWs in the U.S. by 2018, only to see sales fall in each of the last three years, to around 350,000 last year. They complain about mismanaged supplies and allocations and about ominous signals from VW Group's revamped leadership in Germany about the company's commitment to the U.S. "There's no way to spin it," said Matthew Welch, general manager of Auburn Volkswagen near Seattle. "It's a disaster. And it's created by Germany."

If not for Volkswagen Group of America CEO Michael Horn, a 26-year company veteran and darling of U.S. dealers, relations with the factory might have turned volatile months ago. But now Horn is gone, and the tense peace that he managed with frank talk, product promises and piles of incentive cash may be gone with him. "We've got to stop the insanity," Brown said. "By NADA, we'd better have our business plan in writing to our dealers and have a very clear understanding on where we're going, or we're going to lose control of our dealer network."
Source: Automotive News

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A 'Fighting Chance' for Fiat Dealers

Kuniskis' plan to fix the brand has retailer backing

Steven Wolf belongs to a fairly exclusive club -- a Fiat dealer in the U.S. who has consistently made money on the struggling Italian brand. But even Wolf's faith has been badly shaken as Fiat sales have plunged. Late last year he postponed a plan to build a $500,000 Fiat showroom on his 15-acre multifranchise campus in Houston -- at least until he knew Fiat Chrysler's strategy for the brand. Wolf was one of 200 or so Fiat dealers who flew to Detroit last week to be briefed on that strategy, and he was apprehensive about what he might hear. Other dealers were, too. Some feared that the franchise -- in which they had invested millions -- would be opened up to the rest of the FCA US network. A revolt appeared to be brewing. But by the time Wolf boarded a plane back to Houston after the meeting at an airport hotel, his doubts were swept away. During the two-hour session with dealers on Wednesday, March 9, Tim Kuniskis, head of passenger car brands for FCA North America, said the automaker would dramatically alter the way it supports its 206 U.S. Fiat dealerships.
Source: Automotive News

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Auto Lenders Work to Lift Borrowers Out of Subprime

Employees and programs act as guides

Many dealership F&I managers advise customers on credit decisions that would suit them best over the duration of their vehicle ownership. But auto lenders, especially those whose portfolios include subprime borrowers, are providing guidance, too. Subprime borrowers, typically those with credit scores of 600 and below, often have bruised credit as a result of a low-income job or a significant life event such as divorce. Some auto lenders have the goal of helping those borrowers re-establish their credit. Among them are Prestige Financial Services in Salt Lake City; Exeter Finance Corp. in Irving, Texas; and Ally Financial Inc. in Detroit.
Source: Automotive News

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GM Lifts Sales to Business Buyers

Fiat Chrysler Automobiles may own the industry's most noteworthy sales streak with 71 straight months of U.S. gains. But General Motors has put together a respectable string of its own: 28 consecutive months of growth in commercial vehicle sales to companies. As GM pulls back from less-profitable sales to rental agencies, the company has channeled much of those resources into the more-lucrative business of selling pickups, vans and Chevrolet Malibus and Equinoxes to contractors, landscapers and florists. The result has been a sizable gain on its biggest commercial-fleet rival, Ford Motor Co., still by far the industry's commercial-sales leader. Commercial sales to businesses tend to be the most profitable of the three sectors that make up the fleet market, which also includes sales to rental agencies and government buyers.
Source: Automotive News

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When is a Sale Not Really a Sale?

Tactic raises ethical questions

As the U.S. auto industry roared toward a record-breaking finish in 2015, BMW, the top-selling luxury brand for three of the four previous years, was clinging to a 553-vehicle lead over Mercedes-Benz. Surging Lexus was threatening to leapfrog both. But BMW wouldn't leave this race to chance. A Nov. 30 memo dangled $1,000 bonuses for each 2015 3-series vehicle dealerships sold to themselves as a "specialty demo" -- but the offer was valid that day only. The next round of industry sales reports, released the following afternoon, showed BMW's edge over Mercedes had quadrupled. BMW, which said thousands of vehicles its dealers sold in December were registered in January instead, is not the only automaker employing creative strategies to pump up performance. As U.S. new-vehicle sales appear to be near their peak after the longest period of expansion in nearly a century, dealers across the industry face mounting pressure.
Source: Automotive News

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From Driving Beer Truck to Running Car Dealerships

Jeff Carlson of Colorado, who drove a Coors beer truck while in college, is the new 2016 chairman of the National Automobile Dealers Association. Carlson’s term officially began Jan. 1. The ceremonial passing of the gavel from outgoing NADA Chairman Bill Fox will take place at the trade group’s March 31-April 3 convention in Las Vegas. Carlson is president and majority shareholder of Glenwood Springs Ford and Glenwood Springs Subaru in Glenwood Springs, Colo., about two hours west of Denver. He also co-owns Summit Ford in Silverthorne, Colo. Throughout his career, Carlson has served in many roles in the community and at NADA. He is past president of Valley View Hospital in Glenwood Springs and was appointed by former Colorado Gov. Bill Owens in 2000 to serve on the Colorado Motor Vehicle Dealer Board. Carlson has been NADA convention chairman and has served on many committees, including dealership operations, finance, government relations, industry relations and regulatory affairs. He chairs the group that’s planning the organization’s 100th anniversary in 2017.

WardsAuto spoke with Carlson about his life on and off the showroom floor. Click here for the full interview.
Source: WardsAuto

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      Quotable
      “I loved calling on dealerships and I could see how cool it was to sell cars. It got in my blood.”

          --- 2016 NADA Chairman Jeff Carlson, on how his experience with Ford ultimately led to becoming a dealer, WardsAuto, March 14


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