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October 11, 2017 FacebookTwitterFlickrRSSSEND TO A FRIENDPRINT
Inside this issue
AUTOMOTIVE NEWS: NADA's Scarpelli Says Stair-Step Programs Can Damage Brands
REUTERS: U.S. Dealer Lobby Head Criticizes Automakers' Bonus Program
DETROIT FREE PRESS: Why Does a Dealership Charge More for the Same Car? Dealer Group Chair Has an Answer
NADA BLOG: NADA Chairman Discusses the Negative Consequences of Stair-Step Incentive Programs
GMs Barra Skeptical of Electric Car Mandates
FCA's Sergio Marchionne Must Plot A Course For Ferrari And Jeep
Hyundai Changes the Way Its Dealers Sell Cars
NADA Show 2018: Registration Now Open
Top Stories
AUTOMOTIVE NEWS: NADA's Scarpelli Says Stair-Step Programs Can Damage Brands


NADA Video: Mark Scarpelli Delivers a Keynote Address to the Automotive Press Association in Detroit.

DETROIT -- Automakers' use of stair-step incentive programs, which are designed to boost sales volume, could have a long-term adverse effect, potentially hurting consumer loyalty and weakening demand for the brand, Mark Scarpelli, chairman of the National Automobile Dealers Association, said Tuesday.

"Any dealer who's had to deal with these programs can tell you that that they are not only trust killers, but they're brand killers, too," Scarpelli said at an Automotive Press Association-NADA luncheon here.

Aggressive stair-step programs are just one part of what Scarpelli calls "factory creep," or automakers' increasing attempt to control dealership operations, which he fears erodes the "entrepreneurial spirit" of a dealership.

Consumer confidence deteriorates when two customers come into the dealership on different days of the month for the same vehicle and get two different prices, said Scarpelli ...
Source: Automotive News

Click here for Scarpelli's full comments.

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REUTERS: U.S. Dealer Lobby Head Criticizes Automakers' Bonus Program

The head of the National Automobile Dealers Association (NADA) on Tuesday criticized automakers’ use of so-called stair-step bonus programs, calling them harmful to U.S. auto dealers, to consumer confidence and brand loyalty. In a speech in Detroit, NADA Chairman Mark Scarpelli said the practice results in “wild discrepancies and fluctuations” in vehicles prices between different dealers, as well as a “lack of consistency, lack of transparency, and lack of explanation” that lead directly to a “lack of trust” in auto dealers and in vehicle brands, he said.
Source: Reuters

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DETROIT FREE PRESS: Why Does a Dealership Charge More for the Same Car? Dealer Group Chair Has an Answer

If you’ve wondered why the prices for similar cars at different dealerships are sometimes far apart, the head of a national trade group for auto dealers can offer one explanation. And he says the practice is a bad idea. During a talk in Detroit [on Tuesday], Mark Scarpelli, chairman of the National Automobile Dealers Association, blasted so-called stair-step incentive programs, where dealers get cash from automakers for meeting sales goals, as programs that ultimately hurt brand loyalty.
Source: Detroit Free Press

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NADA BLOG: NADA Chairman Discusses the Negative Consequences of Stair-Step Incentive Programs

NADA Chairman Mark Scarpelli on Tuesday urged automakers to consider how stair-step incentive programs are damaging their brands, and alerted manufacturers about the unintended consequences of such programs that erode consumer trust and lead to a lack of loyalty to – and desire for – their brands over time. The ongoing proliferation of market strategies such as indiscriminate price coupons and unfair stair-step incentive programs are leading to severe, unintended, negative consequences for consumers, dealers and manufacturers alike, Scarpelli said.
Source: NADA Blog

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GMs Barra Skeptical of Electric Car Mandates

General Motors Co. CEO Mary Barra said Tuesday that Chinese officials should consider whether there is sufficient demand for electric cars before they move to ban gasoline and diesel engines. Speaking at a conference in Washington honoring her for being named number one on Fortune Magazine’s Most Powerful Women list, Barra said GM is “very committed to an all-electric future.” But she said drivers still have to be persuaded to want electric cars, even in places where the government is mandating their use.
Source: The Detroit News

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FCA's Sergio Marchionne Must Plot A Course For Ferrari And Jeep

FCA CEO Sergio Marchionne has a problem of image and politics that grips his stewardship of the Ferrari and Jeep brands. Both brands are incredibly valuable, and each faces growth challenges that must be balanced against arguments of brand purity, as well as this week's geo-political concerns. Marchionne has not been coy about his desire to sell the company or substantially align it with another automaker in the way that Renault and Nissan have aligned. The CEO has said on many occasions that the cost of electric and emissions technology going forward requires that the company have a partner and greater scale across which to spread the costs.
Source: Forbes

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Hyundai Changes the Way Its Dealers Sell Cars

Korean company adopts more flexible Shopper Assurance plan after studying used-car retailers and online sellers

Hyundai Motor  Co. , aiming to shake up the way its dealers sell cars, said Tuesday it will now offer test drives at customers’ homes or at a location of their choosing and a three-day money-back guarantee on purchases. The Korean auto maker settled on the strategy after studying used-car retailers and online sellers, including Amazon.com Inc. The plan, dubbed Shopper Assurance, comes at a time when the U.S. auto market is plateauing and Hyundai’s sales, in particular, have fallen sharply as executives say the company was too slow responding to consumer trends.
Source: The Wall Street Journal

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NADA Show News
NADA Show 2018: Registration Now Open

 

Don't miss this opportunity to build on the proud history of America's auto dealers

Online registration and hotel selection for NADA Show 2018 in Las Vegas is now open. NADA member dealers and their managers who register by Nov. 17 will receive an early-bird discount of $100 from the onsite registration rate.

The NADA Show runs from Thursday, March 22, to Sunday, March 25. Keynote speakers are Mark Scarpelli, 2017 NADA chairman, and Nick Saban, head football coach at the University of Alabama (Friday’s general session); Wes Lutz, 2018 chairman-elect, and John Krafcik, CEO of Waymo Inc. (Saturday’s general session); and Robert O’Neill, former SEAL Team Six Leader (Sunday’s inspirational session).

The show also includes educational programs, dealer-franchise meetings, an expo and numerous networking opportunities.

For more information and to register, visit www.nadashow.org.
Source: NADA Public Affairs

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Quotable
"Any dealer who's had to deal with these programs can tell you that they are not only trust killers, but they’re brand killers, too. Not being able to offer two customers the same price on the exact same equipped vehicle, just because they came into the dealership on different days of the month, destroys consumer confidence."

    -- NADA Chairman Mark Scarpelli commenting on unfair stair-step incentive programs in remarks to the Automotive Press Association in Detroit, NADA Blog, Oct. 11

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