NADA Headlines - 05/13/2013 (Plain Text Version)
To date, 80 North Carolina residents have squeezed their savings for the bragging right of owning the Tesla Model S electric car, some paying more than $100,000 for their g-force ride, but they may be among the last. A legislative proposal, backed by the N.C. Automobile Dealers Association, would make it illegal for Tesla, or any other car maker, to bypass dealerships and sell directly in the state. The proposal cuts at the heart of Tesla's business model: selling luxury cars over the phone or Internet and then delivering them to the front door of high-net-worth customers. Still, the proposal was unanimously approved by the state Senate's Commerce Committee on Thursday, despite concerns about the state dictating who should be allowed to sell an automobile. But it's not Tesla per se, that worries the dealers. It's the precedent. The prospect threatens the livelihood of North Carolina's 7,000 licensed dealers, who invest millions in building big lots and showrooms to efficiently move product, say supporters of the bill.
$200M investment will renovate showrooms to boost sales, share
General Motors Co., which has underperformed competitors on the West and East coasts for decades, will spend more than $200 million to help dealers in metropolitan areas of California, New York and New Jersey update showrooms, and in some cases move or shutter them, according to sources familiar with the company's plan. The plan — above and beyond GM's facility improvement program that projects 92 percent of dealers will renovate stores by 2016 — is aimed to grow sales and win market share in high-volume and import-heavy California and on the East Coast.
By Keith Crain
For many decades it was assumed that a local dealer had to stay local. He or she couldn't expand beyond a single point, so the goal was to make the single dealership grow. Today there are those who think that only manufacturers can be global. Too many executives and even dealers seem to think that U.S. retail business practices cannot be used elsewhere and that U.S. executives cannot or should not do business outside North America. But more dealership groups are expanding outside the United States and Canada. Dealers from the United States are partnering with others or establishing their own dealerships all over the world. That's because there is no one better than the U.S. auto dealer in any aspect of retailing, whether selling new and used vehicles, servicing them or doing business in any local market -- in the United States, Europe, China, Brazil or anywhere else. There are plenty of opportunities for dealers in established and emerging markets. Manufacturers always are looking for strong partners to retail their vehicles.
Retail sales probably fell in April for a second consecutive month, hurt by cooling demand for automobiles, economists said before a report today. The 0.3 percent drop last month would follow a 0.4 percent decline in March, according to the median forecast of 74 economists surveyed by Bloomberg. Falling gasoline prices also hurt service-station receipts, overshadowing gains at discounters including TJX Cos. Economists forecast consumer spending will slow this quarter as Americans rebuild savings and come to grips with the January increase in the payroll tax. At the same time, lower fuel costs combined with rising stock and home values are boosting buying power, which will underpin purchases as the labor market mends.
Market expected to stabilize below '11, '12 levels
Used-vehicle prices have peaked for 2013 and are expected to stabilize lower than in 2011 and 2012, but higher than before the recession, analysts say. They also say that strong demand for full-sized pickups will buoy prices in that segment. For instance, prices of used pickups less than 9 years old increased 7 percent through April from the year-earlier period, says Larry Dixon, an analyst at NADA Guide. Used-vehicle prices overall rose less than 1 percent, he says. "We expect large pickups to be one of the better-performing segments for the year," Dixon says. "They've got a couple of things going for them. Used supply is still fairly low relative to where we were just a few years ago [as a result] of reductions in production and retail sales going back to high gasoline prices in 2008. "You also have the growth and improvement in the housing market."
Improvements in automaker-supplier relations are stalling, with the difference between the top- and bottom-ranked companies narrowing, according to a survey of auto-parts makers in North America. Toyota Motor Corp. recorded the top score in the survey with 297. Chrysler Group LLC, the lowest of six ranked companies, was within 19 percent with a 250 score in the survey conducted by Planning Perspectives Inc. In 2005, Toyota was No. 1 in the survey at 415, while the predecessor of General Motors Co. was last at 114. “The automakers are failing miserably at recognizing that suppliers can help them,” John Henke, chief executive officer of Planning Perspectives, said in an interview. “Too often they look at them as enemies.” Progress in automaker-supplier relations reached a plateau this year, Henke said. A score of 250 to 350 in considered adequate by Planning Perspectives. The six automakers ranked in survey are all rated adequate, with Toyota and Honda Motor Co. declining since 2005 from good ratings and U.S. automakers improving from scores considered poor by Birmingham, Michigan- based Planning Perspectives.
First, the bad news. Don Draper was in Detroit in 1968, when most “Mad Men” fans hadn't been born yet or were way too young to get into the dark bar (Caucus Club? Chop House? Book Cadillac?) where he had a cocktail. The good news? The SCDP-CGC merger revealed last week on “Mad Men” could keep the Motor City and, especially, General Motors front and center in the storyline. Will the episode at 10 p.m. Sunday on AMC continue to focus on Draper's landing of the top-secret XP-887 account — aka the Chevy Vega? Will dashing GM exec John DeLorean become a recurring character? Will Roger Sterling woo even more automakers with tickets to the 1968 World Series? Will Peter Campbell redeem himself by landing the Vernors, Sanders and Faygo accounts?