Automotive News - March 9, 2009 - (Page 6) 6 • FEBRUARY 9, 2009 Some dealers not sold on GM spiff Jamie LaReau jlareau@crain.com JOE WILSSENS Sales chief Jim Farley says Ford can pitch the Ford, Lincoln and Mercury brands in the same ads. Joint ad spots will promote Ford’s brand of brothers Amy Wilson awilson@crain.com DETROIT — General Motors is launching a program to whittle inventory by enticing dealers with bonus cash for taking more stock. But some dealers fear GM is trying to push vehicles on them that they can’t sell. And they worry that a dealer who declines GM’s request will be selling vehicles at a price disadvantage compared with dealers who take the extra vehicles and get the bonus cash. The program, which runs through March 2, applies to all eight GM brands, dealers say. One dealer familiar with the program says it’s fairly simple: “The more we take, the more GM’s Mark LaNeve wants to cut inventory. Some dealers say they’re being pressured. money we get back.” The program has two parts. First, GM will assign dealers a sales objective through March 2. Second, GM will recommend a number of vehicles for the dealer to order. The two numbers are not necessarily the same; the second number, referred to as the consensus number, takes into account existing inventory and market size. Dealers familiar with the program say the bonus cash payout ranges up to $1,250 per vehicle depending on the percentage of consensus number that the dealer orders and the percentage of the sales goal the dealer reaches. GM has a problem getting dealers to order inventory, dealers say. That’s because so many stores have high inventory. “It’s strictly to get rid of their inventory,” one dealer says of the incentive program. “I’ll have to look at my numbers, but it’s going to be a tough call. If somebody near you does it and you don’t, then you have a serious situation — it’s two-tier pricing.” At the end of January, GM had 801,000 vehicles in inventory, down 103,000 units from January 2008. Cars make up 64 percent of current inventory. A GM spokesman declined to comment on the consensus program. But during a sales call last week, GM sales chief Mark LaNeve said supply is about 105 days, and GM would like to have “a little less inventory.” “We’d like to run more at a 75- to 90-day rate,” LaNeve said. “We keep trying to get there. We are planning production schedules to get to the 75- to 90-day supply. It’s God’s work. We have to keep after it.”c More joint Ford and Lincoln-Mercury advertising is on the horizon at Ford Motor Co. “Frankly, the old lines where a luxury brand couldn’t be included with a Ford, the old line that you have to wait until August to start merchandising your year-end sale, those are gone,” said Jim Farley, Ford group vice president of marketing and communications. The Ford, Lincoln and Mercury brands were grouped together in national promotions for the Employee Pricing Plus campaign, which started late last year. Ford can pitch both brand image and price in the same ads, Farley said. Joint national advertising has happened only once or twice before, dealers said. Stand-alone LincolnMercury dealers have chafed at being increasingly folded in with Ford brand operations in the past couple of years. But one dealer said joint advertising could mean more exposure for Lincoln-Mercury if the ads are modeled after the Employee Pricing Plus campaign. In that campaign, “there would be a Ford-Lincoln-Mercury version, a Ford version and a Lincoln-Mercury version, and it seemed like we got the attention that we needed,” said Jack Straub, owner of Straub LincolnMercury in Keyport, N.J. “If all the executions were FordLincoln-Mercury, I think we might get lost in the crowd there.” c Show buzz over concept may bring life to Kia Soul mate Mini electric test delayed by surge of applicants Diana T. Kurylko dkurylko@crain.com The “overwhelming” response to the Soul’ster concept at the Detroit auto show has Kia considering a production version. RICK KRANZ Rick Kranz rkranz@crain.com The Kia Soul’ster, considered as purely a concept vehicle for last month’s Detroit auto show, now is a candidate for production. The reason, Kia says, is the strong response at the show to the small, stylish, two-door mixture of convertible and pickup. The Soul’ster is based on the tall, boxy 2010 Kia Soul, a front-drive, five-door hatchback aimed at the Scion xB and xD. “The response was so overwhelming” that Kia decided that it needs to take a closer look, said Alex Fedorak, a Kia Motors America spokesman. “It is clearly a vehicle that was built as a concept in a fashion that was production-capable. We have been doing that more and more lately.” The Soul’ster is aimed at young buyers on a limited budget. It was designed by Kia Design Center America, of Irvine, Calif. Tom Kearns was the lead designer, and Mike Torpey drew the initial rendering. The Soul goes on sale around March 1 with a base price of $13,995, including shipping. The Rio subcompact is the only Kia priced lower. The Soul’ster’s roof covers just the front seats. Rear-seat passengers are covered only by a roll bar. The two rear bucket seats fold flat, providing some of the cargo capacity of a pickup. c Audi boss: U.S. is not ready for premium subcompact April Wortham awortham@crain.com HERNDON, Va. — Audi of America President Johan de Nysschen says the United States and its small-equalscheap mentality isn’t ready for premium subcompacts such as the Audi A1, which goes on sale in Europe later this year. De Nysschen told Automotive News last week that Audi is “seriously looking” at bringing the A1 here in the car’s next generation in six to eight years. Bringing it here earlier could damage efforts to build widespread recognition for the Audi brand, he said. “People who know us consider us very highly, but not enough people know us yet,” de Nysschen said last week in an interview at Audi’s U.S. headquarters. “I’d like to get that entrenched much more strongly, and it will probably take us another five to six years. That will be the time that you can kind of roll down the market with a smaller car.” De Nysschen said Audi’s U.S. dealers asked for the A1, until they found out what it would cost. In Europe, the car likely will have a sticker price of about 20,000 euros or $25,735 at current exchange rates. “They said: ‘This is impossible. You cannot charge this much for small cars,’ ” de Nysschen said. “In their mind, they were thinking $18,000, because that’s the conditioning our society still has.”c Mini USA is taking longer than expected to select 450 lessees for its electric car because of the deluge of about 1,800 applicants. Drivers who are chosen are expected to get cars in April. The program originally had been expected to begin at the start of the year. An additional 30 vehicles will be given to fleets and municipalities for the yearlong trial to determine whether the Mini E is commercially viable. New York will get 10 Mini E’s for a unit that patrols city streets looking for potholes and graffiti. Five cars also will go to Los Angeles. The trial is being run in metropolitan New York and Los Angeles. Mini USA has whittled the applicant list to about 1,000 people. Applications are being vetted by 16 dealers — five in New York, three in New Jersey and eight in Los Angeles. The dealers will lease and service the cars during the trial, said Jim McDowell, vice president of Mini USA. “We have to make sure their driving style fits with what we want,” he said. “If you drive 200 miles a day, that’s a longer daily drive than our range.” Mini also required applicants to have a lockable garage so the company can install an electrical charge box. The monthly lease for a Mini E is $850. The U.S. trial originally involved 500 Mini E’s. But Mini reallocated 50 to Berlin, where they will be part of an energy supplier’s fleet. Parent company BMW AG wants to determine whether a market exists for an electric city car. The Mini E is the first vehicle made by BMW’s Munich-based Project i, which has been charged with developing alternative powertrains for urban use.c PHILIP MEECH De Nysschen: Audi is “seriously looking” at bringing the A1, above, to the United States in six to eight years. About 1,800 applicants signed up to lease 450 Mini E electric cars. Delivery is expected in April.
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