Automotive News - March 31, 2008 - (Page 8)

8 • MARCH 31, 2008 advertising OUR DEALERS ARE GROWING Dealer sours on China importer Diana T. Kurylko dkurylko@crain.com AND SO CAN YOU! “With Zimmerman as a partner we have grown to be the XM-Sirius merger: Lower prices, more choices? # 1 GM Dealer Martha in your Malibu? in Albany, NY.“ Thomason got his start in the car business the way many do, working at a small family-owned Ford store in Lake Oswego, Ore. — a suburb of Leslie J. Allen lallen@crain.com Kara DePaula DePaula Chevrolet At age 48, Scott Thomason had made so much money selling his Oregon dealerships to a public car company that he retired to the ritzy desert city of Palm Springs, Calif. Retirement lasted all of three weeks. Thomason says he was “climbing the walls” and driving his wife crazy. So Thomason, now 53, did what any Type A personality does. He went back into business and bought six California dealerships that turned out to be hugely profitable. Then he decided to gamble on an obscure New Jersey company — Chamco Auto — that wanted to im- Dealer (and would-be distributor) Scott Thomason has sued Chamco Auto. port Chinese-built trucks to the United States. Late last year Thomason went to a dealer recruitment meeting and decided to become a distributor. “It was a different aspect of the business, something I had never done before,” he said. “It intrigued me.” He paid $6 million for Chamco’s West Coast distributorship and promised to pay another $4 million after 2,500 vehicles are delivered. But it all came unglued. On March 3, Thomason sued Chamco alleging fraud and deception. He wants his money back. Chamco is paralyzed by an internal power struggle between its shareholders and company executives. Last week, Thomason agreed to an interview with Automotive News on condition that he avoid any discussion of the lawsuit. Family business Portland where he’d grown up. After graduating from the University of Oregon in 1976 with a degree in business, he worked full time for his father, Dee, at the store, which sold 75 vehicles a month. It wasn’t a good time to sell cars, and a recession at the end of the decade quickly claimed victims. By 1982, four of the 10 Ford stores in the Portland area had closed. Thomason bought out his father and moved the store to the southeast side of town, where there was less competition. Car dealers were eager to sell and get out. So Thomason bought five stores on the same road as his Ford see CHAMCO, Page 38 RESULTS! • KEYES AUTO GROUP • IRA MOTOR GROUP • TOM WOOD AUTOMOTIVE • CHECKERED FLAG • AUTONATION • DIEHL MOTOR COMPANY • CORAL SPRINGS AUTOMALL • RUSTY ECK FORD • AUTOLAND • HENDRICK CARY AUTOMALL • PATRICK AUTO GROUP • HUBLER AUTOMOTIVE • PLEASANTON AUTOMALL • DEPAULA CHEVROLET • WALLACE NISSAN OF KINGSPORT • SUPERIOR CHEVROLET Dealers Prove Our Advertising Gets If XM Satellite Radio Holdings Inc. and Sirius Satellite Radio Inc. merge, car dealers may have a new menu of lower-priced satellite-station offerings to show shoppers. And unlike today, XM vs. Sirius won’t be a carbrand differentiator. On March 24, the Justice Department approved the proposed merger, 13 months after it was proposed. It now awaits a ruling by the Federal Communications Commission. Expect few technology changes in the immediate months after XM and Sirius join forces, experts say. Car radios that receive both XM and Sirius may not be available for at least a year. Chevrolet and other GM brands exclusively offer XM Satellite Radio’s Oprah & Friends, while Ford brands exclusively offer Sirius’ Martha Stewart Living. An XM-Sirius merger could break down those exclusive deals. Here are some of today’s other exclusive tie-ups. XM EXCLUSIVES SIRIUS EXCLUSIVES ingly attractive. They include HD Radio, MP3 players and music delivered through cell phones. Take rates Carmakers say the unresolved merger hasn’t affected take rates for satellite radio. Experts say that won’t change. “I don’t think (the merger) is really going to impact the total number of subscribers,” said Phil Magney, principal analyst with the Telematics Research Group Inc. in Minnetonka, Minn. He said the number of satellite radio units in the United States continues to grow as automakers make the radios available in more vehicles. The proportion of those radios that have active satellite subscribers, however, hovers around 50 percent — and has been dropping slightly, he said. Magney sees satellite coexisting with other entertainment technologies. “The consumer that chooses satellite radio most likely also wants to have iPod or MP3 integration. I don’t see them as being mutually exclusive.” The biggest impact of the merger may have nothing to do with music, according to Thilo Koslowski, an analyst with Gartner Inc., a technology research firm in Stamford, Conn. He sees growth in location-based services, such as real-time traffic and weather information delivered by satellite to navigation screens. He said such services are key to the long-term success of the satellite companies. “Satellite radio is evolving,” Magney said. “It’s more than just music.” c New prices, packages In the interim, car buyers could choose from an expanded menu of subscription options. XM and Sirius have proposed packages that would cost $6.99 to $16.99 a month. Today’s standard package costs $12.95 a month. One proposal would give subscribers to XM a chance to receive “best of” programming from Sirius without buying a new radio. Those programs would come via XM broadcast bands for now. Sirius subscribers would get a “best of” XM option. Stephen Witt, vice president of marketing for Alpine Electronics of America Inc., which makes satellite radios, said that for technical reasons it could take 18 months for next-generation dual-band units to hit the market. When they do, cus- Acura/Honda Audi/Bentley/Volkswagen Buick/Cadillac/Chevrolet/GMC/ BMW/Mini Hummer/Pontiac/Saturn Chrysler/Dodge/Jeep Hyundai Ford/Lincoln/Mercury/Volvo Lotus Jaguar Nissan/Infiniti* Kia Porsche Mazda Suzuki Mercedes-Benz Toyota/Lexus* Mitsubishi *XM is the exclusive provider of factory-installed satellite radio for Nissan/Infiniti and Toyota/Lexus. Dealer-installed Sirius units are available, however. Oprah Winfrey, left, is featured on XM Satellite Radio, and Martha Stewart is a fixture on Sirius. GET A COMPLETE MARKETING PROGRAM! Guerrilla TV Marketing Radio Print Hispanic Direct Mail Web Design tomers would be allowed to choose from an a la carte menu of all stations offered by XM and Sirius. Automakers say there is demand for programming from a merged company. Seven automakers have expressed support for the deal. In a letter last summer to the FCC, Len Hunt, then CEO of Kia Motors America, wrote: “We should not expect our customers to incur additional hassle and fees to install a second satellite radio receiver or be forced to choose between the NFL and the MLB and Martha Stewart and Oprah.” In approving the merger, the Justice Department said alternatives to satellite radio had become increas- Secret computer lets Nissan planner peek into future Lindsay Chappell lchappell@crain.com Internet Website Optimization In-Store CALL OR E-MAIL THE AGENCY THAT WILL WORK FOR YOU 24/7 (SERIOUSLY) 1-888-878-ZADV zauto@zadv.com or visit www.zadv.com NASHVILLE — That mysterious dark flat panel hidden in an alcove of Larry Dominique’s office here is a symbol of how rapidly his job is changing. Just don’t ask him to turn it on. Dominique was appointed vice president of product planning for Nissan North America two years ago. Today he is working on a growing list of vehicle programs in an expanding list of markets. The computer screen allows Dominique to peek at top secret design and engineering ideas in far-flung global locations without having to fly there. Larry Dominique can view top secret ideas in far-flung global locations without having to fly there. “The idea is to cut down on all the travel,” he says, nodding at the dark computer screen in the corner, “and also speed up the work.” Until a few years ago, Dominique primarily traveled back and forth from Nissan’s California home base to global headquarters in Japan, with occasional side trips to Nissan Re- search and Development in Michigan. Today he’s based in Nashville and has companywide planning responsibilities. He travels to design and r&d centers in California, Michigan, Japan and France. Dominique also is starting to deal with product planning decisions across the Western Hemisphere. Last year, Nissan North America became the central office for operations from Canada to Argentina. The display screen is a secure line over which designers from around the world can reveal — for Dominique’s eyes only — their latest sketches and engineering solutions. Only three people have access to the system on the U.S. side, and Dominique declines to identify the other two. “Somebody needs to have access in case I’m not around,” he explains. The system does not allow any images to be forwarded or printed. Nothing on it can be transferred to a different system, and content automatically self-destructs after a couple of weeks, he explains. “If I’m over in Japan looking and ask to see a change, it might take a week to execute it,” Dominique says. “With this new system, I don’t have to turn around and fly back to Japan a week later.” c http://www.zadv.com http://www.zadv.com

Table of Contents Feed for the Digital Edition of Automotive News - March 31, 2008

Axle strike leads GM to alter production plan Industry expert Ferron joins Automotive News Group Hummer adds E85 models Lear expands in China Ford spills the beans on car seats Concern ... confidence ... curiosity — welcome to America, Tata Expect most Ford-bred executives to stay put Tip for Tata: Let British brands be British brands Dana CEO sees need for growth in Asia Chrysler: Any deal for partner would be done by Cerberus Farley retools Flex marketing strategy Malibu attracts import-minded buyers European purchasing execs to suppliers: Costs must fall Reynolds removes dealership modems New Saturn ads will promote Aura, Vue, Outlook This Spring Hill launch is a fraction of the first one GM works on small global car Hal Riney, Saturn campaign creator, dies Dealer sours on China importer Secret computer lets Nissan planner peek into future XM-Sirius merger: Lower prices, more choices? Key Chrysler product developer resigns Ford's new boss in HR plans no major changes Wagener to replace Pfeiffer as Mercedes design chief It's time to break the glass ceiling Autos don't cause all global warming Toyota plumbed the depths of Scion Customer loyalty is serious business Future bright for Tata brands Dauch sends wrong signals as Axle strike drags Yanase opened Japan to Western cars Fewer dealers, sure, but more brands What if Ahn falls short? Want to inspire Lori Queen? Just say no Hanwha to build GM Powertrain assembly line Toyota enters untapped Korea, home of Hyundai James O'Rourke Jr. Picture This -- March 31st, 2008 Lexus pays dealers for innovations Suppliers to the 2009 Dodge Journey Ricardo center has battery focus Howa USA opens interior parts plant in Kentucky N.Y. show suggests a future of smart powertrains, muscle BMW sees new models as sales saviors Ford contract has unique take on core jobs 6 more PACE-setters in auto innovation Buy-here, pay-here may grow Dealers Mercedes SL: A fresh face — with 1 flaw Ex-Chrysler design chief John Herlitz dead at 65 Future could be bright for Jag, Land Rover Land Rover in good shape, but challenges remain Fuel economy fines loom for Tata As segment shrinks, Chrysler minivan output takes a big dip Mercedes names 27 AMG dealers Continental to cut jobs Cobalt SS price: $22,995 Kia opens Ga. training center Nissan idles Mexico plant Plastech legal bill: $1 million for a month Magna will add 3 plants in Mexico El Camino diehards say Pontiac G8 should have been a Chevy No 2nd chance for Nasser, other Ford alums Buick grabs a name from the past After short list, a short stay for Laymon Lori Queen or Ellery Queen? Daimler's mum on BMW Southern supplier strategy Tracing the Camaro's bloodline Alfa searches for a U.S. factory

Automotive News - March 31, 2008

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