Automotive News - July 14, 2008 - (Page 4)

4 • JULY 14, 2008 Despite pricey fuel, Jetta diesel in demand Diana T. Kurylko dkurylko@crain.com Diesel vs. gasoline How EPA’s mpg ratings for VW Jetta diesel, gasoline sedans compare CITY HIGHWAY Volkswagen dealers say the high price of diesel fuel isn’t stopping a rush of buyers eager to snatch up the first batch of Jetta TDI cars. The TDI models — with new diesels that meet emissions standards in all 50 states — don’t go on sale until late August. But many dealers say they already have enough orders to eat up their 2008 allocation of the new Jetta sedan and Sportwagen TDI. With diesel approaching $5 a gallon in some states, what’s the appeal? Dealers say it’s the improved fuel economy and high reliability of the diesel engine — plus the kind of performance you can’t get from a hybrid or fuel-efficient small car. “People are becoming aware of what constitutes a true economy vehicle,” says Richard Fisher, owner of Auto Barn VW, which has three Chicago area VW stores. “They don’t just want economy but a car that drives well and handles well and has good performance.” Volkswagen of America plans to sell 15,000 TDI Jettas this year. Next year, the TDI could ac- 2008 Jetta gasoline 2009 Jetta TDI diesel Source: VW 21 29 29 40 sets the price of diesel.” Lee says many TDI orders are from repeat diesel buyers who rave about the durability of the VW diesel engine. “The TDI cars last so long, and this is a vehicle that will go 200,000 to 300,000 miles,” he says. Better mpg VW will promote the TDI’s fuel economy, which it estimates is 33 to 35 percent better than that of a gasoline-powered Jetta. The EPA has rated the Jetta sedan TDI at 29 mpg city and 40 highway, according to VW. The company is also studying whether to bring in other diesel vehicles, including a Tiguan SUV. Dealers say they’ve been clamoring for the diesel Tiguan for months, especially because sales of the new compact SUV haven’t been as hot as they had hoped. Dealers aren’t optimistic they’ll get one in this generation, says Gene Langan, owner of Langan VW, which has two stores outside Hartford, Conn., and will open a third on Aug. 1. But, he adds: “VW is looking at diesels right across the board.”c The Jetta Sportwagen TDI is one of the new Volkswagen diesels that go on sale next month. count for up to 30 percent of Jetta sales, says VWoA spokesman Steve Keyes. That would take volume above 30,000 units. The price is right Dealers say buyers also are rushing in to place orders because the Jettas were priced right. The diesel sedan starts at $22,640 including shipping and the station wagon at $24,240 — a premium of about $2,000 over a similarly equipped model with a gasoline engine. They will be the first VWs with standard electronic stability control, now a $450 option, and free scheduled maintenance. Both are being phased in through VW’s 2009 model year range. The Jettas are the only 2009-model volume passenger cars that will be offered with the 50state diesel engines. On the luxury side, BMW will launch a diesel 3 series this fall. All the other new diesels that have been announced will debut in SUVs and crossovers. Japanese clean diesels won’t debut for about two years. The diesels are hot even in Texas, where pickups rule. “Demand is strong because of the price,” says Eddie Lee, owner of Lewisville Volkswagen in Lewisville, Texas, a suburb of Dallas. “We are in a heavy commuter market, and the mileage off- Everybody’s a critic: How dealers cope with online reviews Alysha Webb awebb@crain.com Bouquets and brickbats Operators of Web sites that publish reviews of dealerships say dealers can respond meaningfully to customers’ criticism and praise by Saying thanks online for a good review Contacting reviewers when they can be identified Changing sales and service operations based on reviews Asking customers to write reviews Asking Web sites to verify that reviewers actually are dealership customers and marketing at Dealix Corp., calls dealer review sites “one of the most powerful marketing tools” available to dealerships. Dealix is a division of Cobalt Group, a marketing services provider in Seattle. A 2007 survey of more than 1,500 U.S. consumers by Cobalt, R.L. Polk & Co., and the online company Yahoo found that nearly threefourths of vehicle owners said they likely would consult online dealership reviews and rankings for future purchases. About one-fifth of new-vehicle buyers in the survey said they changed dealerships because It’s bad enough when a disgruntled customer compares an auto dealership’s service operations to a “cattle call.” It’s even worse when that opinion shows up on the World Wide Web. That happened to Rallye BMW in Westbury, N.Y. But instead of dismissing negative online reviews by anonymous critics, the dealership took the complaints seriously. It added service employees and worked to write up repair orders more quickly. The response evidently paid off. A more recent Internet review of Rallye BMW said: “The dealership and people they employ have got to be the best I have ever come across.” As Web sites that critique dealership sales and service operations proliferate, dealerships are using the reviews to improve procedures and win customers. At the same time, more dealerships are fighting back against online attacks they consider inaccurate or unfair. Shaun Weissman, business development manager of Rallye Auto Group, which owns Rallye BMW, says the review sites “give us an opportunity to see unsolicited responses about what people think about our business. We take that information to heart.” Kevin Root, vice president of product strategy WILLIAM NEUMANN Shaun Weissman of Rallye Auto Group: Online reviews “give us an opportunity to see unsolicited responses about what people think about our business. We take that information to heart.” of online reviews they had read. “Today, the (shopping) experience is nearly as important as price,” Root told Automotive News. Allegations that Nemet Auto Group, of New York, overcharged for repairs appeared on a Web site called ConsumerAffairs.com. The reviews became the basis of a class action lawsuit against the four-dealership group that ultimately was withdrawn, says company owner see REVIEWS, Page 45 ‘No downside for lying’ Some dealers are more likely to swear at online reviews than by them. Bad online reviews, truthful or not, can harm dealerships. As BMW’s chief in N.A., Purves got biggest thrill out of Mini Diana T. Kurylko dkurylko@crain.com ‘Bangle butt’ revisited ➤ WOODCLIFF LAKE, N.J. — Many doubted BMW could successfully launch a very small premium car in the United States, recalls Tom Purves, former president of BMW of North America LLC. But the Mini sold nearly double the 20,000 units BMW wanted in 2003, its first full year of U.S. sales, and has continued to confound critics. “It was my best experience here in the United States — launching the Mini,” Purves, 59, said last month in his last interview with Automotive News as BMW’s top executive in North America. He has moved back to the United Kingdom to become head of Rolls-Royce Motor Cars. Why was this the No. 1 highlight of a nine-year reign at BMW headquarters here? “Because we did what people told us we couldn’t do.” When Purves started, BMW was launching its first crossover, the X5. The Mini: Little car, big achievement The 328ti hatchback was being pulled off the market, and Mini wasn’t on sale here. Under Purves’ leadership, BMW launched several vehicles in segments new to the brand and established a sales lead over chief rival Mercedes-Benz. BMW’s U.S. sales have risen from 154,970 units in 1999 to 336,265 last year — including Mini and RollsRoyce. BMW brand sales totaled 293,795 last year. Purves, a native of Scotland, took over BMW’s North American sales subsidiary in 1999. He joined BMW in 1985. Before going to the United States, his jobs included sales director of Rover Group and head of BMW UK. One issue: The hatchback As CEO of BMW of North America, Purves said, he had to field arguments against bringing the Mini to the United States. One key argument against the Mini was that it’s a hatchback — an unpopular body style here. It’s also small and British. The odds of Mini’s coming to the see PURVES, Page 44 http://ConsumerAffairs.com

Table of Contents Feed for the Digital Edition of Automotive News - July 14, 2008

Small-car boom misses Chrysler Ford's large rwd car plan is iffy Suppliers: Inflation is looming Hummer H3T price: $31,495 VW may build next Passat in U.S. plant Glut of trucks pulls Prius to U.S. Ford sues U.S. over taxes Restyled Ridgeline Volvo will tighten U.S. dealer network As BMW's chief in N.A., Purves got biggest thrill out of Mini Despite pricey fuel, Jetta diesel in demand Everybody's a critic: How dealers cope with online reviews Hyundai goes big on Genesis lease The shift to automatic: A transmission transition Jaguar-Land Rover dealer: Stand-alone would bankrupt me Chevy christens compact Cruze Fiat, BMW will team up on platforms, parts Revision: Bosch still tops Auto News supplier list GM to build Volts in U.S. for Europe GM ads will push mpg for 90 days A missed opportunity 2008 sales forecast? 14,652,757 Suzuki cuts U.S. work force 8% CAFE standards: Stop whining and get to work Uncertainty is the name of the game Honda dealer rubs salt in a wound Careless driver was to blame for crash Unsafe driving wasn't Ford's fault For doomsayers, business is booming again Best ad slogans have staying power Bird Dog Club creator hunts dealer poachers Dealers How to design a Lamborghini? Passion for speed certainly helps Dressed to kill Check for children Delinquency rate on indirect loans skyrockets Group promotes payment assurance Ford has big plans for small vehicles in North America Mulally pushes Ford toward fuel efficiency Ford brand will draw on European lineup With no new vehicles planned, Mercury's future is bleak Engines promise power plus fuel economy Horbury: We'll keep our vehicle designs fresh Ford aims to move Lincoln upscale Toyota's Lentz: Don't panic over collapse; market will stabilize Personnel Chrysler's car sales sag in June — even more than trucks PG sells majority of auto glass business to private-equity firm Chrysler's Campi makes nice Suit against Ford is reinstated BMW reassesses Mini demand JCI plant cuts shift, work force CAW board endorses local president Purves: Thumbs-up for BMW innovations Current trend in Europe: Electric cars Solid reviews for Ford's new Flex Philosopher has insight for ailing U.S. auto industry The 'B' word brings media deathwatch at GM Chrysler to dealers: Don't panic

Automotive News - July 14, 2008

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