Automotive News - February 11, 2008 - (Page 4) 4 • FEBRUARY 11, 2008 AutoNation site will link with membership clubs Groups such as AAA could offer online auto buying without visit to dealership Ralph Kisiel rkisiel@crain.com AutoNation Inc. is developing a Web site for use with groups such as Costco or the American Automobile Association to sell cars entirely online, allowing buyers never to enter a dealership. AutoNation continues to improve its own test Web site, AutoNation Direct, designed for cus- tomers who want to buy a car online. The site for so-called affinity groups, such as AAA, is being developed separately. Ultimately, the nation’s largest dealership group wants the two sites to merge, says AutoNation President Mike Maroone. “We have been getting a lot of opportunities from corporations and organizations that want to buy on a nationwide basis,” Maroone told Automotive News. “We think we’ve got a unique opportunity at AutoNation because of the fact that more than anyone else we’ve got a nationwide footprint. It’s not literally in 50 states, but it’s in all the key markets.” AutoNation operates 257 dealerships representing 331 franchises in 16 states. Dealership-free sales The Fort Lauderdale, Fla., company has been testing its experimental site, autonationdirect.com, at 10 dealerships in the Atlanta area. AutoNation Direct is designed to let consumers buy a new vehicle entirely online, right up to delivery of the vehicle to the customer’s home. see AUTONATION, Page 85 AutoNation’s Mike Maroone: “We have been getting a lot of opportunities from corporations and organizations that want to buy on a nationwide basis.” In era of pricey gas, small cars live large Sales surge, more models on way Leslie J. Allen lallen@crain.com Small wonders Sales of small cars in U.S. are skyrocketing. Here’s a sampling. SALES JAN. ’08 % CHANGE JAN. ’07 VW looks at fuel-sippers ➤ 6 Christina Ra, a former product planner for the Fit. “There was not a lot of personality. It was almost as though the segment had been neglected,” she says. “Those consumers were just considered to be people who were shopping for the cheapest vehicle on the market.” Wisconsin dealer Chris Schneider has a message for the folks who make the Fit small car: “Tell Honda to build more, please,” he says. Schneider is only half-joking. He needs more cars to meet rising demand. At his La Crosse, Wis., dealership, Honda Motorwerks, he has a 30- to 45-day order backlog on the Fit. The base Fit, which starts at $14,585 including the destination charge, gets 34 mpg on the highway and 28 in the city. “We’ve always had a demand for the Honda Fit because of its value,” Schneider says. “It’s a combination of value, space utilization and fuel efficiency.” Budget subcompacts such as the Fit are enjoying a sales boom, largely in response to gasoline prices above $3 a gallon. Last month, Honda sold 4,480 Fits in the United States, more than double the total in January 2007. Sales of other vehicles in what the industry calls the B segment — such as the Kia Rio, Chevrolet Aveo and Toyota Yaris — also rose briskly. Toyota Yaris Chevrolet Aveo Honda Fit Kia Rio Mini Cooper Toyota Yaris 7,666 5,314 4,480 2,709 2,460 30.6 40.2 120.0 66.8 20.0 Kia Rio Third vehicles Multibrand dealer David Conant, principal owner of Conant Auto Retail Group in Cerritos, Calif., says the small vehicles are reaching outside the traditional market of young people and retirees. “It’s everyone along the spectrum,” Conant says. He says some people are buying small cars such as the Fit and Yaris as second or third vehicles, to avoid putting mileage on their primary vehicles. “I just think it’s people saying this car makes complete sense,” Conant says. Power’s Libby credits the Fit and Nissan Versa with helping popularize B-segment cars. Both hit the U.S. market when gasoline prices reached $3 a gallon in the spring and summer of 2006. “Their launches were perfect,” Libby says. “Those two products had outstanding launches, which helped them get established and helped the whole segment. “Honda and Nissan didn’t have anything there before, so it was kind of virgin territory for them.” c Source: Automotive News Data Center Chevrolet Aveo Honda Fit Mini Cooper Fuel economy sells “Fuel economy is paramount on everyone’s mind right now, and we’re certainly seeing that with the Kia,” says Bob Hogan, COO of South Carolina’s MCE Automotive Group, which operates three Kia stores. Hogan chairs the Kia dealer council. Rio sales were up almost 67 percent nationwide last month to 2,709 units. Hogan, who also has Chevrolet and Toyota stores, reports brisk sales of the Aveo and Yaris. Other automakers are rushing small cars to market. Ford Motor Co. plans to start selling a production version of the Verve concept in U.S. showrooms in 2010. China’s Chery Automobile Co. is working on a small car for Chrysler LLC showrooms. No target produc- tion date has been announced. Also, Suzuki plans to bring the Swift small car back to the United States around 2010. Nissan plans another small car, the Cube. And next year, Chevrolet is planning to produce a global minicar based on the Beat concept vehicle. The car would be smaller than the Aveo and eventually could land on U.S. shores. High fuel prices have benefited the segment. But another factor driving sales is the availability of amenities previously found only in bigger vehicles, says Tom Libby, se- nior director of industry analysis for the Power Information Network, a division of J.D. Power and Associates. “The cars are not econoboxes; they’re not like the really cheap, tinny vehicles of 20 years ago,” Libby says. For example, the most expensive Chevrolet Aveo, the LT, starts at $14,580. It offers a 100,000-mile powertrain warranty, remote keyless entry, a six-speaker premium stereo, side airbags and 15-inch aluminum wheels. The B segment used to lack utility and fun, says Honda spokeswoman As Malibu soars, Impala sinks amid GM cuts to rental fleets Jamie LaReau jlareau@crain.com DETROIT — Chevrolet continues to slash sales to daily rental fleets by pulling back on sales of the Impala sedan. While January sales of the new Chevrolet Malibu mid-sized sedan rose 57.9 percent from January 2007, sales of the larger Impala fell 30.6 percent. Most of the Impala’s decline is due to cuts in sales to daily rental fleets, General Motors says. The Impala had been a hot seller. It finished 2007 up 7.3 percent to 311,128 units. “We’re still doing the methodical reduction in daily rental, and that is reflected in that Impala number,” says Terry Rhadigan, a Chevrolet spokesman. “Huge progress is being made. You’ll see some decline in numbers, and don’t be alarmed. It’s all part of our strategy.” GM executives began implementing that strategy in early 2006 when they repriced many vehicles and said they wanted to increase average transaction prices, improve residual values and decrease unprofitable sales to daily rental fleets. Rhadigan would not give the Impala’s retail and fleet sales totals. January sales of the Chevrolet Impala were 30.6 percent below year-ago levels. GM cites lower sales to fleets. GM launched the restyled, re-engineered 2008 Malibu on Nov. 1. Through Jan. 29, Chevrolet had sold 27,968 Malibus. That includes fleet sales, Rhadigan says. Does the Malibu’s success, coupled with weaker Impala sales, mean the new Malibu is luring buyers from the Impala? Dealers and analysts say no. “The Malibu is new in the showroom, and that always counts for something with some buyers,” says Jim Hall, director of industry analysis at 2953 Analytics in suburban Detroit. “If you’re buying truly on price, you’ll always get an Impala because that’s a hell of a deal on a vehicle that size. It’s not all cannibalization.” Dealers say the Malibu is attracting customers and helping boost sales of other models. “Because we’re selling Malibus so well and we don’t have a lot of inventory, we’re taking people who might want a Malibu and selling them Impalas,” says Bill Perkins, owner of Taylor Chevrolet and Merollis Chevrolet, both in suburban Detroit. “They’re OK with that because of the value.” On the East Coast, dealers report, the Malibu and Impala attract different types of buyers. “They are two different cars, despite being similar in size,” says John LaSorsa, owner of LaSorsa Auto Group in New York. He sells Chevrolet, Buick and Pontiac. Says LaSorsa: “The Malibu has such style it’s pulling in an import customer.” c http://autonationdirect.com
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