Automotive News - December 8, 2008 - (Page 4) 4 • DECEMBER 8, 2008 Koreatown dealer scrambles to hang on in L.A. Community pillar jousts with economy and changing market Alysha Webb awebb@crain.com Dai Ryoung Lee LOS ANGELES — Dai Ryoung Lee sits munching on a Dove bar in a crowded office filled with Asian art in downtown Los Angeles. Lee says he has no time for lunch. He’s too busy trying to save his Hyundai dealership in the city’s Koreatown section. “We are in survival mode,” says the 62-year-old owner of Los Angeles City Hyundai, who built his business catering to L.A.’s large community of Korean immigrants. But that customer base is shrinking. Last summer, Lee closed his nearby Chevrolet dealership. And now the Hyundai store is teetering. “I’ve been selling cars in Koreatown for 35 years,” says Lee, who arrived from Korea in 1968 to attend the University of Southern California. “They know me and respect me. They love to buy cars from me.” More than 80 percent of L.A. City Hyundai’s new-vehicle customers are Korean. But Lee says the older first-generation Koreans, who are more comfortable buying from other Koreans, are being replaced by a generation born in the United States. The younger customers are much more mainstream. They’ll gladly walk into any showroom. Lee’s growing demographic problem has been magnified by the overall market distress. So he came up ALYSHA WEBB PHOTOS Advertising at Dai Ryoung Lee’s Los Angeles City Hyundai store reaches out to the area’s large ethnic populations. with an idea: Expand his marketing reach by appealing to Korean Americans in other parts of the country. He plans to sell Hyundais to customers in northern California, Nevada, Arizona, Oregon and Washington state — all areas with large Korean populations. And, if need be, he’ll fly or bus those customers to Los Angeles. Dealerships in those places “aren’t reaching out to the Korean market,” he says. At L.A. City Hyundai, which so far this year has sold about 630 new vehicles and 250 used, the staff has been cut to about 50, from 70 earlier in the year. Lee says he wants to trim that to 40 or fewer. Lee says he will decide in February whether to close the dealership. If he keeps it open, he figures to lose up to $1 million next year. “I can afford that,” he says. Lee says he might try to weather the storm as a commitment to the community. In July he closed his Chevrolet dealership a few blocks from the Hyundai store. Sales had plummeted and the cost of inventory financing got out of see L.A. CITY, Page 20 Age: 62 Born: Pyongyang, North Korea Attended: University of Southern California Family: Wife, 1 daughter Owns: Los Angeles City Hyundai Career: Bought his first dealership in 1990 and added 5 more. Began selling stores in 2005 and now owns just 1. First auto job: Salesman at Felix Chevrolet in Los Angeles, 1973 Early idea: Formed a company that helped Korean-American businessmen buy fleet vehicles. First business venture: Bolstered his green-card application by investing in a hamburger stand. New idea: Sell vehicles to Korean Americans in other parts of the country. Quote: “Right now, this kind of economy, you can’t plan. You just go on a weekly basis. I just want to hang in there and see what happens.” Nissan bucks trend, will move to bigger trucks Lindsay Chappell lchappell@crain.com With demand unexpectedly high, Ford dealers are struggling to get F-150s. Ford to add a shift, OT for F-150 Amy Wilson awilson@crain.com DETROIT — Against a backdrop of plunging fuel prices, Ford is restoring two shifts and overtime production of its re-engineered 2009 F-150 pickup. With gasoline under $2 a gallon, demand for Ford’s big pickup is up. Dealers in some parts of the country are complaining to Ford that they’re running out of F-150s. It’s a far cry from the situation in late June, when gasoline prices were around $4 a gallon and pickup sales plunged. At that time, Ford killed two shifts of F-150 production and delayed the launch of the 2009 model to avoid inventory gluts. Ford now plans to restore a shift of F-150 production at its suburban Kansas City, Mo., assembly plant next month, spokeswoman Angie Kozleski told Automotive News. In late October, the company announced that the other shift, at its Dearborn, Mich., plant would return in January. In the meantime, overtime production is planned this month in Kansas City to meet demand, the plant’s UAW Local 259 reported on its Web site. “Frankly, a lot of regions and dealers in those regions are really concerned about their truck inventory,” Jim Farley, Ford Motor Co. group vice president of marketing and communications, said last week. “We’re starting to see quite a few regions where they’re trading trucks across state (lines) now because we’ve run out of ’08s, and the ’09 shipment is not as fast as they would want.” The 2009 F-150 went on sale in October. Through November, U.S. sales of the F series fell 25.4 percent from the year-ago period. But in the tough November, when Ford’s overall sales plunged 32.6 percent, the pickup posted the narrowest drop — 18.6 percent — of any Ford-brand vehicle line. Ford doesn’t expect F-series sales to return to previous levels, Kozleski said. Through November, Ford sold 473,933 F series. In the truck’s peak year of 2004, it sold 939,463 units. Because of the restored shift in Kansas City, Ford is scrapping plans to rework its Dearborn plant over the holiday break to make regular-cab F-150s, a body style now made only in Kansas City. With extra capacity restored in Kansas City, Kozleski said, that need is gone. c DETROIT — Despite earlier disappointment in the truck business, Nissan North America Inc. is back to try again. Last week, Nissan unveiled a workhorse concept truck here that it hopes will carry it even deeper into the depressed U.S. light-truck market, and challenge one of the few niches still dominated by Detroit 3 vehicles. The unveiling of the concept, along with a second commercial vehicle concept, marked Nissan’s first public showing of the U.S.-designed vehicles it wants to sell here through its new Light Commercial Vehicle business, starting in 2010. Ford Motor Co.’s aged E-series van, formerly known as the Econoline, is squarely in Nissan’s sight. Former Ford commercial vehicle executive Joe Castelli leads Nissan’s charge. “This is going to open up Nissan dealers to a lot of new product opportunities,” says Castelli, Nissan North America’s vice president for light commercial vehicles and fleet. “It’s a great business if everything falls into place.” Nissan’s 2003 effort to crack Detroit’s hold on full-sized pickups fell flat. After spending more than $1 billion to develop the Titan pickup and build a plant in Mississippi to produce it, sales disappointed. In the Nissan unveiled this concept of a big truck it wants to sell in 2010. first 11 months of this year, Nissan sold fewer than 32,000 Titans. Nissan has said it would end production of the Titan in 2010 and obtain its next generation from Chrysler LLC. The U.S. market for large pickups has deflated with the crash of the housing industry. Nissan’s new market segment — light commercial trucks and vans used by plumbers, delivery services and airport parking shuttles — is not faring much better. Through November, sales of Ford’s E-series van fell 26 percent from the year-ago period. In October, Daimler AG said it was killing its U.S. Sterling truck brand, which sells in some of the same segments Nissan is now targeting. Castelli notes that Nissan is still 1½ years from launch and that the market should rebound by then. c
Table of Contents Feed for the Digital Edition of Automotive News - December 8, 2008 Saturn: What's next? Feds tighten strings on Detroit 3 Ford stance: A cut above ailing rivals Summer sizzlers fizzle in fall Dealers back Detroit 3 aid, want spiffs Ford modifies pricing promo to equalize rebates High-fliers Toyota, Honda are struggling, too Chrysler: Bankruptcy counsel supports its stance Dealer Hecker hospitalized Ford to add a shift, OT for F-150 Koreatown dealer scrambles to hang on in L.A. Nissan bucks trend, will move to bigger trucks Why GM must stay with Buick Mercedes prices new GLK below $35,000 Diana T. Kurylko Pride of Sweden set to be Detroit castoffs Toyota pushes breakup of seat suppliers to boost competition Panel to discuss innovation, sustainability Capitol quandary: Can Chrysler survive? Steve Miller: Detroit 3 need 'pseudo-bankruptcy' Acura aims to deliver big-league luxury TL campaign is important for Acura's ad shop, too Appeals court upholds franchise termination GM loses bid to relocate Chevy store This is a very big week for America Obama must steer clear of state fuel standards Higher fuel taxes are not the answer A $15,000 rebate, not a blank check Chrysler retirees look for equality Isn't an auto show a place to sell? Are we turning our back on diversity? If only we'd had an energy policy Personnel GM sets Jan. 1 deadline for dealers to adopt Windows-based parts system Ford picks TRW steering system Ford cuts noise with windshields Dealers, factories battle over Fla. warranty law Online systems boost accessories sales Mercedes cuts output in Ala. Ford will kill Sable, Taurus X November sales suffer car wreck Honda, Audi pull out of racing series Saturn: A different kind of franchise agreement Fewer days sink Nov. output Detroit 3 road trip: Quiznos and humble pie LaNeve: Death talk keeps the showrooms empty Toyota cuts bonuses in bid to stay in the black Auto blowout sends Andrettis to the pits Saturn founder Neil DeKoker still believes And then there were . . . 6? Dealers Automotive News - December 8, 2008 Automotive News - December 8, 2008 - (Page Intro) Automotive News - December 8, 2008 - Ford stance: A cut above ailing rivals (Page 1) Automotive News - December 8, 2008 - Ford stance: A cut above ailing rivals (Page 2) Automotive News - December 8, 2008 - Chrysler: Bankruptcy counsel supports its stance Dealer Hecker hospitalized (Page 3) Automotive News - December 8, 2008 - Nissan bucks trend, will move to bigger trucks (Page 4) Automotive News - December 8, 2008 - Nissan bucks trend, will move to bigger trucks (Page 5) Automotive News - December 8, 2008 - Panel to discuss innovation, sustainability (Page 6) Automotive News - December 8, 2008 - Panel to discuss innovation, sustainability (Page 7) Automotive News - December 8, 2008 - Steve Miller: Detroit 3 need 'pseudo-bankruptcy' (Page 8) Automotive News - December 8, 2008 - Steve Miller: Detroit 3 need 'pseudo-bankruptcy' (Page 8a) Automotive News - December 8, 2008 - Steve Miller: Detroit 3 need 'pseudo-bankruptcy' (Page 8b) Automotive News - December 8, 2008 - Steve Miller: Detroit 3 need 'pseudo-bankruptcy' (Page 8c) Automotive News - December 8, 2008 - Steve Miller: Detroit 3 need 'pseudo-bankruptcy' (Page 8d) Automotive News - December 8, 2008 - Steve Miller: Detroit 3 need 'pseudo-bankruptcy' (Page 8e) Automotive News - December 8, 2008 - Steve Miller: Detroit 3 need 'pseudo-bankruptcy' (Page 8f) Automotive News - December 8, 2008 - Steve Miller: Detroit 3 need 'pseudo-bankruptcy' (Page 8g) Automotive News - December 8, 2008 - Steve Miller: Detroit 3 need 'pseudo-bankruptcy' (Page 8h) Automotive News - December 8, 2008 - TL campaign is important for Acura's ad shop, too (Page 9) Automotive News - December 8, 2008 - GM loses bid to relocate Chevy store (Page 10) Automotive News - December 8, 2008 - GM loses bid to relocate Chevy store (Page 11) Automotive News - December 8, 2008 - Chrysler retirees look for equality (Page 12) Automotive News - December 8, 2008 - Chrysler retirees look for equality (Page 13) Automotive News - December 8, 2008 - If only we'd had an energy policy (Page 14) Automotive News - December 8, 2008 - If only we'd had an energy policy (Page 15) Automotive News - December 8, 2008 - Ford cuts noise with windshields (Page 16) Automotive News - December 8, 2008 - Online systems boost accessories sales (Page 17) Automotive News - December 8, 2008 - Online systems boost accessories sales (Page 18) Automotive News - December 8, 2008 - Online systems boost accessories sales (Page 19) Automotive News - December 8, 2008 - Online systems boost accessories sales (Page 20) Automotive News - December 8, 2008 - Ford will kill Sable, Taurus X (Page 21) Automotive News - December 8, 2008 - Ford will kill Sable, Taurus X (Page 22) Automotive News - December 8, 2008 - November sales suffer car wreck (Page 23) Automotive News - December 8, 2008 - Saturn: A different kind of franchise agreement (Page 24) Automotive News - December 8, 2008 - Fewer days sink Nov. output (Page 25) Automotive News - December 8, 2008 - And then there were . . . 6? (Page 26) Automotive News - December 8, 2008 - And then there were . . . 6? (Page 27) Automotive News - December 8, 2008 - And then there were . . . 6? (Page 28)
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