Automotive News - December 8, 2008 - (Page 17) DECEMBER 8, 2008 • 17 service & parts Dealers, factories battle over Fla. warranty law Donna Harris dharris@crain.com All Of The OBSOLETE! Let us show you how to dominate your market and save up to 50 % OFF MEDIA AND PRODUCTION COSTS! SERVING OVER 2,000 DEALERS SINCE 1969 Martin Schleifer Paul Rosen For a presentation, call Paul at 305-495-6100 or e-mail: paul@MSAadvertising.com 2915 SW 27th Avenue • Coconut Grove, Florida 33133 • 305-442-7272 GREAT ADVERTISING That’s Worked In The Past Is A closely watched battle over warranty repair rates in Florida is moving from the statehouse to the courthouse. The Alliance of Automobile Manufacturers is suing in a Florida court to challenge a dealer-backed law that took effect last May. The new state law requires automakers to pay dealerships the same rates for warranty parts and labor that the stores charge retail customers. The alliance represents the Detroit 3, Toyota, Volkswagen and six other automakers. Alliance executives complain the law has increased manufacturers’ cost of doing business in Florida. They fear dealers in other states will seek similar laws. In its suit, the alliance contends the new law’s provisions “have already generated an onslaught of requests from Florida dealers for additional reimbursement.” Automakers, not dealers, should set wholesale prices for vehicles Lawyer Alex Kurkin: Florida dealers “are fighting a battle for dealers in other states.” and parts, the alliance asserts. The suit contends that the law enables dealers to charge inflated prices for warranty work. That could harm consumers, the suit says, because the cost of warranty reimbursement is factored into new-vehicle prices. In addition to setting price parity for warranty and customer-pay work, the Florida law sets a formula for calculating dealers’ retail parts markup and labor rates. It prohibits automakers from retaliating against dealers who seek retail rates with such tactics as surcharges on new vehicles and warranty audits. Alex Kurkin, a dealer lawyer in Miami who helped draft the Florida law, says he expects other states to follow suit. “Most manufacturers, with the exception of a couple of smaller imports, are paying the manufacturer’s suggested retail price for parts,” Kurkin told Automotive News. Factories typically pay a warranty markup that dealers contend is less than the markup they charge consumers for repairs, Kurkin says. Jim Moors, franchise lawyer for the National Automobile Dealers Association, says laws in New York, New Jersey, and Maine require dealers to be reimbursed for warranty work at retail rates. Those states have formulas that help dealers calculate their warranty reimbursements, Moors says. Maine, North Carolina and Virginia prohibit automakers from imposing surcharges on new vehicles to offset the cost of paying retail rates for warranty work, Moors adds. Kurkin says Florida dealers “are fighting a battle for dealers in other states. There is a great deal at stake.” c Online systems boost accessories sales Alysha Webb awebb@crain.com Not so long ago, auto dealerships sold accessories by showing customers photos in a three-ring binder. But as accessories sales offer dealerships growing profits, online programs are helping to streamline sales and build consumer loyalty. “There were horror stories where the customer got different price quotes for the same accessory from different departments” of a dealership, says David Stringer, president of Insignia Group LLC. Stringer’s company sells dealerships an online catalog of original-equipment accessories. “We get everybody on the same page, so that doesn’t happen anymore,” Stringer told Automotive News. In addition to Insignia, DealerTrack Holdings Inc. and izmocars.com are major vendors of online accessories sales systems. Insignia, of Rock Hill, S.C., works with nearly 1,700 U.S. dealerships, Stringer says. About three-fourths of those dealerships sell General Motors brands. Insignia has a 10-year service agreement with GM. Insignia charges dealerships a $299 setup fee, which covers a program that enables dealers to track accessories sales and commissions. Dealerships also pay a $199 monthly fee. For an extra charge, a dealership can add aftermarket parts to its accessories catalog. After a customer agrees to purchase a car or truck, a salesperson refers the buyer to the dealership’s Insignia Web site. The site shows the customer the cost of the accessories, including installation, and how much they will add to the monthly payment. Accessories can be includ- Insignia’s Web site shows the cost of accessories, including installation, and how much the products will add to the customer’s monthly payment. Daniels says the dealership sells factory and aftermarket accessories. That choice encourages customers to buy accessories from the store, he says. A standardized online process is more likely to keep customers than the traditional method of selling accessories, says Marty Quinn, customer service operations manager for Toyota Division’s Cincinnati region. The region includes 118 Toyota dealerships in Ohio, Michigan, Kentucky and Tennessee. “The customer retention process is what we are really interested in,” Quinn says. Last year, customers bought $38.1 billion worth of accessories, a 4 percent increase from 2006, according to the Specialty Equipment Market Association. New-vehicle dealerships account for a small but growing share of those sales, SEMA says. A sales projection for 2008 was unavailable. c ® TIM DEESE’S Don’t let 2009 become another 2008? Don’t take another huge write down. Can’t come to us we’ll come to you. Make 2009 you’re most profitable year. The Answer USED CARS!! Let us show you how!! Training Used Car Managers for over 28 years Insignia President David Stringer: Online catalog of accessories gets “everybody on the same page.” ed in the cost of financing the vehicle. Insignia says its customers sell an average of $131.34 in accessories per new vehicle, compared with $101.60 for dealerships that do not use the system. Two months ago, Toyota of Muncie, in Muncie, Ind., signed up with Insignia. Jeff Daniels, the dealership’s general manager, says the system has boosted accessories sales and “adds credibility to what we are doing.” “The sale is explained in a very clean manner,” Daniels says. “It seems like a lot of fun for customers.” Call Joan 904 264 7408 or visit www.probac.com http://www.dealertrack.com/accessories http://www.dealertrack.com/accessories http://www.izmocars.com http://www.probac.com http://www.autonews.com/classifieds
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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