Automotive News - February 18, 2008 - (Page 14)

14 • FEBRUARY 18, 2008 It’s no wonder auto sales are declining Tim Jackson An analysis of Colorado’s new-vehicle registrations for the past six years shows a steady, even dramatic, decline. During good economic times and bad, consumers are buying fewer new vehicles. According to data compiled by AutoCount Market Reporting, part of Experian Automotive, new-vehicle registrations in Colorado in 2001 exceeded 208,000. A new report released by the Colorado Automobile Dealers Association, Colorado Auto Outlook, indicates that 2007 newvehicle registrations fell below 160,000. In each of the past six years, a small portion of the new-vehicle market has disappeared, even as more models and brands have been introduced. Adding insult to injury, the population of Colorado has grown more than 10 percent during that period while new-vehicle registrations declined more than 23 percent. EDITORIAL STAFF 313-446-0361 E-mail autonews@crain.com Web site www.autonews.com Keith E. Crain Publisher and Editor-in-Chief comment Tim Jackson is president of the Colorado Automobile Dealers Association. There are three primary reasons why auto sales have declined in Colorado and many other places: 1. Better quality. 2. Longer finance terms. 3. Higher fuel prices. Even 84-month loans are becoming more popular and, in too many instances, necessary. If a consumer is still making payments five, six or even seven years after purchasing a vehicle, he or she is much less likely to buy a new one. fewer new-vehicle sales. New vehicles generally are more fuel efficient and much cleaner than the older vehicles they replace. In order to reduce pollution and greenhouse gases, we must turn the fleet over much more quickly. Unfortunately, the public is not moving to new vehicles as quickly as they were a few years ago. If we are to maximize the benefits of the clean technology and diverse power sources that are becoming available, we must reverse that trend. Peter Brown Associate Publisher and Editorial Director DETROIT 313-446-0361 Fax: 313-446-0383 1155 Gratiot Ave. Detroit, MI 48207-2997 David Sedgwick Editor dsedgwick@crain.com Edward Lapham Executive Editor elapham@crain.com Richard Johnson Managing Editor rjohnson@crain.com John K. Teahen Jr. Senior Editor Mary Beth Vander Schaaf Deputy Managing Editor Charles Child International Editor David Kushma Retail Editor Dave Guilford News Editor Philip Nussel Special Projects Editor James B. Treece Industry Editor Karen Faust O’Rourke Insight Editor Why sales have slipped As an automotive trade association executive, I am asked frequently by media and analysts “Why are newcar sales declining so rapidly?” There are three primary reasons why auto sales have declined in Colorado and many other places and are expected to continue to decline nationally through 2008 and maybe 2009. 1. Better quality. 2. Longer finance terms. 3. Higher fuel prices. The quality of the new cars and trucks our dealers sell today is significantly better than it was 20, 15 and even 10 years ago. It is not uncommon for today’s new cars and trucks to last 200,000 to 300,000 miles with little service or repair. Warranty claims paid by manufacturers are down considerably. Cars do not start having problems at the end of factory warranties. Consumers are well served by the high quality of the new vehicles, but their incentive to buy a new vehicle is reduced. Just one budget For most people, gasoline charges and car payments come from the same budget. The vehicle owner who is putting more money in the tank has less money left to pay for everything around the tank. The result: 60-72-84 Ten to 20 years ago, most vehicle loans were for 36 months; 48-month loans were rare. Not anymore. Since many customers have low credit scores or are in a negative equity situation with their present trade-in, many new cars now are financed for 60 to 72 months. What do you think? We would like to hear from you. Send a letter to the editor via e-mail (autonews@crain.com) or to the Detroit address near the top of the box at right. Here’s what we need. No more than 250 words Your name and title, company name if we can print it, city and state; or tell us about your connection to the auto industry Your phone number or e-mail address Your permission to print it COPY EDITORS: Bob Allen, Tom Fetters, Patricia C. Foley, Kenn Jones, Gregory Skwira Susan Zavela Bamford/Graphics Editor Rick Kranz/Product Editor REPORTERS: Leslie J. Allen, David Barkholz, Mary Connelly, Ralph Kisiel, Jamie LaReau, Arlena Sawyers, Robert Sherefkin, Richard Truett, Bradford Wernle, Amy Wilson Mary Raetz Senior Statistician Debi Domby, Camille Pippen Research Assistants Dan Jones Office Manager continued from Page 12 Buying cars online makes perfect sense To the Editor: Your juxtaposition of Jamie LaReau’s and John K. Teahen Jr.’s pieces on buying a car on the Web, yes or no, was hilarious (“Buying a car? Web is a woman’s best friend” and “Buy a car online? Not me,” Feb. 4). LaReau makes a perfect case: She drove the Volvo C30, loved it, found one at the right price on the Web and ordered it. The antediluvian Teahen (which I say knowing that I’m only about a decade younger than he is) talks about the need to slam doors and hear the satisfying thunk and to indulge in the ancient agora ritual called bargaining before he’ll spring for the car. Good lord, it’s a product, not a piece of handcrafted artisanry. Does Teahen insist that Best Buy crate up exactly the TV he viewed in the store so that he’ll know that it got reception on all 900 of the channels he tried? In the past 15 years, I haven’t so much as touched any of the specific cars I’ve bought — Saabs, Porsches, a Toyota, an Audi, a Volvo — before owning them, though I certainly was amply familiar with the models’ attributes and qualities before making a buying decision. STEPHAN WILKINSON Cornwall-on-Hudson, N.Y. The writer is the senior correspondent, automotive, for Conde Nast Traveler magazine. to “Buy a car online? Not me” in the Feb. 4 issue. I know each person has his own way of doing things and is entitled to his own opinion, but John K. Teahen Jr. has to understand where the future is going. With the busy lifestyles of families these days, not many people have the time to visit a dealership, sit for an hour with a salesman and discuss colors, options and equipment. Today’s generation is buying from the Internet. The majority of our customers look online, get an Internet price and then come in and do the test drive and the paperwork. There is plenty of human contact. At our dealership, when the lead comes in, we call the customer to tell him about the e-mail we have just sent him and to talk about the price quote and schedule a time for a test drive. Teahen talked about the “soulless computer.” Remember that there is a human behind every e-mail, and with every e-mail there is a phone call. Doing it the computer way is the future of many companies doing business these days and beyond. DEREK BACHAND East Brookfield, Mass. Robertta Savage Editorial Assistant Corinne M. Price, Michael Garrison Information Center LOS ANGELES Mark Rechtin/Bureau Chief 310-739-8009 Fax: 310-832-6362 Kathy Jackson/Reporter 323-370-2481 Fax: 323-655-8157 6500 Wilshire Blvd. Los Angeles, CA 90048-4947 NEW YORK Diana T. Kurylko/Reporter Phone/fax: 908-273-6059 dkurylko@crain.com WASHINGTON Donna Harris/Reporter 540-668-7295 Fax: 540-668-7296 Harry Stoffer/Reporter 202-662-7212 Fax: 202-638-3155 814 National Press Building Washington, DC 20045-1801 MID-SOUTH Lindsay Chappell/Bureau Chief 615-371-6654 Fax: 615-371-6655 April Wortham/Reporter 615-371-6617 104 East Park Drive, Suite 315, Brentwood, TN 37027 TOKYO Hans Greimel/Asia Editor +81-3-3828-9060 Fax: +81-3-3828-9061 hgreimel@crain.com Yurakucho Denki Bldg., 20th Floor 1-7-1 Yurakucho, Chiyoda-ku, Tokyo 100-0006, Japan SHANGHAI Alysha Webb/Bureau Chief +86-21-6226-9485 Fax: +86-21-6226-9483 alyshawebb@yahoo.com TURIN Luca Ciferri/Reporter lciferri@craincom.de +39-011 961 0194 Fax: +39-011 961 0113 Viale Cavaglia, 8 10029 Villastellone (TO) Italy STAFF CORRESPONDENT: Eric Freedman/Legal file, 517-337-0269 www.autonews.com DETROIT Victor Galvan/Web Editor vgalvan@crain.com 313-446-0345 Scott Kennedy/Multimedia Editor Automotive News Senior Editor John K. Teahen Jr. likes to slam doors and engage in a round of bargaining before he springs for a new car. Nothing beats face to face To the Editor: The computer is a great tool to use when exploring your options, but as John K. Teahen Jr. says, there is nothing better than buying your next vehicle face to face, hands-on. What people forget is that after the sale, follow-ups will answer questions about how things work; they forget the value of personal contacts in service. Teahen’s co-worker may be right: The computer may make it easy — but will it answer you when you have a problem? ALLEN STETSON Sales Consultant St. Johnsbury Subaru St. Johnsbury, Vt. There’s a person behind that e-mail To the Editor: I am the Internet sales consultant at a dealership and am responding http://www.autonews.com http://www.autonews.com

Table of Contents Feed for the Digital Edition of Automotive News - February 18, 2008

Ford cuts equipment combinations on '09s Lenders shun subprime market Toyota dealers test satellite service centers Despite cost, more carmakers use laminated glass Merger produces turnaround firm Chrysler would shut to move Plastech work Jeep accessories: Mo' for Mopar Auctions: Repos are rising Automakers face more child safety rules Supplier Personnel Family-owned stores could be tough sell for consolidation What would lineup be with brands under single roof? Mercedes will pay $9.5 million to settle suit Beru revamps strategy to boost profits, growth Jaguar: Dealers take 10,000 customer deposits for XF sedans Chrysler exec: Performance segment will survive Mahindra to offer hybrids in U.S. Mazda ad agency hires VW and Mini creative whiz Icy weather and perhaps boredom chill roadster sales GM, Saturn: What's after Reynolds? Ford: Mid-sized model year for mid-sized cars Kia's new American boss: Let's boost sales Rolls gets sporty Luxury brands push to meet demand in Russia Dealer is makers' best voice in D.C. Get real, Kia, Hyundai Face it, Detroit: Trimming dealers will be expensive GM has confidence in the Chevy Volt It's no wonder auto sales are declining A workable idea: GM dealer buyouts It's deja vu again with reborn 2CV Nothing beats face to face There's a person behind that e-mail Buying cars online makes perfect sense Bush seeks to save 2008-11 CAFE rules Personnel Lear investor: No regrets about blocking buyout GM CFO is mum on more aid to Delphi Dealers Road to tomorrow is paved with plastics Council aims to keep Ford current on environmental issues VW ponders Phaeton's U.S. flop, may try again McGuffie is Covisint's president In hydrogen race, Mazda seeks quicker route Suit seeks to enforce title-washing remedy Suppliers to the 2008 Buick Enclave Mercedes, Audi warn dealers: No sales for export Sykora wants CAFE flexibility Minority dealers see tough times in 2008 Arlena Sawyers Toyota goal: Create stress-free store NADA's Taylor predicts 15.7 million U.S. sales this year Honda widens support for dealer ad groups Jay's jabs Survival 101: Get lean, work harder Microsoft will test dealership system Farley wants market-by-market sales strategy Entertaining the troops Report: Detroit 3 cutbacks curb rental-fleet sales Dilts: High interest rates hurt industry GM asks for dealer assistance on quality On the Record Fisker: We're close to making plug-in car J.D. Power exec: Internet leads are slipping away Minority auto group nears 2 deals Garmin makes navigation technology deal Tenneco wins Ford work B-P-G focuses on new product push Volvo offers cash to thin the herd Cadillac challenges dealers to boost sales Chevrolet can stay No. 1, if it will fight GM will push a green marketing message Saturn is expected to be GM's growth brand Certified used sales help Honda dealer profits Hummer counts on pickup to perk sales Mazda will boost marketing budget, unveil Mazda6 Saab dealers to get new vehicles Toyota wants even better customer loyalty Infiniti stresses profits and customer satisfaction Mitsubishi CEO sets tough U.S. sales goal Nissan exec: New models will boost per-store sales Suzuki dealers cheer return of incentives Ford to boost dealer margins Jag dealers anxiously await the XF Ford executives vague about Mercury future Subaru dealers want diesels, hybrids Acura upscale shift inspires 'great faith in the future' BMW readies national loaner-car program Land Rover: Future upbeat, unclear VW dealers get vehicles on wish list Chrysler dealers OK with consolidation plan Mercedes pushes dealership standards Porsche shrinks as luxury segment lapses Large Hyundai dealers get more room to roam Execs' exit stuns Kia dealers Ford recalls 180,000 trucks over door part, fuel hose GM posts massive loss; eyes N.A. profits by 2011 Big-truck sales fall 33.5% in Jan. WTO rips China's tariffs on imported auto parts Fiesta will rejoin the party in the U.S. UAW's Valentine to Delphi: Hands off our pensions Rx for dealership flux: NFL draft + Mideast bazaar Toyota gets the boot in Mexico Nissan triples female managers Silverado hits a million, rolls on

Automotive News - February 18, 2008

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