Automotive News - February 18, 2008 - (Page 56)

56 • FEBRUARY 18, 2008 NADA MAKE MEETINGS Ford to boost dealer margins Amy Wilson awilson@crain.com Ford executives vague about Mercury future Amy Wilson awilson@crain.com Highlights Mercury’s future murky MKS will boost Lincoln sales Margins, ad support will rise pen?” he said. In other news at the Lincoln Mercury meeting: Executives shared launch details about the 2009 Lincoln MKS sedan. The sedan, which executives are calling Mercury’s flagship, goes on sale this summer. The MKS positions Lincoln to increase its sales again in 2008, executives said. Lincoln’s U.S. sales rose 9.1 percent in 2007 to 131,487 vehicles. Company officials declined to share volume projections for the MKS but said it would be one of Lincoln’s volume nameplates, along with the MKX crossover. Margin increases and local advertising support being developed for Ford-brand dealers also will cover Lincoln Mercury dealers. Dealers say Ford is developing plans to increase margins on select SUVs and crossovers by 1 percentage point. The company told dealers that details will be shared in April. c Highlights Margins to increase by 1 percentage point on some SUVs and crossovers Dealers to get financial help for local ads New brand campaign rolls out in April in inventory and lower dealership floorplan expenses. Ford-brand sales in the United States dropped 13.6 percent in 2007 to about 2.09 million vehicles. The margin increase likely will be effective with 2009 models. The 2009 Flex, a new crossover going on sale this summer, is one nameplate in line to get the larger margin, dealers said. Ford also has told dealers it will consider their input when determining margins for the re-engineered and restyled 2009 F-150 pickup. But the news at the meeting was limited to crossovers and SUVs, dealers said. Ford executives at the meeting also told dealers: The automaker is developing a tier SAN FRANCISCO — Ford Motor Co. plans to increase dealer margins on some SUVs and crossovers in 2008 as part of its bid to improve dealership profitability. The increase will be 1 percentage point on certain nameplates, dealer and company sources said after the Ford make meeting. Details are being developed, a Ford insider said, and the company intends to present a plan to dealers in April. “I think it’s fantastic,” said Allen Sartain, a Ford dealer in Decatur, Ala. On Feb. 10, Ford marketing chief Jim Farley said improving profitability is the top goal for the automaker’s dealership network in 2008. “We really want to focus on the front-end gross,” Farley said after the meeting. “This year, especially toward the end of the year with our new product, there’s a chance to work together and lay the foundation for profitable growth in the front end of the store and F&I.” Ford-brand dealerships saw a nearly $1 billion increase in aggregate net profits in 2007, driven largely by cuts Ford’s Jim Farley: “We really want to focus on the front-end gross.” 3 advertising co-op program to help boost marketing at the local level. With sales in decline, many Ford dealers have cut back local advertising, and executives fear that is causing further sales losses. Details of the program are being developed, but Ford told dealers that they likely will get 0.5 percent of a vehicle’s sticker price in a matching program. Until now, there has been no local advertising assessment, dealers said. A new national brand campaign is being readied for an April debut. Dealers have been asked to participate in the development of the ad campaign, said dealers and company officials. The dealers are answering surveys and attending meetings. c SAN FRANCISCO — Ford Motor Co. didn’t deliver the rousing defense of the Mercury brand that Lincoln Mercury dealers at the make meeting were looking for. Ford executives touted the coming Mercury Milan hybrid sedan and powertrain upgrades for the Mercury Mariner crossover. But talking with reporters after the meeting, they declined to say whether dealers would get a definitive answer this year on the long-term future of Mercury. Without much information about vehicles in the pipeline, dealers are worried that Ford Motor could drop the brand. Getting a better answer on Mercury’s future is one of the dealer council’s top priorities for 2008. “Mercury has a place in our brand portfolio,” Ford Americas President Mark Fields said. When asked whether it’s possible that Mercury eventually will be dropped, Fields said: “It’s possible the sun could extinguish in the next five days.” Fields went on to add that any good business is always evaluating its portfolio. “Who knows what could hap- PRINT TELEVISION RADIO BILLBOARDS JINGLES LOGO DESIGN POINT OF PURCHASE DIRECT MAIL Jag dealers anxiously await the XF Mark Rechtin mrechtin@crain.com Highlights XF is coming Brand image is rising New XJ, engines in 2010 A lot MORE creative…for a lot LESS money. 800-941-6638 48 HO Turn Around Time! UR www.TheCarAdStore.com SAN FRANCISCO — After several years of decline, Jaguar outlined a hopeful new direction for the franchise. Not only are dealers awaiting the sale of Jaguar by Ford Motor Co. to Tata Motors, but they also are seeing the brand move back upscale. The two most problematic products are gone. Remaining inventories of the killed-off X-Type entry-luxury sedan should be gone within a month or so. And the aging S-Type is being replaced by the much-improved XF sedan, which goes on sale March 10. At a breakfast meeting, dealers also were told that more powerful engine families are coming in 2010. The new engines will coincide with the redesign of the XJ flagship sedan. With the XF launch, Jaguar will walk away from the lease-deal mentality that has plagued the franchise, said Dealer Ken Gorin: “There are a lot of expectations” for the XF. Ken Gorin, president of The Collection, which sells luxury brands in Coral Gables, Fla. “The concern is on getting the XF out there and marketing it the right way,” Gorin said. “There are a lot of expectations for this car.” Jaguar plans on a short, sharp TV launch. A new TV commercial continues in the vein of past “Gorgeous” ads — with much of the color bleached away and interspersing quick shots of the car with views of glamorous wealthy people. The background music is “Hush,” the 1968 hit song from Deep Purple. The tag line: “This is the new Jaguar.” Marti Eulberg, executive vice president of marketing and sales for Jaguar Cars North America, said the company will not place incentives on the XF, despite the luxury segment being awash in lease deals and cutrate financing. “The (marketing) support is the MSRP,” said Brian Allan, general manager of the Galpin Premier Collection (Aston Martin-Jaguar-VolvoLincoln) in Van Nuys, Calif. “The incentive is the value, not a rebate.” The XF comes with a standard 4.2liter V-8 engine and starts at $49,975, including shipping. c Subaru dealers want diesels, hybrids Diana T. Kurylko dkurylko@crain.com Highlights Diesels and hybrids coming, but no timetable given Factory urged to find ways to raise residuals Dealers ask for more flexibility in local advertising for diesels and hybrids and that they’re certain they can sell them. Dealers are encouraged that diesels are coming because of the launch of SAN FRANCISCO — Subaru dealers want diesels or hybrids, and management says they’re coming sooner rather than later. Subaru of America executives did not specify when, but it will be sooner than the five years previously given, said Phil Porter, owner of Subaru of Jacksonville in Florida and Center Subaru in Torrington, Conn. Subaru dealers told company executives that customers are clamoring diesels in Subarus in Europe, where everything except the Tribeca will get one, said Porter. Dealers also were worried about residual values and urged the company to find ways to raise them. Porter said dealers asked for more flexibility in the way they spend local advertising money that is partially funded by Subaru. They want to personalize ads more. Dealers say Subaru now dictates details down to the size of the logo. c http://www.thecaradstore.com http://www.thecaradstore.com http://www.creditacceptance.com http://www.creditacceptance.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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