Automotive News - February 18, 2008 - (Page 58)

58 • FEBRUARY 18, 2008 NADA MAKE MEETINGS Chrysler dealers OK with consolidation plan Bradford Wernle bwernle@crain.com Highlights Support for Project Genesis Return of gas tank allowance Uncertainty for single-line dealers and gear the remaining lineup to dealerships that carry all three brands under the same roof. Chrysler has begun talking with dealers in metro markets about which ones want to sell out. Chrysler envisions a smaller dealer body in urban areas, with bigger and more profitable stores. The medicine may be tough for some to swallow, but most were con- SAN FRANCISCO — Although Chrysler LLC’s Project Genesis creates an uncertain future for many dealers, the consolidation plan received a generally warm reception from dealers at the Chrysler make meeting. Chalk that up to Jim Press, Chrysler’s co-president and formerly Toyota’s top North American executive. Press’ folksy, aw-shucks style is playing well with Chrysler’s dealer body — often a tough crowd to please. Project Genesis will eliminate redundant badge-engineered vehicles vinced by what Press had to say and the way he said it. “It’s pretty hard to get angry” when Press is speaking, said Michael Rouen, owner of Rouen Chrysler-Dodge-Jeep in Woodville, Ohio. Rouen came away impressed with Press’ grasp of the issues facing the company. Said Stephen Kaiser, president of Fairfield Auto Group Chrysler-DodgeJeep in Muncy, Pa.: “He’s kind of grandfatherly. He walks around and tells jokes — he’s a Ronald Reagan type of guy.” Chuck Eddy Jr., owner of Bob and Chuck Eddy Chrysler-Dodge-Jeep in Austintown, Ohio, was more enthusi- astic: “Press and (CEO Bob) Nardelli are as close to Lee Iacocca as I’ve seen.” Marc Treiber, owner of Rallye Autoplaza in Monroe, N.Y., came away from the meeting feeling that Cerberus Capital Management LP, which owns 80.1 percent of Chrysler, is committed to Chrysler for the long haul. “It was a happy meeting,” said Treiber, who sells Chrysler, Dodge and Jeep. Hayden Elder, owner of Elder Chrysler-Dodge-Jeep in Athens, Texas, and Dodge dealer council chairman, said Chrysler’s new “dream team” will succeed with its ambitious plan. But Elder realizes some stand-alone Dodge franchises may face gaps in their lineup as Chrysler prunes back duplicate models. “I think they need to be looking at the situation they’re in with their franchise,” he said. Mark Hodos, owner of Monarch Dodge in Lauderdale Lakes, Fla., said Chrysler faces stiff obstacles from some dealers, many of whom have held franchises for generations. “There will always be people who won’t sell,” he said. Dealers were also cheered to hear that Chrysler is reinstating its policy of paying to fill up the gas tank on new vehicles when they are delivered to buyers. c Audi hears dealer gripes, eases regulations Diana T. Kurylko dkurylko@crain.com Highlights Dealers warned about penalty for exporting cars Soft economy will affect sales 38% of dealers have Autohaus store upgrades in the works Highlights $15 million fund allows dealers to make warranty repairs without factory approval Some new margin standards have been eased Dealers are warned not to sell to overseas buyers capitalizing on the weak dollar ers will get more authority to do warranty work without Audi pre-approval. “We want to focus on easing doing business with Audi. We tend to sometimes get a little complex,” said Johan de Nysschen, head of the Audi brand in the United States. To make it easier to do warranty work, Audi has put $15 million in the SAN FRANCISCO — Audi of America executives told dealers it will be easier for them to do business because cumbersome requirements are being lifted. Blake Strong, owner of Strong Audi in Salt Lake City, said the company is loosening administrative policies because of dealer protests. Strong pointed to dealer ratings in an NADA survey conducted last summer that placed Audi at the bottom. “We got the attention of the management team and the board in Germany, and they are moving forward,” he said. One key change will be to use Audi zone personnel instead of third parties to inspect dealer facilities. Also, deal- customer assistance program, he said. Each dealer has an individual pot for discretionary repairs. Said de Nysschen: “It creates good will, and the dealer can make a decision — and there is less administrative work. It will ultimately result in better responsiveness to the customer.” But he warned: “It is not a blank check. If a dealer uses up his authorization faster than he should, then we need to work with him and find out why.” Audi has also eased some requirements of its new margin structure, which went into effect Jan. 1. For instance, to meet customer satisfaction requirements, a dealer had to make sure Audi could contact 94 percent of the store’s customers. “That has been a hard number for dealers to meet,” said de Nysschen. Audi kept the 94 percent standard but won’t penalize dealer payments until the number falls to 90 percent, he said. To help with cash flow, Audi has agreed to make margin payments every month rather than quarterly, said de Nysschen. Because supply of the new A5 coupe is tight, dealers complained they would have problems meeting tighter new quarterly sales targets. So Audi decided to ease first-quarter targets, de Nysschen said. Audi also warned dealers against exporting cars, a growing problem because of the continued weakness of the dollar. De Nysschen promised dealers regular and updated lists of known exporters. c Mercedes pushes dealership standards Diana T. Kurylko dkurylko@crain.com Need Salespeople, Tech’s, Managers & Other Employees? The Auto Industry’s #1 Recruiting, Training & Marketing Company Salespeople~BDC~Detailer~Porter~Technician Body Tech~Service Advisor~Service Manager Parts Counter~Parts Manager~Sales Manager Finance Manager~Office Staff~GSM~GM Porsche shrinks as luxury segment lapses Alysha Webb alyshawebb@yahoo.com Highlights Sales slowdown in luxury segment Enough product to sell? Porsche’s first sedan 800-421-4550 www.clickhereforadvice.com Brian C. Hall, President & CEO SAN FRANCISCO — Porsche Cars North America Inc. is shrinking its supply in response to a slowdown in the luxury segment. The move may help Porsche avoid oversupply, but it also may exacerbate one of Porsche dealers’ big concerns: not having enough prod- uct to sell. “We have seen since October and November last year there is some pressure on the luxury segment,” said Peter Schwarzenbauer, CEO of Porsche Cars North America. “We will adjust supply for at least the first half of the year so we can avoid a mild recession.” In 2007, Porsche sold more than 34,000 units in North America, he said. “If we can get close to that, or even slightly below, I will be really happy,” said Schwarzenbauer. Dealers are of two minds about the shrinking supply. Don Hicks, owner of Porsche of Colorado Springs in Aurora, Colo., said his main concern is the lack of units to sell. Getting enough Cayenne SUVs has been especially difficult, Hicks said. In contrast, Charles Burton, president of Carlsen Porsche of Redwood City, Calif., and a member of the Porsche Dealer Board of Regents, supports the production slowdown. One Porsche dealer says the Cayenne SUV has been particularly difficult to keep in stock. “I’d rather they manage inventory properly,” Burton said. Porsche already has cut production twice in recent weeks, he added. Porsche is priming the market with several new products. Dealers are “extremely happy” with the recently launched Cayenne GTS SUV, said Schwarzenbauer. A new Boxster convertible, the RS60, is “on the horizon,” he said. The most eagerly anticipated new product is the full-sized Panamera sedan. It will be Porsche’s first entry into the segment, and is scheduled to arrive in September 2009. It will seat four people, said Schwarzenbauer. Said Peter Sonnen, a Porsche dealer in Marin County in Northern California: “I can’t wait for the Panamera.”c SAN FRANCISCO — MercedesBenz executives said that 38 percent of dealers were moving toward or already working on upgrading stores to meet the new Autohaus standards. Mercedes this year introduced plans for dealerships, agreeing to pay dealers $400 per car sold for three years and increase vehicle allocations if they invest in the plan. Dealers at the make meeting were also told that the softening economy could begin to affect luxury-car sales, especially in markets such as Florida and California. But Mercedes doesn’t expect a big drop. Mercedes executives warned dealers not to export vehicles and reminded them that doing so would cut the number of new vehicles they receive. Dealers have leeway of 2 percent of sales before they are penalized because Mercedes-Benz realizes it’s sometimes hard to identify overseas buyers or exporters, says Jack Leigh, president of Leigh Automotive in Tuscaloosa, Ala. But new-vehicle allocations will be cut when that threshold is exceeded, Leigh says. Surprisingly, dealers weren’t questioning or protesting the new margin structure that went into effect Jan. 1, Leigh says. Mercedes-Benz has restructured its dealer margin to link it to customer satisfaction and quality. Ernst Lieb, CEO of Mercedes-Benz USA, said 85 dealers met the new performance target in December — a month before the new requirements kicked in. By January, Lieb said, 282 dealers were reaching the new goals, meaning about 60 or 70 are falling short.c http://www.clickhereforadvice.com http://powerpusher.com http://powerpusher.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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