Automotive News - February 18, 2008 - (Page 8)

8 • FEBRUARY 18, 2008 advertising YOU’LL SEE MORE TRAFFIC IN DAYS WITH US THAN IN MONTHS WITH ANYONE ELSE. GM, Saturn: What’s after Reynolds? Vendor’s surprise exit leaves execs assessing options Ralph Kisiel rkisiel@crain.com OUR DEALERS ARE GROWING AND SO CAN YOU! Kara DePaula DePaula Chevrolet “With Zimmerman as a partner we have grown to be the #1 GM Dealer in Albany, NY.“ OVER 2000 DEALERS PROVE OUR ADVERTISING GETS RESULTS! ZIMMERMAN Feel that gust of wind? It was most, if not all, of Saturn’s 413 dealers breathing a sigh of relief. They won’t be ordered to buy the GM Integrated Dealer Management System from Reynolds and Reynolds Co. On Feb. 9, Reynolds Chairman Bob Brockman surprised dealers and GM when he told Automotive News during the National Automobile Dealers Association convention that his company no longer would sell the system. “We were pretty happy to hear the news,” says John Steffy, information systems manager for the Findlay Automotive Group in Henderson, Nev. Reynolds was going to convert his group’s three Saturn stores to the system. “We’re relieved — and I’ve talked to other Saturn dealers who share the same sentiments — that we don’t have to go through the expense, downtime and employee frustration that occurs when you switch systems,” Steffy says. Dealers knew General Motors and Reynolds were embroiled in a breach Reynolds Chairman Bob Brockman surprised dealers and GM by saying his company no longer would sell the system. of contract lawsuit, but they didn’t expect Reynolds to just walk away. Neither did GM. “We had no idea it was coming,” says Susan Garontakos, manager of GM dealer communications. Now what? GM and Saturn face tough choices after Reynolds and Reynolds’ abrupt exit as a vendor to 413 Saturn dealers of the GM Integrated Dealer Management System. Here are some options. Allow Saturn dealers to keep their current ADP system Allow Saturn dealers to choose their own system Require Saturn dealers to switch to a GM system provided by Quorum, ADP or AutoSoft over my head,” Carpenter says. “I just have to have confidence that the Saturn and GM leadership are going to do what’s best for our brand. I think everybody hopes it comes as quickly as possible.” Reynolds, of Dayton, Ohio, is the largest provider of dealership management systems in the United States. No sign Reynolds had its usual huge presence on the exhibition floor during the NADA convention. But its display included no sign of Reynolds’ relationship with GM. GM told Reynolds that it could not advertise or sell the GM system at its booth or be part of GM’s display during the convention, Brockman says. Reynolds also has sold about 400 of these systems to non-Saturn GM dealers. “We will continue to service” those dealers, Brockman says. “At least 80 percent, if not more, have been Reynolds customers, many of them for a very, very long time. We want a solution where those folks are happy and taken care of.” He also says GM and Reynolds want a “peaceful and reasonable resolution” to their dispute: “It doesn’t behoove either of us to have any acrimony in going forward.” c All Saturn stores The GM Integrated Dealer Management System is a package of computer software, hardware and services assembled to GM’s specifications, then installed and maintained by Reynolds or one of the three other GM-approved vendors. The package is sold to dealers at a price negotiated by GM and the vendors. Under the GM contract, Reynolds was supposed to install the system in all Saturn dealerships. Saturn dealers currently use a system provided by ADP Dealer Services. Reynolds’ departure leaves ADP, Quorum Information Technologies Inc. and AutoSoft International Inc. as GM-approved vendors. Saturn leaders and their dealers now have at least three options: 1. Saturn dealers could continue to use the current ADP system. 2. Saturn could allow its dealers to choose any system. 3. Saturn could pick ADP, Quorum or AutoSoft to install the GM system in all Saturn stores. GM and Saturn’s dealers will decide what to do. The dealers will be represented by the franchise operations and IT teams, says Tom Carpenter, owner of three Saturn dealerships in the Columbus, Ohio, area. He is a member of the franchise operations team. “This thing is many, many levels ■ Rolls gets sporty Rolls-Royce last week revealed the Phantom Coupe — a sportier variant of the soft-top Phantom Drophead Coupe and the longer Phantom sedan. The Phantom Coupe gets stiffer springs and dampers, anti-roll bars, modified brakes and an automatic gearbox with an electronic Sport program. Worldwide deliveries start in June. The price was not announced but probably will be around $400,000. The Phantom Coupe will be introduced formally at the Geneva auto show in March. YOUR COMPLETE MARKETING PROGRAM! ACTIVATES & INTEGRATES Kia’s new American boss: Let’s boost sales Dealers: Hunt’s successor tells of push for growth Kathy Jackson kjackson@crain.com Revolving door The CEO at Kia Motors America keeps changing, changing and changing. 1999–Dec. 2001: Ahn Byung Mo Dec. 2001-Jan. 2003: James Lee Jan. 2003-Oct. 2005: Peter Butterfield Oct. 2005-Dec. 2006: James Lee Dec. 2006-Nov. 2007: B.G. Lee Nov. 2007-Feb. 2008: Len Hunt Feb. 2008: Ahn Byung Mo Source: Kia Motors America Guerrilla TV Marketing Radio Hispanic Print Direct Mail Website Optimization Web Design Internet In-Store Ford: Mid-sized model year for mid-sized cars Amy Wilson awilson@crain.com 1-888-878-ZADV zauto@zadv.com or visit www.zadv.com CALL OR E-MAIL THE AGENCY THAT WILL WORK FOR YOU 24/7 (SERIOUSLY) SAN FRANCISCO — Kia dealers say the new boss of Kia Motors America wants to chase down corporate cousin Hyundai in sales. That is the first message they heard after the shock that followed the sudden departure of two top Kia executives. Len Hunt, 51, the importer’s popular CEO, left the company Feb. 8, according to a Kia statement. So did Ian Beavis, 54, vice president of marketing. It all happened on the eve of the National Automobile Dealers Association convention here. Replacing Hunt is Ahn Byung Mo, who on Feb. 5 was named to the newly created position of chairman and group CEO of Kia Motors America and Kia Motors Manufacturing Geor- gia. Ahn, 57, was CEO of Kia Motors America from 1999 to 2001. Tim Chaney, director of marketing, was named acting department head. “The changes are being made in an effort to respond to rapidly changing market conditions in the United States,” the company said. Most dealers say they believe Hunt and Beavis were fired. The new boss has a lot on his plate. Kia will introduce its first mid-sized SUV, the Borrego, this summer. And scheduled to reach dealerships this fall is the Soul, a new compact car designed to compete with the likes of Toyota’s Scion brand and the Honda Fit. “I think he wants to overtake Hyundai,” Russ Darrow, owner of six Kia stores in Wisconsin, says of Ahn. “We were all very shocked and surprised” about Hunt and Beavis. “I have no idea what happened, but Ahn said he’s all about one thing: driving up traffic.” Kia trailed its sibling Hyundai by only 97 units in January. Hyundai di- vision’s sales last month fell 22.6 percent to 21,452 units, while Kia was down 5.2 percent. In January 2007, Hyundai led Kia by 5,197 units. Last year was Kia’s best ever in the United States. Sales grew 3.8 percent to 305,473 but were still far behind Hyundai’s 467,009 sales. Dealers and company sources say Kia is pushing for 450,000 sales this year. Eager to grow Hyundai and Kia appear impatient with U.S. executives who don’t meet aggressive sales goals. Steve Wilhite, see KIA, Page 68 DETROIT — Ford Motor Co.’s trio of mid-sized cars will have an abbreviated 2009 model year. With reskinned versions just around the corner, the 2009 Ford Fusion, Mercury Milan and Lincoln MKZ will be in production for about six months beginning in June. The 2010 models will go into production “very late this year” and go on sale in early 2009, Ford Americas President Mark Fields said. The updated sedans were once expected to go on sale this fall as 2009 models. Although the on-sale date has slipped to next year, Ford executives still count the trio as big launches for 2008. The 2010 Fusion and Milan will get hybrid versions for the first time. The Fusion, Milan and Zephyr, the predecessor to the MKZ, went on sale in the fall of 2005 as 2006 models. U.S. sales for the trio were 221,159 in 2007, up 4.6 percent from 2006. The sedans are assembled at Ford’s plant in Hermosillo, Mexico. c http://www.zadv.com http://www.zadv.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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