Automotive News - May 26, 2008 - (Page 46)

46 • MAY 26, 2008 remarketing Volvo certified plan offers free satellite radio Arlena Sawyers asawyers@crain.com To promote sales of certified used vehicles, Volvo Cars of North America Inc. plans to offer free satellite radio service. Starting this summer, buyers of certified Volvo cars and trucks with factory-equipped Sirius satellite radios will get six months of free service, says John Lee, Volvo’s pre-owned car line manager. General Motors and American Honda Motor Co. Inc. have had similar promotions. But those offers generally were for three months of free service. Lee says the radio subscriptions will help Volvo’s certified program distinguish itself from competitors. “We have a low budget, but we were named the top luxury CPO program by IntelliChoice,” an industry analysis firm that ranks certified programs, Lee told Automotive News. “I’d like to continue that by leveraging what we have available and improving the program.” Last month, Volvo sold 2,444 certified vehicles, up 44.2 percent from April 2007. From January through April 2008, Volvo sold 8,821 certified cars and trucks, up 20.5 percent from the year-ago period. Overall, the industry sold 156,450 certified vehicles in April, up 15.1 percent from the year-ago month. In the first four months of 2008, the industry sold 578,297 certified units — up 4.3 percent from the same period of 2007. Lee says Volvo is selling more certified vehicles because the uncertain economy is causing many consumers to turn to high-quality used vehicles as an alternative to buying new cars and trucks. When Volvo dealers buy 2007 S40 cars that have been retired from rental service, the automaker gives the dealers portable global positioning system navigation units. Lee also cites improvements to Volvo’s certified program. Through June, Volvo’s captive finance company is offering 1.9 percent financing on certified sales of S40, V40, V50 and XC90 models. Volvo also is giving dealers portable global positioning system navigation units when they buy 2007 S40 cars that have been retired from rental service. Some Volvo dealers are including the devices when customers buy certified vehicles, Lee says. The systems have a retail value of $250 apiece. Volvo has distributed nearly 1,400 of the devices, Lee says. Volvo’s certified program has shifted its entire advertising budget to the Internet, Lee says. But Volvo benefits from other brands’ broadcast and print ads that promote used-vehicle certification, he adds. Says Lee: “Consumers know about CPO. They come to Volvo retailers or go to our Web site to learn more about what our program offers.” c April used-vehicle prices: Light trucks fall and cars rise Average wholesale used-vehicle prices, April Average price April 2008 Average price March 2008 Average price April 2007 % change vs. March 2008 % change vs. April 2007 ADESA exec: Lower interest rates, tax rebates may lift sales Arlena Sawyers asawyers@crain.com Cars Small and mid-range Sporty Traditional Upscale Total car $8,379 12,617 11,026 13,236 $9,373 $8,177 12,625 10,409 12,829 $9,167 $7,529 10,829 8,285 8,067 10,693 12,664 14,461 $10,850 $10,002 $8,098 13,418 10,492 12,867 $9,078 $7,746 12,227 8,535 7,932 10,945 14,045 14,929 $11,285 $10,138 2.5 –0.1 5.9 3.2 2.2 0.5 –4.0 –1.4 –4.8 –2.9 –2.2 –2.0 –2.5 –0.2 3.5 –6.0 5.1 2.9 3.2 –2.4 –15.0 –4.3 –3.2 –5.1 –11.8 –5.1 –6.2 –1.5 Light trucks Small pickups $7,563 Full-sized pickups 10,397 Minivans 8,171 Full-sized vans 7,681 Lower mid-range SUVs 10,384 Large SUVs 12,383 Other SUVs 14,166 Total light truck $10,583 TOTAL WHOLESALE $9,985 Note: Based on approximately a half million AuctionNet wholesale vehicle transactions a month *Includes standard and premium crossovers and small, upper mid-range and premium SUVs Source: ADESA Analytical Services based on AuctionNet data and Automotive News market classifications Wholesale prices of used cars and trucks in April dropped from yearago levels and barely budged from March prices, the two biggest U.S. auto auction companies say. The average used vehicle sold at auction last month for $9,985, according to ADESA Analytical Services. That price was 1.5 percent below the April 2007 average and 0.2 percent below the average price in March. Still, the rate of decline of used-vehicle prices has slowed, says Tom Kontos, ADESA’s executive vice president of customer strategies and analytics. Lower interest rates and federal tax rebate payments could help stimulate used-vehicle sales and prices for the rest of the year, he says. “These are promising developments,” Kontos told Automotive News. Last month, Manheim’s Used Vehicle Value Index stood at 108.4, down from 114.2 in April 2007 but up from 107.7 in March 2008. The index measures monthly changes in used-vehicle prices, adjusted for model mix, mileage and time of year. Rising gasoline prices continued to drive down auction prices of big SUVs and pickups and boost prices of cars. The average wholesale price of large SUVs last month was $12,383, down 11.8 percent from April 2007 and 2.2 percent from March 2008, ADESA says. The average price of full-sized pickups fell to $10,397, down 15.0 percent from the year-ago month and 4.0 percent from March. Manheim chief economist Tom Webb agrees that wholesale usedvehicle prices are leveling off overall. Says Webb: “Dealers now have a greater comfort level in their ability to project future used-vehicle sales and stem the narrowing in gross margins.” c Turn to page 48 for the Used Vehicle Auctions FIND A CAR. ONLINE. ANY TIME. It’s simple. Tell us what you want—make, model, year—and we’ll do the rest. With ADESA Notify Me, you’ll instantly know when we have your car. So what are you waiting for? Take advantage of the latest technology. ©2008 ADESA, INC. Log on to NotifyMe today. http://www.adesa.com http://www.adesa.com

Table of Contents Feed for the Digital Edition of Automotive News - May 26, 2008

Automotive News - May 26, 2008 Bad times? Not for CEO paychecks GM seeks Volt tax break to avoid $40k sticker Ford's big cuts aim for a Honda-sized lineup Automotive News gets new marketing communications director Toyota pushes N.A. suppliers to match offshore prices VW predicts 5% U.S. sales gain Toyota plans 3 plants for hybrid batteries GM's American Axle strike tab: $2.82 billion Lawsuit in Florida targets congressman's dealership Orbiting the blogosphere Kia to build small cars in U.S. plant VW Mexico exec will run North American purchasing Fiat mulls 500 minicar for U.S. GM scraps big rwd sedans for Chevrolet and Buick Hyundai spends like never before to launch Genesis luxury sedan Surprise: Suzuki slides as fuel prices rise GM paid Walter Chrysler a whopping $600,000 a year Chrysler sends mystery shoppers to dealerships Toyota owes royalties on some hybrids GM, American Axle to resume output Ford predicts bigger demand for smaller engines in Escape This is Volvo? Ads sell chic, not just safety An overnight success in 50 years Obama's comments were out of line Japan does it; why shouldn't we? 25% is high, but Chrysler is wise to revisit SCORE Safety efforts must focus on the driver Blame the dealer for poor service Don't judge Ford quality by just one car Ford quality is best in many years Mitsubishi considers piggybacking with Caterpillar suppliers to cut costs Nissan to make lithium ion batteries 'Boss Ket,' Connery inspire Tim Jackson Germany leads rise in Europe sales Court: Buyers must act in good faith to win lemon law damages Nissan wants suppliers to reduce utility bills Bajaj: From scooters to autos The next $2,500 car? Infiniti will look different, add engine power in Europe Lamborghini boss wants to keep the big engines Lamborghini ups ante in 'entry' supercars Continental exec: We're done selling VDO assets Honda plans Fit hybrid Outgoing Visteon CEO to receive $2.5 million Audi production chief: Cooperation with Porsche will grow Picture this RV shipments fall in March M-B will buy Chrysler studio Supplier personnel VW expects to reap big share of U.S. diesel market Valeo CEO Morin: Pass rising costs to consumers Suppliers to the 2008 Nissan Altima Dealers Auction workshops demystify Web buying April used-vehicle prices: Light trucks fall and cars rise Volvo certified plan offers free satellite radio Mulally: Full speed toward smaller Toyota plans credit card Sanfilippo switches agencies International idles plant Honda Pilot starts at $28,230 Plastech plans assets auction What counts GM's 2-pronged strategy for Calif. rules: If you can't beat 'em . . . meet 'em New wheels for the cop shop The cost of luxury? For Hyundai, it would have been $2.5 billion New tools allow early design input from consumers Lexus in the sky with carbon: How ex-Beatle's PR effort tanked Buy an '08 . . . get a .44 $4 gasoline gives new cachet to aging econo-beaters Time tips its hat to Tata Car marketers: Magazines must widen ad reach Automakers seek 'one-to-one' approach to magazine ads Auto ads go to the movies Here's the next big thing: Ads tailored to you GMC courts women with Acadia

Automotive News - May 26, 2008

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