Automotive News - July 28, 2008 - (Page 4) 4 • JULY 28, 2008 GM or Reynolds? Dealers must decide now Ralph Kisiel rkisiel@crain.com It was a tough choice. Sandi Pfeffer and Fern Turpin Jr. reached different decisions. Pfeffer concluded that her dealership, Bob Frahm Chevrolet-BuickPontiac, of Albion, Mich., should continue doing business with Reynolds and Reynolds Co., its longtime dealership management system vendor. Turpin, dealer principal at Turpin Pontiac-Buick-GMC Ltd., of Ottawa, ended his nearly 30-year relationship with Reynolds and stayed with GM’s Integrated Dealer Management System program by switching to a GMendorsed vendor. They are among 400 dealers who must decide by Thursday, July 31. The dealers were forced to choose after Reynolds sued GM in a contractual dispute, then pulled out of the Integrated Dealer Management System program in February. “We’re all under a crunch to cut our expenses, and the Reynolds program isn’t the cheapest one out there by any stretch,” Pfeffer, the dealership’s controller, says. “But they do offer, I think, the most value, the most significant software and stuff out there.” 1 for GM, 1 for Reynolds For 400 General Motors dealers, it’s decision time. Turpin Pontiac-BuickGMC, of Ottawa, switched to a new information-technology vendor within a GM IT program. Bob Frahm Chevrolet-Buick-Pontiac, of Albion, Mich., stayed with Reynolds and Reynolds as its IT vendor, leaving the GM program. Here’s why. WHY TURPIN IS SWITCHING TO A NEW VENDOR A GM house Turpin, whose father opened a Chevrolet dealership in 1954, wanted to remain in the GM Integrated Dealer Management System program. “We’ve always been true-blue GM, and we’ve always had Reynolds,” Turpin says. “They are expensive, but it’s a strong system.” But when Reynolds backed out of the GM program, Turpin was dismayed. “Being a true believer of General Motors and of what IDMS was bring- Cuts IT costs nearly in half Remains in GM’s Integrated Dealer Management System program Likes deep integration between Quorum-supplied system and GM WHY BOB FRAHM IS STICKING WITH REYNOLDS Believes Reynolds has the best dealership software available Wants to maintain 20-year relationship with Reynolds Can re-evaluate business with Reynolds in 3 years management system and GM’s system would suffer. That integration affects the ability to pass data back and forth quickly between dealer and factory systems. “That was the biggest part that scared me. If they are out of IDMS, what kind of integration points am I going to have? What kind of contact am I going to have with the factory?” Turpin says. He says he will cut his information technology costs almost in half by switching to a Quorum system. “You’ve got to look at every penny these days. When I can cut my IT costs in half, it’s a considerable amount of money,” Turpin says. ing to the table for all dealers of all sizes, I had to look at the whole situation,” he says. He switched his Pontiac-Buick-GMC and Turpin SaturnSaab stores to Quorum Information Technologies Inc. “It wasn’t out of spite for Reynolds, but it was out of fear for how important is a GM dealer going to be to Reynolds if they had to sue to get out of IDMS.” Turpin was concerned that the integration between his dealership The count so far As of Wednesday, July 23, more than 40 percent of the 400 GM dealsee DECISION, Page 34 Chevy plans new U.S. subcompact by ’11 Jamie LaReau jlareau@crain.com DETROIT — By 2011, Chevrolet will get a version of one of the three minicar concepts that General Motors unveiled at the 2007 New York auto show, company executives say. The vehicle, expected to replace the Aveo, will be expanded to the size of a subcompact. In April 2007, GM unveiled the Groove, Beat and Trax minicars in New York. In November, GM said it will build and sell the Beat overseas, with production starting in 2009. But the automaker has said it will not sell the Beat in the United States. Now, GM says the United States will get a version of the Groove or Trax by 2011. “Of the triplets, we will get one of those variants,” says Ed Peper, Chevrolet’s vice president. Which one? “I don’t want to say at this point.” The vehicle that Chevrolet gets will be “very similar to one of those vehicles” but larger, in part to meet U.S. crash test standards, Peper says. For example, the front fender and grille likely will be extended to meet U.S. safety standards. The car will come to Chevrolet “in RICK KRANZ General Motors unveiled three minicar concepts — from left, the Beat, Trax and Groove — at the 2007 New York auto show. GM says a version of the Trax or the Groove will go on sale in the United States by 2011. The new car has been designed to be more stylish than the Aveo. The name hasn’t been decided. the next couple of years,” Peper says. GM global design chief Ed Welburn says the company has designed the new small car to be more stylish than the current Aveo. Welburn says the name of the vehicle hasn’t been decided. GM will build the Beat on the company’s global minicar platform in Shanghai. The unnamed subcompact intended for the United States will be built on GM’s Gamma global smallcar platform. Sources familiar with the project say GM likely will assemble the new car at its plant in San Luis Potosi, Mexico. Chevrolet has said it will replace the Cobalt compact with the new Cruze compact in the 2011 model year. “We’re looking at all opportunities when it comes to small cars and small utilities,” Peper says. “The market is very hot right now for small, fuel-efficient vehicles.” c Mercedes expects U.S. sales to fall; B class may come in 2011 Diana T. Kurylko dkurylko@crain.com Daimler AG will slow its incentive spending in the United States, where it expects sales to fall in the second half of the year because of economic turmoil and high fuel prices. To counter a drop in profits, Mercedes-Benz is likely to raise prices again in the United States, said Dieter Zetsche, chairman of the board of management. Earlier this year, Daimler raised prices several hundred dollars on many 2008 Mercedes models. “We have had higher list-price increases than our competitors, and we will continue to go for pricing and lose some volume rather than see our contributions deteriorate,” Zetsche said in a conference call Thursday, July 24. Because of a shift in demand to smaller vehicles, Mercedes also is The Mercedes A class, left, and B class are likely to be sold in the United States when the next generation arrives. likely to export the next generation A class and B class to the United States, said Zetsche. Mercedes previously reversed a decision to bring the B class here because of the weak dollar. Market launch plans were under way when Zetsche’s predecessor as head of the Mercedes brand, Eckhard Cordes, pulled the plug. The new generation of the frontwheel-drive subcompacts, due in 2011, will include a small crossover and a coupe. Those models are expected to come to the United States to compete with BMW’s 1 series and a future BMW crossover dubbed the X1, as well as small SUVs from Volkswagen and Audi. An electric car also is expected. The gloomy forecast was issued as Daimler reported that second-quarter net income fell 25 percent from a year earlier to 1.40 billion euros ($2.21 billion) largely because of a $587.6 million charge from its minority stake in Chrysler. Revenues were up 6 percent from a year earlier to $40.01 billion on a 10 percent rise in unit sales of 566,500 light and commercial vehicles. Zetsche said Mercedes-Benz had a summer model-year sell-off in June that caused a significant spike in incentives, but spending for the rest of the year will be lower than that of direct competitors. While Mercedes-Benz has maintained its volume in the United States, sales in some segments, such as the M class, have been flat, Zetsche said. He said Mercedes has done “better than our direct competitors” in the United States so far this year. But Zetsche said that with some forecasts calling for U.S. sales of 14.2 million in 2008, Mercedes-Benz expects to feel “a higher impact on the second half of the year.” c
Table of Contents Feed for the Digital Edition of Automotive News - July 28, 2008 Automotive News - July 28, 2008 A scared-stiff industry stomps on the brakes No-lease edict stuns Chrysler dealers Hummer: Bonuses, buyouts Amid the gloom, Mercury celebrates Ford banks on Mulally's small-car plan PACE awards open for innovative suppliers GM expands employee discount plan through July American Axle blames strike for big quarterly loss Mercedes expects U.S. sales to fall; B class may come in 2011 Chevy plans new U.S. subcompact by '11 GM or Reynolds? Dealers must decide now Ralph Kisiel Ghosn: It's wrong time for a new partner GM geniuses turned their auto dreams into realities Dealers fresh out of Mini Coopers Chrysler, Ford, Honda top NAACP report card GM alters bonus for dealers who outperform their region Automakers angle for Chrysler's idle engine plant Chrysler revokes franchises in Pa. Sonic-Mercedes case could allow big dealers to add stores Buick's new LaCrosse It's still true: Product is king Still a bad idea NHTSA's Nason is leaving some big jobs undone Don't advertise them until they're on sale Safety matters much more than mpg Chrysler's no 'fuel economy laggard' $4 gas won't turn the U.S. into Europe For Europeans, America still spells opportunity Challenges travel with OnStar to China Personnel Mexico sales rise 1.2% in June Picture this Europe's worst sales result? Toyota Kia spends big to launch Borrego Kia launches Borrego just as SUVs lose favor Detroit 3: Goodbye, bailouts Dealers Eaton: Supercharger sales will grow Fla. appeals panel overturns class status in Kia brake suit Audi certified push pays off Used-car rule goes to the shop for tuneup Big-truck prices take a tumble in June Automaker tax break piggybacks on mortgage bill Honda rides high in 2nd-quarter rankings Ford Credit takes a hit as truck values fall 100 years of the Tin Lizzie Lamborghini profit soars AutoNation net income falls GM names CFO for N.A. TI Automotive unit will move Mercedes to cut Ala. production Fleming was a consummate newspaperman Toyota plans to raise Prius output A dart for Smart Tesla gets good reviews at Bentley 422 hp — and, uh, easy at the pump Ford's 2nd qtr: The reddest ink ever Bill Gates joins the car-dealer club Detroit 3 should put Mini under the microscope What's a Gov. to drive? Automotive News - July 28, 2008 Automotive News - July 28, 2008 - Hummer: Bonuses, buyouts (Page 1) Automotive News - July 28, 2008 - Hummer: Bonuses, buyouts (Page 2) Automotive News - July 28, 2008 - American Axle blames strike for big quarterly loss (Page 3) Automotive News - July 28, 2008 - GM or Reynolds? Dealers must decide now Ralph Kisiel (Page 4) Automotive News - July 28, 2008 - GM or Reynolds? Dealers must decide now Ralph Kisiel (Page 5) Automotive News - July 28, 2008 - GM alters bonus for dealers who outperform their region (Page 6) Automotive News - July 28, 2008 - GM alters bonus for dealers who outperform their region (Page 7) Automotive News - July 28, 2008 - Buick's new LaCrosse (Page 8) Automotive News - July 28, 2008 - Buick's new LaCrosse (Page 9) Automotive News - July 28, 2008 - Buick's new LaCrosse (Page 10) Automotive News - July 28, 2008 - Buick's new LaCrosse (Page 11) Automotive News - July 28, 2008 - Chrysler's no 'fuel economy laggard' (Page 12) Automotive News - July 28, 2008 - Chrysler's no 'fuel economy laggard' (Page 13) Automotive News - July 28, 2008 - For Europeans, America still spells opportunity (Page 14) Automotive News - July 28, 2008 - For Europeans, America still spells opportunity (Page 15) Automotive News - July 28, 2008 - Personnel (Page 16) Automotive News - July 28, 2008 - Personnel (Page 17) Automotive News - July 28, 2008 - Picture this (Page 18) Automotive News - July 28, 2008 - Picture this (Page 19) Automotive News - July 28, 2008 - Europe's worst sales result? Toyota (Page 20) Automotive News - July 28, 2008 - Europe's worst sales result? Toyota (Page 21) Automotive News - July 28, 2008 - Detroit 3: Goodbye, bailouts (Page 22) Automotive News - July 28, 2008 - Dealers (Page 23) Automotive News - July 28, 2008 - Fla. appeals panel overturns class status in Kia brake suit (Page 24) Automotive News - July 28, 2008 - Fla. appeals panel overturns class status in Kia brake suit (Page 25) Automotive News - July 28, 2008 - Big-truck prices take a tumble in June (Page 26) Automotive News - July 28, 2008 - Big-truck prices take a tumble in June (Page 27) Automotive News - July 28, 2008 - Big-truck prices take a tumble in June (Page 28) Automotive News - July 28, 2008 - Big-truck prices take a tumble in June (Page 29) Automotive News - July 28, 2008 - Big-truck prices take a tumble in June (Page 30) Automotive News - July 28, 2008 - Big-truck prices take a tumble in June (Page 31) Automotive News - July 28, 2008 - Big-truck prices take a tumble in June (Page 32) Automotive News - July 28, 2008 - Honda rides high in 2nd-quarter rankings (Page 33) Automotive News - July 28, 2008 - 100 years of the Tin Lizzie (Page 34) Automotive News - July 28, 2008 - Mercedes to cut Ala. production (Page 35) Automotive News - July 28, 2008 - Toyota plans to raise Prius output (Page 36) Automotive News - July 28, 2008 - Toyota plans to raise Prius output (Page 37) Automotive News - July 28, 2008 - What's a Gov. to drive? (Page 38) Automotive News - July 28, 2008 - What's a Gov. to drive? (Page 39) Automotive News - July 28, 2008 - What's a Gov. to drive? (Page 40) Automotive News - July 28, 2008 - What's a Gov. to drive? (Page 41) Automotive News - July 28, 2008 - What's a Gov. to drive? (Page 42)
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