Automotive News - October 27, 2008 - (Page 1) autonews.com ® OCTOBER 27, 2008 Entire contents © 2008 Crain Communications Inc. All rights reserved. $155/YEAR; $5/COPY THE SCRAMBLE FOR CREDIT Survey: Worried dealers flee GMAC Amy Wilson awilson@crain.com LANEVE KEOGH YEA JANG Marketing strategies GM dealers seek more competitive floorplan loans As the market sours, GM is refining its online marketing, says Mark LaNeve. Hyundai is pitching luxury, say Brandon Yea and Jang Seok-san. And Audi is promoting diesels, according to Scott Keogh. The marketing chiefs reveal their strategies. | PAGE 20-22 | General Motors dealers are fleeing GMAC Financial Services — the nation’s No. 2 auto lender — as a source of inventory financing and consumer loans. Dealers seek to replace GMAC as their floorplan lender in the wake of new restrictions imposed by the company, according to an Automotive News survey of more than 500 GM dealers. Leaders of some state dealer associations warn that scores of dealerships could fail because of GMAC’s new policies. Like many lenders, GMAC is struggling to borrow money. GMAC spokeswoman Sue Mallino concedes that the new restrictions, which include higher interest rates and limits on credit lines, are hard on many dealers. But she says the changes are necessary for GMAC to In search of the bottom manage its risk. Cerberus Capital Management LP owns 51 percent of GMAC; GM owns the rest. see GMAC, Page 35 GLOBAL AUTOMAKERS Q3 2008 -10.4% Shareholder value of automakers and suppliers plunged in the third quarter. It’s getting worse. | PAGE 33 | Va. dealers turn to local credit unions In the house As of Friday, Wright was still completing plans with his unlikely allies. If all goes well, the credit unions will conduct and pay for the marketing of a see VIRGINIA, Page 34 JON SCHULTE/ISTOCKPHOTO Hat in hand Michigan’s congressional delegates say the Detroit 3 need federal assistance. No one seems to care if you call it a bailout. “The situation is very, very serious,” says John Dingell, D-Mich. | PAGE 8 | Car dealerships normally steer customers away from To survive the credit crunch, credit unions so they can add Hyundai dealer Mark Wright a profitable markup to the inis collaborating with some traterest rate. But not now. ditional rivals: credit unions Wright believes it’s far more and three nearby dealerships. important to keep sales afloat. The dealerships in suburban “I guess this is all a little outRichmond, Va., are planning a Wright: Teaming side the box,” says Wright, a November sales event in with rivals 39-year-old restaurant manwhich local credit unions will ager turned car dealer. “But handle much of the marketing. given the craziness going on in the marLindsay Chappell lchappell@crain.com ketplace and all the difficulties consumers are having with finance, we thought this might be a new approach.” Chrysler dealers under GM? States would rule Donna Harris dharris@crain.com On the Web This week at www.autonews.com: If General Motors acquires Chrysler LLC, state franchise laws would impose tight limits on GM’s ability to kill brands or dump large numbers of dealers. Under those laws, GM would have to honor Chrysler’s dealer agreements and support its brands, franchise lawyers say. And if GM were to eliminate the Chrysler, Dodge or Jeep brands, the lawyers add, it would have to pay dealers for their investments. One more if: Should Chrysler declare bankruptcy as part of merger proceedings, franchise lawyers say, GM would have more freedom to trim Chrysler’s dealership network. “You can’t talk about the dealer network until something actually happens,” GM spokeswoman Susan Garontakos said late last week. “It’s all speculation right now.” Many analysts predict that if the companies combine, GM would keep the Jeep brand and continue to supply Chrysler and Dodge dealers with vehicles, if only through badge engineering. NEWSPAPER GM’s and Chrysler’s U.S. retail networks are low in sales per franchise. The automakers want to reduce those networks but can’t unilaterally do so. “Dealership franchise agreements cannot be terminated at whim under the state franchise laws,” says Mike Charapp, president of the National Association of Dealer Counsel, a trade group for lawyers who work with dealers. Most state laws prevent automakers from yanking a franchise without see FRANCHISE, Page 34 Tuesday: Honda Motor Co., Sonic Automotive and Lithia Motors report quarterly financial results. Wednesday: BorgWarner reports quarterly financial results. Thursday: Lear, Visteon and Asbury Automotive report quarterly financial results. Friday: Nissan Motor Co. and American Axle report quarterly financial results. http://www.autonews.com http://www.autonews.com
Table of Contents Feed for the Digital Edition of Automotive News - October 27, 2008 Chrysler dealers under GM? States would rule Survey: Worried dealers flee GMAC Va. dealers turn to local credit unions Anxiety over Chrysler: Deal or no deal? Ford, GM execs join panels looking at eco-friendly options Big pickups, SUVs gain share Chrysler will cut 4,300 salaried jobs by year end BMW seeks joint vehicle electronics effort Runkle: Give tiny suppliers a chance VW goal: 80% N.A. content for Tenn. plant April Wortham China's BYD plans U.S. hybrids Lucky Icahn lost Lear Mahindra's U.S. launch to get $60 million ad drive Toyota may renew no-interest loans Hesterberg, Thomson will address congress Desperate industry begs feds for help Hyundai dealers want ads to pitch favorable loans Toyota, GM top global r&d spending After Detroit 3 take back design, supplier sitting pretty Germany's Preh supplies F-150 ventilation part Buehler is Volt supplier Freescale: New infotainment chip Are they too big to fail? A goal for GM: Buy back full control of GMAC Tax credit would move domestic cars GMAC loan bonus is a bad idea Take a good look: Toyota is losing its halo What flexibility is and what it isn't Toshiba joins battery battle Personnel Hyundai slows Ala. output of Sonata, Santa Fe Picture this LaNeve: GM marketing budget faces '09 hit Hyundai counts on luxury, hybrid hopes Keogh: Audi belongs with top luxury brands Dealers Court overturns class-action status in Blue Oval suit 2 major lemon-law lawyers lose right to practice in Md. Auctions offer more online for just-in-time dealers Used-truck prices higher in September Lack of used Minis limits certified program Wood trim maker expects to avoid worst of woes VW: U.S. may get Scirocco after all Ford's new F-150 is built for jobs, not jaunts Think of it as GPS for tools Feds look at China-made valves on Ford tires Shareholder value tumbles in 3rd quarter Shareholder value tumbles in 3rd quarter Ford truck marketing exec: Hybrid pickup 'publicity stunt' Survey: Ford Motor reliability improves Chrysler heir: Get back to basics Farley has bright idea to boost auction action Kerkorian speeds away from autos Names familiar? NADA leadership is a family affair Mitsubishi bucks trend on profits New trade debate in the works? Beware the 'vital' deal Automotive News - October 27, 2008 Automotive News - October 27, 2008 - (Page Intro) Automotive News - October 27, 2008 - (Page Bellyband1) Automotive News - October 27, 2008 - (Page Bellyband2) Automotive News - October 27, 2008 - Va. dealers turn to local credit unions (Page 1) Automotive News - October 27, 2008 - Va. dealers turn to local credit unions (Page 2) Automotive News - October 27, 2008 - Chrysler will cut 4,300 salaried jobs by year end (Page 3) Automotive News - October 27, 2008 - VW goal: 80% N.A. content for Tenn. plant April Wortham (Page 4) Automotive News - October 27, 2008 - VW goal: 80% N.A. content for Tenn. plant April Wortham (Page 5) Automotive News - October 27, 2008 - Hesterberg, Thomson will address congress (Page 6) Automotive News - October 27, 2008 - Hesterberg, Thomson will address congress (Page 7) Automotive News - October 27, 2008 - Toyota, GM top global r&d spending (Page 8) Automotive News - October 27, 2008 - Toyota, GM top global r&d spending (Page 9) Automotive News - October 27, 2008 - Freescale: New infotainment chip (Page 10) Automotive News - October 27, 2008 - Freescale: New infotainment chip (Page 11) Automotive News - October 27, 2008 - GMAC loan bonus is a bad idea (Page 12) Automotive News - October 27, 2008 - GMAC loan bonus is a bad idea (Page 13) Automotive News - October 27, 2008 - What flexibility is and what it isn't (Page 14) Automotive News - October 27, 2008 - What flexibility is and what it isn't (Page 15) Automotive News - October 27, 2008 - Hyundai slows Ala. output of Sonata, Santa Fe (Page 16) Automotive News - October 27, 2008 - Picture this (Page 17) Automotive News - October 27, 2008 - Picture this (Page 18) Automotive News - October 27, 2008 - Picture this (Page 19) Automotive News - October 27, 2008 - LaNeve: GM marketing budget faces '09 hit (Page 20) Automotive News - October 27, 2008 - Hyundai counts on luxury, hybrid hopes (Page 21) Automotive News - October 27, 2008 - Keogh: Audi belongs with top luxury brands (Page 22) Automotive News - October 27, 2008 - Keogh: Audi belongs with top luxury brands (Page 23) Automotive News - October 27, 2008 - Dealers (Page 24) Automotive News - October 27, 2008 - 2 major lemon-law lawyers lose right to practice in Md. (Page 25) Automotive News - October 27, 2008 - Lack of used Minis limits certified program (Page 26) Automotive News - October 27, 2008 - Lack of used Minis limits certified program (Page 27) Automotive News - October 27, 2008 - Lack of used Minis limits certified program (Page 28) Automotive News - October 27, 2008 - Lack of used Minis limits certified program (Page 29) Automotive News - October 27, 2008 - Lack of used Minis limits certified program (Page 30) Automotive News - October 27, 2008 - VW: U.S. may get Scirocco after all (Page 31) Automotive News - October 27, 2008 - Feds look at China-made valves on Ford tires (Page 32) Automotive News - October 27, 2008 - Ford truck marketing exec: Hybrid pickup 'publicity stunt' (Page 33) Automotive News - October 27, 2008 - Ford truck marketing exec: Hybrid pickup 'publicity stunt' (Page 34) Automotive News - October 27, 2008 - Survey: Ford Motor reliability improves (Page 35) Automotive News - October 27, 2008 - Survey: Ford Motor reliability improves (Page 36) Automotive News - October 27, 2008 - Survey: Ford Motor reliability improves (Page 37) Automotive News - October 27, 2008 - Beware the 'vital' deal (Page 38) Automotive News - October 27, 2008 - Beware the 'vital' deal (Page 39) Automotive News - October 27, 2008 - Beware the 'vital' deal (Page 40)
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