Automotive News - October 13, 2008 - (Page G8) autonews.com ® OCTOBER 13, 2008 Entire contents © 2008 Crain Communications Inc. All rights reserved. $155/YEAR; $5/COPY Toyota’s October surprise What credit crunch? Toyota’s captive brags in a big ad blitz that it’s ready to do deals Kathy Jackson kjackson@crain.com LOS ANGELES — Rich and powerful Toyota, stung by a stunning collapse in sales last month, will spend a ton of money in October on a nationwide TV blitz that brags about the company’s captive finance arm. The message: In a credit-crunched America, Toyota Financial Services has plenty of cash to lend. Executives say they’re trying to do what General Motors’ “Keep America Rolling” campaign did after 9/11 — get the country rolling again. The “Saved by Zero” ad campaign began Oct. 2. It promotes a 0 percent financing program on 11 vehicles. Dealers say Toyota will shell out at least $250 million this month to cover the cost of the subsidized loans and to fill the airwaves with commercials. Calling it “mind-boggling,” one dealer who asked not to be named said he doesn’t believe Toyota has ever spent so much in a single month on incentives and advertising. “We thought they had dried up on us,” said Dave Conant, a large-volume Toyota dealer in Los Angeles. “But they said they have plenty of money and would still be strong and aggressive on deals that make sense.” To get regional dealer ad associations to deliver the same message — that Toyota Financial is doing deals — the automaker will pay out 50 cents for every dollar that associations spend in October. That’s up from the 32.5-cent rate ad groups normally get. “This is big, really big,” said Fritz Hitchcock, another large-volume see TOYOTA, Page 59 PHILIP MEECH Paris show stars A Lambo sedan! Lamborghini’s aggressive Estoque 4-door concept, above, stood out among Paris auto show debuts. Other notables: the BMW Concept X1 and Chevrolet Orlando crossovers and the Lexus IS hardtop convertible. | PAGE 17 | Innovative dealers Auto dealers always find creative ways to survive — even in tough times. Automotive News profiles eight dealers who have found new ways to serve customers and build business. Ohio GM dealer Chris Haydocy, right, works with a community college to train the next generation of service technicians to repair alternative-fuel vehicles. Check out the ideas of all eight retailers on Pages 21-38. PAUL DANIEL Pariah in the palms Florida dealer Earl Stewart is crusading against the document fees that many dealers add to sales contracts. Rival dealers say he’s simply trying to sell more vehicles, and they want him to shut up. | PAGE 4 | Farley Meyer Strasberg Strategy 2009 The grim repo: Record defaults expected in ’08 Arlena Sawyers asawyers@crain.com For Patrick Altes, business is brisk. His company repossesses vehicles in north and central Florida for banks and credit unions. Altes seizes vehicles of all sorts. But lately he has been repossessing pricey brands such as BMW, Lexus, Hummer and big Ford trucks. “When times were good, home builders and construction and concrete people bought brand-new Ford F-350 crew cabs and diesels,” Altes told Automotive News. “Then the housing market collapsed. Now we’re getting a lot of luxury vehicles from real estate salespeople and mortgage brokers.” The battered U.S. auto industry is poised to set a negative record in 2008: Most vehicles repossessed in a year — about 1.9 million. That’s bad news for the owners of those cars and trucks and the lenders who are losing billions of dollars from financing them. And it’s bad news for see REPO, Page 59 Nardelli warns of industry collapse Bradford Wernle bwernle@crain.com Top marketing executives Jim Farley of Ford, Deborah Meyer of Chrysler and Mazda ad account head Rob Strasberg reveal their plans for selling in a weak market. | PAGES 41-43 | DETROIT — Bob Nardelli, just 14 months into his tenure as CEO of Chrysler LLC, now fears the collapse of an “extremely fragile” auto industry amid the credit crisis and Wall Street meltdown. Nardelli said federal officials, preoccupied with trying to unfreeze credit, don’t appreciate the importance of the auto industry. “You start to see the global collapse of the auto industry where strong, dominant international players are really feeling it in their home market,” he told Automotive News last week. “We thought the $4-a-gallon gas was going to be our biggest challenge, but that’s been minimized by the credit market.” Nardelli’s comments came as shares of Detroit 3 rivals General Motors and Ford Motor Co. cratered. GM closed at $4.89 on Friday, with Ford at $1.99. On Friday, GM issued a statement saying it was not preparing to seek bankruptcy protection. Nardelli said the auto industry faces unique federal regulatory burdens, such as increased fuel economy requirements. “I’m not sure it’s registered at the highest levels the impact of losing the auto industry,” he said. “When I say the entire industry, it’s not only the OEMs; it’s the Tier 1, Tier 2, Tier 3” suppliers. Nardelli said cash is “the numberone metric for the auto industry.” In Chrysler’s case, he said: “We’re concerned about it. We’re monitoring it, but we’re not on the edge.” c On the Web This week at www.autonews.com: NEWSPAPER Tuesday: Johnson Controls will Webcast its 2009 outlook at 8 a.m. EDT. Wednesday: J.D. Power hosts its annual forecasting fall conference at 8 a.m. EDT. Wednesday: Automotive News hosts a Webinar titled “Accountable Advertising on the Internet” at noon EDT. Go to www.autonews.com/ section/WEBINAR to register.
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