Automotive News - March 24, 2008 - (Page 16)

“ We Have Grown From 125 Units To Now Over ” 500 Per Month! 16 • MARCH 24, 2008 ADVERTISING STAFF AutoNation’s lead shrinks as largest U.S. dealer group Mix of products, range of locations help No. 2 Penske gain ground Donna Harris dharris@crain.com Circulation 313-446-0450 Advertising 313-446-6790 Classified Advertising 313-446-6065, 800-388-1800 E-mail lschlagheck@crain.com Web site www.autonews.com ADVERTISING AND SALES DETROIT 1155 Gratiot Ave., Detroit, MI 48207-2997 313-446-6790 Fax: 313-446-8030 Larry Schlagheck, Advertising Director lschlagheck@crain.com, 313-446-6790 Rick Greer, rgreer@crain.com 313-446-6050 Kathleen C. Lightbody, klightbody@crain.com, 313-446-6037 Russ Procassini, rprocassini@crain.com 313-446-0350 Karen Rentschler, krentschler@crain.com 313-446-6058 Jerry Salame, jsalame@crain.com 313-446-0481 Regional Sales Managers Bryan Foster, Marketing Director bfoster@crain.com, 313-446-6013 Ellen Dennehy Director of Relationship Marketing edennehy@crain.com, 313-446-6039 Cheryl Rothe, Marketing Manager crothe@crain.com, 313-446-6767 Lance Graves, Promotion Art Director lgraves@crain.com, 313-446-0469 Brandi Johnson, Marketing Coordinator bnjohnson@crain.com, 313-446-0326 Marie Hingst Classified Advertising Manager mhingst@crain.com, 313-446-6065 Dolores Lanivich, Denise Hendricks Classified Advertising Sales LOS ANGELES Justus Breese jbreese@crain.com, 323-370-2446 Pacific Region Sales Manager Lauren Ford, lford@crain.com 323-370-2447 Todd Landau, tlandau@crain.com 323-370-2466 Regional Sales Managers 6500 Wilshire Blvd., Los Angeles, CA 90048-4947 Fax: 323-655-8157 NEW YORK Scott Ghedine sghedine@crain.com, 212-210-0126 Henry Woodhouse hwoodhouse@crain.com, 212-210-0125 Regional Sales Managers 711 Third Ave., New York, NY 10017-4036 Fax: 212-210-0489 CHICAGO Jim Farnan, Regional Sales Manager jfarnan@crain.com, 312-649-5257 360 N. Michigan Ave., Chicago, IL 60601-3806 Fax: 312-649-5265 The Big 5 The top 5 dealership groups on this year’s Automotive News list saw sales of new retail vehicles drop 3.7% from 2006 to 2007. New retail unit sales 2007 New retail unit sales 2006 % change 1. AutoNation Inc.† 2. Penske Automotive Group Inc.† formerly UnitedAuto Group Inc. 328,963 195,473 138,371 131,719 116,595 369,567 181,544 139,903 129,198 125,541 –11.0 7.7 –1.1 2.0 –7.1 Adam Simms TOYOTA SUNNYVALE Since 1969, Martin Schleifer and his team have set the industry standard for automotive advertising and marketing for thousands of dealerships. In today’s economic environment, more dealers are turning to MSA Advertising for strategies to dominate their markets. We’ll show you what’s working across the country! • Proprietary Internet Advertising Program • Innovative Broadcast/Print/Direct Mail • Annual Strategic Media Plans • Advertising Specialties/Promotional Products • In-House Production Facilities • Co-op Compliance And Management • We Work With Dealers’ In-House Agencies Dodge • Infiniti • Hummer Rolls Royce • Bentley TOWBIN AUTOMOTIVE Toyota • Nissan • Chrysler • Hyundai Kia • Honda • Dodge • Jeep • Mazda DARROW AUTOMOTIVE GROUP GANLEY AUTO GROUP The #1 Group In Ohio GUNTHER VW-MAZDA-KIA The #1 VW Dealer In America Buick • Pontiac • GMC Hyundai • Subaru • Suzuki WILLIAM LEHMAN PRESTIGE AUDI PENSKE The #1 Audi Dealer In America Honda Mission Valley Honda and Mazda Of Escondido It isn’t General Motors vs. Toyota. But after a decade of dominance as the nation’s largest auto dealership group, AutoNation Inc. may have reason to check its rearview mirror. Last year, AutoNation’s new-vehicle retail sales and gross revenue both sank to their lowest annual levels since 1998, according to this year’s Automotive News list of the top 125 U.S. dealership groups. The rankings are based on new-vehicle retail sales in 2007. As AutoNation’s sales volume sank, sales at No. 2 Penske Automotive Group Inc. grew last year. The slumping economy could erode AutoNation’s lead even more in 2008. “This year there is more risk than opportunity,” AutoNation CEO Mike Jackson told Automotive News in January. About half of AutoNation’s 245 dealerships are in Florida and California. Those states have been especially hard hit by the credit crunch and sliding real estate values. By contrast, Penske’s 169 U.S. dealerships are spread over a broader geographic area. Penske also has a relatively greater concentration of luxury franchises that are better able to weather an economic downturn. In a conference call last month with industry analysts, Penske Automotive Chairman Roger Penske cited “the diversification provided by our premium luxury brand mix and our international operations.” 3. Sonic Automotive Inc.† 4. Group 1 Automotive Inc.† 5. Van Tuyl Inc. previously listed as V.T. Inc. †Publicly held *2006 data restated Source: Automotive News Data Center add $300 million in revenue through acquisitions in 2008. Last year, Penske reported nearly $12.83 billion in U.S. gross revenue, compared with AutoNation’s $17.62 billion. Other highlights Jackson: “More risk” this year Penske: It helped to be diversified. According to this year’s list of the top dealership groups: CarMax remained the top U.S. retailer of used vehicles, a position it has held since 2005. Last year, No. 28 CarMax sold 337,021 used cars and trucks at retail — more than its two top competitors, AutoNation and Penske Automotive, combined. Privately held Hendrick Automotive passed publicly traded Lithia Motors Inc. for the No. 7 spot. Overall, the top 125 groups increased their share of the U.S. newvehicle market to 17.0 percent last year from 16.7 percent in 2006. The 125 largest groups increased their average revenue per dealership to $57.9 million in 2007 from $56.3 million in 2006. They generally offset declines in new-vehicle sales with income from other departments. For example, the top groups retailed 4.4 percent more used vehicles last year than they did in 2006. c motive Group. An acquisition spree had given the former used-vehicle retailer, then called Republic Industries Inc., 111 new-vehicle dealerships. In 2001, AutoNation reported more than three times the retail new-vehicle sales and group revenue of No. 2 Penske Automotive, then called UnitedAuto Group Inc. Last year, AutoNation sold 68.3 percent more new vehicles at retail than Penske and had 37.4 percent higher gross revenue. As AutoNation has added luxury and high-volume import franchises, it has unloaded weaker dealerships it acquired during its buying frenzy. At its peak in 1999, AutoNation had 290 dealerships, compared with 245 stores last year. Penske Automotive says it expects to CONFERENCES Libby Irwin, Conference Director lirwin@crain.com, 313-446-0420 Shauna Vercher-Morrow Special Events Manager svercher-morrow@crain.com, 313-446-0485 No. 1 since 1997 AutoNation first took the top spot in the annual Automotive News ranking in 1997, passing Hendrick Auto- The #1 Group In Minnesota Ford • GMC • Hyundai • Dodge • VW Kia • Chevrolet • Cadillac • Chrysler Jeep • Lincoln • Pontiac • Toyota DENNY HECKER The complete list of the top 125 dealership groups appears in a pullout section attached to Page 17. It is also available at autonews.com/moreonline. autonews.com WWW.AUTONEWS.COM John Fitzgerald, Director of Business Planning and Online Commerce jfitzgerald@crain.com, 313-446-1679 CIRCULATION subs@crain.com 888-446-1422 (U.S. & Canada) 313-446-1662 (all other locations) Fax: 313-446-6777 To subscribe via the Web www.autonews.com/subscribe.htm Patrick Sheposh, Circulation Director Lauren Cialella, Circulation Manager Jennifer Natone, Circulation Coordinator Subscriptions U.S. 1 year, $155; 2 years, $266. Canada $239 (U.S.); other countries, $395. Single copy sales, $5 per issue plus shipping. Reprints Mike Shober, The YGS Group, 800-494-9051, Ext. 100 automotivenews@theygsgroup.com Microfilm ProQuest Information and Learning Co. 800-521-0600 The #1 Group In Wisconsin BMW • Mini • Cadillac • Rolls Royce RUSS DARROW BRAMAN MIAMI METRO FORD BUD BROWN CHRYSLER HOLLYWOOD CHRYSLER-JEEP UNIVERSITY DODGE Lithia looks into improper sales reports at dealerships Ryan Beene rbeene@crain.com Martin Schleifer Gigi Turkel Paul Rosen For a presentation at your dealership, please contact Paul Rosen direct at MAIN OFFICE: 305-442-7272 e-mail: paul@msaadvertising.com 305-495-6100 5 Regional Offices To Serve You CORPORATE HEADQUARTERS: 2915 Southwest 27th Avenue Coconut Grove, Florida 33133 Lithia Motors Inc. is investigating whether several of its dealerships improperly reported retail sales to automakers to get incentive money. Lithia, the nation’s eighth-largest U.S. dealership group, said it has delayed submitting its annual report to the Securities and Exchange Commission because of the investigation. In an SEC filing last week, the Medford, Ore., company said it does not expect the investigation’s findings to affect the preliminary financial results it reported Feb. 20. Lithia said a special counsel, Lithia’s internal audit committee and an independent accounting firm are reviewing sales data from an unspecified number of the company’s 110 dealerships. The team also is interviewing employees and examining factory audits and company e-mails, according to the SEC filing. Audits of two dealerships resulted in $107,400 in incentive chargebacks to manufacturers, Lithia said. After an internal review, a third dealership repaid $51,100 in incentives. Lithia did not identify the automakers in the SEC filing, but the company indicated earlier that the affected dealerships sold Ford, Chevrolet and Hyundai vehicles. Last month Lithia said it took a $1.8 million charge against earnings to reflect “franchise impairments” related to the sales reporting problem. The broader investigation has not uncovered significant new chargebacks, the company said. There is no evidence that senior executives knew of or encouraged improper dealership practices, the company added. An internal review identified what Lithia called “a small percent http://www.autonews.com http://autonews.com http://WWW.AUTONEWS.COM http://autonews.com/moreonline http://www.autonews.com/subscribe.htm http://www.autonewseurope.com http://www.automobilwoche.de

Table of Contents Feed for the Digital Edition of Automotive News - March 24, 2008

Ford lists 6 to succeed Mulally GM pushes luxury superstores Industry straps in for rough ride Bob Irvin is a worthy addition to Hall of Fame Debate at Scion: How to grow Ford moves executives in Asia to new jobs CEO of lanelogic: We're still here Kia's N.Y. duo Chrysler's exec trio: Reports of friction mostly fiction Where others see gloom, Honda chief sees boom in U.S. Fukui: Nickel battery is best bet for hybrid Beijing conference explores key issues in China market Planworks keeps its role as buyer for GM ads Lincoln: MKS will make up for brand's slow start in '08 Deal's no big deal: Styling top reason to buy GM Penske's Smart start: He'd like 15,000 more Dodge's pitch for Challenger: A halo that you can afford Chrysler plans 'We listen' ads You go, Bob With zest, activist Ditlow remains on lemon patrol Autos did the job after 9/11; don't bet on that now Chinese cars? Dealer beware Solar power is the only answer Where will we get power for the Volt? Want higher CAFE? First, do this In N. California, hybrids are hot Detroit 3 can learn from the Marlboro Man The Prius is a phenomenon Wait 3 years, then judge Ford How many Jeeps will India buy? Lithia looks into improper sales reports at dealerships AutoNation's lead shrinks as largest U.S. dealer group Honda ad agency creates unit to build Acura brand Study: Consistent theme in auto ads builds viewer recall Big-truck sales continue slide in Feb. -- off 27.1% MazdaSpeed revs up racing accessory sales Calif. company eyes electric charging stations for Volt, Vue Indictment: Bribe scheme cost GM $83.3 million The greening of Toyota dealerships 6 more finalists in race for PACE recognition Tenneco expands Japanese work, seeks more Bosch buys diagnostic equipment firm in China JV will design vehicle platforms Citation moves headquarters NxtGen tests emissions system VW stake may help Porsche on fuel economy rules Chrysler's Project Genesis wins over Ore. dealer Germany, new EU members send up European sales Saturn will choose store system soon VW thinks modular for flexibility at auto plants Automakers eager as axles turn high-tech Talking drivetrains with American Axle Dollar halts U.S. retail sales of Audi Q7 hybrid Hyundai: Genesis Coupe offers more go for dough Maxima's target: Luxury Euro makes Pontiac adds 3 sporty variants Outsider Elmer Johnson shook up GM Importer Yanase was Hall of Fame member Obituaries Redesigned TSX has many Acura firsts Dealers Certified sales up 7.5% in Feb.; Audi leads the way eBay's new Web site has new look, more features Big pickups and SUVs lead plunge in used-vehicle prices Ex-Reynolds CEO O'Neill joins J.D. Power Auto Hall of Fame will induct 8 Liberatore looks beyond Daimler Molina gets the top job at GMAC F&I pioneer Pat Ryan to retire from Aon Study: Hydrogen research worth the cost Gulf States trial halted As yuan rises, so do prices of Chinese parts Personnel exec Laymon: Ford still seeking outside talent GE gives supplier credit Dana CEO wants Asian growth Tesla launches production Todt steps down as Ferrari CEO Union pursues Toyota effort Chrysler offers spiffs for military Land Rover ads focus on heritage Mark Rechtin Fresh heir: To turn green, must BMW create brand? GM ponders mini-muscle Camaro New Ford ads coming in April With a spiffier image, Lincoln would rock abroad Rival says Nardelli's OK Ford hails its cab, but mpg is an issue

Automotive News - March 24, 2008

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