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| Wednesday, July 02, 2008 |
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LATE & BREAKING NEWS
GM, CHRYSLER, LEXUS TURN TO eBAY:
General Motors, Chrysler LLC and Lexus Division are using a new feature of the online auction eBay to promote their dealers' certified used vehicles. The eBay Motors Certified Pre-Owned Showroom launched this month. It lists more than 70,000 factory-certified used cars and trucks for sale by more than 5,000 dealerships, said Rob Chesney, eBay Motors vice president.
Automotive News, July 1, 2008
SALES PLUNGE AS AUTOMAKERS ARE HIT HARD BY HIGH GAS PRICES:
Honda's lineup of small cars helped its United States sales climb to a record for the second consecutive month, but its major competitors reported significant declines in June, the worst month yet in a miserable year for the automobile industry.
Sales were down 28 percent at the Ford Motor Company, 21 percent at Toyota and 18 percent at General Motors and Nissan ... hardest hit was Chrysler, whose sales fell 36 percent after it discontinued some models in a bid to increase profit margins.
The New York Times, July 2, 2008
Videos & Voices of Significance This Week
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Tim Zierden
Assistant VP and General Manager, Software Solutions
JMSolutions
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Tim Zierden is assistant vice president and general manager of software solutions for JMsolutions, a leader in integrated, automotive web-based products and service. He has over 14 years of automotive industry experience and is currently responsible for the strategic direction of JMsolutions' AAX Inventory Management and CMX Customer Management Solutions software.
What does JMsolutions have to offer as far as used vehicle inventory management goes?
Well, we have our AEX Inventory Management suite of products. The first part of the AEX system, its foundation, is the core inventory. My background is that I spent ten years at CarMax on the merchandising side building their buying, merchandising, stocking and wholesale processes. One of the things that I learned through that experience was the crucial importance of really focusing on stocking the right core inventory.
So how would you define "core"?
Core really is just that. If you think about it, it is the strong center of your inventory that you know that on any given month, you are going to have X number of customers walking through the door looking for this particular type of car. You always have to be thinking, "Do I have enough in stock?" If I don't have enough in stock, where do you get what you need? Where do you find those exact vehicles? At JMsolutions we spend a lot of time and energy helping dealers understand how that profitability really works.
We've demonstrated the following when it comes to core inventory percentage: if you went from 10% core inventory to 20% core inventory to 30%, it equates to about a $400 per unit increase in gross profit at each 10% increment.
What about turn time?
Interestingly enough, your turn time comes down dramatically as you start to stock the right cars. There are a variety of reasons for that, but the emphasis on core and stocking the right cars is the cornerstone.
What else?
We also walk dealers through the appraisal process and make sure that they are actually doing a good (what we call "perfect") appraisal where they are looking at the guide books, and looking at their own sales history. We believe that's a pretty good guide of what a car is worth, what you can buy a car for, what you can sell a car for.
You can look at market pricing about what you might be able to retail the car for as you are actually providing the value on the trade-in. That means you can do a good customer presentation about how you arrived a specific value, defend why that's the correct value; so then you can ask the customer whether or not they are planning to trade. We think that separates a little bit of the anxiety around what is my trade worth versus what is the new car worth, and really help to clarify and improve the entire process.
We've been in this business a long time and continue to be the premier provider in this space and we're pretty excited about what we've got coming and the opportunities for our dealers to help sell their new and used vehicles.
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| SIGNIFICANT NEWS |
News digested 06/23/2008 -- 06/27/2008 |
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Industry Conferences Coming Up |
PAACE Automechanika Mexico
Mexico City, Mexico, July 9 - July 11, 2008
General Motors Minority Association
LaJolla, CA, July 9 - July 12, 2008
GIADA 53 Annual Convention
Ponta Vedra Beach, FL, July 13 - July 16, 2008
Visit Calendar of Industry Events for More Information on These Events
http://www.automotivedigest.com/calendar.asp?mod=calendar
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Press Releases Worthy of Read |
This Week's FEATURED Industry Press Releases
Click here for more Industry Press Releases!
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People Going Places |
| WHO: | Dean Eisner |  |
| WHERE: | Manheim |
| WHAT: | Dean Eisner, President and CEO of Manheim, was inducted into the National Independent Automobile Dealers Association's Ring of Honor during the group's annual convention recently. Eisner assumed his current position in 2001 and has transformed his company into one of the world's leading providers of automotive services. |
| | READ ABOUT MORE PEOPLE! |
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What Industry Leaders are Saying |
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Used-car Dealers Quick to Change Inventory Mix:
- "We used to run 80 to 90 trucks and big SUVs, but we're now down to maybe 10 to 12. We still carry some to accommodate the general public, but not like we used to." -- Tony Salem, Metro Auto Center
- "Toyota dealers around here are having a hard time getting a new Prius, but at the auctions, the 2007 Prius is holding out for probably more money than the car brought brand new from an MSRP standpoint." -- William Petrtz, Sunshine Motors
- "If you look at everything in its entirety, I don't think we have a doom-and-gloom situation. So I think independent dealers can have some advantages that they can capitalize on if they're careful." -- Julian Codding, Reliable Motors
- "I bought a white 2003 Tahoe last week, a Z-71 Quad-bucket, with DVD, a third seat and leather, and it was so cheap, it scared me. I've also sold a couple of big trucks. I got them cheap enough that they were saleable because people could afford them." -- Kenneth Warren, Warren's Auto Supply
Sourced From: AutoRemarketing, June 26, 2008
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Elite Wheels Vehicle Reviews |
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Stylish Altima Coupe is Fun to Drive!
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| 1) Used-car Dealers Quick to Change Inventory Mix |
Situation
- Dealers shifting inventory mix as demand grows for small cars
- Dealers that used to have 50/50 cars/trucks, now have 70/30
- Others go 80/20 as truck sales fall sharper in some areas
- Despite economic slowdown, dealers remain optimistic about future
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Significant Points
- Many dealers in agriculture areas keeping good supply of trucks
- SUVs still popular in areas w/ large families
- Dealers surprised at interest small cars draw at auctions
- Also surprised at cheap prices for trucks
- Independent dealers seeing tougher competition from franchises
- Because franchises trying to make up loss of new-car sales
Read Quotes
Click Here for Full Digest and Source Article:
Sourced From: AutoRemarketing, June 26, 2008
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| 2) Small, Fuel-efficient Used Cars Find New Life |
Situation
- Used-car prices rising "dramatically" in past 6 months
- Demand creating shortage of hybrids, compacts
- Hybrids especially hot; Mini Cooper also draws interest
- SUVs continue price decline; down about 27%
|  2007 Toyota Prius |
Significant Points
- Black Book charting used-vehicle prices
- Used 2007 Prius cost $1,900 more in June than January
- 2007 Mini Coopers brought $2,300 more in same time frame
- 2007 Honda Civic Hybrid up $1,550
- Suzuki Aerio up $900; Toyota Corolla up $400
- Ford Escape Hybrid only SUV of note; prices up $700
Read Quotes
Click Here for Full Digest and Source Article:
Sourced From: Forbes.com, June 25, 2008
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| 3) PIN: Domestic Vehicles Losing Retained Value |
Situation
- Power Information Network analyzes retained values for 3-year-old vehicles
- Vehicles sold in May 2005 valued at 56% of original purchase price
- That's down 3% from last May
- PIN also says Toyota Prius has quickest retail turn rate at just 4 days
- Followed by Honda Civic Hybrid, 10 days, Honda Fit, 11 days
|  2006 Honda Fit 4dr Hatchback |
Significant Points
- Officials cite soft market for decline
- Noted that domestics declined but still lower than national average
- Honda, Toyota slightly up; Nissan slightly down
- Korean automakers improving but still below average
- Industry average retail turn is 57 days, just 1 day quicker than last year
Read Quotes
Click Here for Full Digest and Source Article:
Sourced From: AutoRemarketing, June 23, 2008
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| 4) California Offers Plan to Reduce Emissions; Critics Say It's Too Costly |
Situation
- California unveils plan to fight global warming, reduce emissions
- Aims to reduce pollutants by 10% from current levels by 2020
- Also has goal of driving investments in energy technologies
- Other parts of country, even world, may follow lead
- Governor Schwarzenegger supports plan
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Significant Points
- Plan calls for cap-and-trade program on CO2 emissions
- Buildings, appliances would be required to use less energy
- Oil companies make cleaner fuels; utilities use more renewable energy
- Also more hybrids, hydrogen-fuel vehicles
- Critics say plan is costly, may drive out manufacturing; some prefer more nuclear
- Officials say overall benefits should help state's economy by 1%
Read Quotes
Click Here for Full Digest and Source Article:
Sourced From: Reuters.com, June 26, 2008
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| 5) Body Shop Employee Helps Police in Fatal Hit-and-Run Case |
Situation
- Tip from body-shop employee helps Lexington, KY, police
- Led to suspect in fatal hit-and-run case
- 18-year-old female college student was hit crossing downtown street
- Suspect hid out for days before bringing truck to body shop
- Media accounts say driver chose shop because of friends there
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Significant Points
- Employee noticed traces of body tissue on truck
- Some media accounts said driver told them he "did something bad"
- Victim's family grateful for tip but upset at Kentucky law
- Leaving scene of accident only misdemeanor at time
- Outrage over death prompted KY to pass "Connie's Law" to up penalty to felony
- Family claims driver was probably drunk but couldn't be charged w/ manslaughter
Read Quotes
Click Here for Full Digest and Source Article:
Sourced From: Auto Body Repair News, June 23, 2008
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| 6) New Transmission Flush Unit Gets It All in 10-minutes or Less |
Situation
- Wynn's recently introduced its new TranServe(R) III Automatic Transmission Service Machine
- Portable unit operates off vehicle battery
- Traditional systems can leave up to 75% of contaminated fluid in the system
- Leave fluid from the torque converter, transmission coolers or lines
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Significant Points
- TranServe III connects to transmission through cooler lines so most of old, contaminated fluid is removed
- Flushes transmission, torque converter, transmission cooler and cooler lines; refills them in 10 min or less
- Automatically adds same amount of fluid as removed
- Use of unit provides free 210K miles or 8 model years warranty coverage
Click Here for Full Digest and Source Article:
Sourced From: Hot Auto Products.com, June19, 2008
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| 7) Gasoline Demand at Lowest Level Since 1991 |
Situation
- US gasoline demand down 1.4% in May vs. year prior levels, according to API statistical report
- Decline in apparent consumption dragged gasoline demand down 1% for 1st 5 months of year - 1st time since 1991
- Gasoline demand weakened by higher prices, but diesel demand more resilient as fuel needed by highway freight transportation
- US oil deliveries from Jan through May averaged 20.6M bpd, 2.5% below 1st 5 months of 2007
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Significant Points
- May deliveries of distillate fuel rose 5.5% from 2007 levels to record 4.3M bpd because of increase in low-sulfur diesel demand
- API reported record amount of ultra-low sulfur diesel production in May at more than 3.2M bpd, surging nearly 14% from year ago
- Crude oil down 11M bbl from April's levels, leaving supply nearly 40.0M bbl below May 2007 - lowest level for month of May since 2004
- Jet fuel demand rose 5.1% in May vs. year ago - highest level since Aug 2007, 1st year-to-year increase in 7 months
Click Here for Full Digest and Source Article:
Sourced From: DTN Oilspot, June 19, 2008
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| 8) Condition-based Maintenance Possible with Predictive Sensor Data |
Situation
- Growing diagnostic data can be used to predict when failures are imminent
- Developers correlate sensor data w/ real-world wear patterns and failure modes
- Could alert owners and operators when breakdowns are expected
- 1st use likely for emissions systems
- Condition-based maintenance requires years of detailed data to avoid false warnings
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Significant Points
- Prognostics would be useful for reducing downtime
- Accurate data could also help avoid bringing in units except when necessary
- Military efforts focused 1st on batteries, brakes, bearings, belts, and tracks
Click Here for Full Digest and Source Article:
Sourced From: SAE.org., June 23, 2008
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| 9) JD Power: Satisfaction Scores Slip Over Poor Fuel Efficiency |
Situation
- JD Power and Associates survey new-vehicle owners about their recent purchases
- APEAL Study complements Initial Quality Study
- Quality Study focuses on problems encountered during early stages of ownership
- APEAL measures level of delight w/ design, content, layout and performance
- APEAL considers 10 measures, encompassing more than 90 vehicle attributes
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Significant Points
- 2008 average APEAL measure was 770 out of 1,000, down 2 points from last year
- More than half of downturn attributed to concerns over fuel efficiency
- Only area to see improvement was audio, entertainment and navigation technology
- Automakers can improve scores by improving fuel economy
- Also by implementing the latest energy innovations like alternative fuels
Read Quotes
Click Here for Full Digest and Source Article:
Sourced From: AutoRemarketing, June 26, 2008
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| 10) Hard Times for Detroit Automakers but They Can Survive |
Situation
- High oil prices killing demand for light truck products of Detroit automakers
- Weak dollar making problem worse
- Even Toyota caught off guard opening V8 pickup plant in San Antonio
- GM, Chrysler and Ford all likely to need infusion of cash despite drastic restructuring
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Significant Points
- Big 3 better off now than 2005, 1991, 1979 or 1974 to handle current economic downturn
- Were more heavily encumbered by costly, inflexible labor agreements in 2005 than today
- Product mix includes more cars and crossovers today than 2005
Read Background
Click Here for Full Digest and Source Article:
Sourced From: Detroit News, June 27, 2008
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| 11) Overcoming Technician Fears of Servicing Hybrid Vehicles |
Situation
- Lack of quality hybrid training classes nationwide, technician apathy have resulted in misconceptions, myths surrounding technology, says training organization
- Craig Van Batenburg, owner of Automotive Career Development Center in Worcester, MA, outlined biggest myths surrounding hybrid vehicles
- Technicians worried about electrocution, which won't happen as long as ignition switch shut off properly
- Hybrid vehicles do present safety challenges, orange-sheathed cables carry enough voltage to be considered lethal
- Another myth is that hybrid vehicle starts by itself; some techs aren't aware of Idle-Stop feature, fuel-saving software that shuts off internal combustion engine
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Significant Points
- Technicians also worried that hybrids too complicated to work on, but also true of non-hybrid; technicians must keep up with training
- Hybrids can be intimidating at first - but w/ 17 models on market today & 1M on US roads, hybrids cannot be ignored by independent service dealers
- According to JD Power, approximately 345K hybrid vehicles sold in 2007, up from 256K in 2006
- JD Power attributes sales increase to high gas prices, along w/ automakers lowering price premium, sales incentives for hybrid models
- As hybrid vehicle registrations increase, so does opportunity for aftermarket to service them
Click Here for Full Digest and Source Article:
Sourced From: Auto Body Repair News, June 23, 2008
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Wheels SVP Scott Pattullo on what should worry the Fleet industry.
