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LATE & BREAKING NEWS
CHRYSLER TRIES FUEL-PRICE GUARANTEE TO BOOST SALES:
Chrysler LLC will let U.S. consumers lock in gasoline prices for three years under a new incentive program launching at a time of sliding vehicle sales, rising oil prices and deepening consumer uncertainty The U.S. automaker, which has seen sales drop by almost 18 percent this year, said it would offer anyone buying one of its vehicles a pre-paid card that could be used to cap fuel prices at $2.99 per gallon for three years. The sales incentive ... will only cover the first 12,000 miles driven based on the estimated mileage for the Chrysler car or truck purchased, executives with the privately held automaker said.
Reuters, May 5, 2008
UAW STRIKE HITS GM's POPULAR CHEVY MALIBU:
A local strike on Monday at General Motors' Fairfax plant near Kansas City threatens production of one of GM's hottest-selling vehicles, the Chevrolet Malibu, at a time when the industry is struggling because of the sluggish economy. Sales of the Malibu were up 40% in April compared with a year ago, and transaction prices on the cars are up 30%, the automaker says. Disrupting production of a strong-selling, profitable model at a time of collapsing auto sales is "stupidity of the highest order" on the part of the United Auto Workers union, says David Cole, chairman of the Center for Automotive Research.
Videos & Voices of Significance This Week
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George Nenni
Vice President
Dominion Enterprises
george@getauto.com
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George Nenni is a vice president at Dominion Enterprises, overseeing the website and data businesses of Dominion’s automotive group. George began his career with Dealer Specialties in 1993 and served as director of operations when Trader Publishing acquired the business in 2000. He was later promoted to vice president and general manager of Dealer Specialties and, in November 2006, he was promoted again to his current position as a vice president at Dominion Enterprises.
George, the Dominion Enterprises’ automotive group has experienced tremendous growth recently. Can you comment on the growth?
Dominion Enterprises’ presence in the automotive data services arena really began with the acquisition of Dealer Specialties in January 2000. Dealer Specialties provides full-service and self-service data and photo collection and data distribution for auto dealers and currently serves about 9,000 dealers in 48 states. As Dominion learned more and more about Dealer Specialties and the technology side of the business, it became apparent that we could leverage our experience to serve auto dealers in a number of ways including websites, e-mail marketing, CRM, lead management and the underlying data businesses that would support the whole operation. That was the vision; and with recent acquisitions such as InterActive Financial Marketing Group, Autobase and AVV, we are coming closer and closer to fulfilling that vision.
What is your role at Dominion Enterprises?
One of the largest divisions in Dominion Enterprises is the automotive group. Within the automotive group, I manage the website and data businesses: Dealerskins, XIGroup, DataOne, SelectQu, DataCube and, of course, Dealer Specialties. Dealerskins focuses on high-end dealer websites while XIGroup and DataOne provide websites for smaller franchise dealers and large independent dealers. SelectQu and DataCube help us with data acquisition out of the DMS. Dealer Specialties has the largest footprint in terms of the size and scope of the business.
These businesses work closely with Dominion automotive businesses outside of the website and data group such as @utoRevenue, InterActive Financial Marketing Group, Autobase and AVV. We’ve put together a collection of businesses that help dealers with their automotive web marketing, both the CRM and lead management piece as well as the underlying data on which to run all those businesses.
How much of a challenge is it to bring all these businesses together?
Dominion Enterprises is a highly decentralized company. All of our businesses still run independently and, in many cases, with the same entrepreneur that started the business. Some companies buy businesses to make them more efficient; we buy businesses to learn from them. Our synergies exist in getting a bunch of really smart people to serve customers. These business leaders are constantly coming up with new ideas, just as new needs for the automotive industry are uncovered every day. We are continually hard at work improving the ease of use between products so that auto dealers can focus on what they do best, selling more cars.
Dealer Specialties' AutoLink product has been around for a long time. How did it evolve into PowerSites?
Back in 1998 auto dealers were building websites or having websites built for them, but they didn’t know how to manage their vehicle inventory. We built a product, called AutoLink, that allowed a dealer to have their own website, but the underlying inventory data and photos were provided by Dealer Specialties. When we acquired DataOne in March of last year, they offered a similar product called PowerSites that we believed to be much more robust. PowerSites was the next step in what we wanted AutoLink to become, so we migrated the new software to Dealer Specialties and we are phasing out AutoLink.
How do you see video integrating into the dealer's website presentation?
If you’ve spent any time on the Internet you know how important video has become. Video allows a consumer to walk around the vehicle, to crawl inside the back of the vehicle, see the seats go up and down and how the vehicle functions -- all from the comfort of their home, at work or anywhere they can get an Internet connection. Our VeVo product has blown away all our growth expectations for 2007. It’s a very inexpensive automated product that allows the dealer to have video on their website. Dealer Specialties still supports up to 100 photos per car; with a typical dealer posting anywhere from 24 to 32 photos per car.
Does the consumer audience prefer to see those 32 photographs as opposed to a video stream of the same images?
Photos are still important because they offer a high-resolution image. Video clearly introduces motion, but it also introduces audio. Now you can hear a salesperson discuss the competitive advantages of one vehicle versus another while taglines run across the bottom of the screen; these are premium features that help educate the consumer and help better position the dealer. Our VeVo videos mimic the old advertising donut: you start with an intro and an outro -- which is the dealer’s branding information -- and the middle of the donut is car-specific information.
George, you’ve been a pioneer in this business. How do you feel dealers are adapting to new technology?
That’s a great question. I think they are really embracing it. One external force to consider is the downturn in the economy. All dealers are feeling its effects and it has changed they way they do business. First, dealers want to be able to measure a return on investment from their Internet spend. If they are investing money on a website, e-mail marketing, direct mail or buying leads, they want to be able to really dial in and say this is my return on each of these investments. We are very careful to put that in front of the dealer and say, here is what it costs and here is your return on this advertising investment. Second, dealers want everything simplified. They want nice, clean, simple interfaces that really tie together all the tools so that they can log in just once to see a dashboard of their operations with their inventory and advertising spends, see all the Ups that have come in over the Internet, or the walk-in traffic, and be able to really manage their business. Tough economic times demand a different approach, and that is what we provide with new technology.
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| SIGNIFICANT NEWS |
News digested 04/28/2008 -- 05/02/2008 |
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Industry Conferences Coming Up |
NAFA's 2008 Institute & Expo
Salt Lake City, UT, May 3 - May 6, 2008
RadTech UV&EB Technology Expo & Conference
Chicago, IL, May 4 - May 7, 2008
10th Annual National Buy Here Pay Here Conference
Las Vegas, NV, May 6 - May 8, 2008
Alternative Fuels & Vehicles National Conference + Expo
Las Vegas, NV, May 11 - May 14, 2008
2008 SYNERGY SESSIONS
New Orleans, LA, May 13 - May 14, 2008
Third Automotive Congress: Plastics-in-Motion
Prague, Czech Republic, May 14 - May 18, 2008
AUTO FINANCE RISK SUMMIT
San Diego, CA, May 14 - May 16, 2008
Biodiesel University
Hilton Head Island, SC, May 16 - May 17, 2008
Global Automotive Aftermarket Symposium 2008
Chicago, IL, May 20 - May 21, 2008
iRemarketing 2008
Phoenix, AZ, May 21 - May 23, 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: | Heather Ward |  |
| WHERE: | Subaru of America |
| WHAT: | Subaru of America, Inc recently named Heather Ward as Manager of Corporate Communications. Before coming to Subaru, she worked as Regional Marketing Manager for Commerce Bank. In her new position, Ward will be responsible for the company's corporate and internal communications. |
| | READ ABOUT MORE PEOPLE! |
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What Industry Leaders are Saying |
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Automakers Without Small Cars in Peril:
- "It's easily the most dramatic segment shift I have witnessed in the market in my 31 years here." -- George Pipas, US sales analyst manager, Ford Motor Company
- "The era of the truck-based large S.U.V.'s is over." -- Michael Jackson, CEO, AutoNation, Inc.
- "This shift appears to be a permanent situation. These new products have become more fashionable, just like small, fuel-efficient cars are in Europe." -- Jesse Toprak, chief industry analyst, Edmunds.com
Sourced From: New York Times, May 2, 2008
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Elite Wheels Vehicle Reviews |
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Hyundai Azera Now Luxury Segment Leader
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1) Automakers Without Small Cars in Peril |
Situation
- Soaring gas prices turned steady migration by Americans to smaller cars into a stampede
- Analysts calling it a 1st, about 1 in 5 vehicles sold in US was compact or subcompact in April
- Almost 10 years ago, w/ SUVs at their peak, only 1 in 8 vehicles sold was small car
- Fuel-sipping 4-cyl engines surpassed 6-cyl models in popularity in April
- Sales of traditional SUVs down more than 25% in 2008
- Fullsize PU sales down 15%+ in 2008; expected to strengthen w/ economy, commercial use
|  Toyota Yaris |
Significant Points
- Switch to smaller, more fuel-efficient vehicles building in recent years
- Accelerated recently w/ advent of $3.50 / gal gas
- W/ oil prices expected to remain high for years, auto executives see turning point
- Trend toward smaller, lighter vehicles w/ better mileage blow to Detroit automakers
- Decline of SUVs and PUs curtailed biggest source of profits for GM, Ford, Chrysler
- Compacts new star of showroom at time when overall industry sales are falling
Read Quotes
Click Here for Full Digest and Source Article:
Sourced From: New York Times, May 2, 2008
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2) Edmunds.com Says Automakers Hold Line on Incentives in April |
Situation
- Average incentives inched forward slightly in April according to report by Edmunds.com
- Average incentive $2,249 / vehicle sold, 0.5% rise from March; up 1.6% from April 2007
- Domestics averaged $3,377 in incentives / vehicle sold in April, compared w/ $3,366 in March
- European brands reduced average incentive spending by $305 to $2,647 during April
- Japanese automakers up slightly to $1,288, up from $1,266; Koreans down $44 to $2,079
- Aggregate spending calculated at $3.17B, down 3.8% from March; domestics 67.2% total
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Significant Points
- Automakers continue to try to cut costs in challenging economic environment
- May attempt to boost sales thru gasoline-related incentives in summer months
- Fuel costs continue to weigh on minds of consumers
- Of Big-6, Honda increased incentive spending by largest amount at $208 / vehicle sold
- Scion had lowest average incentive spending by far at $182 / vehicle sold
- Compact cars lowest in incentive spending, just $1,049 per vehicle sold
Read Quotes
Click Here for Full Digest and Source Article:
Sourced From: AutoRemarketing, May 1, 2008
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3) Congress May Get Public Pressure on Car Expenses |
Situation
- US Congress members can have all their personal car costs covered regardless of monthly payment price
- Monthly lease payments can be moderate, but many pay $800+ per month, including hybrids
- The federal government picks up cost of lease, fuel, maintenance, insurance, registration fees, excess mileage charges
- Perk may draw attention in coming weeks as Congress considers proposals to address gas prices and excise tax
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Significant Points
- About 125 House members use this expense coverage program, which is unavailable to Senate members
- At least a dozen of the 42 reps from NY, NJ lease cars; some choose not to lease to avoid problems
- Members under fire in districts for what constituents consider extravagant tastes or for leasing foreign cars
- In 2007, House adopted rule requiring members to choose cars from list of low-emissions vehicles approved by EPA
Read Quotes
Click Here for Full Digest and Source Article:
Sourced From: New York Times, May 1, 2008
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4) Gas Prices Fuel Sales of Toyota Hybrids |
Situation
- Hybrid-electric version of Toyota Camry outselling V6-powered Camrys by solid margin
- March sales of Camry Hybrid set new record: 6,930 units, or 22% of Camry's 31,310 sales
- Camry Hybrid monthly sales eclipsed 6K units only once since car's launch in May 2007
- Thru 1st Q on pace to sell nearly 60K units of Camry Hybrids, roughly 10% increase over 2007
- Nearly 80% of Camry Hybrids manufactured at Toyota's assembly plant in Georgetown, KY
- Toyota sold 181,221 Prius models in 2007, up 68.9% over 106,971 Prius deliveries in 2006
|  Toyota Camry |
Significant Points
- Another sign consumer interest turning from horsepower to fuel economy
- Camry Hybrid's popularity reflects growth curve for Toyota's mainstream hybrid models
- Fuel prices helped hybrids emerge to be volume sellers critics once said unlikely
- Camry Hybrid's fuel economy of 33/34 mpg attracting economy-conscious buyers
- Penetration of Camry Hybrid at expense of V6 unlikely to affect US V6 production
Read Quotes
Click Here for Full Digest and Source Article:
Sourced From: Edmunds Auto Observer, April 29, 2008
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5) US Auto Buyers Continue to Flee Trucks, SUVs |
Situation
- GM, Ford, Chrysler saw double-digit US sales declines; Toyota's sales edged up 3% in April
- GM's truck/SUV sales down 27%; overall sales down 16% for month compared w/ last April
- Ford's SUV sales down 36% compared w/ April 2007; overall sales down 12%, cars down 1%
- Toyota car sales up 12%, on strength of Yaris, up 46% / Prius up 54%; truck/SUVs down 8%
- Chrysler sales fell 23%, w/ car sales down 19%, truck/SUV sales down 25%
- GM had best-ever month for hybrids
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Significant Points
- High gas prices accelerated consumers' rush away from trucks and SUVs
- Retail gas prices began April at $3.26 / gal nationwide; up to $3.57 / gal at the end
- Pickup sales have been falling for months due to slowdown in housing construction
- Trend away from SUVs began several years ago; buyers moving to crossovers
- Will change be permanent or return to larger vehicles once initial shock has worn off
- Automakers all say conditions will improve in 2nd half 2008
Read Quotes
Click Here for Full Digest and Source Article:
MSNBC.msn.com, May 1, 2008
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6) Automated Cars Driver Controlled For Now |
Situation
- Driverless cars may be approaching auto industry faster than originally thought
- Nov's "Urban Challenge", sponsored by Defense Advanced Research Projects Agency, proved autonomous vehicles could mix in w/ urban environment live traffic while executing complex maneuvers
- 1st prize won by team from Carnegie Mellon University, completed 60-mile obstacle course at average 14 mph
- Driverless vehicles in competition had to obey all traffic laws while avoiding other robotic vehicles and live motorists
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Significant Points
- Mitigating frontal crashes and panic braking could go long way to reducing number of people (42K) killed annually on American roads
- Lane-departure warning systems optically track lane markers using digital camera
- Then vibrate steering wheel or make drumming noise when driver drifts wide
- Fears that combining adaptive control w/ automated steering would encourage too much driver dependency on safety aids
- Automated safety measures incorporated in cars have so far added assistance to driver, rather than subtracted control
Click Here for Full Digest and Source Article:
Sourced From: Economist, April 25, 2008
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7) Do Hybrids Create Health Risks? |
Situation
- Some scientists and researchers worry that hybrid electric cars could cause health problems for passengers
- Flow of electric current to motor in hybrids produces magnetic fields; some studies associate w/ serious health matters, including possible risk of leukemia in children
- W/ batteries and power cables in hybrids placed close to driver/passengers, some exposure to electromagnetic fields unavoidable
- Researchers w/ expertise in hybrids say may not be cause for alarm but neither should potential health effects be ignored
- National Institutes of Health and National Cancer Institute acknowledge potential hazards of long-term exposure to strong electromagnetic field (EMF)
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Significant Points
- While Americans live w/ EMFs in many products, no agreement over what level of exposure constitutes health hazard
- Government safety tests don't measure strength of fields in vehicles although Honda, Toyota say internal checks assure their cars pose no added risk
- Much discussion over high EMF levels sprung from hybrid drivers making their own readings
- Field-strength detectors widely available; common model, TriField meter, costs about $145 online
- But experts and automakers say not simple for hybrid owner to make reliable, meaningful EMF measurements
Read Quotes
Click Here for Full Digest and Source Article:
Sourced From: New York Times, April 27, 2008
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8) GM Truck Production Cuts Hurt Recovery Plan |
Situation
- Continued slow sales prompted GM to cut production of large pickup trucks and SUVs
- Slashing production by about 10%, or about 138K vehicles at 4 plants in US and Canada
- About 3,550 workers will be out of jobs as a result
- Move will reduce by 88K number of pickup trucks GM had planned to produce in 2008
- Number of SUVs GM had planned to build lower by 50K
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Significant Points
- Unsure if sales of those high-profit vehicles, in light of higher gas prices, will ever bounce back
- Production cuts hurt GM; eat into revenue affected plants generate
- Comes on top of challenging year in 2007
- Fullsize PU and large SUV segments down 15 and 26% respectively for 1st Q 2008
- GM has 40% of fullsize truck market; more than 63% of large SUV segment
Read Quotes
Click Here for Full Digest and Source Article:
Sourced From: Edmunds Auto Observer, April 29, 2008
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9) No Electric Cars on Canadian Roads |
Situation
- Almost all electric cars made in Canada exported to US because of government regulation
- Regulatory agency Transport Canada questions safety of these "low-speed vehicles" (LSVs)
- Doubts LSVs would stand up in collision w/ delivery truck or SUV and crash-tested one that didn't fare well
- Agency wants LSVs confined to areas such as university campuses, military bases, parks, gated communities
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Significant Points
- Two Canadian companies, ZENN Motor Company and Dynasty Electric Car, make small electric cars designed for city use
- Manufacturers allege political bias against cars
- Much support in oil-rich Alberta for Stephen Harper's conservative government
- Dynasty gave up battle; being bought by Pakistani firm which will move production to Karachi and export to US
- ZENN says not a single death related to LSVs in US where 44 states allow them and about 45K cars in use
Read Quotes
Click Here for Full Digest and Source Article:
Sourced From: Economist.com, May 1, 2008
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10) Penske Numbers Up Despite Slow New-Vehicle Sales |
Situation
- Penske Automotive Group reports 1st Q 2008 financial results
- Revenue at $3.2B, up 4%; same-store revenue down 2.3%
- Income at $33.8M, up 17.4% from adjusted income in 1st Q 2007
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Significant Points
- Company cites challenging new-vehicle sales environment
- Same store new-vehicle revenue down 5.5%
- But used sales, service and parts posted gains
- F&I up 5.5%; same-store revenue for used sale up 2.2%
- In his comments, chairman Roger Penske was optimistic over Smart ForTwo program
Read Quotes
Click Here for Full Digest and Source Article:
Sourced From: AutoRemarketing, April 29, 2008
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11) AmeriCredit Reports Lower Net Income |
Situation
- AmeriCredit's management described fiscal-year 3rd Q as difficult
- Actions taken: trim dealer relationships, raise minimum cutoff scores, lower loan-to-value
- In addition to tighter lending requirements, AmeriCredit facing tough capital market
- Net income of $38M for fiscal 3rd Q, compared to net income of $104M 2007
- For 9 month period, reported net income of $81M, compared w/ $273M in prior year
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Significant Points
- Industry-wide retrenchment has led to improved competitive environment
- Allowed company to tighten credit while maintaining loan pricing
- Not 1st time AmeriCredit's business model has been tested
- Overall credit challenges helped AmeriCredit, as other auto lenders pull back as well
Read Quotes
Click Here for Full Digest and Source Article:
Sourced From: Subprimenews.com, April 29, 2008
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12) Volvo Aiming to Create Safest Car by 2020 |
Situation
- Volvo first to set target date 2020 to eliminate death and injury in its cars
- Some analysts see as bid to hold lead in consumer perceptions of safety
- Volvo not only player in safety revolution in auto industry, says Claes Tingvall, Swedish road administration's head of traffic safety
- Tingvall doubts Volvo's target fully achievable but said even tenfold reduction in injury rates would yield dramatic benefits
- Volvo stages 400 crash tests / year at its Gothenburg complex
- Analysts say complex 1 of most advanced crash-test centers in the world
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Significant Points
- Volvo once sat at safety tip pioneering 3-point seatbelt, crumple zones, side impact air bags, rear-facing child seats
- Became emblematic of US "soccer moms" in 1990s, who sought to keep children secure, and Europe's middle class who liked solid predictability
- In Jan, 77% of US consumers polled by Consumer Reports ranked Volvo as safest car brand
- Safety improvements by other manufacturers getting through
- Recent survey of German drivers by Auto Motor und Sport magazine gave Mercedes edge on safety
Read Quotes
Click Here for Full Digest and Source Article:
Sourced From: MSNBC.msn.com, May 1, 2008
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13) Ford's Road to Recovery Still Rocky |
Situation
- Cost-cutting largely drove Ford's surprise 1st Q improvement; much to do to achieve turnaround
- Garnered lots of praise for posting $100M net profit in 1st Q
- Results will worsen during rest of 2008, leading Ford to 3rd straight annual loss
- Ford says it remains on target to post profit in 2009
- Not likely to realize substantial long-term profitability until next decade
- Market share continues to fall, though rate of decline has slowed
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Significant Points
- Ford must more fully leverage global engineering and manufacturing resources
- Invest in right segments and match global vehicles to consumer expectations
- Must find floor in US market share
- Get back on US customers' consideration lists
- Consolidation of US dealer network must increase sales / profits at surviving stores
- US economy must rebound w/o too much delay
Read Quotes
Click Here for Full Digest and Source Article:
Sourced From: Automotive News, April 28, 2008, page 1
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14) iRemarketing 2008 to Address Internet Strategies |
Situation
- iRemarketing 2008 set May 21-23 in Phoenix
- Major topic will be online marketing
- More consumers surfing web for vehicle information
- More dealers using web for advertising, selling and buying at auction
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Significant Points
- Damon Johnson of KBB will discuss successful online operations
- Will examine how web is changing online remarketing
- Will include ideas for more effective communication techniques
- Workshop will highlight online techniques to maximize transactions
Read Quotes
Click Here for Full Digest and Source Article:
Sourced From: AutoRemarketing, April 29, 2008
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Kevin Root from Dealix on how dealers can spend efficiently on marketing and advertising.
