Follow your Advertising Dollars
 
Advertising is one of your largest expenses. Do you know how much you’re spending? Do you know what you’re paying for?  It’s surprising how many dealers spend the money and then fail to follow it.  First, use a budget, make sure you’re adhering to it, and then calculate and track the results of your advertising. Here are some questions to ask yourself:
 
•  Do you utilize a written monthly advertising budget, comparing actual expenditures against budgeted amounts?

•  Are you spending too much money to sell your vehicles? What if you reduced your advertising budget next month? Would your sales volume drop off proportionately? Or would the incremental reduction in volume represent what your advertising dollars are paying for?

•  Are you spending money to drive traffic to your dealership—and then failing to monitor the results? You have to track advertising results to minimize ineffective advertising and maximize the impact of effective advertising. Use your CRM tool to analyze trends, acquire meaningful statistics, and help you make data-based decisions on where to spend your marketing and advertising dollars.

•  Dealers typically measure advertising on a per-unit basis. If instead you measured this expense per department—or even the total dealership—as a percentage of gross profit generated, you would know how much of your gross profit is spent on advertising, and if the expense generates the results you want. Then you can compare your results to NADA profiles to determine if you’re spending too much or not enough on advertising.
 
Steve Lane is a management instructor at NADA University’s Academy. Reach him at slane@nada.org. Learn more about the Academy at www.NADAuniversity.com.
 

U.S. Faulted for Pushing GM, Chrysler to Speed Dealer Closings
In a report issued by Neil Barofsky, special inspector general for TARP program, indicates rate of dealer closings may have been unnecessary and were costly in terms of job losses. Many of those dealers have since been reinstated. NADA releases a statement.
Bloomberg.com, July 19, 2010

Chevy Volt Doesn't Get Leno Charged Up
Oops! GM gave Jay Leno a Chevy Volt to test drive late last year, but when interviewed the comedian described it as an "underwhelming compact model being phased out. "If you didn't know, you might think it's a Cobalt or a Camry," he said.
Detroit News, July 19, 2010

Car Loan Approval Rates are Improving
The loan approval rate for automotive customers is improving, according to an IHS Global Insight report. Even those with credit scores below 620, down to 5% approval last year, is now up to 9% approved, with 90% of top-scorers and 82% of mid-scorers approved.
MSNBC.msn.com, July 19, 2010

GMAC's North American Auto Finance Business to Become Ally
Ally Financial is rebranding the GMAC consumer and dealer-related operations to the Ally name. The U.S. auto finance products and services will transition to Ally Financial on August 23. Operations in Mexico and Canada will also change name to Ally Credit in August.

As States Mull Bans, Ford Improves SYNC to Give Drivers Safer Alternatives to Hand-Held Texting
Ford is expanding SYNC technology to help drivers lock out phone distractions while driving. A new update for 2011 vehicles includes readback of text messages and a "do not disturb" feature that locks out certain phone functions while the car is moving.

ZAP Acquires Majority Stake in China's Jonway Auto
ZAP, a 15-year-old California electric vehicle company, is acquiring 51% of Zhejiang Jonway Automobile Co. Ltd. The ZAP-Jonway merger accelerates cost-effective manufacturing of ZAP's electric vehicles.

AutoSoft Adds Menu Selling to F&I Solution

Dealer management system provider AutoSoft International  today announced the latest addition of menu selling to Finance Assistant, its F&I solution, providing a powerful selling tool that can increase F&I sales and improve customer satisfaction with fully customizable menus and multiple product/services packages. Also includes all legal disclaimer forms ensuring full dealership compliance with industry regulations. For more info visit AutoSoft International.

OPENLANE iDEAL Open Seller Program Boosts Dealer to Dealer Sales

OPENLANE, Inc, leading North America online auction company, continues its record-breaking sales year, with best ever U.S. open auction and Canadians sales. Recent expansion of OPENLANE’s "iDEAL Open Seller program" throughout Canada, providing dealers with the freshest online inventory available in a more efficient and timely manner, creating a significant boost in dealer-to-dealer sales. For more information visit OPENLANE or call 866.969.0321 or email dealer_info@openlane.com.

Carfax Database Reaches Records Milestone
Carfax, the most trusted provider of vehicle history information, says its online database of vehicle history information now exceeds eight billion records. More than 34,000 sources, such as state DMVs, service and repair facilities and police departments report vehicle history information that’s housed in the Carfax database. Millions of people every year rely on this valuable information to help them buy and sell used cars with more confidence. For more info, or to become a subscribing dealer, visit www.carfaxonline.com.

To Tell The Truth
By Larry Geohagan

Some years ago there was a TV game show that had three guests with a story; one participant told the truth while the other two did their best to convince the panelists they were truthful even though they were not. Today, in the used-car arena, many sources are available to provide market demand information — best used-vehicle model sales rates as well as pricing, selection, etc. There are some who tout price as the only thing in the high-test market of the Internet. Others say knowing the quickest turn vehicle in your inventory based upon what you are stocking is all-important. To maximize sales volume profitably—which is the truth? Of course, price and turn are both important, but four points continue at the forefront of the curve.

First, you need People — properly selected, well trained, likeable, and ethical with great work habits.

Second, you need Products — the vehicles people want to buy, in the correct quantity, priced fairly.

Third is Promotion — we do have to tell folks how and where they can find the right vehicle.

Fourth, we must have a Process — that allows us to meet our customers’ desires and needs EVERY time.

As an industry friend likes to say, “every day, every time, without fail, no exceptions.” So before we jump on the next latest greatest bandwagon, ask yourself if you are committed to the “Four P’s.” Have you identified the true road map for used-vehicle success or are there imposters posing as the quick fix of the day keeping you from dealing with the real issues?

Larry Geohagan, an NADA and ATD 20 Group Consultant, works with automobile and heavy-truck dealers to implement best practices in their dealerships and conducts training programs for NADA University, can be reached at lgeohagan@nada.org. Learn more about ATD 20 Groups at www.nada20group.org.

Automakers Must Bring Advanced Technologies to Market Faster
With federal mandates around the corner, the luxury of time no longer exists

There was a time when automakers could take their time in testing and validating technology. Today, most have reduced their vehicle development process from years to months.

“More than ever before, objective testing and validation of technologies such as those found in alternate fuel vehicles are required to help address challenging technical issues, validate and bring products to world markets faster,” said Dr. Toby Astill, Marketing Officer of Canada’s National Research Council Institute for Fuel Cell Innovation (NRC-IFCI).

Two of the most important products requiring more speed in testing and validation are hybrid technology and a solar-powered battery power. Alternative fuels have become the focus of companies once solely concentrating on design. Now, more than ever, production needs the assistance of testing commpanies such as NRC-IFCI ATVC and NATC  to test the viability of their products, counting on independent third-party companies to expedite market-readiness. READ MORE...

Technology and Infrastructure are Key Elements for EV's Future

In case you haven't noticed, interest in electric vehicles in quite high. The planet is populated with folks who are concerned about the planet -- and then there are those who just want to get in on this whole new automotive phenomenom. Either way, there won't be a future for EVs if we can't re-charge them and use them more than once!As a result of these concerns, a new market research report is out, focusing on an analysis of the opportunities and the challenges we face in bringing electric vehicles into mainstream transportation. The report itself can be costly, so it might be worth it to share. Meanwhile, click here for some key features of the report as they affect those in the auto industry -- or click on the image for some insight into the future of EVs by President Obama.