Autoblog

In March of this year, Honda sent a letter to certain members of its dealer network letting them know they needed to make changes to their stores. With so many Hondas leaving showroom floors, dealers are doing all right on the sales side, but some aren't performing to Honda's standards on the maintenance side, with waits of up to three weeks to get your Honda serviced.

And maintenance wasn't the only issue Honda chose to address with particular outlets. The changes Honda asked dealers to make include increasing or improving a building's site size, showroom area, service department area, and number of parking spaces, among other things. They are the kinds of changes certain to make customers happy.

Dealers, though, are none too pleased. One dealer said Honda's asking him to invest more than $2 million, and his market doesn't support that. Another dealer, also facing a $2-million-plus bill for requested changes, said the increased debt load would decrease the value of his business should he sell. Honda, of course, doesn't think it is asking too much. Dealers feel that Honda is threatening not to renew their franchise agreements if the changes aren't made, but Honda says it doesn't really have that power. Nevertheless, dealers have been told they have until May 31 to lay out their improvement plans, and until January 2010 to break ground.

[Source: Automotive News - sub req'd]

In Dallas, a businessman has spent half a million dollars to install nine pumps that dispense E85, E10, and biodiesel. The catch: the businessman is a HUMMER dealer, and the pumps are next to his dealership. The station is called Classic Clean Fuels, and it is intended to make a statement for next year's H2 and H2 SUT, which will be the first production models to be Flex-fuel capable.

You won't need to drive a HUMMER to get E85 at the station. The pumps are open to the public, a first for a dealer-owned gas station. By 2010, GM has said all HUMMERs will be biofuel-capable. GM plans to market 15 Flexfuel models next year, but only one percent of the country's service stations sell E85. GM is using that as an opportunity to open the public's (and dealers') minds to putting alternative fuel stations in alternative places.

Said GM's Larry Burns, "Down the road we may even want to consider hydrogen dispensers at dealerships."

[Source: Auto News, sub req'd]

Kids in the U.S. want computers in their cars, but kids in Japan want computers instead of cars. Add that craziness to Japan's dwindling population and popular mass-transit options and you'll understand why the Japanese car market dropped to just 5.3 million vehicles, a 27-year low. Toyota, Japan's sales leader in America, is not immune to the sales downturn, accounting for 2.26 million of those new car sales. In order to catch the attention of younger potential car-buyers, Toyota has taken drastic measures: opening its own mall, complete with 220 stores, restaurants and... car dealerships? Not only are there a number of dealerships integrated into the mall, but there are Toyota's littered throughout the walkways.

In addition to showcasing its latest new vehicles, Toyota is also showing off its high-tech robots, some of which, oddly enough, play musical instruments.

[Source: AP via Motor Authority]

Back in the 90s, many automakers tried to cut dealerships out of the business equation by selling cars online, but OEMs found out that selling vehicles wasn't as easy as it looked. Since then, automakers have stuck to supporting its dealers on the web, and Saturn plans to take online shopping to the next level. Ten Saturn dealers are participating in a pilot that will give customers the ability to spend less time inside the dealership by using the Internet to apply for credit, schedule a test drive, settle on a price, and more.

The move makes sense for Saturn since it prides itself on its customer-friendly nature, and doing more without leaving the house or office leads to shorter dealer visits and faster transactions. One function of any sale that will difficult to do online is the valuation of the trade-in, but dealers will be able to give a ball-park figure based on make, model, mileage, and the description of the customer. If the pilot goes well, we're guessing other GM makes and the competition will start putting more of the car-buying process online. We're wondering why it took this long to get to this point in the first place.

Among the many ills plaguing automakers, and General Motors in particular, is an excessive amount of dealers selling their wares through competing outlets. GM has decided to rectify the matter by combining its top three "luxury" marques – Cadillac, HUMMER and Saab – into megastores that aim to provide consumers with a variety of choice without watering down each brand's distinct niche.

The plan involves consolidating the 1,400 Cadillac dealerships with the 238 Saab and 170 HUMMER outlets to form a one-stop shop for all things at the high-end of the General's spectrum. There have already been a few cases where GM has helped larger dealers buyout Mom and Pop operations that weren't willing to expand or were looking to get out of the retail game entirely. While the move has the potential to make it easier for consumers to get everything they want under one roof, the amount of capital GM might need to enable larger to dealerships to consume their smaller competitors could prove to be pricey. Plus, it's going to take a top-notch interior designer to combine the Quonset hut theme of HUMMER with the Kenny G stylings of Saab into a cohesive environment.

[Source: Automotive News – Sub. Req.]

Toyota has so far resisted expanding its dealer body in the wake of the Japanese automaker's unprecedented climb up the sales charts. In eight years, Toyota has gone from having 15 million of its vehicles on the road to 22 million today. So far dealers have been able to keep up with the torrid sales pace, but at the service end, dealerships are busting at the seams. In an attempt to alleviate some of that pressure for landlocked dealers, Toyota has piloted off-site service centers and oil change centers. The early results show that the nine dealers in the pilot received significantly more customer pay (non-warranty) repairs than the average Toyota dealership, which translates into more money for the dealer.

For Toyota owners near dealers with satellite shops, this means your car or truck will be fixed in a more timely fashion, and 15,000-mile checkups won't land you on a three-week waiting list. We totally understand why Toyota doesn't want to have more dealerships, but the added service capacity is a no-brainer. Making Toyota owners wait weeks for needed repairs is just bad business.

[Source: Automotive News - Sub. Req.]

GM may have just half the market share it had 30 years ago, but the Detroit-based automaker still seems to have as many dealers as McDonald's has drive-thrus. The General has slashed more than 2,000 dealerships over the past 12 years, but the company will accelerate closings in order to right-size its sales outlets. GM closed 260 stores in 2007 and another 23 in January of this year, but according to Automotive News, the automaker still has a sizable 6,753 member dealer body. That number seems even higher when considering that US number two automaker Toyota makes do with only 1,445 retail locations.

Sales VP Mark LeNeve told Automotive News that GM has a lot of work ahead regarding dealer closings, and that the General will speed its efforts. While fewer dealers will likely mean that you'll have to drive a few miles further to get that Chevy or Cadillac you want, the remaining stores will make more money. (Or that's the general idea, at least.) Additional profits should enable dealers to spend more on advertising and facility upgrades to try and attract more customers.

[Source: Auto News (subs. req'd)]

Ford Motor company has bumped the prices of its domestic vehicles by an average of $198 fleet-wide, bringing the overall model year increase to $502 per car, truck, van, and utility vehicle. The only vehicles not effected by the latest increase are the Lincoln Town Car, the E-Series vans, and the soon to be defunct Lincoln Mark LT. While half a grand sounds like a lot of money, it only represents a 1.8-percent increase over last year's overall costs, which is a full percentage point less than the average inflation in the past year. While nobody likes to see prices go up, it's hard to fault Ford for attempting to keep up with the financial times. The big question is whether customers will be willing to pay for the hike in a soft car market, or if Ford will need to put more cash on the hood to move metal.

[Source: Automotive News - Sub. Req.]

Yesterday we wrote about GM's intent to shrink its 14,118-strong dealer network, with one idea to combine Pontiac, Buick, and GMC dealers into larger, more modern flagship outlets. Turns out that was only part of the plan: according to Automotive News, "General Motors is preparing to make public a plan to encourage the creation of superstores in major metro areas that would carry every GM brand."

These superstores, which would be called GM Collections, are being evaluated for major metropolitan markets where the real estate itself is more valuable than the dealer franchise. For dealers interested in such an outlet, GM's idea is to move service and parts centers off-site to make room for all of the brands. Some dealers think that's a turn-off for consumers, others report good results. In LA, this has been standard practice for a while, with some service departments 25 minutes away from their dealerships. We don't find anything wrong with it, either -- after all, once you've bought the car, how often do you need to go back to the showroom?

The superstores plan is another part of the consolidation plan. In addition to combining Pontiac, Buick, and GMC, the General is also thinking about merging Cadillac, Hummer, and Saab dealerships, which would leave only Chevrolet and Saturn as standalone entities.

UPDATE: Mark LaNeve sent an email to GM dealers this morning saying that the article in "Automotive News concerning a major push to put all of GM brands under one roof is out of context and a mischaracterization." There are no plans to make an announcement about new metro superstores at the NADA conference next month in San Francisco. However, Automotive News still maintains that GM will allow certain stores to carry all of GM's eight brands. We've included the full text of LaNeve's email after the jump (thanks Rob!) and you can check out Automotive News' updated article here (sub. req.).

[Source: Automotive News - Sub Req.]

It's a long way to travel between Italy and America. Not only is it how far Lamborghini road cars have to travel to meet their new owners here in the US, but it's also the divide American dealerships have had to bridge in order to provide the level of service that customers expect when dropping six figures on a new car. And that's a gap Sant'Agata intends to narrow with the establishment of Automobili Lamborghini America LLC.

Establishing a field office in the US – to be placed somewhere on the East Coast or in California – will give its US dealership network a local address with which to coordinate instead of dealing directly with the factory. The American subsidiary will also provide product planning input back to the factory. The United States represents the largest market for Lamborghini where its sales rose from 100 units in 2001 to 900 in 2007.

Although Lamborghini has had operations in the United States under previous ownership – remember how it bounced around owners through the 80s and 90s? – this will be the first American division since Volkswagen/Audi took over in 1998. The field office will operate with a staff of ten, headed up by Pietro Frigerio, formerly Lamborghini's western United States regional sales manager.

Lamborghini has also announced that it will extend its warranties for 2008 from the previous 2 years/24,000 miles to 3 years with unlimited mileage. The company is also considering a certified pre-owned vehicle program and a financing framework.

[Source: Automotive News – sub. req'd]