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]

UPDATE: 3-24-08 -- This was left on the original M3 forum thread by Ken, the nearly-defrauded winner of the eBay auction: "Sorry its taken so long to post a update. The site is very slow (understandably). This morning, BMW of Lincoln has agreed to sell me the car at a price of 60K, with certain conditions. I'll be going over the conditions with the dealership tommorow, and I hope to have everything finalized by tommorow afternoon." You can read the rest of his comment here. It's pretty cool what the Internet can do...

Apparently all is not kosher in corn country. BMW of Lincoln, Nebraska posted an auction on eBay for a brand new M3 Sedan for $60,000. Perhaps they were hoping for the kind of eBay madness that would push the price to six figures (something other dealers are doing right on the show floor). If that's what they were after, well, they didn't get it. The car was won by a gentleman in California for the listed price: $60,000.

The problem is that the dealer doesn't want to give him the car. Not long after the auction ended, the winning bidder got a call from BMW of Nebraska telling him the auction was "a mistake," and that he couldn't have the car. In spite of the fact that the dealership changed the Buy It Now price twice -- and so was paying attention to the auction -- and eBay rules that make it clear that if someone wins the auction then you must complete the transaction, the buyer is still trying to get someone to give him the car he won at the winning bid price. Follow the link for the full story, and to you, Dooma350, good luck. Thanks for the tip, Ken!

[Source: M3post.com]

Ford has a dealer development program aimed at helping those who lack up-front capital open a dealership. The dealer pays Ford back with profits from the business, and slowly buys out Ford's stake. There are 81 dealers in the program now, 62 of which are minorities who the program was originally intended to aid, and Ford has offered to buy all of them out by returning the dealer's full investment.

Some dealers say Ford is trying to shed the minority-owned franchises, and Ford denies the accusation, saying that it is simply trying to let struggling dealers exit the business without losing everything, and that it wants to get its dealer organization in line with its economic reality. To be fair, the offer has been extended to every dealer in the program, some of which even are profitable. As well, for dealers who rely solely on the dealership for income, there's a chance Ford will give them an additional $100,000.

No matter what's the real impetus, at least Ford is trying to make an offer that isn't pennies on the dollar. Said Hispanic dealers' alliance chairman and dealership owner Fernando Varela, "In tough market conditions (when) you're not making any money, they're offering you something. Other manufacturers let you walk off, and you lose your investment." Ford has given dealers until April 1 to decide on the buyout; dealers are asking to have until June 1 to make the decision.

[Source: Automotive News, sub req'd]

On March 1, 2008, Second Life will host the grand opening of the Automobile Dealer Relations Center (ARDC) called AutoLand. While that sounds like the kind of place where you'll have to run for your life from a cyborg Yul Brenner, it will actually be home to a multi-brand showroom in the virtual life sim that was created by customer relationship management software maker iMagic. What's more, you'll be able to chat with up to 50 dealers nationwide about pricing, availability and service issues.

We have to admit that we find the idea of a virtual car showroom kind of funky (disclaimer: this blogger has never been in or on or at Second Life before today). After all, Second Life's graphics aren't cutting edge, so at best you'll only be able to look at chunky representations of the car you're interested in buying. As for chatting with dealers, virtual sales don't affect the brick-and-mortar bottom line much, and if the chatroom becomes a forum to gripe about service issues, we can see things getting testy pretty quickly. If nothing else, it's a neat experiment, and we'll see what happens. And when you get tired of kicking digital tires, you can head on over to Peugeot island and see what the hubbub is about: that company leads all 11 automotive brands in Second Life with more than 9 million accounts.

[Source: AOL Money & Finance]

In 2007 Hyundai had a US sales target of 555,000. That number was set by HQ in Korea, and when it was clear they weren't going to make it, they revised it downward to just over 500,000. By the time the bell rung, even that number proved a little beyond Hyundai's reach: they sold 467,009 cars last year. That still represented a 2.5-percent gain over 2006 sales.

Hyundai's goal this year is a 20-percent increase in global sales. For the US, though, the goal is 500,000 units, which is the goal set by the folks in the US, not Korea, and even though nearly everyone has predicted a sales downturn, that goal is "regardless of what the industry is doing." To achieve those sales, the automaker has revamped numerous aspects of their dealer incentive operation. Hyundai dealership profit was down five-percent last year, and only two-thirds of dealers benefited from company incentives. This year, the dealer incentive has been streamlined and set up so that 99-percent of dealers are expected to receive some sort of incentive. Dealers will also be receiving more Accents and Elantras to prevent the shortages experienced last year.

Hyundai is also bringing back its dealer ad associations and is going to distribute more largesse to help dealers advertise everything happening for the growing brand. Hyundai has a refreshed Sonata and the new Genesis coming in the spring, and the Genesis coupe and Elantra Touring coming later this year, and it wants to make sure everyone hears the word. It's quite conceivable that Hyundai can increase its sales this year in spite of the market, and making its dealers happy will be a good way to help the cause. Dealers are, of course, happy about the changes, but also want to make sure Hyundai doesn't forget its bread and butter cars and customers in the Genesis hoopla.

[Source: Automotive News - Sub. Req.]

At the end of World War II, GM "put a dealership in every little hamlet" to keep up with the postwar boom. Sixty years later, in 2005, long after that boom had ended and every domestic maker was losing market share, GM had 15,094 dealerships. By 2007 GM had reduced that to 14,118 dealers. But if GM plans to compete financially with its overseas competition, it will need to shrink that number a great deal further.

Chevrolet has 4,000 dealerships. Toyota, to sell the same amount of cars, has just 1,244 dealers. Put another way, the typical Toyota dealer moves 1,766 cars per year. The typical Chevrolet dealer moves 554. And the other domestics fare about the same: the usual Ford dealership rolls 556 vehicles off the lot every year, while a Dodge dealer does 374 per year.

GM is looking at consolidating Pontiac, Buick, and GMC shops into one. However, state franchise laws don't make closing dealerships easy, and it's hard to tell a profitable dealer that he needs to close for the good of the parent company. Dale Willey, head of the National Automobile Dealers Association, said "Dealers make the decision to get into the business, and the manufacturers accepted the dealers getting into the business. It ought to be the dealers' decision to get out of the business." While GM CEO Rick Wagoner realizes that the "payoff is significant" for reducing the number of outlets, he must know that the price will be significant as well.

[Source: Detroit News]

Most people that purchase a brand-new car from the dealer lot have heard about the forthcoming customer satisfaction survey that will be mailed to their home. While some dealers will ask you to fairly assess their performance, others will try to manipulate scores with overt suggestions and even begging. A recent study by automotive research firm TrueDelta of 1,700 survey takers showed that nearly half of all dealerships tried to manipulate satisfaction scores, and one in four were asked to provide perfect scores by dealer employees. In the end, all the cajoling worked, as one in eight admitted to inflating their scores at the behest of the dealership. The study also pinpointed which OEM dealers were the worst offenders, and BMW, Hyundai, and Nissan comprised the axis of manipulation.

As the scribes at Automotive News point out, satisfaction scores are big business, and everything from ad support to additional franchise opportunities are rewards for dealerships that score above average in customer satisfaction. Poor scores can result in the cold shoulder from the OEM to the Grim Reaper taking away the right to sell cars. Even when we actually buy a five-figure vehicle off the lot, most dealerships keep the pressure on with additional insurance or warranty coverage, inflated interest rates, and even the satisfaction survey we take months later. It's a wonder buying cars on the Internet isn't more popular.

[Source: Automotive News - Sub. Req.]

Earlier today we referenced Toyota disputing Edmunds.com claiming that the Tundra was sold in July with $6,861 of incentives per vehicle. That would've been the highest amount of incentives for any full-size pickup sold last month, but it turns out Edmunds made an error and last Friday printed a retraction on its AutoObserver site. Though Toyota does not release the official amount of incentives it offers for the Tundra, Edmunds is now claiming the amount offered last month is $4,625. That amount, while still high, makes it the third highest amount of incentives behind the Dodge Ram 1500 ($6,739 per vehicle) and Nissan Titan ($4,835 per vehicle). Edmunds further claims the 2007 Chevy Silverado was sold with $3,995 worth of incentives last month, and the Ford F-150 with $3,574. The Honda Ridgeline, if it can be rightly included in this group, was sold with $2,746 worth of incentives.

[Source: AutoObserver]