Autoblog http://www.autoblog.com Autoblog http://www.blogsmithmedia.com/www.autoblog.com/media/feedlogo.gif Autoblog http://www.autoblog.com en-us Copyright 2009 Weblogs, Inc. The contents of this feed are available for non-commercial use only. Blogsmith http://www.blogsmith.com/<![CDATA[REPORT: Stand-alone Lincoln-Mercury dealers being scaled out of existence]]>http://www.autoblog.com/2009/11/09/report-stand-alone-lincoln-mercury-dealers-dying-off/http://www.autoblog.com/2009/11/09/report-stand-alone-lincoln-mercury-dealers-dying-off/http://www.autoblog.com/2009/11/09/report-stand-alone-lincoln-mercury-dealers-dying-off/#commentsFiled under: , , , ,



In 2006, Ford began to shrink its dealership network in order to more efficiently align its distribution network. Three years later, it appears that the hardest hit are the company's stand-alone Lincoln-Mercury dealerships. While there were 619 Lincoln-Mercury dealerships nationwide just a few years ago, the number had dwindled down to just 357 at the beginning of 2009.

Automotive News recently spoke with Ford CEO Alan Mulally about the future of the Lincoln brand and its stand-alone Lincoln-Mercury stores. While Ford's current strategy is pushing combo Ford-Lincoln-Mercury retailers, Mulally would not confirm that eliminating the stand-alone Lincoln-Mercury dealerships was the desired end result. When pushed on the question, Mulally reiterated that Ford was focusing on building a distribution network which allowed sales volume, product breadth, and profitability... qualities that are apparently better served by the Ford-Lincoln-Mercury store.

Mulally added that although these combo dealerships will be selling the Lincoln MKS on the same lot as the Ford Taurus (both vehicles share platforms and mechanicals), retailers will learn how to deliver the sales experience that fits the vehicle and differentiates the brand. Whether this concept works or whether car salesmen simply take the easy route and sell the less expensive Ford remains to be seen.

Either way, it has to be asked - is peeling away at the automaker's stand-alone LM dealers part of a larger plan to do away with Mercury altogether? Inquiring minds want to know...

[Source: Automotive News - Sub. Req. | Image: Stephen Brashear/Getty]

REPORT: Stand-alone Lincoln-Mercury dealers being scaled out of existence originally appeared on Autoblog on Mon, 09 Nov 2009 18:59:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>alan mulallyAlanMulallycar dealercar dealerscar showroomCarDealerCarDealersCarShowroomCombinationConsolidationDealershipsDualFordFord dealershipsford mercuryFord-Lincoln-MercuryFordDealershipsFordMercurylincolnLincoln-Mercurlincoln-mercuryMercurymulallyMullallyshowroomMon, 09 Nov 2009 18:59:00 EST<![CDATA[REPORT: Credit lines increasingly hard to come by for auto dealers]]>http://www.autoblog.com/2009/09/03/report-credit-lines-increasingly-hard-to-come-by-for-auto-deale/http://www.autoblog.com/2009/09/03/report-credit-lines-increasingly-hard-to-come-by-for-auto-deale/http://www.autoblog.com/2009/09/03/report-credit-lines-increasingly-hard-to-come-by-for-auto-deale/#commentsFiled under:



Like him or loathe him, George W. Bush's clearest, most salient speech came almost a year ago on September 25, 2008 when our Harvard MBA president explained to the nation and the world exactly how bad the economy had gotten and why so much federal money ($700 billion-ish at the time) was being hurled at America's banks. The full speech can be found here, but one little section bears quoting:
The decline in the housing market set off a domino effect across our economy. When home values declined, borrowers defaulted on their mortgages, and investors holding mortgage-backed securities began to incur serious losses... Other banks found themselves in severe financial trouble. These banks began holding on to their money, and lending dried up, and the gears of the American financial system began grinding to a halt.
While there have been signs of those gears getting a little bit of oil, certain sectors of the economy remain firmly stuck. Or as CNNMoney puts it, "auto dealers are in their own special financing hell." How so? It's a toxic combination to be sure. A car dealership's inventory is much more expensive than other small businesses (like, say, The Yarn Depot). Additionally, the economy as a whole is still fairly south of the border so despite Cash for Clunkers, millions of people aren't buying expensive things. Then, of course, the banks that lend the money are themselves going belly up, almost 80 so far in 2009 alone.

To address the lose-lose situation, the Small Business Administration (SBA) is trying out several programs designed to help out dealerships. One such initiative sees the SBA backing the auto dealer loans. So far, only one dealership has qualified. The problem is that car dealers require a special type of loan known as a floor plan loan, and the SBA's program doesn't cover floor plan loans. These special loans allow dealers to repay the loan as the inventory sells, instead of on a monthly basis. And as inventory isn't moving like it used to, banks aren't keen on making any floor plan loans.

[Source: CNN Money | Image: Hulton/Getty]

REPORT: Credit lines increasingly hard to come by for auto dealers originally appeared on Autoblog on Thu, 03 Sep 2009 10:32:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>Auto DealersAutoDealersCar DealersCar DealershipsCarDealersCarDealershipsDealersDealershipsSBASmall Business AdministrationSmallBusinessAdministrationThu, 03 Sep 2009 10:32:00 EST<![CDATA[Cash for Clunkers program nets 4,000 sales on first day]]>http://www.autoblog.com/2009/07/29/cash-for-clunkers-program-nets-4-000-sales-on-first-day/http://www.autoblog.com/2009/07/29/cash-for-clunkers-program-nets-4-000-sales-on-first-day/http://www.autoblog.com/2009/07/29/cash-for-clunkers-program-nets-4-000-sales-on-first-day/#commentsFiled under: ,



The government's Cash for Clunkers program only got off the ground on Monday, yet 4,026 eligible vehicles were reportedly swapped out in the program's first day. The program already has 20,564 certified Clunkers dealers, which gives eligible customers plenty of places to to cash in on the federal program. That is, assuming the EPA didn't make your vehicle ineligible in the 11th hour.

Hitting 4,000 Cash for Clunkers-related sales in the first day is impressive, but that's only a small portion of sales that the program is expected to create. The vehicles sold on Monday alone represent $17 million in rebates, which leaves $933 million in program funding after administrative costs are taken out. Transportation Secretary Ray LaHood estimates that the program has room for 250,000 rebates total, so it seems that we've just scratched the surface.

But if consumers continue to trade in their vehicles at such a torrid pace, the money allocated for the program will be completely gone in about two months, well ahead of the November deadline to exhaust the program's budget. We've got a feeling, however, that there are more than a few deals struck on Monday that had been in the books for a couple of weeks. After all, some manufacturers have been accepting Cash for Clunkers deals since early July.

[Source: Detroit News, Photo: Will Keown]

Cash for Clunkers program nets 4,000 sales on first day originally appeared on Autoblog on Wed, 29 Jul 2009 10:59:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>000 sales000Sales026 sales026Sales4cash for clunker salescash for clunkersCashForClunkersCashForClunkerSalesdealershipsjunkersalesWed, 29 Jul 2009 10:59:00 EST<![CDATA[GM grants reprieve to 30 dealers, reviewing more]]>http://www.autoblog.com/2009/06/11/gm-grants-reprieve-to-30-dealers-reviewing-more/http://www.autoblog.com/2009/06/11/gm-grants-reprieve-to-30-dealers-reviewing-more/http://www.autoblog.com/2009/06/11/gm-grants-reprieve-to-30-dealers-reviewing-more/#commentsFiled under: ,



General Motors wants to shrink its dealer network by around 2,500 outlets and has sent closure notices to more than a thousand already. Still, the General has left a door open that allows affected dealers to appeal the decision and show proof of why they should not be cut from the herd.

According to reports, almost the entire affected body of dealers appealed, and 500 of those appeals are still pending. Thirty dealers have had their sentences overturned and will be allowed to stay open. It is good news for the dealers... and yet the math remains the math: strorefronts have got to go.

[Source: Automotive News, sub. req'd | Photo by MARK RALSTON/AFP/Getty]

GM grants reprieve to 30 dealers, reviewing more originally appeared on Autoblog on Thu, 11 Jun 2009 10:29:00 EST. Please see our terms for use of feeds.

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Cadillac is one of the core brands that will form the new General Motors, but the dealership network can't continue in its current guise, according to GM sales head Mark LaNeve. There are 1,422 Cadillac dealers nationwide, more than four times the number of Mercedes-Benz dealers and more than six times the number of Lexus dealers. That kind of saturation meant that in 2008, the average Cadillac dealership did one-sixth the business of a Mercedes dealer and one-tenth the business of a Lexus dealer.

To be fair, Cadillac has fewer cars on offer than Mercedes, BMW, or Lexus. Still, GM wants to gets its dealer volume numbers closer that of the competition - proportionally speaking - and that means more dealer closings. GM hasn't said how many, but to even get close to retail parity they'd be looking at many hundreds of closures, with many of them likely to be in metropolitan areas. Whenever those dealers are chosen, as with the others, they will be allowed to remain open until their franchise agreements on October 31, 2010.

[Source: Automotive News - Sub. Req.]

Under Fire: GM targeting metropolitan Cadillac dealers for closure? originally appeared on Autoblog on Tue, 09 Jun 2009 09:58:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>cadillacdealerdealernetworkdealersdealershipdealershipsgeneral motorsGeneralMotorsgmgm dealersgm dealershipsGmDealersGmDealershipsTue, 09 Jun 2009 09:58:00 EST<![CDATA[Dealer Bailout: Chrysler to redistribute all new inventory]]>http://www.autoblog.com/2009/06/08/dealer-bailout-chrysler-to-redistribute-all-new-inventory/http://www.autoblog.com/2009/06/08/dealer-bailout-chrysler-to-redistribute-all-new-inventory/http://www.autoblog.com/2009/06/08/dealer-bailout-chrysler-to-redistribute-all-new-inventory/#commentsFiled under: , ,



After the suggestion of Congressional hearings on the matter, Chrysler's Jim Press assured Senator Kay Bailey Hutchison (R-TX) that Chrysler dealers with leftover inventory after June 9 would "receive a fair and equitable value." It appears that Chrysler is making good on that promise.

The company's head of sales, Steven Landry, outlined the measures being taken to relieve shuttered dealers of their wares and remunerate them for it. Of the 42,000 cars held by the 780 dealers whose franchises were nixed, 26,000 of them have been sold. The rest, save for 220 cars, have been assigned to be moved to dealers that are still in business. Those last 220 cars are in the possession of dealers who haven't yet agreed to Chrysler's plan, but the cars already have new dealer homes waiting if and when things are agreed.

As for payment, after the cars arrive at their redistribution point, the new dealer's finance company will pay off the old dealer's finance company for an inventory acquired, save for $350 in destination fees. All else, according to Landry, including holdback and advertising funds, will be repaid. There is at least a little good news to start the week...

[Source: Automotive News, sub. req'd | Photo by Scott Olson/Getty]

Dealer Bailout: Chrysler to redistribute all new inventory originally appeared on Autoblog on Mon, 08 Jun 2009 17:27:00 EST. Please see our terms for use of feeds.

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The soon to be terminated 789 Chrysler dealerships have all of five days to sell thousands of Chrysler, Dodge, and Jeep models, or else the damned dealers may have to eat their remaining inventory. When the termination letters went out on May 14, the pink-slipped dealers had 44,000 new cars and trucks on their lots, and there are still plenty of vehicles left to sell. Times are tough for the 789 closing Chrysler dealerships, but for customers looking to get into a new Chrysler, Dodge, or Jeep, this may be the best time ever to get off the sidelines and buy.

Virginia dealer Pohanka Chrysler-Dodge is having an "everything must go" sale to rid itself of its remaining models, and the deals are reportedly off the charts. The dealer's sales team already moved 80 models since the notices went out, leaving a substantial 40 vehicles to be sold off in less than five days. One woman, who was interviewed by CNN, received 40% off of the price of a well-appointed Dodge Nitro. The midsized SUV carried a $29,170 price tag, but she paid only $17,510. With only five days left to sell its remaining vehicles, dealer Ray O'Bryhim says he may have to discount vehicles even further to avoid losing big with unused inventory.

Since Chrysler is in bankruptcy proceedings, it isn't obligated to buy back any leftover inventory, and the dealers aren't legally able to sell new Chrysler products without a franchise license, which they'll lose after their contracts expire in five days. Chrysler points out that since it hasn't produced vehicles since May 1, many dealers are hungry for inventory, and they've been buying vehicles from the soon to be closing retail stores.


Gallery: Closing Chrysler dealer sale


[Source: CNN]

Dealership has five days to sell entire inventory originally appeared on Autoblog on Thu, 04 Jun 2009 05:45:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>789 chrysler dealers789ChryslerDealerschryslerdealer closingsDealerClosingsdealershipsdodgejeepThu, 04 Jun 2009 05:45:00 EST<![CDATA[REPORT: GM preparing to give more dealerships the axe]]>http://www.autoblog.com/2009/05/29/report-gm-preparing-to-give-more-dealerships-the-axe/http://www.autoblog.com/2009/05/29/report-gm-preparing-to-give-more-dealerships-the-axe/http://www.autoblog.com/2009/05/29/report-gm-preparing-to-give-more-dealerships-the-axe/#commentsFiled under: , , , ,



On top of the 1,124 General Motors dealers that will be closed next year, the ailing automaker is reportedly going to announce another round of dealer closings on Monday when its bankruptcy declaration is expected. According to two Automotive News sources, 450 dealers will not see their dealer franchises renewed. For his part, Mark LaNeve, GM's VP of North American sales, said the number would be "less than half that."

No matter the number, it's more of the same bad-yet-necessary news being spread around. LaNeve notes that the dealers who won't be renewed "have very specific issues" including "specific performance issues." Among them are supposed to be some stores that are skewed exclusively or heavily Pontiac. These dealers will be shutting up shop when their franchise agreements expire in October 2010.

[Source: Automotive News -sub req'd | Image: Mark Ralston/Getty]

REPORT: GM preparing to give more dealerships the axe originally appeared on Autoblog on Fri, 29 May 2009 18:29:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>bankruptcycar salesCarSalesdealerdealersdealershipdealershipsgeneral motorsGeneralMotorsgmgm bankruptcygm dealersGmBankruptcyGmDealerspontiacshowroomFri, 29 May 2009 18:29:00 EST<![CDATA[GM and Chrysler CEOs called to D.C. to explain dealer closings]]>http://www.autoblog.com/2009/05/26/gm-and-chrysler-ceos-called-to-d-c-to-explain-dealer-closings/http://www.autoblog.com/2009/05/26/gm-and-chrysler-ceos-called-to-d-c-to-explain-dealer-closings/http://www.autoblog.com/2009/05/26/gm-and-chrysler-ceos-called-to-d-c-to-explain-dealer-closings/#commentsFiled under: , , ,



The situations with GM and Chrysler are beginning to look like what happens after a fumble in an NFL game: a dozen men pile on top of each other all trying to get the ball. The difference in the case of GM and Chrysler is there are far more than two teams struggling for the prize. The latest to hop on and shove a hand in is the Senate Commerce Committee, which wants the CEOs to testify "early next month" regarding the planned dealership closings.

Chrysler's sent 789 dealers eviction notices, GM is out to dispatch 1,124 dealers in the US and about 245 in Canada. The GM dealers won't have their franchises renewed as of October 2010, and are said to be staying in operation until they sell the last of their inventory. Chrysler dealers are expected to board up the windows by June 9, although Jim Press recently gave assurances that there will still be help given to those dealers after that date. The Commerce Committee isn't moved by either proposal, citing what it calls "the short and insufficient transition period given to dealerships for franchise terminations."

The hearings would be chaired by Senators John Rockefeller and Kay Bailey Hutchison, and will address what happens to dealer inventory and jobs and consumer needs like warranties and servicing. Hutchison was working on legislation to force automakers to give dealers 60 days notice before closing their franchises (which GM has done) or else go without government help. That legislation was put on hold after Press' letter, but now Nardelli and Henderson will need to go explain things to the principal in person.

For GM it's just one more thing to lump into the impending bankruptcy in-box. For Chrysler, every additional delay in sorting out its business situation only gives Fiat more of those pre-wedding jitters.

[Source: Automotive News - Sub. Req.]

GM and Chrysler CEOs called to D.C. to explain dealer closings originally appeared on Autoblog on Tue, 26 May 2009 08:29:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>bankruptcychryslerchrysler bankruptcyChryslerBankruptcydealersdealershipdealershipsfinancialsgeneral motorsGeneralMotorsgmgm bankruptcyGmBankruptcygovernmentkay bailey hutchinsonKayBaileyHutchinsonsenatesenate commerce committeeSenateCommerceCommitteeTue, 26 May 2009 08:29:00 EST<![CDATA[REPORT: Slighted dealers line up to criticize Chrysler tactics]]>http://www.autoblog.com/2009/05/24/report-slighted-dealers-line-up-to-criticize-chrysler-tactics/http://www.autoblog.com/2009/05/24/report-slighted-dealers-line-up-to-criticize-chrysler-tactics/http://www.autoblog.com/2009/05/24/report-slighted-dealers-line-up-to-criticize-chrysler-tactics/#commentsFiled under: ,



A story in the New York Times shines a light on some reasons for the Committee of Chrysler Affected Dealers to challenge the car company's bankruptcy efforts. The element common to all of the dealers profiled is that they did extraordinary things Chrysler asked them to do, such as buy too many cars and combine franchises at their own expense, only to find out they had been chosen for termination after bankruptcy.

Chrysler isn't buying back the inventory that sits on dealer lots -- inventory that, in some cases, Chrysler specifically asked dealers to take too much of in order to help make the company look better for sale. Banks have also dropped many dealers because they no longer have new-car franchises, making it even harder to sell the cars they have.

Until a few days ago, the dealers were told they had only until June 9 to liquidate everything. However, an exchange between Senator Kay Bailey Hutchison (R-TX) and Chrysler President Jim Press has lead to an assurance from Press that dealers will "receive a fair and equitable value for virtually all of their outstanding vehicle and parts inventory," and that former franchisees would "receive a daily report which specifically outlines each unit of inventory and its place in the transition process." The suggestion was also that this would be the case after June 9.

Meanwhile, dealers who spent millions of dollars to show their commitment to Chrysler, only to be unceremoniously cut, will continue to fight their cases in court and on the showroom floor.

[Source: NY Times]

REPORT: Slighted dealers line up to criticize Chrysler tactics originally appeared on Autoblog on Sun, 24 May 2009 13:07:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>chryslerchrysler bankruptcychrysler dealersChryslerBankruptcyChryslerDealersdealersdealershipdealershipsgovernmentlegalSun, 24 May 2009 13:07:00 EST<![CDATA[REPORT: GM won't pay dealers for franchises, will buy back parts, vehicles]]>http://www.autoblog.com/2009/04/29/gm-wont-pay-dealers-for-franchises-will-buy-back-parts-vehicl/http://www.autoblog.com/2009/04/29/gm-wont-pay-dealers-for-franchises-will-buy-back-parts-vehicl/http://www.autoblog.com/2009/04/29/gm-wont-pay-dealers-for-franchises-will-buy-back-parts-vehicl/#commentsFiled under: ,



In a special broadcast to dealers yesterday, General Motors' sales chief, Mark LaNeve, explained that the automaker would buy back unsold new vehicles and parts from dealerships slated to be phased out by the end of 2010, but GM wouldn't pay off dealers for their franchises.

As reported earlier this week, GM plans to cut it U.S. dealerships by 42% by the end of next year, reducing the total number of retailers from 6,246 to 3,605. Beginning this May, GM will begin sending letters to around 1,200 dealers informing them that their franchises will not be renewed and "they will not be part of a reinvented GM going forward."

According to LaNeve, the 1,200 or so dealerships slated to be cut are "very poor performing and not adhering to the sales and service agreement obligations." Joining the underperformers will be an additional 500 dealerships in saturated urban markets, another 500 that will be shuttered by the end of the year due to normal attrition, yet another 500 retailers that carry Hummer, Saab and Saturn vehicles - brands which GM is desperately trying to unload - along with 35 stand-alone Pontiac dealers that will meet their demise when the brand is phased-out at the end of 2010.

How this is all going to sit with dealer franchise laws remains to be seen, but after watching the Oldsmobile debacle play out, we doubt any resolution between GM and its dealers will be easy.

[Source: Automotive News - Sub. Req. | Source Image: Justin Sullivan/Getty]

REPORT: GM won't pay dealers for franchises, will buy back parts, vehicles originally appeared on Autoblog on Wed, 29 Apr 2009 15:33:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>cutdealerdealersdealershipsfranchisegeneral motorsGeneralMotorsgmreducedWed, 29 Apr 2009 15:33:00 EST<![CDATA[GM reportedly accelerating the closure of 1,700 dealers]]>http://www.autoblog.com/2009/04/16/gm-accelerating-the-closure-of-1-700-dealers/http://www.autoblog.com/2009/04/16/gm-accelerating-the-closure-of-1-700-dealers/http://www.autoblog.com/2009/04/16/gm-accelerating-the-closure-of-1-700-dealers/#commentsFiled under: , ,

June 1, 2009 is turning into the equivalent of General Motors' D-Day, and every day seems to bring new events that are being planned in advance of it. GM had more than 6,000 dealerships at the end of last year, and in the initial viability plan it offered to the government, the automaker pledged to close 25% of those over the next five years. As with the rest of the plan, the Auto Task Force said "That isn't enough."

So GM has turned the big guns on its dealership closures, having seen 200 of them shut down this year already. It is not waiting for attrition to rid itself of others, but pin-pointing under-performing locations and "could move to terminate franchise agreements." And GM is doing so with a different payment scale than it had when it closed down the 2,800 Oldsmobile dealerships, which ran up a tab of $1 billion.

Also, it appears, the bell tolls louder for a GM bankruptcy. Tucked in the article was this line: "The issue of how many U.S. dealerships GM can support has been one of the hot-button issues for U.S. officials as they drive GM toward a stepped-up restructuring that many observers have now concluded will include a bankruptcy filing."

[Source: Yahoo!]

GM reportedly accelerating the closure of 1,700 dealers originally appeared on Autoblog on Thu, 16 Apr 2009 10:58:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>auto task forceAutoTaskForcedealerdealersdealershipdealershipsearningsfinancialsfranchisegmgm bankruptcygm dealershipsGmBankruptcyGmDealershipsgovernmentThu, 16 Apr 2009 10:58:00 EST<![CDATA[Three Nebraska auto execs disappear... along with 81 cars]]>http://www.autoblog.com/2009/03/12/three-nebraska-auto-execs-disappear-along-with-81-cars/http://www.autoblog.com/2009/03/12/three-nebraska-auto-execs-disappear-along-with-81-cars/http://www.autoblog.com/2009/03/12/three-nebraska-auto-execs-disappear-along-with-81-cars/#commentsFiled under: ,



Perhaps it began as an innocent experiment among dealer personnel: what would happen if three dealership executives all disappeared on the same day and 81 of the dealership's cars showed up at auto auctions in two other states? The answer to that question is that the FBI went bird-dogging on the hunt for owner Allen Patch, controller Rachel Fait, and General Manager Rick Covello on "suspicion of theft."

Legacy Auto Sales in Omaha, Nebraska was said to be in financial trouble. The three vanishing execs are suspected of trying to sell nearly all the dealership's inventory and then... well, at this point no one knows what they were going to do. But on Saturday and Monday night, transporters arrived at the dealership (that's one of them pictured) and began hauling cars away. When employees showed up for work on Tuesday, the higher-ups were gone and their desks were cleaned out.

The cars, worth $2.5 million, were found being sold at an auto auction in Salt Lake City, Utah, and also discovered in Las Vegas, Nevada. GM Covello apparently turned himself in. Fait was arrested in Tooele County, Utah on Wednesday, while Patch was located at his attorney's office in Utah and has probably been arrested by now. File this one under "Sounded like a good idea at the time..." Hat tip to WS.

[Source: Omaha.com]

Three Nebraska auto execs disappear... along with 81 cars originally appeared on Autoblog on Thu, 12 Mar 2009 11:01:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>crimedealerdealersdealershipdealershipsetcfordnebraska dealerNebraskaDealerstolenthefttoyotaThu, 12 Mar 2009 11:01:00 EST<![CDATA[881 dealer closings in 2008 sets new record]]>http://www.autoblog.com/2009/02/22/881-dealer-closings-in-2008-sets-new-record/http://www.autoblog.com/2009/02/22/881-dealer-closings-in-2008-sets-new-record/http://www.autoblog.com/2009/02/22/881-dealer-closings-in-2008-sets-new-record/#commentsFiled under: , , ,



Dealerships dropped like flies in 2008, with 881 retail stores resigned to history at year's end. The steep drop in vehicle sales and difficulty finding cash to finance inventories were the main reasons for the record decline, but 2008 won't likely hold that title very long. While vehicle sales dropped 18% in 2008 to 13.2 million vehicles, many analysts are expecting 2009 sales to plunge all the way down to 10 million units. The additional drop in sales, along with domestic automakers' drive to consolidate their dealer networks, will likely make 2009 very difficult on franchises. Predictably, domestic-brand dealers were the hardest-hit, suffering 80% of the overall casualties. GM, Ford, and Chrysler are likely hoping the trend continues through 2009, as Detroit automakers have less than 50% of the US retail market and closer to 75% of the overall dealerships.

[Source: Reuters, Photo by Spencer Platt/Getty]

881 dealer closings in 2008 sets new record originally appeared on Autoblog on Sun, 22 Feb 2009 16:57:00 EST. Please see our terms for use of feeds.

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Dealership rationalization was something General Motors was looking at well before the economy went pear-shaped. GM still has more than 6,300 dealerships in the U.S., and it is even more important now to start shedding some of that financial burden. That is why The General told dealers at the NADA conference that it plans to get rid of 1,600 dealerships by 2012.

GM's initial viability plan to Congress proposed an eventual reduction to 4,000 dealerships. No one knows yet, though, how GM plans to do that. GM said it will explain the dealer elimination plan in the follow-up viability plan it submits to Congress on February 17. Said one GM dealer, "They basically said, 'We're looking for strong dealers, and if you're not a strong dealer, you better evaluate your options."

GM did say that 400 dealers per year being shut isn't a firm number, simply a target. Nevertheless, dealers are none too happy. Some dealers say GM is using GMAC to force dealers out by setting capital requirements beyond a dealer's reach. GM says it has no intention of using GMAC in such a way. When the time comes, dealership liquidation will be be judged market by market, and based on a number of factors including age, location, volume, capitalization and customer satisfaction. While the plan will obviously save GM money in the long term and make it more efficient, in the short term it is going to cost GM a fortune to close 1,600 locations.

[Source: Automotive News, sub req'd, Photo by Justin Sullivan/Getty]

GM plans to trim 400 dealers per year until 2012 originally appeared on Autoblog on Mon, 26 Jan 2009 14:43:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>bridge loanBridgeLoancongressdealerdealersdealershipdealershipsgmgm bailoutgm dealersgm dealershipsGmBailoutGmDealersGmDealershipsnadaMon, 26 Jan 2009 14:43:00 EST<![CDATA[REPORT: Dealers say bailout hasn't made for more GMAC loans]]>http://www.autoblog.com/2009/01/20/report-dealers-say-bailout-hasnt-made-for-more-gmac-loans/http://www.autoblog.com/2009/01/20/report-dealers-say-bailout-hasnt-made-for-more-gmac-loans/http://www.autoblog.com/2009/01/20/report-dealers-say-bailout-hasnt-made-for-more-gmac-loans/#commentsFiled under: , , ,

GM dealership handshake

Show me the money. With apologies to Cuba Gooding Jr., that is exactly what many General Motors dealers are saying to GMAC Financial Services.

Despite being given $5 billion from the U.S. Government last month, GMAC apparently hasn't loosened its purse strings enough for dealers' likings. Some, in fact, are reporting that GMAC keeps rejecting their credit applications. This is somewhat surprising because GMAC previously agreed to lower the necessary minimum credit score ratings from 700 to 621 for new vehicle loans, so presumably more requests should be going through. Dealers are frustrated and although some preferred dealers have seen loan rate reductions, others are saying that GMAC is still as much as 1.5 percent higher than the competition.

In response to this problem, dealers have come up with a wish list of sorts. They are asking that GMAC return to leasing, approve some sub-prime loans and cut interest rates for loans to dealers to help finance their inventory. Also of concern is the fact that customers are increasingly upside down on their trade-ins. As a direct result, these consumers are having trouble getting approved because GMAC requires bigger down payments than it once did.

[Source: Automotive News, sub. req.]

REPORT: Dealers say bailout hasn't made for more GMAC loans originally appeared on Autoblog on Tue, 20 Jan 2009 07:28:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>bailoutdealer relationsDealerRelationsdealershipdealershipsdetroit 3detroit 3 bailoutdetroit threeDetroit3Detroit3BailoutDetroitThreefinancinggeneral motorsGeneralMotorsGMgm bailoutgmacGmBailoutTue, 20 Jan 2009 07:28:00 EST<![CDATA[GM to delay dealer incentive payments]]>http://www.autoblog.com/2008/11/17/gm-to-delay-dealer-incentive-payments/http://www.autoblog.com/2008/11/17/gm-to-delay-dealer-incentive-payments/http://www.autoblog.com/2008/11/17/gm-to-delay-dealer-incentive-payments/#commentsFiled under: ,

From November 28 to December 11, GM is holding back incentive payments to dealers, including dealer cash and customer cash. Why? in the words of Mark LaNeve, GM's VP of North American sales, because "Anytime you can delay any kind of a payment, it helps cash flow" And cash is probably the most important four-letter word in any GM dictionary.

The withheld payments don't cover all the monies that GM sends to dealers, just various incentives. According to Automotive News' numbers, the two weeks of extra cash could let GM hold on to an extra $300 million. If GM needs $14 billion per month to operate, $300 million would extend the lifeline by... almost another day. Payments after December 11 would resume on a weekly basis, but with the new two-week delay, something like an employee paycheck. GM discussed the plan with the National Dealer Council beforehand and, unsurprisingly, the council understood. Follow the jump to read LaNeve's letter to dealers.

[Source: Automotive News - Sub. Req.]

Continue reading GM to delay dealer incentive payments

GM to delay dealer incentive payments originally appeared on Autoblog on Mon, 17 Nov 2008 18:31:00 EST. Please see our terms for use of feeds.

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2008 has been a historically woeful year for the auto market, but Ford dealers have been in the crosshairs of a sales decline for over a decade. That brutal reality, along with financial incentives of up to $700,000 or more from the Blue Oval, has lead to the closure of over 500 dealers since mid-2006, and over 150 so far in 2008. To close still more dealers while giving remaining stores a heads-up of future happenings, Ford is embarking on a series of meetings with Ford and Lincoln Mercury dealers. Among the topics of discussion will be future products, product volume and market conditions.

Though Ford isn't stating publicly how many dealerships it wishes to close, the Blue Oval is hoping to have enough departures to make the remaining dealerships healthy. Ford would like to see Ford brand dealers with 1,500 sales per month and Lincoln Mercury dealers with 600 sales per month, which is far higher than what Ford's 3,900 stores are averaging now. To help entice dealers to hang up their plaid sport coats, Ford will be offering cash incentives, but Ford Market Representation Director David Kelleher is hinting that those deals won't last long.

[Source: Automotive News - sub. req'd, Photo by Scott Olson/Getty]

Ford to meet with dealers about future products, try to close stores originally appeared on Autoblog on Wed, 27 Aug 2008 19:32:00 EST. Please see our terms for use of feeds.

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If you believe the Johnston family, owners of Wildcat Mitsubishi in Tucson and Ideal Automotive in Sierra Vista, Arizona, they have a little communication and paperwork problem. If you believe the soldiers at the Army base in Fort Huachuca, the Better Business Bureau, the Arizona Department of Financial Institutions, the Arizona Transportation Department, the police department, and at least one civilian customer, the Johnstons have a much larger number of far more serious problems.

The Army base has banned personnel from patronizing the dealerships, alleging its soldiers have been abused. Soldier James Tuman traded in an SUV and a motorcycle and got financing from Ideal Automotive to buy a used car. When he tried to return the car because of mechanical issues, the Johnston's wouldn't give him his money back, instead saying he could buy another car on the lot. When he threatened to complain, they said they'd declare the car repossessed, which could hurt Tuman's security clearance. Tuman ended up with no money and no car.

Other complaints against Johnstons range from financing auto loans without a license and issuing temporary tags with the wrong VIN numbers. The Johnstons say they are sorting things out... but until the Army et al sort things out with the Johnstons, you might want to give Wildcat and Ideal a wide berth.

[Source: Auto News, sub req'd]

U.S. Army declares Arizona car dealer a no-go zone originally appeared on Autoblog on Mon, 11 Aug 2008 14:29:00 EST. Please see our terms for use of feeds.

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Hyundai is shaking its money makers, spending €60 million to upgrade its dealer network in Germany, France, Italy, Spain, and the United Kingdom. Each of 2,500 dealers will spend at least €24,000 on improving their facilities, with matching funds coming from both distributors and the parent company.

The plan is called Mission Q, and it has several objectives: upgrade the dealer experience, increase customer loyalty, and move the brand away from being considered solely for value or low cost. Hyundai wants "people to think of Hyundai as a market leader in quality, SUVs, family cars and because of our sports sponsorships, and then later come to the price discussion."

In addition to the new furniture and paint, Hyundai has created a brand academy at its European headquarters to train distributors and dealer staff. As it moves up the brand ladder, cars from China and India will be arriving to take Hyundai's place in price-first considerations. And that means that Honda, Nissan, and Toyota should probably start getting ready for another guest at the table.

[Source: Automotive News, sub req'd]

Hyundai pushing dealers upmarket abroad originally appeared on Autoblog on Tue, 22 Jul 2008 10:28:00 EST. Please see our terms for use of feeds.

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