October 18, 2011

Ernst Lieb Out as Head of Mercedes-Benz USA
According to Automotive News, Ernst Lieb has been removed from his post as CEO of Mercedes-Benz USA after five years in the position. He will be succeeded "until further notice" by Herbert Werner, the U.S. subsidiary's CFO and vice president for finance and information technology, Mercedes said in a statement Monday. Lieb, a 56-year-old German, had held the position since September 2006. Mercedes is battling its German rivals for the titles of top-selling luxury brand in the United States and the world. Its U.S. sales are up 7 percent this year to 170,058 units, behind BMW with sales of 177,679. The Mercedes figures exclude sales of the Sprinter van. Toyota Motor Corp.'s Lexus brand, which has been the luxury sales leader for the past 11 years, has fallen behind with sales of 135,647, largely because of inventory shortages caused by the March earthquake in Japan. Like other luxury automakers under pressure to meet tougher government fuel economy rules and changing consumer preferences, Mercedes is gearing up to add volume and enter new segments. A new family of front-wheel-drive compact cars arrives in 2013. For more on the departure of Mercedes-Benz CEO Ernst Lieb, click here.

Suzuki as Independent as Ever, VW Discovering
When the mighty Volkswagen Group acquired 19.9 percent of Japan’s Suzuki Motor Corp. in late 2009, it looked like the start of a well-conceived, entirely complimentary auto-industry tie-up. However, the two companies had barely begun to work together when they discovered they didn’t like working together. According to Edmunds Auto Observer, Suzuki is a car company accustomed to doing things its own way, reflecting the personality of its hands-on and independent president, Osamu Suzuki. It is believed that Suzuki’s long time connection with GM, which began in 1981, was relatively stress-free because GM largely left Suzuki to its own devices and various model-sharing programs were limited to modest, econocar models such as the Geo Metro in the U.S. and Opel Agilia in Europe. But, it seems VW had in mind the kind of relationship that Ford enjoyed with Mazda for many years. Suzuki is still a scrappy company, a wily operator that continues to think outside the box. While it’s often seen to struggle in the U.S. market, Suzuki still is an outfit where from which one should expect the unexpected. There aren’t many companies like Suzuki around anymore, as VW is learning. Read more on the relationship between VW and Suzuki here.

Cars with the Most Brand-Loyal Buyers
Keeping existing customers is a hallmark to success in any business, and it’s especially important in the automotive industry, where the average product costs well over $30,000 and the typical ownership cycle is five or more years. While automakers in the luxury segment are often thought of as enjoying among the most loyal customers in the business, the top names in this regard are all mainstream makes, according to a just-released report based on second-quarter 2011 sales compiled by Experian Automotive in Schaumburg, Ill. Forbes reports that three Kia models ranked among the top 10 vehicles having the most brand loyalty in Experian’s report, including the list-leading Kia Forte compact sedan at 68 percent, along with the Soul compact wagon, and the two-door compact Forte Koup. Seven out of 10 of the models in Experian’s list were comprised of mainstream domestic-brand models, topped by the Chevrolet Cruze in second place with 64 percent brand loyalty. The remainder were Ford models, including the subcompact Fiesta, the midsize Fusion sedan, the seven-passenger Flex crossover SUV, the Taurus full-size sedan, and the compact Focus. Click here to check out the vehicles boasting the highest owner loyalty. For analysis on the list, click here.

Shopper Index Increase Bodes Well for Dealers, OEMs
Following similar trends as July and August, the Dataium Automotive Shopper Intensity Index rose significantly last month, moving higher by almost 8 percent. According to Auto Remarketing, the index climb, showing potential for an increase in retail sales in the next few weeks, bodes well for dealers and manufacturers. Conversion rates or leads per visitor were up nearly 10 percent from August, and Chrysler and Infiniti posted the highest gains, according to the report. In other good news for the industry, this year is on track to post close to a 10 percent increase in sales over 2010. On the other hand, while conversion rates were up, lead and visitor counts were both down this past month. That said, the company predicted “solid gains” for OEMs over the next few months. “We look for solid gains over the next few months as manufacturers continue with model year end clearance events and end of year buying by consumers,” officials noted. Click here for a chart to illustrate month over month change for automotive retail sales in units and dollars compared to the ASI index. For full coverage of shopper intensity and what it means for the auto industry, click here.

Rubbing Out Friction in the Push for Mileage
With more than three decades of intensive engineering efforts devoted to the cause, automakers have depleted the store of cheap and easy solutions to improving fuel economy. Yet with federal mileage standards rising to 50 miles per gallon and above in coming years, the pressure to do better is only increasing. That is why, according to The New York Times, reducing friction inside engines is becoming crucial. Internal-combustion engines are by nature high-friction devices. A multitude of mechanical parts turn or rub in metal-to-metal contact, separated only by a thin oil film. Friction nibbles away at engine power, producing heat that is lost to the atmosphere. Limiting those losses is a goal of every automaker, with huge efforts directed toward tiny returns. For instance, the 3.5-liter V-6 engine of the 2011 Honda Odyssey benefits from a suite of advances that improves the minivan’s EPA highway rating to 28 mpg from 25 for the previous version. Among the improvements were measures that cut engine friction by 4 percent, good for 0.15 mpg — a small but worthwhile gain, said Paul DeHart, senior powertrain engineer for the Odyssey. Click here for the complete article on the quest by automakers to reduce engine friction as a way of improving fuel economy.

CNA National Appoints Justin Eichmann to Newly Created Position of e-Commerce Manager
AIADA Affinity Partner, CNA National (CNAN), is pleased to announce that Justin Eichmann has joined the firm as e-commerce manager. He is responsible for the management and development of CNAN’s online applications from the end user’s perspective. “This newly created position is further proof of our commitment to improving our technology capabilities along with providing the level of service and support that our agents and dealers require,” said Joe Becker, president and chief executive officer of CNAN. “Our e-business suite has continued to evolve to the point that it now warrants a manager dedicated specifically to this important arena,” he continued. “The vast majority of dealerships are now rating products online and most of our business is currently generated through e-contracting.” Eichmann has more than 15 years of business experience including nearly a decade spent at ADP Dealer Services, a leading provider of integrated computing solutions for the automotive industry. He worked first as project lead for CRM implementation and later served as account manager for the Southwest Region. Most recently Eichmann was employed as a senior account executive for Cox Business Communications. For information about CNA National F&I products, visit www.CNANational.com or contact your local CNAN representative or Randy Rife at (800) 345-0191 ext. 720. Click here to have someone contact you directly.

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