October 19, 2011

Washington Gets One Right
Car dealers have grown used to hearing bad news from Capitol Hill. From our perspective, Washington seems committed to making at least one boneheaded, anti-business move per month. So, writes AIADA Chairman Jim Smail in his latest blog post, you can imagine his surprise and excitement when he found out last week that Congress has finally, FINALLY ratified the United States’ free trade agreement with South Korea. The vote is a victory for dealers everywhere, and was the result of four years of hard work and intense lobbying by everyone from farmers, to unions, to manufacturers, to AIADA. After four long years, the House, Senate, and White House were able to come to an agreement and Congress overwhelmingly voted to pass the legislation. President Obama will sign it in the coming days. This is a win for all dealers of international brands. It indicates a move away from dangerous and self-defeating “Buy American” legislation and a move toward rational, business-friendly legislation that benefits all Americans. To all the dealers that wrote or visited your elected representatives on this issue: Thank you. Dealer involvement was crucial to passing KORUS. Follow the links to see how your representative and senators voted. Click here to read the rest of Jim Smail’s blog post on passage of KORUS and why it is a win for international dealers.

U.S.-International Price Gap Widens
According to Automotive News, international cars are selling in the U.S. market at the biggest price premium to domestic autos in almost 12 years as a weak dollar curtails imports of lower-priced models, allowing General Motors Co. and Ford Motor Co. to gain share. The average selling price for a new international car climbed to a record high of $31,536 in August, according to the U.S. Bureau of Economic Analysis – $7,614 more than the average domestic-made car and the biggest gap since December 1999. While Japan's tsunami disrupted auto exports, continued deliveries of premium-brand cars such as Volkswagen AG's Audi boosted luxury autos to a higher portion of international-car sales, said Paul Ballew, chief economist for Nationwide Mutual Insurance Co. in Columbus, Ohio. "It's very hard to import, especially from Asia, small cars right now because of where the dollar is," he said. "If you look at luxury-car sales the last few months, they're up double-digits from a year ago while small cars are down more than 20 percent." The surging yen may deter Japanese automakers from using aggressive discounts late this year to try to reclaim U.S. market share. Read more on the international-domestic price gap by clicking here.

Survey Explores Women Buyers' Research Habits, Emotional Impact of Purchase Process
Media network and publisher for women BlogHer Inc. announced Monday the results of a survey that delved into how women feel and where they turn for advice while buying a car. Auto Remarketing reports that the study titled, “Put Her in the Driver’s Seat,” revealed a positive impact on female buyers who used blogs and social media for car research and also showed a preference for blogs and official product information sources versus traditional media and social networks among women. "Women clearly articulated the features they need to see and the voices they want to hear when considering a car purchase," said Elisa Camahort Page, co-founder and chief executive officer of BlogHer. So where do women search for advice and information before buying a new car? The study revealed the top five information sources for women were dealership visits (65 percent), word of mouth (56 percent), car review websites (53 percent), auto manufacturer websites (43 percent), and blogs (31 percent). Interestingly, Facebook notched a chunk of the survey sample, with 17 percent of women turning to the social media site for vehicle research. Click here to see the entire survey presentation. For Auto Remarketing’s coverage of its findings, click here.

More Than Ever, the Car Dealership Experience Matters
In an ideal world, car shoppers could research models, arrange financing and insurance, negotiate a trade, and even arrange home delivery of their new car from the comfort of their living room. While many dealers are close to this level of online sophistication, none are completely willing to embrace the internet as a replacement for floor traffic in dealerships. According to The Car Connection, the dealership experience may be even more important now than in the past. Prior to the internet age, a dissatisfied customer would complain to friends, neighbors, and relatives about a negative dealership experience, reaching perhaps dozens of people. Today, thanks to the popularity of social media and message boards, a negative experience can reach thousands of people instantly. In other words, auto dealer customer service has become even more critical than in years past. The challenge for dealerships is attracting and retaining sales staff who are customer-focused, internet savvy, and knowledgeable about product. As we move closer to online car buying, dealers will need to be more proactive about providing real-time inventory tracking as well. Read more from The Car Connection about what dealers can do to improve their perception in the information age here.

Four-Cylinder Engines, MPG on the Rise
For consumers, its high fuel prices and slimmer wallets. For automakers, it’s the tug of pending fuel-economy regulations. Combine the two, and the U.S. auto market is undergoing a visible and predictable reconstitution, evidenced by smaller vehicles and smaller engines. A recent examination of data from Edmunds.com shows that over the last four-and-a-half years, the proportion of vehicles sold in the United States with 4-cylinder engines has climbed from 32 percent to more than 45 percent. In several recent months, the U.S. 4-cylinder engine mix has run more than 50 percent of sales, and the smallest engines now are established as the dominant choice in the market. Click here for a comparison chart. According to Edmunds Auto Observer, the market’s shift to smaller engines means fuel economy is on the upswing, too. In January 2007, the average fuel economy for all new vehicles sold was 20.5 miles per gallon. By March of this year, when 4-cylinder penetration reached 50.5 percent (one of the highest rates in four years), average fuel economy was 23.5 mpg – 15 percent improvement from January 2007, when 4-cylinder engines were in just 32 percent of all new vehicles sold. For more on the proliferation of four-cylinder engines, click here.

AIADA to Celebrate “A Legacy of Leadership” at 42nd Annual Meeting and Luncheon
Join AIADA, fellow dealers, and industry leaders at our 42nd Annual Meeting and Luncheon in Las Vegas. Together, we’ll consider the Legacy of Leadership that is inspiring today’s international dealer community and what it means for the future of our industry. This year's meeting will include keynote remarks from Mark Templin, Group Vice President and General Manager at Lexus. “Lexus has proven itself a leader in the U.S. auto market, and Mark Templin has played a central role in making it one of today’s most popular luxury brands,” said AIADA President Cody Lusk. “His remarks will provide invaluable perspective for dealers considering how our industry can continue to lead in the U.S.” Read more about Templin and AIADA’s 42nd Annual Meeting and Luncheon here. In addition to Templin’s remarks, the event will include the presentation of the David F. Mungenast Lifetime Achievement Award and the passing of AIADA’s chairman’s gavel from the current chairman, Jim Smail of Pennsylvania to Chairman-Elect Ray Mungenast of Missouri. Don’t miss your chance; register today by clicking here or call 1-800-GO-AIADA.

Around the Web
Audi A2 Takes Aim at BMW i3 [Motor Trend]
Toyota to Race Hybrid Car at Le Mans Next Year [Driver's Seat]
Porsche Confirms New Smaller SUV [Forbes]
Hyundai, Kia Expect 14% Sales Growth in 2012 [DriveOn]