March 20, 2012
Low Interest Rates, High Resale Values Fuel Auto Leasing Rebound
Leasing roared back to life last year, fed by an ideal combination of low interest rates and high trade-in values, reports The Detroit News. Before the 2008 recession, it accounted for about a fourth of new-vehicle sales in the U.S. "Now there is a potential for it to go to more than 30 percent of sales, we think," said Jesse Toprak, vice president of market intelligence at TrueCar.com. One of leasing's biggest attractions is that it typically offers lower monthly payments than a sale. With fuel prices once again threatening to spike past $4 this summer, leasing may be the best way for consumers to buy large vehicles and be covered if their residual values drop. Leases also guarantee that dealers will get vehicles back in two or three years – lightly used late-model cars and trucks that they can put directly onto their lots. At the Land Rover dealerships in Dallas, Frisco, and Austin owner Jim Snell hopes to see his lease rates double. Leasing is "back up to 35 to 40 percent of sales," Snell said. "It was about 60 percent, and I'd like to see it go back. Maybe this will be the year." For coverage of the rising appeal of leasing for many consumers, click here.
Subaru Marks 25 Years at Lafayette, Indiana, Plant
Subaru's Indiana factory just marked its 25th year since being incorporated – and today, it's more successful than ever. Subaru incorporated its Lafayette, Ind., plant on March 17, 1987 and two years later, it started making a single model, the Subaru Legacy. It added the Outback in 1995 and the Tribeca in 2005. Last year, the plant, costing $700 million-plus to build, achieved record production, churning out 161,716 vehicles. In addition to Subarus, it still makes Toyota Camrys as a consignment job for Toyota. Read more about it at AIADA’s site, www.whatisanamericancar.com. USA Today reports that it visited this impressive plant four years ago to research a story on how automakers have gone "no waste." At Lafayette, Subaru workers were going to extremes to try to reduce even the slightest amount of wasted material. It recalls how the plant was filling barrels with pins and other small leftover items that could be melted down or returned to manufacturers. What little was left over and couldn't be recycled was shipped to a recycling plant in Indianapolis, not put into the waste stream. Click here for more on the 25th anniversary of Subaru's Lafayette plant.
TrueCar Creates Industry-Relations Post to Smooth Dealer Ties
TrueCar Inc. is turning to Pat Watson, former chief of the South Carolina Automobile Dealers Association, to try to repair relations with dealers nationwide. The online vehicle shopping network and sales lead generator, has added the position of vice president of industry relations to its executive management team and appointed Watson to fill it, reports Automotive News. Watson will oversee relationships with dealer associations at the national, state, and local levels. He joined TrueCar on March 12. Watson "is a true advocate for dealers and will help TrueCar to stay focused on making sure that our dealer partners' needs are met," TrueCar founder and CEO Scott Painter said. TrueCar's network of participating dealers shrank dramatically this year. The exodus gained steam after Group 1 Automotive Inc. dropped TrueCar, citing data-security concerns. TrueCar also has run afoul of regulators in several states over advertising practices and allegations that the site was brokering vehicle sales through a pay-per-sale model. Under that model, dealers only pay TrueCar when a TrueCar lead results in a vehicle sale rather than the more widespread industry model in which dealers pay a monthly subscription for leads. For more on TrueCar.com’s efforts to improve industry relations by adding a new post, click here.
Jeremy Lin Hired To Endorse Volvo
The U.S. arm of Swedish car brand Volvo reached an endorsement agreement with New York Knicks basketball star Jeremy Lin that will cover several international markets but focus on the U.S. and China, According to The Wall Street Journal, over the next two years Mr. Lin will participate in Volvo's corporate and marketing activities as a "brand ambassador" for Volvo Car Corp., appearing in advertising, the car maker said Monday. The deal with Volvo, which was expected, marks one of the first major corporate contracts for the 23-year-old Knicks guard, who ascended from basketball benchdom to stardom earlier this year. The U.S.-born son of Taiwanese immigrants, Mr. Lin has captivated Chinese basketball fans, hungry for a hero since the retirement of former Houston Rockets star Yao Ming. Freeman Shen, senior vice president of Volvo Car Corp. and chairman of Volvo's China operations, said the hiring of Mr. Lin was an important part of Volvo's "brand rejuvenation," showcasing the new Volvo brand strategy "Designed Around You" with "sportsmanship and intelligence." Click here for more on Volvo’s deal with New York Knicks star Jeremy Lin.
The Worst-Built Cars for 2012
There really aren’t any truly abysmal new cars in dealers’ showrooms any more. Even the worst of the lot would be considered superior when compared to some notorious clunkers from the 1970′s and ’80′s. Still, not all models are created equal, according to Forbes. As the latest round of new-car ratings from Consumer Reports illustrates so soundly, the differences between the “best” vehicles in the market and the also-rans is decreasing to an ever narrowing degree. Forbes says it poured over the latest data from Consumer Reports’ 2012 Annual Auto Issue to identify which models, based on a convergence of objective test results, could be considered the 10 Worst Built Cars for 2012. It started by examining the report’s road test ratings and isolated the models that were ranked at or near the bottom. It then identified those models that received the lowest marks for reliability, based on Consumer Reports’ subscriber surveys, and were cited for at least two other “worsts,” including bottom-of-the-pack value ratings, highest five-year operating costs, lowest owner satisfaction, poorest fuel economy in a given class, and/or worst performance in accident-avoidance tests. Click here for a slideshow. For more on the worst-built cars of 2012, click here.
CNA National Launches Enhanced Tire-and-Wheel Coverage
AIADA Affinity Partner CNA National Warranty Corporation (CNAN) has announced the launch of its new Preferred Tire Care SM product, PTC12, as one of the industry’s most comprehensive tire-and-wheel protection plans for auto consumers. “PTC12 offers our most comprehensive coverage ever, securing additional peace of mind for our consumers and dealerships,” says Alan Miller, senior vice president of sales for CNA National. “With PTC12 most repairs and replacements for damage caused by road hazards are covered with no deductible.” PTC12 coverage includes the costs of mounting, balancing, valve stems and taxes. PTC12 features no deductible and is available on new and used vehicles. Along with rental car, roadside assistance and towing benefits, PTC12 offers unlimited claim benefits with no limits on occurrences or mileage. “By offering an enhanced PTC12 package, we have clearly separated our product from competitors,” says Miller. CNAN is the only service contract company to be voted a number-one provider for eight years in a row in the Auto Dealer Monthly Dealers’ Choice Awards. If you haven’t talked to a CNAN Representative lately, click here to have someone contact you or call (800) 345-0191 ext. 720 to find out how you can partner with the best. Visit www.CNANational.com to learn more.
Around the Web
March Muscle Car Madness [Jalopnik]
Riding in the Aston Martin One-77 [Edmunds Inside Line]
2013 Mercedes-Benz SL65 AMG [Autoblog]
Audi Recognizes Top Dealers of 2011 [Auto Remarketing]