December 20, 2012
Industry Report Exposes Why Some Dealerships Lose Employees
Conventional wisdom would say the more hours a salesperson works, the more money he or she earns. Not so, according to a new industry report on the automotive dealership work force. “Burning people out, working them all four weekends, makes them less productive,” says Ted Kraybill, founder of DeltaTrends, an automotive research and consulting company in Clearwater, Fla. “Two-and-half weekends a month seems to be the optimum amount for maximizing salesperson productivity and profit.” That’s just one finding in the 2012 Dealership Workforce Study Industry Report prepared by Northwood University and NADA University to study employee compensation, benefits, retention and turnover, hours of operation, and work schedules. “What’s working best to retain employees is also the biggest opportunity for most dealerships to improve upon,” Kraybill tell Automotive News. “And that is reducing the number of hours that employees have to work.” That’s because dealerships that offer a work-life balance have a higher employee retention rate, he says. The study also found that about half of all salespeople stay at a mass-market brand dealership less than 1.8 years. For the full story, including the roles salary and healthcare play in employee retention, click here.
Ray on Point: Happy Holidays
AIADA Chairman Ray Mungenast reminds us in this week’s Ray on Point that December is a busy time of year for everyone. End of year sales, office celebrations, and lingering questions over the economy and fiscal cliff make it easy to lose sight of the big picture. And the big picture is worth looking at. As of the end of November, international nameplate brand sales were up 19.3 percent compared to 2011. Today, the seasonally adjusted annual sales rate sits at 15.54 million units, the highest since January 2008. For dealers, the big picture is overwhelmingly positive. However, the big picture contains more than sales numbers and economic triumphs. Over the past week the terrible events in Newtown, Conn. have devastated our nation. In the wake of unspeakable tragedy, a movement has started on social media to commit one act of kindness in memory of each victim of that violent day. Ray writes that he is working to spread some good, and is proud to be a part of an industry where dealers from every corner of the nation are doing the same. Click here to read Ray’s full blog post.
Honda Accord, Suzuki Kizashi Rate Highest on New Crash Test
Thirteen mid-sized cars have earned high marks on the insurance industry's newest frontal-crash test, but a pair of Toyota models tested fared worse than the rest. Automotive News reports that the so-called small overlap test involves crashing the front corner of a car into a barrier at 40 mph. Just three out of 11 luxury cars rated "good" or "acceptable" on the insurance industry group's first round of tests this summer, but today the Insurance Institute for Highway Safety gave a good rating to the four-door Honda Accord and the Suzuki Kizashi, and an acceptable rating to 11 more mid-sized cars. Click here for the full list of vehicles and how they were rated. "Normally we see new technology and new innovations go into the luxury cars first, so we see them doing better," IIHS President Adrian Lund said. "This is a bit of a surprise." The Toyota Camry sedan and Prius v hybrid ranked worst on two measures of safety, leading IIHS to slap them with a "poor" overall rating. "They've got to find a way to strengthen the occupant compartment and manage the forces out there on the edge of the vehicle," Lund said of Toyota. For the full story, click here.
An Early Look at December Sales
November was a tough month to call, sales-wise, what with Hurricane Sandy and her potential to either lift or drag sales. There were also the Thanksgiving Weekend sales events to consider. According to Edmunds, December should be a bit more straightforward, but it is still worth noting that fully 40 percent of the month's sales will occur during the last eight days of the month. With that in mind, it is worth noting that so far retail sales are holding up well. The current pace and historical pattern point to retail sales this month of around 1.12 million units and a SAAR of 12.6 million. This compares with unit sales of around 965,000 and a SAAR of 13 million last month. If we assume a fleet mix of around 18 percent then December will end with total sales of around 1.36 million and a SAAR of 15.3 million. This compares to 1.14 million units and SAAR of 15.5 million last month. Looking at retail share, GM and BMW are up quite a bit over last month while Nissan, the South Korean makes, and Honda were down some. Click here for a chart. For the full story on December sales, click here.
A Kinder, Gentler Lexus Christmas Commercial
Much has been written (and satirized) about the disconnect between the world where most of us live and the one portrayed in the Lexus “December to Remember” car ads. According to Business Week, in Lexus World, some lucky person of wealthy extraction is given a new car with a fancy red bow. The cutesy tricks employed to surprise the wife/husband/girlfriend/boyfriend only makes it more painful for those who know the best they can hope for is the Bad 25th anniversary box set. But this year’s batch of Lexus ads appear to have lost a bit of their Masters of the Universe edge. The 2012 message seems to be: We know you probably won’t rig your luxury apartment elevator to play the Lexus jingle as part of an elaborate gift-giving ritual. But should you tear yourself away from Facebook for a few moments to go experience the good life, we hope it will be in a Lexus. Click here to watch the ads. Whether that makes anyone actually buy a Lexus is another question. Some of the commenters on the Lexus Enthusiast blog are underwhelmed and think the ads are skewed too much toward young viewers. For the full story, click here.
A Change Can Do You Good with CNA National
Changing service contract providers can be an easier transition than you may think with AIADA Affinity Partner CNA National Warranty Corporation (CNAN). Programs change, and over time it is important for dealers to evaluate whether their service contract provider still meets their needs. Changes in product, a company’s financial strength, underwriting, and selling opportunities all are valid reasons to consider changing service contract providers. Learn more from CNAN and how “A Change Can Do Your Dealership Good.”
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