Strong Auto Sales Boost Dealer Groups

First Up 04/26/12

April 26, 2012

In Washington, Unions are Making Themselves Heard
AIADA Chairman Ray Mungenast penned his latest blog post from AIADA’s headquarters, just outside of Washington, D.C. On Tuesday, his first day in town, the Senate held an important vote. It was an effort by Senate Republicans to overturn a law that, if the courts allow it, would enable unions trying to organize a workplace to fast track votes and in essence “ambush” the employer. As expected, the effort to overturn the new regulations failed 54-45, along party lines. So, why should dealers care? For one, the new regulations will make it easier for unions to organize, and more difficult for employers to offer alternatives, or even educate their workers on the consequences of organizing. The impact could be felt in dealers’ small businesses, and in the plants that manufacture their vehicles and parts. This spring and summer, dealers should keep an eye on how unions are working to influence elections and the way they do business. With that in mind, take the time to register today for AIADA’s Summit in Washington, where you can learn more about labor, taxes, regulations, and other issues impacting your bottom line. Read the rest of Mungenast’s latest blog on the importance of union issues to dealers this election season, click here.

Strong Auto Sales Boost Dealer Groups
U.S. dealership groups reported higher-than-expected first-quarter profits on Wednesday, helped by the need for Americans to replace their aging cars and trucks with more fuel-efficient vehicles as prices at the pump neared record highs. According to Reuters, AutoNation Inc., Penske Automotive Group, and Lithia Motors Inc. all reported an increase in retail sales and new vehicle prices for the quarter. The average age of U.S. vehicles is a record 10.8 years and analysts say those cars and trucks are much less fuel-efficient than newer models today. As fuel approached $4 a gallon, it prompted Americans to trade in their older cars. Higher vehicle prices also show that automakers are staying away from using incentives that spur sales but lower profits and resale values. Penske reported net income from continuing operations of 55 cents per share, besting the 47 cents per-share profit expected by analysts. Lithia's net income rose to 63 cents per share, up from 33 cents per share, a year ago. Read the rest of Reuters’ coverage of how dealer groups fared during the first quarter of this year by clicking here.

Toyota Turns to Innovative Production Methods to Boost Quality
Toyota says it is putting renewed focus on innovation in production methods and design after getting a wake-up call from its massive recalls. A highly flexible assembly line that can grow or shrink over a weekend to adjust to demand was among the innovations Toyota Motor Corp. showed this week in production technology. According to The Detroit News, it also highlighted special stamping that allows car doors to be carved into molded shapes and instantaneous laser-welding that adds to the stability of luxury models. Reporters were given a tour of auto plant anatomy never shown to the public at Motomachi factory in the city named after Japan's No. 1 automaker. Toyota, which makes the Prius hybrid, Camry sedan and Lexus luxury models, also showed several samples of doors that had been stamped with Toyota President Akio Toyoda's autograph, as well as cartoon creatures. Toyota said the metal stamping technology is new and developed within the company. The new stamping, which also produces sharper shapes on car exteriors, will be introduced for the limited edition iQ subcompact model going on sale in a few months, according to Toyota. Read more about Toyota’s new innovative production methods here.

Automakers Expect to Avoid Losing Output Amid Resin Shortage, AutoNation Says
AutoNation Inc., the largest U.S. retailer of new vehicles, said automakers expect to avoid losing output amid a shortage of a key resin used in fuel and brake parts. Automakers see the shortage of the resin PA-12, also called Nylon-12, as "nothing like" the challenge of last year's tsunami in Japan and floods in Thailand, AutoNation CEO Mike Jackson said on Wednesday. Automotive News reports that the retailer boosted prices and used-vehicle sales last year as the natural disasters limited shipments from Toyota Motor Corp. and Honda Motor Co. "Production for the next four to six weeks has all been confirmed by the various manufacturers, and they've told us that they will find solutions for the period beyond that," Jackson said. "Everything's smooth sailing. If there's a moment of truth it would be in four to six weeks when they can't confirm production schedules." Resin is in short supply after the March 31 explosion at chemical maker Evonik Industries AG, which halved global capacity to make Nylon-12. Evonik's Marl, Germany, factory made a base ingredient used in the resin called cyclododecatriene, or CDT, and supplied the material to other makers of Nylon-12. For the latest on how automakers are coping with a resin shortage, click here.

Google Seeks Partners for Its Autos
The leader of Google Inc.'s effort to develop self-driving cars was in Detroit on Wednesday to send a message that the internet company is looking for partners to bring its innovations to market within the next decade. "We're talking to every car company to see what their level of excitement is," said Anthony Levandowski, head of Google's project to develop software and sensors to allow vehicles to drive themselves. Google still needs to do "millions of miles" of testing before it is ready to offer a self driving car system for sale, Mr. Levandowski said. It also is discussing with insurers how to address the liability issues raised by self driving cars. But he said he expects a system could be ready "much sooner than the next decade. If not, shame on us as engineers." According to The Wall Street Journal, Google hasn't decided how it could market a self-driving car system. Among the options, Mr. Levandowski said, are partnerships with auto makers, offering systems as aftermarket installations, or possibly giving self driving technology away free as a way to drive use of other Google services. Click here for more on Google’s attempt to develop self-driving cars.

Drive Sales through Events and Service Clinics at Your Dealership
Shell Advantage Marketing Solutions (SAMS) offers dealerships a strategic line up of programs proven to provide multiple revenue streams and boost ROI. These products include Sales Events, Service Clinics and bLinked®. Sales Events move new and pre-owned models by increasing showroom and internet traffic. Service Clinics appeal to inactive and at-risk customers and serve to showcase your dealership’s knowledgeable, factory-trained technicians, as well as trigger a greater percentage of customer pay services. Clinics are also an ideal time to introduce customers to new models. bLinked® is a program that combines a dealership’s customer data, monthly manufacturer incentives, desired profit levels and current inventory to target individuals who are in the best position to buy a new vehicle. bLinked® also features a Dealer Portal with a unique service-in-to-sales tool that matches daily service appointments of qualifying customers to vehicles in current inventory. Click here to learn more about Shell Advantage Marketing Solutions and these programs. Contact your Shell Sales Representative today to take advantage of this complete solution, or contact Don Moser at (713) 546-8120.

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