You Get What You Get (If You Don’t Get Upset)

First Up 09/20/12

September 20, 2012

Ray on Point: You Get What You Get (If You Don’t Get Upset)
If you have children, or have spent any time around children, chances are you’ve heard the saying, “You get what you get, and you don’t get upset.” The phrase loses its meaning as we grow up. Some of us start businesses. Employ people. Pay for taxes and health insurance and estate planning. And we learn that getting upset with the status quo is the only way to protect our families, businesses, and workers. As dealers, if we don’t get upset and get engaged with the political process, if we passively allow the government to control more and more of our business, we stand to lose everything, writes AIADA Chairman Ray Mungenast in this week’s blog post. Car dealers better get upset, and work to influence the outcome of the upcoming elections, or we won’t like what we get. So get involved. Get donating. Get campaigning. Slap a yard sign on your lawn. Talk to your friends, neighbors, and employees – let them know what’s at stake. Because if we don’t get upset? Then we get what we get. Read the rest of Mungenast’s blog on what’s at stake for dealers this election here.

Insurance Group Out with Car Claim Data
Minicars and cars with big engines have the most frequent insurance claims for injuries to their occupants, while high-end sports cars and other luxury vehicles have the most expensive claims for damage, a study released today found. "For consumers concerned about insurance premiums, this information is key," said Kim Hazelbaker, senior vice president of the Insurance Institute for Highway Safety's Highway Loss Data Institute, which has been studying claims data for the past 40 years. In a review of 2009-2011 vehicles, the Porsche 911 had the lowest personal injury claims, while the Toyota Yaris had the highest frequency of personal injury claims. It was followed by the Suzuki Sx4 and Chevrolet Aveo. Others with low personal injury claims were Ford's F-150 4WD pickup, Jeep Grand Cherokee, and Chevrolet Silverado 1500 4WD. High end sports cars, luxury vehicles, and less expensive cars with big engines have higher-than-average collision claims, reports The Detroit News. Among new models, the $196,000 Ferrari California convertible tops the list for highest overall collision losses, with an average loss of $2,132 per insured vehicle per year, seven times the average for all vehicles. Click here to read more about which vehicles have the highest insurance claim rates.

Important and Intriguing New Vehicles Flood Dealerships Starting This Fall
As new models fill dealerships this fall, a handful of new cars and trucks hitting the market over the next year stand out. They're the most important and intriguing vehicles on the horizon, according to Mark Phelan at The Detroit Free Press. Some will test customer demand for new vehicle types and technologies. Others aim to revitalize struggling brands and bring new excitement to mainstream models. All face the challenges of a tepid economy and rising fuel economy standards. The Fiat 500L will go on sale in early 2013, which dealers hope will contribute to their bottom line immediately. Also on the way is the Nissan Sentra, expected to hit dealerships late this year. According to Phelan, arriving on the heels of the surprising new Altima midsize, the Sentra has a chance to rejoin upper-echelon compacts like the Elantra, Corolla, Civic, Fusion, and Cruze. A new Toyota Corolla is also heading to dealerships sometime in 2013. The new Corolla's fuel economy and features must improve significantly, but it would be shocking if it doesn't remain one of America's best-selling cars. To read about the rest of Phelan’s selections for the most intriguing vehicles hitting dealerships, click here.

Forbes: Buy the Car Lot with Group 1 Automotive
Shares of Group 1 Automotive Inc. have been trading near their fresh 52-week high of $61, hit on September 13, driven by solid second quarter results, accretive acquisitions, and a marked recovery for its largest customer – Toyota Motor Corp. This automotive retailer has now delivered 15 straight quarters with a positive earnings surprise, and achieved the Zacks #1 Rank (Strong Buy) on September 11, reports Forbes. Headquartered in Houston, Texas, Group 1 Automotive was founded in 1995. The $1.38 billion company is one of the largest automotive retailers in the U.S., which sells new and used cars and light trucks; arranges vehicle financing, service and insurance contracts; provides automotive maintenance and repair services; and sells vehicle parts. It owns and operates 122 automotive dealerships, 159 franchises, and 28 collision centers in the U.S. and the U.K. that offer 32 brands of automobiles. On July 26, Group 1 Automotive announced a 21.4 percent rise in adjusted earnings per share to $1.25 for the second quarter of 2012, reflecting a positive earnings surprise of 7.8 percent over the Zacks Consensus Estimate. Revenues grew 28.6 percent to $1.9 billion. Read more about Group 1 Automotive here.

The Wild West of Online
States are struggling with rules for selling and advertising cars online, reports Automotive News. For example, one state law puts an auto dealer at risk when somebody else takes his dealership's ad, alters the information then posts it on a different Web site. The process is known as scraping. As one dealer puts it, retail auto marketing online is still "the Wild West." Some in the industry question whether traditional concepts such as brokering, bird-dogging, curbstoning, and state advertising restrictions are outdated in the digital world. But they're still on the books and may trip up dealers using new marketing techniques. The discussion has prompted the National Association of Motor Vehicle Boards and Commissions to include a panel on the impact of Internet marketing at its meeting this week in Alexandria, Va. Greg Kirkpatrick, president of the association, says dealers "are just getting inundated with vendors offering the latest sales boost via the Internet." However, many industry players argue that Internet commerce is not significantly different from brick-and-mortar commerce. Mike Jackson, CEO of AutoNation, the largest U.S. dealership group, says Internet companies should follow the same rules that his stores have to. Click here to read more about the “Wild West” of Internet dealership advertising.

Don’t Let Your Life’s Work Go up in Smoke
Something strange seems to be happening from a property loss standpoint, and AIADA’s Affinity Partner, Federated Insurance, wants business owners to be aware and vigilant about their property protection plans. During 2011, 15 Federated insured business owners suffered fire losses in excess of $1 million! It is highly unusual to have so many fires of this magnitude. Four fire loss exposures were identified: Click here to find out the causes. In addition, the containment and cleanup of pollutants running off the sites from fighting the fires can be very costly. So why is this happening? In each case, human error and indifference toward basic fire prevention ultimately led to a business closure due to fire. Some experts suggest that an underlying cause could be the lack of basic maintenance due to current economic conditions. This appears to be the case when equipment has been improperly installed and used despite manufacturers’ warnings. Or, when temporary electrical wiring is strung rather than having a licensed electrician make a permanent installation that meets the code. Click here to download a fire prevention checklist for your dealership. Or, to learn more, visit to locate your nearest Federated marketing representative.

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