As Sales Soar, VW Stores are Hot Items

First Up 10/22/12

October 22, 2012

As Sales Soar, VW Stores are Hot Items
According to Automotive News Volkswagen sales have surged in the United States, so has interest in acquiring VW dealerships. Fifty-five VW stores have changed hands this year, 50 percent more than in all of 2011, says Frank Trivieri, executive vice president of sales at Volkswagen of America. "People who could get any franchise want the VW brand now," he says. Interest is especially high at four public dealership groups that have avoided the brand in the past: Group 1, AutoNation, Sonic, and Penske Automotive. Public groups currently own only 22 of VW's 607 U.S. dealerships. But Group 1 has picked up six VW stores in the past 18 months and now has eight. And the company says it wants more. "The interest in the company is high, and the relationship that we have with their management is very good," says Pete DeLongchamps, Group 1's head of financial services and manufacturer relations. "We think they are doing an awful lot of things right that makes this a good value proposition." Alan Haig, managing director of dealership broker Presidio Group says VW has been among the most acquired franchises by the 10 biggest dealer groups this year. Click here for more on the popularity of VW dealerships.

Audi May Help Mercedes Overtake BMW in U.S. Sales Contest
Audi, beginning a push to improve customer service at its U.S. dealerships, may be the spoiler in the U.S. luxury vehicle sales race, helping Mercedes-Benz by shearing buyers from BMW. According to The Detroit News, the U.S. luxury sales race looks to be heading for another close finish between Mercedes and BMW. Mercedes is ahead of BMW by 5,221 deliveries this year through September after finishing 2,715 behind in 2011. A contest once dominated by Toyota Motor Corp.'s Lexus, No. 1 for 11 straight years, is now volatile, making it difficult for BMW to repeat. The U.S. is a significant piece of the tightening global sales race, where fast-growing Audi is closing in on BMW and both lead Mercedes. Audi models, with their reputations for sporty driving, are more often compared with BMW's than with Mercedes vehicles, according to data provided by, a website that tracks online shopping. "If you were going to blame anybody for BMW not making it, I definitely would point toward Audi," Ivan Drury, an industry analyst with, said in a telephone interview. The data "shows a clear rivalry brewing," he said in an e-mail. Click here for the tight luxury sales race in the U.S. this year.

TrueCar CEO: Disrupting the Car-Buying Process Nearly Drove It Out of Business
Many companies believe they can disrupt an existing offline business by offering consumers lower prices over the Internet. But, reports All Things D, Scott Painter, TrueCar’s founder and CEO, says he knows what it’s like to drive prices too low. The company started off providing leads to dealers that were willing to offer the lowest prices on a car. While great for customers, it often meant a loss for the dealer. At first, Painter wasn’t terribly concerned, adding that he has always been interested in “sticking it to the man.” But after learning the hard lesson that the dealers were his partners – and there’s actually not that many of them in the U.S. – he altered the business to be more dealership-friendly. Today, it operates more as an intelligent Kelly Blue Book service that provides pricing transparency to customers by tracking all car sales in the U.S. TrueCar collects a flat rate from the dealer when one of its customers buys a car. Painter says dealers are starting to sign up for its services again and he expects the company to be cash flow positive by the end of the year. Read about TrueCar’s transformation here.

Year of the Electric Car Blows a Fuse
This year was supposed to be the year of the plug-in car but, as 2012 draws to a close, it looks like the electric car market still isn't fully charged, reports CNN Money. By the end of 2012, most major automakers will have a plug-in car of some type on the market, but plug-in cars still make up just one tenth of one percent of all cars sold in America. So have automakers gotten ahead of themselves and produced too many? Promoters of electric cars say no. They acknowledge that while there are many types of electric cars out there, they're not available in enough places or in large enough numbers. A big reason for there being a small supply of electrics but many models has to do with regulations in California that require automakers that want to sell any cars in that state – A.K.A. every automaker – to sell a certain number of so-called zero-emission cars there. That has led many automakers to produce "compliance cars" that exist solely to meet California's requirements. If those cars only sell in tiny numbers, electric car proponents say, it doesn't reflect the potential market. For more on what’s hindering the electric car market in the U.S., click here.

Nissan Recalls Altimas in U.S. for Loose Steering Bolts
Nissan Motor Co is recalling 13,919 of its top-selling Altima sedans in the United States because bolts that may not have been tightened properly during production could fall off, increasing the risk of a crash, according to U.S. safety regulators. reports that the Altima sedans are from the 2012 and 2013 model years and were made at the Nissan plant in Canton, Miss., from May 10 to July 26. "Some of the subject vehicles may have been manufactured with four transverse link bolts and two power steering rack bolts that were not torqued to the proper specification," Nissan told regulators in a letter NHTSA showed on its website. As a result, the bolts may shake loose during driving, the letter states, and drivers may notice rattling noise. Through September, in the U.S. market, 27 percent of the vehicles Nissan sold were Altima sedans. Altima owners will be asked to bring their cars into Nissan dealerships, where the bolts will be torqued to the proper specification, NHTSA said. The cars are under warranty protection. Owners will begin to be notified on October 29, Nissan told NHTSA. Read about Nissan’s recall of certain Altima sedans here.

Nominate a Dealer for AIADA’s Lifetime Achievement Award
Every year, during our Annual Meeting and Luncheon, AIADA honors a highly respected member of the international nameplate auto industry with our David F. Mungenast Sr. Lifetime Achievement Award. The award was created to honor the legacy of Dave Mungenast and recognize some of the truly outstanding leaders in our industry who possess an unparalleled work ethic and a commitment to their families and communities. Recognizing members of our industry who reflect the values and commitment that Dave exemplified is the best way we have to honor his memory. If you know someone in the international auto industry like Dave, AIADA wants to know! Please take the time to read more about the award and nominate a distinguished member of our industry by clicking here. Nominations are due by October 31. The 2013 recipient of the David F. Mungenast Lifetime Achievement Award will be honored at AIADA’s 43rd Annual Meeting and Luncheon on February 11, 2013 in Orlando, Florida. If you’re not already registered, click here to do so.

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