Ray on Point: What Comes Next?

First Up 11/08/12

November 8, 2012

Ray on Point: What Comes Next?
On Tuesday, the American people went to the polls and voted. AIADA Chairman Ray Mungenast writes that while the final result may not be what many hoped for, it is a clear and unassailable outcome. So what comes next? For the next couple of months, a lame duck Congress will preside in Washington. Leadership from both sides of the aisle are already reassessing their strategies. After this most recent election, I hope Washington’s elected officials will catch a clue. Because until our President and legislators are willing to work together, we won’t see any significant bills, including a budget, passed. International nameplate dealers will now need to fight harder than ever to protect our stores and brands from Washington’s buy-American efforts, regulatory burdens, and tax and spend policies. Establishing a personal relationship with your legislator and educating them on how dealerships operate is absolutely crucial in this environment. With that in mind, please consider working with AIADA to hold a dealer visit at your store. No matter what, dealers always think the best days are ahead of them, and Mungenast says he still thinks that today. Read the rest of his latest blog post here.

7 Current and Former Auto Dealers Elected to Congress
All seven current and former auto dealers running for seats in the U.S. House of Representatives won on Election Day, reports Automotive News. Winners include Roger Williams (R-Texas), a former Texas secretary of state who runs a Chrysler-Dodge-Jeep-Ram store in suburban Fort Worth, and Jim Renacci (R-Ohio), the co-owner of a Chevrolet dealership that was rejected as General Motors went through bankruptcy. Williams won his first term in Congress comfortably with 58 percent of the vote, but Renacci was narrowly re-elected over Democratic Rep. Betty Sutton after Ohio lost two seats in Congress and the state's redistricting plan forced the two incumbents to compete. Renacci won 52 percent to 48 percent, a margin of around 15,000 votes. Also winning re-election by more comfortable margins Tuesday were: Scott Rigell (R-Va), who owns Ford and Volvo dealerships; Mike Kelly (R-Pa.), who owns a Chevrolet store; Vern Buchanan (R-Fla.), who has sold some of his several dealerships and had his Dodge dealership rejected during the Chrysler bailout; John Campbell (R-Calif.), who sold several dealerships, including one of the first Saturn stores, when elected in 2004; and Bill Shuster (R-Pa.), who sold his Chrysler dealership when first elected in 2000. Read about the dealers elected to Congress on Tuesday here.

Hurricane Sandy Wipes Out 200,000 Vehicles
According to The Detroit News, Toyota Motor Corp., Chrysler Group LLC, Nissan Motor Co., and Honda Motor Co. plan to scrap about 15,000 vehicles damaged by Hurricane Sandy as automakers and dealers continue assessing the storm's impact. Nissan alone estimates more than 6,000 Nissan and luxury Infiniti brand cars and light trucks are "un-saleable" because of the storm, Travis Parman, a company spokesman, said. U.S. industrywide light-vehicle sales in October fell short of the average estimate of analysts surveyed by Bloomberg after Sandy slammed the East Coast. Sales for the month rose 6.9 percent, below the 12 percent gain that was the average of nine estimates. "Between dealer and port vehicles for both Nissan and Infiniti, initial estimates have us at more than 6,000 units as 'un-saleable' to be scrapped," Parman said Tuesday. Honda and Acura dealers expect to have to scrap about 3,440 vehicles, said Chris Martin, a spokesman for Honda's U.S. unit. New York and New Jersey are among the top 15 U.S. states for vehicles in operation and auto dealerships; there are 886 auto dealerships in New York and 463 in New Jersey. Click here for more on the impact of Hurricane Sandy on dealerships and autos in the region.

Toyota's Camry is Killing it Again
Any doubts Toyota Motor Corp. is rebounding were erased by its latest earnings report, which arrived on top of large market-share gains in the U.S. According to CNN Money, much of the gain was made possible by the Camry's dominance of the family sedan segment. Toyota on Nov. 5 announced second-quarter fiscal profit of $3.2 billion, more than triple last year's total, and elevated its forecast for annual profit by 2.6 percent to $9.7 billion. In the U.S., by contrast, Toyota is returning to previous form, tracking at 14.4 percent share of all U.S. light vehicles, up nearly two points from this time last year – an increase representing nearly 300,000 additional vehicle sales on an annual basis. Luckily for the company, the Camrys on lots are of an all-new variety that debuted a year ago during a lull among introductions and production ramp-ups of competitive family sedan models. Toyota also has provided 0-interest financing and subsidized leases. The Camry was the top-selling car in the U.S. through October with sales of 344,714 units, a gain of 37 percent from last year, well ahead of No. 2, the Honda Accord, with sales of 276,196. Read more about how the Camry is leading Toyota’s rebound here.

American Suzuki Cleared to Borrow Up to $45 Million to Close U.S. Dealerships
American Suzuki Motor Corp. won interim court approval to borrow as much as $45 million as it shuts auto dealerships and revamps motorcycle and boat sales under bankruptcy protection. According to Automotive News, Suzuki Motor Corp. will try to avoid long court battles with its 216 dealers by offering cash payments within 10 days if they voluntarily scrap their franchise agreements. Various state laws normally protect dealers when auto manufacturers try to force them to shut down, Richard Pachulski, another American Suzuki lawyer, said in court. On Nov. 5, Suzuki put the distributor into bankruptcy to end U.S. losses, avoid the costs of tightening federal regulations and to shut down a sales network in which 69 percent of dealers sell fewer than five cars a month, according to company attorney James Stang. The company will reorganize its motorcycle, boat, and all-terrain vehicle business and continue selling through separate dealers, American Suzuki said in court papers. American Suzuki will return to court in the coming weeks to seek final approval to borrow as much as $100 million. Click here to read AIADA’s statement regarding Suzuki’s bankruptcy. For more on the automaker’s proceedings, click here.

CNA National Hosts Service Managers Roundtable
AIADA Affinity Partner CNA National Warranty Corporation (CNAN) recently hosted its Service Managers Roundtable on October 18-19 at its headquarters in Scottsdale, Arizona. “This year’s roundtable was another great opportunity for service managers to share ideas and learn new strategies that they could implement in their dealerships and make an immediate positive impact to their bottom line,” says Alan Miller, senior vice president of sales for CNA National. Topics discussed included keeping customers returning for service and new ways to increase average profit per repair order. As always with the annual roundtable, there was no registration fee for attendance and hotel accommodations were provided by CNA National. Several managers from AIADA member dealerships were in attendance. Earlier this year CNAN was recognized by Auto Dealer Monthly’s Dealer’s Choice Award as both “Best Provider” for service contracts and “Best Provider” for reinsurance. For more on what CNA National offers AIADA members, click here.

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