November 14, 2012
Automakers Expect Sales Growth in 2013 Despite Looming Fiscal Cliff
With the election in the rearview mirror, the auto industry is barreling toward 2013 with visions of more sales growth, a gradually healing housing market, and easier credit that could shield the industry even if President Barack Obama and Congress don't resolve their budget impasse by year's end, according to analysts. Late last week, the Thomson Reuters/University of Michigan preliminary consumer sentiment index climbed to 84.9, the fourth straight increase and the highest since July 2007. Strength in the housing market is brightening consumers' outlooks, and auto companies expect that to translate into more shoes in the showroom. Even with the so-called fiscal cliff looming as a threat to the economy, the auto industry's momentum is based on several factors that may continue regardless of whether Washington reaches a compromise on tax increases and spending cuts. According to The Detroit Free Press, cheap credit, pent up demand, and an improving housing market are contributing to the market’s ongoing success. Read more about what to expect from the U.S. auto market in 2013 here.
Online Dealer Reviews Drive Showroom Traffic
A year ago, Tom Wood Toyota in Indianapolis started urging customers to write online reviews of the dealership on Cars.com in addition to Google. According to Automotive News, reviews have become an integral part of dealership online marketing because Internet shoppers are more likely to visit a store if they see good reviews. That has created an opportunity for some companies, such as Chicago-based Cars.com, to jump into a mix dominated by search giant Google and third-party review sites such as dealerrater.com and Yelp. A recent study by Volkswagen of America found that VW dealerships that attained an average score of 4 stars or better on consumer reviews received 32 percent more traffic to their Web sites from Google searches than those with 1 or 2 stars. About the time Cars.com started its review program, Google was eliminating all dealership reviews on Google search pages from third-party review sites, such as dealerrater.com and Yelp, causing dealerships to lose dozens or hundreds of reviews overnight. Tom Wood Toyota is one of eight stores in Indiana and two in Minnesota owned by Tom Wood Automotive. The Toyota store sold 1,545 new and used vehicles in 2011. Read more about the importance of online dealership reviews here.
VW Bests Rivals in a Europe of Haves and Have-Nots
As cratering car sales in Europe ravage companies such as Fiat, General Motors Co.'s Opel and PSA Peugeot Citroën SA, Volkswagen is parlaying the region's sovereign-debt woes into a market-share coup. Its unexpected weapon: cheap car loans, fueled in no small part by the economic chasm between financially robust Germany and its beleaguered southern neighbors. According to The Wall Street Journal, the aggressive financing, which has helped Volkswagen lift its share of Western Europe's car market to nearly a quarter from 20 percent when the debt crisis erupted three years ago, shows how the crisis is re-carving the continent's corporate landscape. Volkswagen's borrowing costs have narrowed to a third of those at competitors such as Fiat and Peugeot in recent bond sales. Volkswagen owes its edge partly to a cash pile of €9.2 billion ($12 billion) and strong sales in robust export markets such as China. But one of its biggest advantages is its home base: Germany, Europe's economic powerhouse. Borrowing costs for blue-chip German companies track what the German government pays, which has tumbled as safety-minded investors flock to its bonds. Click here to read more about VW’s continued success despite Europe’s economic downturn.
Toyota Recalls 2.77M Vehicles, Including Prius
Toyota Motor is recalling 2.77 million vehicles around the world for a water pump problem and a steering shaft defect that may result in faulty steering. According to USA Today, no accidents have been reported related to these two problems announced Wednesday. Some 1.51 million vehicles are being recalled for the steering defect in Japan and 1.25 million vehicles abroad – including 670,000 in the U.S. Affected models include the Prius hybrid, Corolla, Wish, and other models produced from 2000 to 2011 in Japan, and from 2000 to 2009 overseas. Of those vehicles, some 620,000 spanning five hybrid models, including the Prius, have a defective water pump in addition to the steering shaft defect. Those vehicles were produced from 2001 to 2010 in Japan, and from 2003 to 2011 overseas. Another 10,000 vehicles with only a pump problem are also being recalled. Despite the recalls, Toyota is now headed to record vehicle sales around the world, offsetting a sales plunge in China with booming demand in emerging markets such as Indonesia, India, and Thailand. Click here for more on Toyota’s recall of 2.77 million of its vehicles worldwide.
2014 Cars: A Very Early Preview
It's never too early to see what's under the hood for the world's carmakers. Because of the peculiarities of the industry, some 2014 models have already been shown at auto shows like Paris and Frankfurt, or pictures have been released in advance of other shows like Los Angeles and Detroit. Manufacturers like to keep new models under wraps until the very last minute, lest they steal sales from outgoing models, but sometimes complex logistics or simply corporate flag-waving take precedence over sales tactics. For those who can't wait for the official start of the 2014 model year on October 1, 2013, CNN Money is featuring a peek at some of the all-new cars and crossovers that will be emerging from design studios and engineering centers. Cars like the BMW i3 are expected to hit the market. Made of lightweight yet super strong carbon fiber, it is BMW’s first all-electric car with a range said to be around 100 miles. Also coming next year is the Mini Cooper Paceman – a two-door version of the four-door Countryman. The first vehicles will arrive in the U.S. around mid-2013. Click here to check out the other vehicles CNN Money is featuring as part of its early preview of 2014 cars.
Join Dealers in Orlando for AIADA’s 43rd Annual Meeting and Luncheon
Each year, AIADA’s dealers gather to consider where the international nameplate auto industry stands and prepare for what the future holds. Join fellow dealers and industry insiders in Orlando, Florida on February 11, 2013 for its 43rd Annual Meeting and Luncheon. This year, we’ll discuss how the economy is Driven by the international nameplate auto industry and what dealers can do to maintain their edge. Featuring keynote remarks by Mercedes-Benz USA President and CEO Steve Cannon, the presentation of the David F. Mungenast, Sr. Lifetime Achievement Award, and the passing of the gavel from 2012 Chairman Ray Mungenast of Missouri to 2013 Chairwoman Jenell Ross of Ohio, the 43rd Annual Meeting and Luncheon is a can't-miss event for international nameplate dealers, as well as their employees. Register today by clicking here or by calling 1-800-GO-AIADA
Around the Web
It's Here: Lamborghini Aventador Roadster [TopGear]
Next Generation Range Rover Sport to Get 7-Seat Option [Autoblog]
10 Cars Every Guy Should Know [AutoGuide.com]
Best Deals on Winter Rugged Family Vehicles [Forbes]