January 17, 2013
Online Experience New Battleground for Buyers
With brand competition so close these days on vehicle quality, cost, and styling, the customer shopping experience online and in the store has become a key battleground for automakers, panelists from Google, Hyundai, and TrueCar said Wednesday at the Automotive News World Congress. Hyundai is putting as much emphasis on improving its Web presence for shoppers as on improving its dealer facilities and operating practices, said Dave Zuchowski, executive vice president of national sales for Hyundai Motor America. A recent Google study reveals how much cross-shopping happens online and the many points during the shopping process when buyers can change their minds about vehicles, said Kim Stonehouse, Google's automotive industry development manager. Based on information from 10,000 vehicle buyers, Google found that 63 percent of new vehicle purchasers begin their search with a specific brand in mind, but only 20 percent purchase the vehicle they first researched online. TrueCar CEO Scott Painter said the online car-buying process is becoming so transparent that eventually there will be little difference in the ultimate price that dealers can fetch for the same model. Click here for coverage of Wednesday’s panel discussion in Detroit regarding the online car buyer experience.
Japanese Automakers Go On the Offensive in U.S.
Japan's automakers, fully restored from the effects of a devastating tsunami and other disasters, are making up for lost time in North America, reports The Detroit News. Led by Toyota Motor Corp., Nissan Motor Co., and Honda Motor Co., Japanese manufacturers boosted their U.S. sales faster than most of their rivals after replenishing their inventories, expanding their share of the U.S. light vehicle market to 37.9 percent from 34.9 percent. They ramped up their North American output by 17 percent to a record 15.2 million vehicles in 2012, according to Kohei Takahashi, a Tokyo-based auto analyst at J.P. Morgan. They're planning now to put more vehicles into production in the region, including the Acura NSX supercar, which will be derived from the NSX concept car displayed this week at the North American Auto Show. Toyota displayed the Furia, a concept car widely expected to become the next Corolla compact, while Honda unveiled an Urban SUV concept, based on the same platform as the Fit subcompact. Nissan also slashed the price of its Leaf electric car by $6,000 or 18 percent, after initiating production of the vehicle in Tennessee at a lower cost. For more on the recovery of Japanese automakers, click here.
Beyond Boomer Buyers: Carmakers Seek Younger Crop of Customers
The power that U.S. baby boomers have exercised for nearly 50 years over the auto industry is starting to wane, reports The Wall Street Journal. Auto industry executives gathered for the North American International Auto Show in Detroit this week made it clear with their designs for coming models that they are pivoting their attention – and their product strategies – toward the 20, 30, and 40-something consumers collectively known as Generations X and Y. “The baby boom is 60 years old,” says Rupert Stadler, chief executive of Volkswagen AG’s Audi luxury car brand. “We have to look for young customers.” The search for younger buyers is leading auto makers to re-think everything from dashboard entertainment systems to the relative importance of mileage over horsepower to fundamental marketing strategies, most notably the traditional formula that a small car is a cheap car. In the U.S., about 46 percent of Audi sales come from Generation X and Y now, says Scott Keogh, head of Audi’s U.S. operations. By 2020, he adds, they “will be 75 percent of the luxury segment.” Read about the growing influence of Generation X and Y buyers and how automakers are accommodating their desires here.
Auto Execs Surveyed Say VW, BMW Most Likely to Grow
According to Autoblog, a new survey of top global automotive executives indicates both Volkswagen and BMW are the most likely to grow their market share over the next five years. Tax advisory firm KPMG LLP has released its 14th annual Global Automotive Executive Survey. A total of 81 percent of respondents said they expect to see Volkswagen make gains, compared to 70 percent last year. BMW, meanwhile, saw 70 percent of those surveyed say they believe the company will increase its market share. That's a jump of 7 percentage points over last year. This is the first time in the history of the survey that BMW has claimed the second-place spot. Meanwhile, Hyundai has seen its perceived market share potential fall for the third year in a row. Around 61 percent of those surveyed predicted gains for Hyundai, down from 63 in 2012. Toyota also has a surprising year, but for just the opposite reason. While the manufacturer had slipped in ranking since 2011, it enjoyed the largest increase of any company in the 2013 survey, jumping to 68 percent from 44 percent last year. Click here for a chart to compare automakers in the survey. Click here to read more about KPMG’s survey.
Suzuki Gains Court Approval for Latest Bankruptcy Plan Component
In what the company called a move to solidify plans for its new automotive parts and service operation, American Suzuki Motor Corp. announced this week that the disclosure statement for its amended Chapter 11 bankruptcy plan has been approved by Judge Scott Clarkson of the U.S. Bankruptcy Court of the Central District of California. According to Auto Remarketing, the court’s approval of the disclosure statement allows ASMC to begin soliciting votes to accept the plan. A confirmation hearing is currently scheduled for Feb. 28. “The approval of our disclosure statement represents an important step in our realignment and restructuring process,” said Freddie Reiss, ASMC’s chief restructuring officer. “We look forward to implementing our plan upon emergence and advancing our business strategy in the continental U.S. of focusing on the long-term growth of our motorcycles/ATV and marine divisions, while continuing to provide automotive parts and service through our dealer network.” The company’s amended plan further specifies how its motorcycles/ATV and marine divisions, along with its continued automotive parts and service operation, will be sold to a newly organized, wholly-owned subsidiary of Suzuki Motor Corp. Officials said that move will enable those operations to continue uninterrupted. Click here for the latest on Suzuki’s bankruptcy plan.
Outsourcing Loaners Yields Benefits for Dealerships
Lindsay Honda in Columbus, Ohio, BMW of Sarasota and Ancira Nissan of San Antonio have more in common than one might think. Like a growing number of dealerships nationwide, they have discovered how outsourcing service loaners through Enterprise Rent-A-Car instead of using cars from their own inventory saves money and increases efficiencies. Besides providing clean, well-maintained vehicles to customers, dealerships can reduce liability exposure, lower inventory expense, and give service advisors more time to take care of customers instead of administering loaner cars. To manage loaners efficiently, dealerships use the Automated Rental Management System (ARMS®) application from Enterprise Rent-A-Car, the largest rental car brand in North America. ARMS® creates seamless electronic communications between the dealership’s service advisors and Enterprise to track rental days, reduce errors, avoid delays and control costs. According to Enterprise, eliminating 30 to 50 loaners from a dealership’s own inventory can free up $600,000 to $1 million in inventory expense. In today’s economic environment, that’s a great deal for dealershipFor a free Enterprise Loaner Program Analysis click here or email firstname.lastname@example.org for more information.
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