Worthy of Thought — Traffic Impact on Vehicle Sales?
Here is an extraordinary TV Spot from Cisco called called “The Last Traffic Jam.”
It takes place sometime in the near future — in “The Museum of Lasts” — showing people looking at an actual traffic jam inside the museum. The punchline is that because of cool things Cisco is doing there won’t be any more traffic jams.
We sure hope Cisco is right. The commercial captures, highlights and engages all of us in the automotive industry. We have yet to really understand just how much traffic does and will continue to impact vehicle sales and how people will use vehicles in the future.
Watch it more than once.
News You Need to Know
View All The Situation: The number of deals involving the sale or acquisition of U.S. automotive dealerships doubled in 2014 to over 200.
How do we know?
Listening, watching, and connecting with Erin Kerrigan of Kerrigan Advisors.
To see for yourself, start HERE by checking out her comprehensive presentation at the J D Power Summit in San Francisco last week.
What seems to be the characteristics of a Dealership Sale?
What is triggering all this interest and investment?
- * Lots of Negotiation
- * Not easy to get a deal “done”
- * Approval of the manufacturer franchisor takes as long as two month
- * The volume of sale transactions is robust and deals are increasing
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- * Dealer Sales are booming -- but may leveling off in 2015
- * The average dealership made $1 Million in profit in 2014
- * 92% of the dealerships are still in private hands of aging patriarchs
- * Warren Buffett bought VanTyl; Lithia bought DCH
- * Average dealership has double in value in the last 10 years to $36M
- * One in five dealership were sold or in process in 2014
- * Low cost money is available to make any deal a consideration
- * Deals can be structured to handle a lot of Blue Sky
Ten Notable Take-Aways :
CLICK FOR NADA 2015 PICS
- 1. Several conferences were scheduled around NADA, which helped boost dealer attendance for all, including J.D. Power Summit, the AFSA Vehicle Finance Conference, & Automotive News.
- 2. Going Global -- On the NADA exhibit floor, there were lots of attendees from China, Canada, and Europe spotted in the NADA International Lounge.
- 3. In general, dealers seemed to be confident about business in 2015 & their use of technology -- are you?
- 4. Workshop content was substantive & many sessions had standing room only, and Autobytel was so popular they had to run an unplanned additional session.
- 5. Mobility apps were marketed heavily as consumers migrate to cell phone shopping
- 6. Easy to use video technology was featured as a new platform for dealers to sell cars
- 7. And speaking of video, video presentations were everywhere in booths demonstrating products and services.
- 8. Big Box suppliers like Reynolds & Reynolds, ADT, and Google were offering more complete suites of sales & service programs
- 9.The NADA Exhibit for NADA itself was huge & loaded with products and services like training and software that were competitive with exhibitors.
- 10. And even though new innovative systems & apps did not have exhibit booths, they made a big impression in the more informal selling environment of hospitality suites. Most Notable & innovative were:
- *LotLinx -- Deeplinks consumer internet vehicle inventory searches
- *Au.to -- Vehicle search intelligence similar to Google
- *Surecritic -- Provides verified consumer reviews of dealers
- *Octane -- Automotive app developers for dealers
- *DMEautomotive -- Direct marketing systems like mobility tools
- *3 Birds -- Fixed Ops demand and retention marketing
- *Telogis -- Next generation connected vehicle software
According to Dykema Automotive Practice, as the industry continues to evolve toward vehicles without drivers, there are four main challenges to watch including:
The Culture Combination: If vehicles are going to integrate the most advanced technologies, car companies need to work with the brightest tech minds. But so far, it hasn't always been a comfortable collaboration. . Silicon Valley and Detroit are two very different places. But while the stalwarts of Silicon Valley might not want to move to Detroit, many see the auto industry’s potential. Apple has partnered with Ferrari, Volvo and Mercedes on CarPlay, which will deploy the iOS operating system to let drivers control navigation and entertainment from their iPhones. Intel is working with Ford on things like an interior camera that will recognize the driver and a system that unlocks cars with smartphones.
The Long Lead Time: On average, it takes three years to design and build a new car and that car will stay on the road for roughly 11 years. The industry needs to find a way to bring new car technology more quickly to market -- as consumers have come to expect all technology to move as fast as the updates we get for the devices we carry in our pockets — and as reliable as a car itself.
Keeping Data Private: In the not-too-distant future, we'll be able to take road trips and depend on our cars to tell us when we are near our favorite chain restaurants, how much gas costs at the approaching stations and whether the sprinkler system has turned on at home. According to Steve Tupper, the leader of Dykema’s Privacy, Security and E-Commerce practice, "Carmakers can give drivers a very rich experience if drivers allow the use of their data. The critical thing is to help drivers understand and control that data access. The carmaker that does this better than any other will win lots of hearts and minds.”
Keeping Data Secure: As technology improves auto safety, the industry must find ways to keep those systems secure. According to the McKinsey study, 43 percent of new car buyers say they are worried that hackers will tamper with their brakes or safety systems. “You can't have vehicles communicating reliably with one another if you don't have a secure network,” says Paul Laurenza, a Dykema attorney who focuses on transportation safety.
MORE >> WHITE PAPER -- To drill down and gain more assessment and insight on driverless cars from the Dykema Law Firm.
Upcoming Industry EventsView All
View All Automotive Finance Corporation (AFC), a business unit of KAR Auction Services (NYSE: KAR), has announced that Joe Keadle has been promoted to senior vice president of operations.
Keadle will report directly to John Hammer, AFC CEO and president.
In his new role, Keadle will oversee all field operational functions including branch operations, sales and training. He will
focus on developing, leading and coordinating AFC field operations while assuring the standardization of all operating
practices and procedures and will be instrumental in leading AFC’s growth initiatives.
Keadle joined AFC in 2010 as regional manager and in 2011 was promoted to vice president of operations for the west
Keadle has more than 20 years of experience and has held a wide variety of positions in the financial services and
automotive industries. Prior to joining AFC, he served in a variety of roles for a multi-franchise dealership group including
business manager, new car sales manager and used car sales manager. Later he was with Wachovia Bank in Charleston,
South Carolina where he developed and managed dealer relationships and was the national floor plan development
manager at New South Federal Savings Bank. He holds a bachelor’s of science degree from the College of Charleston.
Follow The Leaders
Andy Crews of AutoFair Honda in Manchester, NH, was selected from among an elite group of U.S. dealers recognized at the ceremony. Tim Russi, president of Auto Finance at Ally, and Mark Ellis, senior vice president of corporate sales for TIME, announced the winner and finalists during the convention’s opening session.
As a New Hampshire dealer, Crews is president of Autofair Dealer Group in Manchester consisting of Honda, Hyundai, and Ford Franchises in Manchester.
With over 20 years of experience in the automotive industry, Crews, who is originally from Georgia, moved to New Hampshire to join AutoFair in 2006. He sits on the board of several non-profit groups: CareGivers, Easter Seals Veteran’s Count Club, and Manchester Dealers Charitable Foundation.
Crews serves on business association boards in Greater Manchester including the New Hampshire Automobile Dealers Association.
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