Today's Automotive Industry News
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.
No question, if you want to project intelligence and really appear to be smarter than you actually are, then you have got to not just read and study this great WSJ article in the Personal Journal section, you got to memorize, visualize, and utilize the “How to Project Intelligence” chart embedded in this article.
Here just a few of the “gems” in this really “smart” articles that you can pick up on and adopt as soon as your read the entire article from the link below .
To make you look and sound smart, be enthusiastic
Watch Video and read article here.__________________________________________________
- First Impressions – Remind yourself about how best to create good first impression
- Put down the cell phone – Look people straight in the eye when you talk to them
- Listen, Sit up straight and put on a serious face
- Avoid certain gestures like touching your face or hair
- Show a self-assured expression rather than a poker face
- Know that making attempts at impression management can give away low intelligence
- Wearing eye glasses make people think you are intelligent
- Do try to use big words or complicated phasing
- Don’t talk too long or too loud
- If you don't know or if wrong, say so
This listing is linked to the complete article that was authored by Luke Johnson of Risk Capital Partners and published in a late December issue of Financial Times. Please go the link at the bottom of this listing and spend some time ingesting the entire article including the complete content of each of these traits.
Here are the 13 Traits derived by the author after 25 years observing organizations:
1. Serendipity: New ideas do not always happen through relentless application.
2. Openness to suggestions: Accidents can breed quantum leaps if we see them.
3. Teams: Scientific advances are normally made by group.
4. Kaizen: Japanese management theory which promotes continuous improvement.
5. Iterations: Not always big breakthroughs.
6. Application: Not theory or purely academic concepts.
7. Small not giant: Now more nimble, dispersed groups are winning.
8. Many disciplines: Few products are developed by one group of specialists.
9. Youth and diversity: As we age, we become cynical and resistant to change.
10. Talent: Creative individuals are essential.
11. Frugality: Lavish budgets do not necessarily guarantee better results.
12. Patience: Most important advances take years, involve much work & heartache.
13. Allowing failure: Dead ends are inevitable.
Summary: Inventing and innovating are the most exciting and risky activities in business and absolutely necessary if companies are to thrive. Culture matters when inventing ideas and delivering products and services.
SEE FULL ARTICLE
Not long ago, you might have assumed that the Nissan Leaf took top spot in US electric vehicle (EV) sales during December. However, nobody knows for sure.
Tesla CEO Elon Musk wouldn’t give those numbers when he spoke at the Detroit Auto Show.
Stock market analyst service MarketWatch reported that the Model S became the best-selling electric car in the US during December 2014, beating the Leaf for the first time.
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In case you missed it: On the last day of 2014, we lost Edward Herrmann, longtime spokesman for Dodge and avid car enthusiast.
There were many tributes on all the major news wires, in newspapers, Pebble Beach publications, and Automobile magazines.
See links to some of the comments and tributes to this big man who made over 45 pictures and did much for the automotive industry, including classic cars and enthusiast events and marketing.
You will want to pay particular attention to the tremendous contribution and impact that Herrmann made at the Pebble Beach Concours d'Elegance and in recent years on the History Channel's Automotive magazine program.
The size of this gentleman and the resonance of his voice-overs left an immediate impact along with his elegance, stature, and image. He made a difference on the screen and in the automotive industry.
Used car sales have been hot lately for auto retailers, surpassing new car sales in third quarter earnings reports.
Finding easier credit and increasing prices seen on new car window stickers have been drivers of used vehicle sales.
Growing popularity in CPO vehicles is also helping. Here are the latest results from several large, publicly traded dealers.
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Honda Motor Co. has added to the Takata recall as it becomes what’s already one of the biggest recalls of the year spanning 10 automakers – and may eventually eclipse General Motors’ massive recall.
However, the issue with recalls goes well beyond the Takata recall – Carfax says that one in six vehicles on U.S. roads have a faulty part recalled by the automaker, but the vehicle has yet to be taken in for repair by the vehicle owner.
The good news is that Carfax has several solutions to help dealers easily find out about open recalls. As a Carfax® Advantage Dealer®, you can run all the Carfax® Vehicle History Reports™ you need to know about open recalls at acquisition and disclose them to buyers at retail by showing them the Carfax.
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A new collateral management platform has been introduced that will help vehicle finance companies reduce the time and costs related to funding and servicing automobile loans through dealer operations.
This loan systems has a unique intuitive interface feature that goes beyond simple vehicle tracking within the loaning process for dealers and lenders, allowing them to process more loans more quickly.
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It’s that time of the year again – time to plan for next year.
For those of you selling and servicing electric vehicles, hybrids, fuel cell vehicles, and other green machines, there are a few events to know about.
Here’s a list of car shows and conferences to consider attending. Plus, at the end of this event list there’s yet another list: Ways to make the most of events and conferences, even if you hate going to them!
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Automotive marketers, particularly dealers, continue to use social media more and more and are learning the most effective and impactful ways to use this new marketing communications tool.
The editors at Automotive Digest recently found a great resource for apps and creative resources for social media ideas, content, and campaign resources called Refresh [https://refresh.io/about]
The first resource we found on Refresh was a listing of the best social media campaigns in 2014.
This listing may inspire, ignite, and be a catalyst to create new social media campaigns for your dealership or company for 2015.
Sourced from Salesforce Marketing Cloud
While new and used vehicle sales methods rely heavily on new media tactics (Youtube videos, Facebook likes, Twitter hashtags, e-newsletters, texting, etc.), a new Foresight Research study shows that classic marketing methods haven’t died off.
Word of mouth recommendations on what car to buy is still the most valuable resource out there.
As certified pre-owned vehicle sales become more important for dealers, having the best word of mouth strategy in place makes a lot of sense – including participating in channels where influencers are commenting on their vehicle purchases and sharing recommendations online.
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What seemed to be & is actually going on?
• TV ads seemed to be falling off. And so are big media company profits.
• Digital is not cutting into the TV Ad revenue, however
• Net ad spending growth was actually 2.5% in Third Quarter
• Mobile Ads not so much to blame as Cyclical Factors
• At first look, it appeared Big Media was taking in the teeth but not the case.
• Analyst sees 2.5% growth for local and national advertising in 2015
Source: from WSJ
Hybrid electric vehicles, led in sales and brand image by the Toyota Prius, have been softening lately in new vehicle sales and used vehicle values. Some of that has to do with dropping gasoline prices and with more competition coming from affordable, fuel efficient four-cylinder engine cars coming to market..
How is the cost of ownership going for hybrids?
Vincentric, a leader in cost-of-ownership data, released its most recent Hybrid Analysis.
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Ad: Double page spread in the enthusiast magazines like Car and Driver.
Product: New 2015 Dodge Challenger.
Head: “They May Be Gone, But They Left Us With the Keys.”
Tag Line: Their Spirit Lives On.
Principals in the Print Ad: Horace and John Dodge (brothers).
Overall Effect: Visual, strong punch line, two brothers and the car.
Impact: Engaging, gets your attention, and will sell cars.
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Edmunds.com hid four cameras in a grocery store, wanting to see if customers would be willing to haggle for their groceries.......……… Edmunds is seeing a lot of viewership and controversy over this TV commercial. Saturn and its “no haggle” policy is long gone. How accurate is this ad for the car shopper’s dealer experience? GET MORE DETAILS
Here’s the top five rankings for October that comes from a compilation of Alexa rank, Twitter followers, and Facebook fans.......……… Consumer Reports finished at No. 1 for the month. Find out how the ranking is compiled, and see where Automotive Digest ended up on the October list. GET MORE DETAILS
What does it do: Targets in-market shoppers with dynamic, localized incentives on Facebook. Enables auto brands to deliver a highly targeted, vehicle specific and locally relevant incentive to an in-market customer......……… What’s really significant: : The solution’s public launch marks a new moment in automotive advertising, as those in the industry are currently forced to rely on inefficient, generic campaigns. What is the system called? : AutoLift. Who is launching: BLiNQ Media GET MORE DETAILS
Hyundai of New Port Richey has taken the 2014 CPO Dealer of the Year award. Last year, the Florida dealership sold 1,357 certified pre-owned vehicles, the most for any Hyundai dealership in the US and more than 500 units stronger than any other Hyundai store.....……… For the first three quarters of this year, Hyundai of New Port Richey sold 1,169, a 19.2% increase over that time period in 2013. What’s been behind these CPO sales performance gains?..…............ GET MORE DETAILS
Situation: Built-in universal cellular “Subscriber Identity Module”(SIM) Card in new iPad allows users to use multiple carriers.
New SIM Card removes the power and control by carriers.
While empowering users, the SIM Card will enable carriers to attract user-subscribers from competitors.
iPhone may be the next Apple platform to allow users to access multiple providers.
Significance: This SIM card will enable dealers and automotive industry users to make more effective use of their iPads--and soon iPhones-- by being able to switch to other carriers to gain more and better reception depending on where there are in the dealership or market areas to gain the best reception for that particular location.
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Guess how much the battery pack in the Tesla Model S costs? $30,000!!! Building a smaller, lighter and cheaper battery for Tesla’s upcoming lower-cost sedan has been at the heart of its $5 billion “Gigafactory” in Reno, Nev....……… It’s going to take a few model years to see the price drop substantially for Tesla, Nissan, and other electric vehicle makers. Here are some of the latest developments in electric vehicle batteries……….…............ GET MORE DETAILS
Why keep track of Marcus?
Three reasons: Marcus Lemonis, Growing Market for Pre-Owned luxury cars, & AutoMatch
Why find out what Marcus doing? He is rapidly becoming the most influential investor-entrepreneur in the country. If you are not watching and eating up his program on CNBC in and around “Shark Tank” then start there. Search for many of his past programs on YouTube and the Internet. You will be inspired and charged.
One of the many small companies that Marcus elected to invest in was a used car operation in Chicago that was going nowhere if not out business. In short order, Marcus turned the company around. Another reason we should pay attention is that he started his successful career at AutoNation and went on to make millions at Camper World. His money, management acumen, and vision transformed a no-where used car dealer operation into a successful national chain called AutoMatch USA.
Buy Inc Magazine and study this article from the September issue.
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_______________________________________________________ Wholesale used vehicle prices continued declining for the fifth straight month in September....……… But it turned out pretty well for dealers who priced right and quickly retailed them; and then purchased from the growing supply of auction consigned units, according to the latest Manheim report..…............ GET MORE DETAILS
This so-called news site attracts 11 M viewers a day. 2014 sales are expected to approach $100 M. Ranks as # 7 in online news sites in the U.S. Posts 750 article per day. Focuses on video, global news, and lots and lots of photos. The biggest source of revenue for such mass-oriented sites is still advertising. Has very little car banner advertising but a growing “Car” content platform. OK—who are we talking about? Daily Mail Online. See what the guy behind this new site in the US is doing with the help of Jon Steinberg, Chief Executive Officer of Daily Mail North America.GET MORE DETAILS ____________________________________________________