Category Archives: Fountain Auto Mall

U.S. auto industry recovering faster than anticipated; Automakers headed toward best annual performance in three years

The U.S. auto industry is seeing demand recover faster than anticipated, with carmakers headed toward their best annual performance in three years at sales of 12.8 million vehicles.

Consumers entered this year’s final month demanding models ranging from big pickups to luxury sedans to fuel-sipping hybrids after pushing November’s sales to the fastest monthly pace since the government’s “cash for clunkers” trade-in program in August 2009. General Motors Co. (GM) and Chrysler Group LLC, two years removed from bankruptcy, have been taking share from disaster-stricken Toyota Motor Corp. and Honda Motor Co.

U.S. buyers are replacing their cars after delaying new- vehicle purchases as long as possible, and they are snapping up F-Series pickups and Prius hybrids as consumer confidence in the economy jumps. That means the automakers haven’t had to resort to fire-sale prices to goose demand.

“The industry has managed production levels to where demand was this year and didn’t get ahead of itself,” said Jeff Schuster, a Troy, Michigan-based analyst for LMC Automotive. “With inventory now being replenished, it’s not a situation where we’re seeing too much production or seeing heavy incentive use.”

Spending on marketing promotions averaged less than $2,700 a vehicle throughout the industry, down about $74 from a year ago, according to LMC and J.D. Power & Associates.

Consumer confidence surged in November by the most in more than eight years, and the portion of consumers planning to buy a new vehicle within six months climbed to the highest since April, data from The Conference Board showed Nov. 29.

The average age of cars and light trucks on the road today has risen to 10.6 years old, Jenny Lin, Ford’s senior U.S. economist, said on a Dec. 1 conference call.

“We are going to see more and more of this pent-up demand realized,” Lin told analysts and reporters.

She cited declining gasoline prices for providing “relief” to consumers, who responded with purchases of sport- utility vehicles and pickups. Sales of Dearborn, Michigan-based Ford’s SUVs climbed 29 percent and F-Series trucks increased 24 percent.

GM’s deliveries of Chevrolet Silverado and GMC Sierra pickups surged 34 percent and 22 percent, respectively, and Chrysler’s Jeep brand sales soared 50 percent. The average price for unleaded gasoline has dropped 71 cents, or 18 percent, to $3.28 a gallon on Dec. 3 from its peak this year on May 4, according to AAA, the nation’s largest motoring group.

Consumer demand was broad-based, as Toyota (7203) and Honda boosted deliveries of smaller vehicles, making up for production lost after March 11’s tsunami and earthquake inJapan and more recent floods in Thailand disrupted their supply chains.

Toyota, Asia’s largest automaker, reported a 49 percent increase in sales of Prius hybrid models, including its new wagon variant. Deliveries of its redesigned Camry sedan climbed 13 percent to 23,440, securing its position as the top-selling car line ahead of Nissan Motor Co.’s Altima and the Ford Fusion. Toyota slashed discounts on cars by 32 percent last month, according to researcher Autodata Corp.

Honda, the only automaker among the 10 largest that didn’t have a companywide U.S. sales increase for November, still managed to boost deliveries of Civic cars by 3.4 percent. That’s the first increase since April for the Tokyo-based automaker’s top-selling model.

Among luxury brands, Daimler AG (DAI)’s November deliveries jumped 47 percent, as the brand’s year-to-date sales closed to within 1,600 of Bayerische Motoren Werke AG (BMW)’s BMW line. The two German brands are vying to replace Toyota’s Lexus, the annual luxury champ for the last 11 years, which also lost production to the March disasters.

Industry sales accelerated to a 13.6 million seasonally adjusted annualized rate, according toWoodcliff Lake, New Jersey-based Autodata. The pace exceeded the 13.4 million average estimate of 14 analysts surveyed by Bloomberg.

“The recovery is showing a little bit more resiliency than what people feared,” Paul Ballew, chief economist for Nationwide Mutual Insurance Co., said in a Dec. 1 phone interview. “Vehicle sales are inching their way back up to 14-, and then eventually 15- and 16-million units.”

If December matches November’s 14 percent increase in industrywide deliveries, auto sales will finish the year at 12.8 million cars and light trucks. That would exceed the 12.7 million sales total that was the average estimate of 18 analysts surveyed by Bloomberg in August.

Jefferies Inc., IHS Automotive and TrueCar.com are now considering increases to their estimates for 2012 deliveries, according to analysts at the three firms.

Auto sales may total 13.5 million light vehicles next year, the average of 14 estimates compiled by Bloomberg. The industry delivered 11.6 million cars and light trucks last year, up from a 27-year low of 10.4 million in 2009.

The seasonally adjusted annualized rate for auto sales “appears to be building to a 2011 exit run-rate close to 14 million without a full Japanese supply recovery and bad economic news cycle,” Adam Jonas, a New York-based analyst for Morgan Stanley, wrote in a Dec. 1 research note. The momentum “bodes well for 2012,” he said.

Advertisements

J.D. Power Reports: September New-Vehicle Retail Selling Rate Shows Marked Improvement From August

 

 Sept. 22, 2011  — New-vehicle retail sales for September continue to improve, with the selling rate expected to be much stronger than in August, according to J.D. Power and Associates, which gathers real-time transaction data from more than 8,900 retail franchisees throughout the United States.

Retail Light-Vehicle Sales
September new-vehicle retail sales are projected to come in at 842,400 units, which represents a seasonally adjusted annualized rate (SAAR) of 10.3 million units. This marks the first time the retail selling rate would be above 10 million units since the 10.8 million-unit rate in April. Retail transactions are the most accurate measurement of true underlying consumer demand for new vehicles.
“Coming off a solid Labor Day sale, retail sales exhibited unexpected strength in the second week of September, as the recovering inventory levels have helped to bring buyers back into the market,” said Jeff Schuster, executive director of global forecasting at J.D. Power and Associates. “However, incentive levels remain flat compared with August and the economy remains a concern, so the sales pace in the second half of the month is expected to give back some of the gains.”
Total Light-Vehicle Sales
Total light-vehicle sales in September are expected to come in at 1,038,700 units, which is 9 percent higher than in September 2010. Fleet sales are expected to be down 1 percent compared with last September, but will account for 19 percent of total sales.

Sales Outlook
Given the relative strength of September, J.D. Power is maintaining its forecast for light-vehicle sales in 2011 and 2012. Total light-vehicle sales for 2011 are expected to come in at 12.6 million units, a 9 percent increase from 2010. Retail light-vehicle sales are forecasted at 10.2 million units for 2011, an increase of 11 percent from 2010.
For 2012, the outlook for total light-vehicle sales remains at 14.1 million units and retail light-vehicle sales are at 11.5 million units. However, there is a high level of uncertainty that remains.
“The uncertain global environment, specifically the debt troubles in Europe, continue to be the major source of downside risk in the U.S. economy and automotive markets,” said John Humphrey, senior vice president of automotive operations at J.D. Power and Associates. “Until a level of stability is reached globally and consumer confidence is returned, the U.S. automotive selling pace is not expected to return to pre-recession levels.”
North American Production
Through August 2011, light-vehicle production in North America has increased to 8.5 million units, up 8 percent from the same period in 2010. The Detroit 3 OEMs have increased production by 16 percent year-to-date, while the Japanese manufacturers have lost 8 percent—due to the parts shortages from the earthquake in Japan back in March. European OEMs are up 38 percent for the same period, as a result of added production of the BMW X3 and Volkswagen Passat in North America, as well as strong demand for the new Volkswagen Jetta.
Vehicle inventory maintained a 49-day supply at the beginning of September, unchanged from August. Car inventory remained at the same 40-day level as it was in the previous month, while truck supply edged down by one day to 57 days. With stronger production levels and imported shipments returning, inventory is improving—although several manufacturers continue to have limited supply availability: Hyundai/Kia with a 21 days’ supply (was 19 days in August), Honda with a 32 days’ supply (previously 28 days), and BMW at 33 days’ supply (previously 30 days).
The 2011 North American production outlook remains on track for 12.9 million units, an increase of 9 percent from 2010. Fourth-quarter 2011 production output is expected to reach 3.3 million vehicles, which is an increase of 11 percent from the same quarter in 2010.
“Continued inventory stock replenishment and Japanese OEM recovery is responsible for the large year-over-year increase relative to the lower level of recovery in vehicle demand,” said Schuster. “As inventory normalizes into 2012, growth in production levels is expected to slow to a pace more consistent with sales.”

Keeping Loyal Customers Loyal

Keeping Loyal Customers Loyal

In a lagging economy, keeping your loyal customers loyal can become increasingly more challenging, but there is probably no other time when good customer loyalty is more vital to your business. Your loyal customers are your high-value clients, bringing in as much as 80% of your overall sales, according to Pareto’s principle (the 80-20 Rule). Do you know who your most loyal customers are? What are you doing to keep these high-value clients happy and loyal customers?

These steps will help you gain a better understanding of who your best customers are and what you can do to keep them loyal.

 1.  Ask Them What They Think.  Survey all of your customers, former customers and potential customers with just two simple questions: would you recommend us to others? Why or why not? The answers to these two questions tell you how what general percentage of your customers is loyal as well as their reasons behind why they are or not.

2.  Stay In Touch.  Whether it’s included in a loyalty program or you purchase on separately, find an email marketing tool and use it wisely. Be sure to target messages to the right customers at the right time. Provide your customers specific information they would find helpful and special offers that are customized just for them. Let them know about contests, upcoming events, new products, etc. But don’t send out too much too often. Find a balance between encouraging their patronage without taking advantage of their trust.

3. Go the Extra Mile.  In addition to your advertisements, announcements and non-solicit emails, sign up for a greeting card system or set up recurring email campaigns. Send birthday greetings with a gift or special offer just for them. This personal touch helps your customers understand that you value them as individuals and invites more loyalty and trust.

4. Encourage Participants, Not Spectators.  Keep your loyal customers involved and ask for their opinions on any pending changes or new directions in your business arise. You never want to make a business decision that will alienate your loyal customers. Their word-of-mouth marketing will achieve more success than almost any other marketing efforts you employ.

5.  Say It To Their Face.  Never shy away from an opportunity to thank your customers for their business. Train your employees to extend sincere thanks for even the smallest business transaction. Greet your customers by name (when you can) and encourage all your employees to do the same. Host customer appreciation events. Support local charities. Be involved in their (your) community and you will be surprised how much you get ahead by simply giving back!

Demand for autos and auto parts jumped 11.5 percent in July; Aircraft orders soared 43.4 percent

Companies ordered more autos, aircraft in July

 A surge in demand for autos and aircraft drove orders for long-lasting manufactured goods higher in July, easing fears that the economy might be on the verge of another recession.

The rebound in the auto industry helped offset a decline in orders for most other factory goods.

Stocks rose after the better-than-expected report showed the biggest increase in durable-goods orders since March, when the Japan earthquake disrupted supply chains and slowed auto production.

The Dow Jones industrial average jumped about 100 points after the report came out. Overall orders for durable goods rose 4 percent last month, the Commerce Department said Wednesday.

The report “reinforces other data that the economy wasn’t at serious risk of recession through July,” said David Resler, chief U.S. economist at Nomura Securities. Retail sales and industrial production also held up well last month, he said.

The data did offer a cautionary signal: a key category that tracks business investment plans fell 1.5 percent, the biggest drop in six months. That suggests businesses are pulling back on spending. Orders in all other major categories dropped, including computers, electronic goods, and machinery.

Resler and other economists also warned that the turmoil in the stock markets could cause businesses to pull back further this month.

“It remains to be seen whether firms cancelled or postponed planned orders,” Paul Dales, an economist at Capital Economics, said in note to clients.

A durable good is a product that is expected to last at least three years. Economists view the report cautiously because orders tend to fluctuate from month to month.

Excluding transportation goods, orders rose just 0.7 percent. It was the third straight gain in so-called core orders. Demand for primary metals surged 10.3 percent, the most since last November. Some of that increase was likely due to higher prices for metals such as copper.

Overall, orders rose to a seasonally adjusted $201.5 billion in July. That is 35 percent higher than the recession low hit in April 2009. But it is still 18 percent below the level in December 2007, when the recession began.

Demand for autos and auto parts jumped 11.5 percent, the most in eight years. Aircraft orders, a volatile category, soared 43.4 percent, after falling 24 percent in June.

Auto production is rebounding after a slowdown caused by the Japan earthquake. The Federal Reserve reported last week that factory output rose 0.6 percent in July, mostly because of an increase in auto production.

A big order by American Airlines helped boost the aircraft sector. American Airlines ordered 100 new Boeing 737 planes with fuel-efficient engines in July.

Manufacturing has been a key source of economic growth since the recession officially ended in June 2009. But it began to slump this spring, along with the broader economy.

Orders fell in April and June, partly because of supply disruptions stemming from the March 11 earthquake in Japan. And a spike in gas prices earlier this year cut into consumer spending, reducing demand for big-ticket items, such as computers, appliances and furniture.

Several recent reports suggest the sector could be slowing further. A survey by the Federal Reserve Bank of Philadelphia showed that manufacturing in the mid-Atlantic region contracted in August by the most in more than two years. A Richmond Fed survey released Tuesday and a New York Fed survey last week also pointed to slowdowns in those areas, although not as severe as the Philadelphia region.

Economists predict further weakness, even as temporary factors fade. Falling stock prices and fear of another recession may persuade consumers and businesses to hold back on big purchases. That could slow orders for industrial machinery, electronic goods and appliances.

Analysts have been scaling back their forecasts for economic growth for this year and next.

Michael Feroli, an economist at JPMorgan Chase, projects the economy will expand at only a 1 percent annual rate in the second half of the year. That’s not much better than the 0.8 percent growth that the government reported for the first half of the year.

The Federal Reserve this month said that it expects weak growth for the next two years. As a result, it said that it plans to keep its short-term interest rate near zero until at least mid-2013.

The Fed has limited options for stimulating growth. And a renewed focus on deficit reduction in Washington, which could result in steep spending cuts or tax increases, could weaken the economy further.

Investors hope that Federal Reserve Chairman Ben Bernanke announces another round of bond purchases on Friday in a highly anticipated speech in Jackson Hole, Wyo. The bond purchases, known as quantitative easing, are designed to keep interest rates low and boost stock prices. But economists don’t expect Bernanke to launch any major efforts.

Dealer Marketing Magazine’s Advice to Auto Dealers

AT POWERHOUSE WE SPECIALIZE IN VERTICALLY INTEGRATED MEDIA SOLUTIONS– WE MAKE SURE YOUR INTERNET MARKETING MESSAGE IS CONSISTENT WITH TRADITIONAL MEDIA ADVERTISING BY FOLLOWING A CONSISTENT EFFORT TO REINFORCE YOUR MARKETING MESSAGE TO YOUR CORE AUDIENCE. SEE BELOW DEALER MARKETING ADVICE TO AUTO DEALERS.

Marketing your dealership used to be so much simpler. There was television, Radio, newspaper, and direct mail — and that was it. Those were the days weren’t they? Today, however, with the advent of the Internet, things have changed. Now every dealership, big and small, has to have a Website in order to survive. It doesn’t matter if you’re a small dealer in rural Alaska selling trucks and 4x4s or a luxury dealership in Los Angeles selling Porsches, without a Website, you might as well not exist.


Websites are only one aspect of Internet marketing, however. In order to really take advantage of the changes brought on by the Internet, you need to have a marketing strategy that takes advantage of all the Internet has to offer in order to help you grow your business and succeed, in good times and bad.

Internet marketing has many different facets, from Search Engine Marketing (SEM) and Search Engine Optimization (SEO) to promoting your online presence with your offline marketing efforts, website building, and everything in between.

In order to help you negotiate the maze of different strategies and technologies that are out there, we spoke to several Internet experts and convinced them to share some of their secrets with you.

Combining traditional marketing and Internet marketing
Ten years ago, a Website was just a marketing add-on; today it is the first view most of your customers have of your dealership, because the Internet is the first place most customers start their vehicle search. Conversely, however, most customers still hear about your dealership through your offline advertising.

What this means for dealers is that it is time to stop separating Internet marketing and traditional marketing. All of your offline advertising needs to lead to your Website and your Website needs to reflect what you say in your offline advertising, thus creating synergy in your marketing. Synergy is an overused word, but what it literally means is two or more things that when combined create more than when they act separately, which is what happens when you combine your offline and online marketing.

“Based on the data, there is no better way to promote your Website than through traditional marketing an online placement. In other words, advertising your Website address in every ad medium you use generates the best results,” confirms Jason Ezell, national sales director, director of industry relations, and one of the original founders for DealerSkins.

One of the reasons that many dealers’ online and offline marketing do not work in sync is because their advertising agency and their Website provider do not work together.

“Your Website provider should give you the most powerful Website with the most effective backend tools, and your ad agency should give you the most cutting-edge creative and marketing strategy,” offers Dean Evans of Dealer.com. “They should work together as a team and share information; work in partnership with the Website developer and the agency to maximize the investment for dealers.”

Measuring your success
John Wanamaker, whom many consider the father of modern advertising, once said, “I know half the money I spend on advertising is wasted, but I can never find out which half.” That, however, was the nineteenth century and things have changed. Today, with the marketing metrics made possible with the Internet and other new technologies, you should be able to calculate your return on investment so that none of your budget is wasted. This is one area where the vast majority of marketing experts agree.

“The statistical information we gain from shoppers’ ‘tire-clicking’ is vital to running all aspects of the dealership,” says Jason Ezell. “These stats can tell us exactly where a dealer’s marketing dollars are best spent, which cars are most and least popular, and what other cars a shopper is considering before sending a lead. In the ‘new economy,’ this data will be invaluable.”

Remember, however, when you measure your marketing efforts to compare your online and offline efforts, you may be surprised which forms of advertising deliver the best return on investment. As Dillon McDonald, chief operating officer for Jumpstart Automotive Media, reminds us, “Measure traditional media and digital media against the same scorecard, which is a mix of car sales, audience engagement, and leads generated — not solely lead count.”

Lead generation to vehicle purchase: What’s The Weakest Link?

The Weakest Link

The path leading from ‘searching for a vehicle’ to ‘purchasing a vehicle’ involves many information transactions. The buyer often starts by searching online, looks at vehicle detail pages, initiates contact with some sellers (by phone or email), corresponds a few times to narrow down the field, schedules appointments with some subset of the sellers with whom they corresponded, and finally purchases one of the vehicles.

Links in the chain
From an industry standpoint, the path that follows is like a chain: The generator, the lead itself, the dealership, and the staff member working the lead are all links in that chain. There are strong and weak lead providers who produce strong and weak leads; there are strong and weak dealerships that employ strong and weak staff. By the time leads have run the gauntlet of links from lead generation to vehicle purchase, they have had several opportunities to hit a weak link. As long as the links in the chain stay strong, the lead progresses toward a sale; as soon as there is a bad link, the lead is most likely dead. If it goes really poorly with the staff member link, you not only lose this sale but probably also lose the opportunity for service business or future vehicle sales with this lead. The point is that the chain is only as strong as the weakest link and your success with each lead hinges on having a strong chain.

Taking control
As a dealer, you have little control over how a lead is generated; however, you do have some control over how your existing and potential customers are treated by your staff, which determines, in the minds of consumers, whether or not you are a good or bad dealership. You also have control over the staff you employ and their training. This is link in the chain that you must focus on, if you want to get more out of your leads.

The dilemma
The salespeople working the leads have made no investment and are therefore less inclined to really work every lead. Often, the staff will take only a single pass or not work leads at all and just blame the lack of success on lead quality. I suggest a new model for your consideration: Let your staff invest in the leads! Have them buy the leads themselves or share in the cost with you and provide a performance-based way for them to earn their investment back. If your staff is invested in the leads they work, they will be much more likely to work those leads until they buy or die, which will produce an immediate, profound change in your lead closing ratio.

Keep making sales
Yes, sales are down, way down. However, people are still searching for cars, buying cars, and selling cars. Traffic, searches, and private party listings have held relatively steady throughout the economic downturn. Of course, there wass a slight drop in all three areas, it was not nearly proportional to the drop in sales at dealerships. Sales are out there but in the current economic climate staff must work harder to get them: Don’t let a staff member be the weakest link in your chain.

NOTE: POWERHOUSE USA HELPS CLIENTS GENERATE QUALIFIED LEADS THROUGH VARIOUS SOURCES INCLUDING THE INTERNET. BY USING DEALER WEBSITES, THIRD PARTY WEBSITES, CUSTOM LANDING PAGES, MICROSITES, GOOGLE ADWORDS, YAHOO!, MICROSOFT BING!,VARIOUS OTHER SEARCH ENGINES, SEARCH ENGINE MARKETING, SEARCH ENGINE OPTIMIZATION, VIDEO ADS, TEXT ADS, YOU TUBE AND THE LIKE. POWERHOUSE USA IS A FULL SERVICE MARKETING ADVERTISING, PROMOTIONS, SPECIAL EVENTS AND INTERNET ADVERTISING COMPANY LOCATED IN ORLANDO, FLORIDA THAT PROVIDES CREATIVE BUSINESS SOLUTIONS TO COMPANIES OF ALL TYPES. FOR MORE INFORMATION VISIT WWW.POWERHOUSEUS.COM

LEASING MAKES ITS GRAND RETURN

LEASING MAKES ITS GRAND RETURN
Are You Prepared for Ripening Market Conditions?

Interest rates are climbing. Energy costs have gotten the attention of every North American who does not live in a cave. Long term financing has put the majority of retail auto customers in an “upside down” position. The Middle East situation is volatile and unstable as a source of petroleum. The Big-3 manufacturers are sitting on a way-too heavy supply of vehicles with the new models due to hit showrooms in less than 60 days. And the import manufacturers have sky-high residual values just begging for a low monthly payment.

The year was 1986. That�s right, twenty years ago.

How quickly time flies.

As I looked around U.S. showrooms this month, I wondered how many automotive retail professionals can remember the true benefits of leasing, let alone how to properly present it. And isn�t a proper presentation with proper disclosure more important today than ever before?

“Hybrid” Trade-Cycle Technology

Back when �hybrid� meant more than an environmental alternative to a gasoline engine, I was leasing vehicles in a big way and doing it with integrity. In 1988 I was promoted to �Plan Sales Manager� at Fette Ford in Clifton, New Jersey; subsequently, we became the number one 24-month Red Carpet Lease dealership in the nation for Ford Division. We offered full disclosure of selling price (years before it was popular or mandated by federal law) and trained our sales force on the benefits of a protected residual that would insulate consumers from uncertain market conditions. We averaged 90 retail lease agreements per month and put our dealership on the map.

Two years later we were sure glad to bring those customers back � and without the negative equity.

Today, in the “new economy”, I am reminded of those lessons learned from the 80�s. My wife and I leased our new 2006 Toyota Sequoia last fall. When we took delivery in October, did we know that gasoline would reach $3.00 per gallon today? Whew!

Is Your Sales Force Trained and Prepared to Explain Leasing?

Dealers throughout North America are taking the time this summer and fall of 2006 to discover the benefits of a trained sales force. Leasing and the sales process (beginning with proper Appointments, Meet and Greet, Fact Finding and Product Presentations) spell the basics of what every dealership needs in order to be successful.

Leasing is a tool to help sell more vehicles.

If you�re not yet using it, or if your sales team has not yet been exposed to sales and lease training,find out more about in-house workshops and in-dealership training.