Category Archives: Longwood Lincoln Mercury

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.

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Toyota Camry is more American than the Ford F-150 according to Cars.com’s American-Made Index.

NOTE: THERE IS SOME FLAWED METHODOLOGY IN THIS SURVEY HOWEVER, THE POINT IS THAT ALMOST ALL CAR COMPANIES ARE MAKING CARS AND PARTS HERE. ADD IIN EMPLOYEES AT THE DEALERSHIP LEVEL AND MARKETING SPENDS AND YOU CAN SEE WHAT A HUGE ECONOMIC DRIVER AUTOMOTIVE REALLY IS.=DP

Saturday, July 4, 2009
Survey: Camry more American than F-150
Alisa Priddle / The Detroit News
The Toyota Camry is more American than the Ford F-150, at least according to Cars.com’s annual American-Made Index.

The findings further muddy the buy American debate that rages across the country.

Toyota Motor Corp. also is the most American car company, according to the rankings of the index in terms of U.S. content in its cars and trucks.

The findings are based on where each vehicle is built, its popularity based on sales volume and the percentage of the parts made in the U.S. based on the cost or value of those parts.

This year, the Camry (not counting the hybrid or the Solara) dethroned the F-150 which had been a five-time winner. The Ford truck came in at No. 2.

Toyota had the most individual models on the list with four, including the Sienna minivan in the sixth spot, followed by the Tundra full-size pickup, and the new Venza crossover at No. 10.

Detroit’s Big Three automakers collectively have five vehicles in the top 10 spots, which is their lowest showing since Cars.com started the index in 2006 and was conducted twice a year initially.

“This year was unique for our index, to say the least,” said Patrick Olsen, editor of Cars.com. “The difficult sales environment and changes in cars’ domestic-parts content — both important factors in our index’s equation — played a huge role in how the rankings changed from last year.”

The results likely won’t go over well in Detroit, said analyst Joe Phillippi of AutoTrends Consulting Inc. in Short Hills, N.J., but the more important point is that the vehicles and many of their parts are made in the U.S. and “we need all the payroll generation we can get.”

To its credit, Toyota has maintained its headcount in the U.S., Phillippi said. “There have not been wholesale firings and mass layoffs and they continue to employ a lot of people even in a downturn and their game plan is to continue to employ more.”

General Motors Corp. results were impacted because the methodology used excludes models slated to be discontinued that do not have a clear successor. That wipes out the Pontiac G6, for example, which has scored well in the past, but has fallen victim to GM downsizing. Also absent from the list this year is the Chevrolet Cobalt, which has fewer domestic parts and seen its sales fall off because it, too, is being discontinued. It will be replaced by the all-new Chevrolet Cruze next year.

GM retains three vehicles in the top 10 with the Chevrolet Malibu taking the third spot and the Chevrolet Silverado (5th) and GMC Sierra 1500 pickup (8th).

The Ford Taurus had the most domestic parts at 90 percent but landed 9th on the list, largely because the new Taurus is selling about 2,000 units a month compared with about 25,000 Camrys a month.

Chrysler Group LLC has no vehicles in the top 10. The company’s high-volume minivan is made in Canada.

Phillippi said while the results may surprise some consumers, it likely will have little impact on buying decisions and he doubts many shoppers research domestic content. “These days, price and incentives are at the top of the list given the squeeze on peoples’ budgets.”

The index provides some justification for consumers who have been loyal to imports, Phillippi said.

Jim Hall, analyst with 2953 Analytics in Birmingham, called the claims “spurious” and questioned the math given that the index uses a parts count but does not go deeper and calculate the number of labor hours to make each part — a figure that varies greatly with an engine being very labor-intensive, for example.

In terms of validity, “it’s like Michael Jackson saying he’s the King of Pop,” Hall said of the self-proclamation of the superstar and the Web site in its findings.

Ford’s decision to opt-out of government TARP financing has multiple benefits

Do June Ford Sales Signal a Rebound? 

 July 2nd, 2009 @ 8:34 am

There has been abundant confirmation that Ford’s decision to opt-out of government TARP financing—a move made possible by CEO Alan Mulally’s prescient borrowing of $23 billion against its assets in 2006—has multiple benefits. People seem to be retaining their confidence in Ford cars and trucks, and it’s starting to show up in sales figures—which are still down, but not as dire as they might be. For one thing, Ford’s “financial viability” (meaning, not in bankruptcy court) ensured that it would receive $5.9 billion in federal advanced technology funding through 2011 to make its existing models, from the Taurus to the Focus, 25 percent more fuel efficient. General Motors and Chrysler may get funded, too, but only Ford received this boon in the first round (along with Nissan and Tesla). In June, Ford sales were down 10.7 percent compared to June 2008, but GM dropped 33 percent in the same period, and Chrysler 42 percent. Ford also outsold Toyota for the third month in a row. Strong Fusion and Flex sales were cited as one reason for an uptick. Ford could get into positive territory as its new products come on line. Crucial for the automaker is the 2010 Taurus, which has been dramatically made over and is moving somewhat upmarket. Business Week calls the Taurus (starting at $26,000, the same as the model it replaces) “styled and packaged just right.” The new car bristles with features, including adaptive cruise, collision warning, blind spot information system, rain-sensing wipers, capless refueling, and a new generation of its SYNC audio system. Here’s a first video drive of the new Taurus: The new Euro-rooted Fiesta and Focus are moving forward, and the Fiesta is being pre-marketed with a smart youth-oriented campaign that includes 100 Twitter-friendly bloggers using the cars for six months. The Focus, in a partnership with Magna International, will be the basis of a new electric battery car in 2011, and Ford is also working on a plug-in hybrid for 2012. The new, leaner Ford has also jettisoned Jaguar and Land Rover (to India’s Tata, generating $2.3 billion), gotten out of the supercar business by selling Aston Martin, reduced its share in Mazda, and is no doubt working overtime to sever its relationship with Volvo. The Fusion Hybrid is a very credible entry in the field. And the company is also trying to reinvigorate the stagnant Lincoln and Mercury brands with a new Fusion-based luxury sedan and SUVs grouped around “MK” branding. Executive Chairman Bill Ford said that “Alan was the right choice [to be CEO], and it gets more right every day.” Of course, Ford is hardly out of the woods. Sales are, after all, still down. But it hasn’t made any significantly wrong moves in its attempt to recover from the auto industry’s worst slump since the Depression.

U.S. Auto Makers Score Wins in Meeting Consumer Expectations says AutoPacific’s 2009 Ideal Vehicle Awards

U.S. Auto Makers Score Most Wins in Meeting Consumer Expectations According to AutoPacific’s 2009 Ideal Vehicle Awards

Survey of 32,000 Consumers Reveals Vehicles that Meet or Exceed Expectations

TUSTIN, Calif., June 29 /PRNewswire/ — Porsche and Ford Motor Company earned top honors in the 2009 Ideal Vehicle Awards (IVA), announced today by automotive research firm AutoPacific. The IVAs are based on owners’ ratings of their new 2009 model year cars and trucks across 15 key vehicle attributes. The cars or trucks that owners would change the least are the most ideal.

“In today’s economy, car buyers take many factors into consideration – styling, safety features, fuel economy and more,” says George Peterson, president of AutoPacific. “IVA winners deliver the most of what consumers are really looking for in their vehicles.”

“While some measurements barely differentiate between the highest and lowest-ranked vehicles, the Ideal Vehicle Awards clearly show which carmakers are providing the attributes car buyers want,” says Peterson. “Looking at segment wins and top overall honors, shoppers can use the IVAs as a benchmark for vehicles that are designed and built with customers just like them in mind. In fact, AutoPacific owner research also shows that IVA-winning vehicles achieve higher overall satisfaction from their owners.”

For 2009, the top-rated premium brand is Porsche, outscoring Buick and Jaguar for the most ideal premium vehicle brand honors. The top-rated mainstream brand is Ford, outscoring Mercury for top mainstream brand results. Porsche and Ford were also the highest scoring premium and mainstream brands in the 2008 IVA rankings.

The top-rated vehicle overall is the Honda Odyssey minivan, which beat out the next-highest rated vehicle, the Toyota Venza, from the premium mid-size crossover SUV segment. Rounding out the top five were three Ford Motor Company products: the Ford F-150 large pickup, followed by the Ford Taurus and the Lincoln Town Car, both in the large car segment.

Ford Motor Company leads the industry with a total of five segment winners. Hyundai/Kia and Toyota/Lexus each had three segment winners, with Chrysler, General Motors and Honda bringing in two wins each.

Of the twenty-three Ideal Vehicle Award (IVA) categories, American brands have nine segment winners, Japanese brands seven, European brands four, and Korean brands have three segment winners.

The top-rated product segment is Large Car, beating out last year’s leading category, Large Crossover SUV. American buyers continue to value large, comfortable vehicles suitable for suburban driving and longer distance highway cruising.

    2009 Ideal Premium Brand: Porsche
    2009 Ideal Mainstream Brand: Ford
    2009 Ideal Product Segment: Large Car

    2009 Ideal Vehicle Award Winners:

    Passenger Cars:
    Premium Luxury Car               Lexus LS
    Aspirational Luxury Car          Hyundai Genesis
    Large Car                        Ford Taurus
    Luxury Mid-Size Car              Lexus ES350
    Premium Mid-Size Car             Saturn Aura
    Mid-Size Car                     Volkswagen Jetta
    Image Compact Car                MINI Cooper
    Compact Car                      Hyundai Elantra
    Economy Car                      Honda Fit
    Sports Car                       Porsche 911
    Sporty Car                       Dodge Challenger

    Pickups, SUVs and Minivans
    Large Pickup                     Ford F-150
    Compact Pickup                   Ford Explorer Sport Trac
    Luxury Sport Utility             Lincoln Navigator
    Large Sport Utility              Nissan Armada
    Premium Mid-Size Sport Utility   Ford Explorer
    Mid-Size Sport Utility           Jeep Liberty
    Luxury Crossover SUV             BMW X5
    Large Crossover SUV              Chevrolet Traverse
    Premium Mid-Size Crossover SUV   Toyota Venza
    Mid-Size Crossover SUV           Subaru Forester
    Compact Crossover SUV            Kia Sportage
    Minivan                          Honda Odyssey

In addition to identifying segment winners, IVA also establishes numerical ideal vehicle ratings for virtually every passenger car and light truck in the United States market. These results come from calculating owner input across 15 specific areas related to a vehicle’s attributes, including: exterior styling, exterior size, passenger roominess, cargo space, driver’s seat comfort, driver’s seat visibility, interior technology, interior lighting, power and acceleration, ease of getting in and out, interior storage compartments, ride, handling, safety features and tires and wheels.

In 2009, AutoPacific has named its Vehicle Satisfaction Award winners, plus announced “Owner Recommendations,” based on a survey of more than 25,000 new car owners.

Ford shifts advertising into overdrive.

Ford shifts advertising into overdrive.

The struggles of General Motors and Chrysler may be the opening Ford Motor Company has long waited for. It has increased radio marketing as it looks to take share from competitors. Ford aired 81,261 spots in May according to Media Monitors. That’s more than twice what General Motors ran.

Even so, General Motors hasn’t stopped spending with radio altogether. Over the last year it leads Ford 607,121 to 517,182 in radio spots. Both automakers are also significantly above its low-water mark. In January they aired fewer than 6,000 radio commercials.

Ford Gets a Leg Up for Not Resorting to Bailout

Ford Gets a Leg Up for Not Resorting to Bailout

By Jim Henry | June 22nd, 2009 @ 9:14 am

Ford could be gaining ground with consumers who appreciate the fact that Ford has not resorted to a federal bailout to keep itself in business.

That’s good news for Ford, although I keep saying Ford is wise not to crow too soon or too loud. Ford could some day find itself in the same boat as Chrysler and GM, unless sales improve.

In May, not a single brand in the U.S. market posted higher sales than the year-ago month, according to AutoData sales figures. That’s the first time in recent memory I can remember that happening. In recent months, somebody somewhere has always managed an increase, even if it was a tiny brand with an increase of less than 1 percent.

CNW Marketing Research reported today the results of surveys starting in December 2008. The results showed an increase in the percentage of consumers who indicated they were more favorably inclined to consider buying a Ford, because Ford didn’t ask for or receive federal assistance.

In December, that group made up 19.6 percent of the respondents. In February it was 27 percent, and in May 38 percent, CNW said.

In the most recent survey, about 9 percent of respondents said that “not accepting bailout funds” was the single most important reason for considering a Ford, according to CNW.

“A ‘Buy American’ attitude has been growing, but the primary beneficiary is likely to be Ford which is not only a U.S. brand, but not owned by the federal government. Consumers in large part — better than 80 percent — believe the bailout funds were misspent and government ownership is anathema to how business should be done,” CNW said, in its monthly Retail Automotive Summary.

“Time will likely heal these attitudes. When Chrysler was purchased by Daimler, a large portion of the WWII generation said they wouldn’t buy a car from a German company,” CNW said.

Chart: CNW Marketing Research

THE ROAD AHEAD FOR FORD

NEW YORK (CNNMoney.com) — For much of the last year, Ford Motor has been the strongest U.S.-based automaker.

But with Chrysler already out of bankruptcy and General Motors possibly six weeks away from its own exit from bankruptcy, Ford could soon find itself in the weakest position of the traditional Big Three.

The problem for Ford is that its strength was only relative to the greater problems at GM and Chrysler. Ford built its cash reserves not through profits, but by mortgaging most of the company’s assets before the credit crisis of 2008 cut off funding for the other automakers.

That pile of cash gave Ford (F, Fortune 500) the ability to ride out the sharp plunge in auto sales without turning to the government for help — at least so far. But it also left Ford with about $32 billion in debt on its books at the end of the first quarter.

With GM (GMGMQ) and Chrysler using the bankruptcy process to shed much of their own debt cheaply and quickly, Ford has gone from the automaker with the most cash on hand to the one with the most debt on its books. GM will have only about $17 billion in debt if it can follow its planned emergence from bankruptcy. Chrysler left bankruptcy with about $11 billion in debt, and a new partner, Italian automaker Fiat, it did not have previously have.

Ford also hasn’t been able to cut its manufacturing capacity or its bloated dealership network as Chrysler and GM through bankruptcy reorganization.

Ford officials insist the company remains in a strong competitive position against its Big Three rivals — despite all the help they got from the government and the bankruptcy courts.

“We don’t know what the implications are going to be, but one thing’s for sure: I like our position,” said Ford Chairman Bill Ford at a conference in Detroit Monday.

But others worry that Ford’s debt level could soon become the same kind of burden that plagued GM and Chrysler before their bankruptcy filings.

“It’s a huge issue,” said David Cole, chairman of the Center for Automotive Research, a Michigan think tank. “GM and Chrysler are showing how you can do things in bankruptcy you can’t get close to outside of bankruptcy.”

Other auto industry experts say that even if Ford can manage its debt level, it will soon find itself in need of a bailout or possibly bankruptcy if auto sales don’t start to rebound in the next year.

“Leverage is a concern, but it’s not the primary concern. The greater concerns are low sales and underused capacity,” said Gregg Lemos-Stein, credit analyst with ratings agency Standard & Poor’s, which rates Ford’s corporate credit as CCC+, deep into so-called “junk bond” status.

Lemos-Stein said while the company still has a better cash position than its rivals, “they don’t have an indefinite supply of cash, especially since we expect the outflows of cash to continue.”

Still, some experts believe Ford’s future looks brighter than its rivals because it has a better lineup of vehicles in the showroom and its pipeline. While GM is busy shedding weaker brands and Chrysler is shifting away from trucks towards smaller cars, Ford has already adapted to changing demands from customers.

“They’ve managed their product portfolio pretty well. That’s very important,” said Tom Libby, president of the Society of Automotive Analysts.

Libby said that product development at GM and Chrysler took a hit as the companies rushed to slash costs in recent months. That could leave Ford with newer, more attractive products for at least a few years.

“They are not being forced to make changes at gunpoint,” added Subroto Banerjee, a partner at business research firm Frost & Sullivan. “They’ve done it very smartly, without all the problems and distractions of the process at GM and Chrysler.”

Libby conceded that some of the market share gains Ford has achieved in recent months came because buyers were worried about the future prospects at GM and Chrysler.

If those concerns are now put to bed by those companies’ quick trips through bankruptcy, Ford will lose a marketing advantage it once had.

And all three Detroit rivals face the problems that brought the U.S. industry to its current crisis — a weak economy, an historic plunge in auto sales and a decades-long trend of losing market share to importers like Toyota Motor (TM) and Honda (HMC).

So even if Ford is still stronger than GM or Chrysler, it may not be strong enough to buck those three powerful headwinds.

First Published: June 17, 2009: 2:19 PM ET