Auto dealers and auto makers have been faced with a dilemma this summer. Although sales have been down, partially due to the cash for clunkers program from last summer, the demand has still been there. In a recent survey conducted by Automotive News, 73% of dealers reported that they did not have enough new vehicles in stock, and were losing sales as a result of this. Here is the dilemma. Profits have been posted with the current strategy implemented by the auto makers, which has been to not over produce and sell more vehicles at a lower price, but to produce the amount of vehicles that they expect to sell, and sell these vehicles at a higher price. They can continue to play it safe with this strategy, or take a chance at recapturing those “lost” sales due to lack of stock, and produce more vehicles, believing that they will be able to recapture those lost sales. This is a chance that could be quite profitable, or end poorly if the real demand is not in line with the projected demand. With the economy in the current state that it is in, I don’t expect to see them take this chance, but I’m not so sure that it’s the right decision to play it safe here. What do you think?
August auto sales in the U.S plummeted to their lowest point since February this year. 10.8 million Units were sold, which fell well short of the projected sales of about 11.5 million units, reports Automotive News. This can partially be attributed to the cash for clunkers government program that helped maintain auto sale levels last August. There is no doubt that the 21 percent decrease in sales from last August and the lack of the cash for clunkers program this summer are connected. Obviously cash for clunkers was necessary in order to bring the Auto Industry out of the 21 month slump of losing money that it was in until August of last year, but now that the government incentives have ended so that in effect, the government has taken the training wheels off, the question is, will things turn around? Or will sales once again wane, calling for another governmental intervention? Weigh in if you have anything to add.
In a response to the upcoming federal proposal to implement a letter grading system for new vehicles fuel economy, NADA spokesman Bailey Wood told Automotive News that the National Automobile Dealers Association will oppose the proposed governmental plan. Opposing this proposal was clearly the right move by the NADA, because it was in the best interest of the Auto Dealers, but as a result of this stance that they have taken, they have cemented themselves in a position against the powerful environmental groups that have backed the proposal. And unfortunately for the NADA, this came right after they also recently butted heads with the environmental groups over whether stickers should be put on electric and plug-in hybrid automobiles detailing the pollution that is produced by charging those vehicles, which the NADA was against. The NADA has made all the right moves here, but they have now found themselves in a battle against the government and some powerful lobbyist groups. I’m not sure who will come out on top at the end of this, but it could get ugly. Which party is right here, and whose initiative will get passed? I’m not really sure at this juncture, so weigh in if you have any thoughts or anything to add.
What a difference a year makes. This year the show was obvious smaller but the attitudes were a 1000 percent better. Dealers and Exhibitors are looking forward, the sense that the hardest part is over was very evident. The dealers that we spoke too were in quest of better solutions at an economical cost. They were reviewing their options to see if there are alternatives to their current systems and practices that can improve their business.
The DMS systems are under assault to change their behavior and cost structure. Dealer Track was slamming when we stopped by as an alternative to ADP and Reynolds. Dealers want support to be better and cost effective. Everyone is working to keep their customers happy and satisfy their needs but it is a battle.
AutoRaptor had a great show, new business and connecting with all our partners, Carfax, Dealer Track, PBS, AutoTrader, Autobytel, ADP, the list goes on.
AutoRaptor CRM solution is today’s answer for the forward thinking Independent dealer who wants to maximize their profit the simple way. Not every solution has to break the bank; quick return on investment (ROI) married with a high tech sales solution is what will help your business succeed. We have so much confidence in AutoRaptor, that we do not require contracts or setup fees. The only commitment is yours to work the process.
“As an independent dealer, we chose AutoRaptor as a way to more effectively manage our leads. Its low cost and web-based platform was ideal for a dealership of our size. What we also discovered along the way, however, was AutoRaptor’s ability to become an easy to use and comprehensive way to manage deals from beginning to end. “
Jahon Jamali, General Manager
Just one comment from an Independent dealer who sees what technology can do to improve his business. Small staff or large AutoRaptor can handle all types of users with custom settings for the way you operate. Integrated with other web services so that your inventory is always within the application. Desk deals, send emails and follow up, follow up, follow up and win the deal.
Call for a free demo at 888-421-6533 or email to contact@autoraptor.com and get started in managing your leads.
Saab dealers knew of the chance that GM would wind down Saab if a proposed sale to Koenigsegg AB went sour. Still, dealers say they had every indication the deal was progressing smoothly.
Dealers had signed termination agreements in June that said General Motors Co. would wind down Saab and terminate its dealers if a sale fell through, unless another buyer wanted Saab, said Michael Simon, general manager of a stand-alone Saab store in suburban Chicago.
“The way that it was set up was the same way as the Saturn agreement,” Simon said, speaking of GM’s failed sale of Saturn to Penske Automotive Group Inc. Penske backed out on Sept. 30, and GM is now winding down Saturn.
But everything seemed to be going smoothly with the Saab sale. Dealers say brand representatives … From Automotive News>> story
From Automotive News Published: Nov 24 4:29 pm U.S. Eastern time.
| GM posts $1.2 billion loss, says it will begin to repay U.S. loans Chrissie Thompson and Jamie LaReau |
| DETROIT — General Motors Co. posted a $1.15 billion loss during the third quarter following its exit from bankruptcy and spelled out plans to begin repaying $6.7 billion in U.S. loans. “We have significantly more work to do, but today’s results provide evidence of the solid foundation we’re building for the new GM,” CEO Fritz Henderson said in a statement. The “managerial net loss” was for the period of July 10, the day GM exited 39 days of court protection, through Sept. 30. For the full quarter a year earlier, GM had an operating loss of $4.2 billion and a net loss of $2.5 billion. GM also said:
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NOVEMBER U.S. SALES
November sales rate will at least match October, Ford analyst says
DETROIT (Reuters)- – November’s U.S. auto sales will at least reach October levels, Ford Motor Co.’s chief U.S. sales analyst said on Friday.
The light-vehicle seasonally adjusted annual sales rate reached 11.2 million units in October, the industry’s best performance in a year — excluding August, when the government’s cash-for-clunkers incentive program boosted demand to a 13.7-million-unit rate. Maintaining October’s levels would beat November 2008’s 10.3 million units of demand.
“I think that we won’t fall backward from October. How much November might advance from the October level it is too early to say,” Ford U.S. sales analyst George Pipas said today to the Automotive Press Association. “What I’ve seen so far is good enough that it suggests to me that we are not going to … >> story Published: Nov 13 3:31 pm U.S. Eastern time