GENERAL MOTORS ANNOUNCES 1,7 BILLION DOLLAR PROFIT.

DETROIT – General Motors Co. today announced third quarter net income attributable to common stockholders of $1.7 billion, or $1.03 per fully-diluted share. In the third quarter of 2010, GM’s net income attributable to common stockholders was $2.0 billion, or $1.20 per fully-diluted share.

Net revenue increased $2.6 billion to $36.7 billion, compared with the third quarter of 2010. Earnings before interest and tax (EBIT) adjusted was $2.2 billion, compared with $2.3 billion in the third quarter of 2010. There were no special items in either period.

“GM delivered a solid quarter thanks to our leadership positions in North America and China, where we have grown both sales and market share this year. But solid isn’t good enough, even in a tough global economy,” said Dan Akerson, chairman and CEO. “Our overall results underscore the work we have to do to leverage our scale and further improve our margins everywhere we do business.”

Site Names Best Used Cars for Teens

Vehix is helping provide direction with a list of “8 Great Used Cars under $10,000 for Teenagers.”

The vehicles had to satisfy a long list of requirements to make the list. For instance, to help protect young drivers, all vehicles must weigh at least 3,000 pounds and demonstrate good crash-test scores.

Vehicles must include four doors and offer a four-cylinder engine versus a larger six-cylinder to deliver higher fuel economy.

All vehicles on the list of best used cars for teenagers are younger than 10 years old, cost less than $10,000 with average mileage for their age, and demonstrate high reliability scores according to Consumer Reports Magazine and J.D. Power and Associates.

The winners are:

•2005 Ford Escape
•2004-2005 Honda Accord Sedan
•2002-2003 Honda CR-V
•2006-2007 Hyundai Sonata
•2007-2008 Kia Optima
•2006-2007 Mazda MAZDA6
•2003-2006 Subaru Impreza
•2002-2004 Toyota Highlander

FTC To Review Dealers’ Treatment Of Military Customers

According to trade press reports, the Federal Trade Commission (FTC) will examine how dealerships treat military personnel and their families when making vehicle purchases during the second in a series of public roundtables on dealer practices. The roundtable will take place August 2-3, 2011 in San Antonio, Texas.

The FTC was given authority to adopt standards for dealer-assisted financing under financial reform legislation enacted last year. The agency plans to host several roundtables to determine if there are any consumer protection issues that may need to be addressed by possible rule-making or other actions.

The U.S. Consumer Financial Protection Bureau, whose newly appointed director is former Ohio Attorney General Richard Cordray, oversees the financial institutions that provide loans to auto consumers. An office within the new agency was created to educate military families about financial issues and protect them from unscrupulous lenders.

During the debate last year over whether dealerships should be overseen by the new U.S. Consumer Financial Protection Bureau, Undersecretary of Defense Clifford Stanley argued unsuccessfully that dealers should fall under the new agency’s oversight. He stated that there were documented cases of service members falling victim to predatory lending practices.

The National Automobile Dealers Association has been invited to participate at the upcoming roundtable and will discuss how optional dealer-assisted financing expands access and reduces the cost of credit for all car buyers, including military personnel and members of their families.

New YouTube Rules—What Your Dealership Needs to Know

If you publish videos on YouTube you need to be aware of a change from Google and YouTube that affects who can view, share, or edit your videos. This change affects any video originally posted to YouTube including any links or embedding content provided from YouTube to your website or social media sites.

Google just recently announced the introduction of Creative Commons licenses for YouTube. Under the new rules, individual users must decide, at the time they upload a video, whether to publish their content under the new CC license. If they do so, the video then becomes accessible to every YouTube user for use in their own videos via the YouTube Video Editor. The new feature will give users a large selection of video clips from all types of subject areas. Adding Creative Commons tags will also help YouTube on the copyright front by clearly distinguishing what clips users can use freely and what they cannot.

Users who want to check out the Creative Commons selection right now can go to http://www.youtube.com/editor and select the CC tab.

Should your dealership use the Creative Commons option?

Creative Commons licenses provide a standard way for content creators to grant someone else permission to use their work. By marking your original video with a Creative Commons license, you are granting the entire YouTube community the right to reuse and edit that video. You retain your copyright and other users get to reuse your work subject to the terms of the license. Remember, you may only mark your uploaded video with a Creative Commons license if it consists entirely of content made and licensable by you under the CC-BY license.

Unless you have a specific reason to not want your content to be shared or reused, it is our view that you should choose “yes” to the Creative Commons license option. Choosing the ‘standard license’ now means you are not granting permission for your work to be shared or reused.

How to mark your video as Creative Commons

1. Click the radio button next to ”Creative Commons Attribution license (reuse allowed)” while uploading, or

2. Go to My Videos, select edit next to the video you wish to include in Creative Commons. Scroll down until you reach License under Broadcasting and Sharing Options. Click the radio button next to ”Creative Commons Attribution License (reuse allowed)”.

Want to know more?

For more information on the CC-BY license and a summary of the full Legal Code with the full license accessible at the bottom of the page—please visit http://www.CreativeCommons.org.

Ed Steenman is owner of Steenman Associates that provides traditional and digital media services to automotive dealerships and dealer groups nationally. Ed is available to speak to 20 groups or other related events and can be reached at ed@steenmanassociates.com This e-mail address is being protected from spambots. You need JavaScript enabled to view it or his website http://www.steenmanassociates.com.

Another Texas Dealer Wins Quality Award
Written by Jeffrey Bellant
Monday, 27 June 2011 05:50 PM

LAS VEGAS – Texas dealer Paul Marshall Allen won the 2011 National Quality Dealer of the Year award, becoming the third Texas dealer in a decade to earn the honor.
Allen, owner and president of Auto Land in Haltom City, Texas, took home the top prize at the recent National Independent Automobile Dealers Association convention. In accepting his award, Allen thanked God, his employees, the state association and his family. He said it was a humbling experience. Allen s wife, Jodi, was thrilled with the announcement. It s amazing, she said. It s unexpected.
There were a lot of qualified nominees. But he works so hard all the time. Juan Sabillon, a fellow Texas dealer, was happy for Allen and the state. He s a great guy, he said. One more (National Quality Dealer) on the books for Texas. Dealers from Texas also won the award in 2008, 2004 and 2001.

NIADA s Mike Linn, CEO of the association, announced the winner during the event broadcast on NIADA.TV.

Allen said he knew that he had won when Linn began reading a letter from one of his customers, because he recognized the customer s story. That s when I started looking at my family, saying, that s me, he said.
Allen said he s honored to receive the award, especially considering there are 9,000 registered dealers in Texas. I think it just proves that I m on the right track, that s all, he said. Allen opened his dealership in 1991 in Forth Worth with his father, Gary. He was previously a stock trader. He has served his community on the Haltom City Planning and Zoning Commission, as well as president of the Haltom City Urban Business Association.

Allen formed the latter group to fight against new zoning laws that would have jeopardized dealers ability to do business in the city. The association s work convinced the city council to establish separate zoning standards for dealers. The graduate of Texas Tech University also provides an annual endowment for academic scholarships. Allen is president-elect of the Texas IADA and has served as president of the Fort Worth IADA. Linn said Allen even had many letters of recommendation from other dealers and has been a Texas IADA member for 17 years. Northwood University selects the award winner and this year proved to be a challenge. Joe Lescota, chairman of the automotive marketing department at the Michigan campus, said the committee actually had to vote more than once to choose the Quality Dealer winner.

This year was extremely tough, Lescota said. It was so close. Alabama s Paul Claborn, the 2010 winner, urged Allen to capitalize on the opportunities that will be coming his way in the next year.

Measure Muddies Auction Licenses

Sunday, June 19, 2011 03:14 AM
By Robert Vitale – The Columbus Dispatch, Columbus Ohio

An attempt by two state lawmakers to help a Springfield-area auction company comply with state law might shut down an entire segment of the industry throughout Ohio, competitors fear.

Auctioneers who help farmers and construction companies sell used heavy machinery say new licensing requirements that were written into Ohio’s transportation-funding bill will allow only one such auction company to operate in the state.

The bill was signed into law by Gov. John Kasich in late March. The law is to take effect on July 1.

Critics say it would require all auction businesses in Ohio that sell used heavy machinery to maintain 60,000-square-foot warehouses on 90-acre sites. Licenses would be granted only to businesses that do at least $1million in annual sales.

The Ohio Auctioneers Association says that only one company meets that threshold: Ritchie Bros. Auctioneers, a Canadian business that operates in South Vienna, a village along I-70 between Columbus and Springfield.

The law would grant a monopoly to Ritchie Bros., the association says. Lawmakers who sponsored the amendment said it has been misinterpreted and will be clarified in the final state-budget bill.

Ohio’s Constitution demands that laws be applied uniformly throughout the state, and courts have said laws can’t draw arbitrary or unreasonable distinctions among people or groups.

”This was not our intent at any point,” said state Rep. Ross McGregor.

McGregor and Sen. Chris Widener, who are both Republicans from Springfield, said they added the construction-equipment auction license to the transportation bill not to exclude other businesses from farm- and construction-machinery sales but to include Ritchie Bros. among those eligible to sell used cars.

The Bureau of Motor Vehicles denied Ritchie Brothers a used-car dealer’s license because the company didn’t adhere to a state law requiring businesses to hold the titles of the cars they sell.

Gene Pierce, a lobbyist who represents Ritchie Bros., said the South Vienna auctioneer sells a small number of cars on consignment when they’re in lots that include heavy equipment.

Widener said the new license wasn’t meant to replace existing auctioneer licensing requirements but to create a separate category that would allow Ritchie Bros. to continue both parts of its business.

Only companies that auction both heavy-machinery equipment and used cars would need the new license. Companies that already have auctioneer licenses wouldn’t be required to obtain the new one, and the budget-bill amendment will spell that out, Widener said.

But John Oberle, an attorney representing the auctioneers association, said the group reads the pending law differently. So far, he said, the proposed changes to clarify it haven’t eased concerns.

Some construction equipment also is classified as motor vehicles, he said, so auctioneers worry they’d be required to have the new license as well. Making it tougher on auctioneers to operate in Ohio could cost the state business because one company wouldn’t be able to handle everything, and customers would turn to Indiana or other neighboring states, Oberle said

Senate budget crimps time Ohio consumers can back out of car sales

Published: Tuesday, June 14, 2011, 6:13 PM
By Sheryl Harris, The Plain Dealer

The proposed state budget would limit the time consumers have to cancel a used car purchase if a dealer fails to provide them with a title or sells them an unmarked lemon. Ohio law allows car dealers to sell used cars or mobile homes before they have the titles for them as long as the dealers contribute to a state-administered fund created to protect car buyers.

If the dealer fails to get the title to the buyer (or his lender) within 40 days of the sale, the buyer has the right to cancel the purchase and get a full refund. There’s no time limit for making that demand. If the dealer doesn’t pony up, the Title Defect Rescission Fund reimburses the wronged consumer and goes after the dealer for the money. The Senate’s proposed budget would impose strict new limits on consumers trying to tap into the fund. Under the language senators tucked into the budget, buyers deprived of a title would have a limited time — only 60 days from the time the title finally transfers – to give the dealer notice they want to rescind the used car deal.

Buyers who miss the deadline would not be eligible for reimbursement through the dealer-financed fund administered by the state attorney general’s office. ”Most people don’t even know about this law and won’t realize they have rights within 60 days,” Akron consumer attorney Laura McDowall said. ”The dealers that do this are these fly-by-night players. Very rarely do you have regular car dealers getting caught in this,” she said. Because fly-by-nights cater to less savvy buyers, she said, the time limit is a bad idea. She said the law makes it clear consumers have a ”reasonable time” to rescind a sale. ”It’s pretty easy for a dealer to string someone along for a couple months, dodging phone calls, promising to make it right,” she said. ”Before the consumer realizes they’ve been had, the time to cancel the deal is gone.”

But Sandra Lynskey, chief of the Ohio attorney general’s Consumer Protection Section, said consumers gain more than they lose under the Senate’s proposed changes. For the first time, she said, all Ohio car dealers would be required to participate in the fund. Also new, Lynskey said, is a provision that would allow the fund to pay off the wronged consumer’s outstanding loans on his or her trade-in if was sold by the dealer.
The fund already covers sales of used cars if dealers fail to disclose that the vehicles had doctored odometers or were rebuilt from salvage. Under the proposal, the fund would expand to include, for the first time, sales of manufactured homes and vehicles that dealers fail to disclose are ”buybacks,” lemons repurchased by the manufacturer because of defects. The tradeoff: Consumers must discover these omissions and give notice to the dealer within 180 days or they wouldn’t be eligible for refunds.
Cleveland consumer attorney Ron Frederick said allowing dealers to sell cars without having the title in hand is just bad policy. ”This allows dealers to sell cars they don’t own,” said Frederick. ”Nobody else can sell something they don’t own.” He points to the experience of Terkesha and Edgar Fail, who tried for months to get the title for a used van they bought in March. Terkesha Fail said the dealer didn’t send the title to her lender by the time her 30-day temporary tags expired.
Unable to drive the car without plates and unable to get plates without the title, Fail said, the Richmond Heights couple put their old plates on the van at the advice of the dealer, who promised the title’s delivery was imminent. In June, Edgar Fail was cited for driving with fictitious plates. The van was impounded and the couple, both of whom are looking for work, had to raid their savings for $200 to get their van back. Only then – nearly 75 days after the sale – were the Fails able to get the title from the dealer. Edgar Fail still faces a traffic court hearing.
The title defect fund doesn’t reimburse consumers for the types of charges the Fails incurred. The Senate slapped together the 5,000-page budget in such a rush that the version posted for public view on the Senate site is apparently wrong. Lynskey said the language her office signed off on with the Senate majority was mistakenly not reflected in the bill posted on the legislature’s site.
As written, the budget would strike out a portion of current law lets wronged consumers use the Consumer Sales Practices Act to sue over title defects, a possible way around the new time limits. Lynskey said that strike-through was an error and that the Senate was correcting and reposting the bill. By cramming the changes into the budget, the legislature avoids having to hold public hearings. But Frederick said the issues are broad enough the legislature should let the public weigh in: ”They should give people an opportunity to fully vet it.”

What’s Your Name Worth?
Written by AJ LeBlanc
Wednesday, 08 June 2011 11:45

What is the impact of having one negative, or worse, numerous negative reviews, from customers about their experience at your dealership?

We all know that one customer is worth numerous car sales and service visits over a life time, so every customer lost due to a bad review means tens of thousands of lost dollars from your bottom line. Your store’s online reputation, whether positive or negative, can spread like wildfire creating either a wave of car sales and service business, or an exponentially negative amount of lost business, which can take years to regain.

Today’s car shoppers use research tools to educate and compile more information about the buying process, so they can find the best deal for the car or services they are looking for. Over 90 percent of car shoppers are using search engines to shop for vehicles and looking through other car shoppers comments and reviews about how their car buying or service experience went at your dealership. With 95 percent of car shoppers not going past page one of Google’s search results, it you need to have as much positive exposure on this page as possible. You want the shoppers to see the great experiences other customers have had at your dealership, not numerous listings of unhappy customer reviews from third party sites.

Make sure you own as much of that positive page one Google real estate for your dealership name, as possible, using all the tools available such as social media sites, Google places, press releases, and videos—just to name a few. Even the vendors you use, like finance companies, will Google your name when you’re applying for a loan for a new store, renovations, or expanding your inventory, to see how your business is fairing in the local community, which could impact your ability to repay back the loan you’re seeking.

Google, Yahoo, and Bing switched to universal search in 2007 which combines websites, reviews, maps, images, news, press releases, social media, and videos in the search results. Video has a 41 percent higher click through in the search results than just a static monochrome text link. Make positive videos about your dealership and the products and services you sell and get them on page one of Google to push out any possible negative reviews down in the search results and help control the messaging potential customers see about your business. Below is a screenshot of Marazzi Nissan, ranked consistently in the top 20 of over 1,100 Nissan dealers nationwide, located in Naples Florida and is employing the use of positive videos taking up 40 percent of page one Google, eliminating four possible links that could be unfavorable for potential customers to see. Dominate page one Google, the new Monopoly board.

AJ LeBlanc, is the co-founder of Car-mercial.com and Carbuyersengine.com. For more information, visit http://www.car-mercial.com and http://www.carbuyersengine.com.

NHTSA chief plans push to pry drivers from mobile devices.

Agency plans new guidelines this fall

June 9, 2011 – 12:19 pm ET
DETROIT (Bloomberg) — The National Highway Traffic Safety Administration is studying ways to encourage new drivers to disconnect from mobile devices and the Internet while operating vehicles, Administrator David Strickland said today.

”I’m not in the business of helping people Tweet better, I’m not in the business of helping people post to Facebook better,” Strickland said at an automotive technology conference today in Novi, Mich. ”My job is to make sure we keep people safe behind the wheel.”

U.S. Transportation Secretary Ray LaHood, whose department oversees NHTSA, has said drivers are distracted by vehicle information and entertainment systems such as Ford Motor Co.’s Sync and General Motors Co.’s OnStar.

The Transportation Department has began developing guidelines for in-vehicle systems and aims to publish them this fall, Strickland said today.

”I’m not going to deny the fact that people want these things,” Strickland said. ”They do. Especially the generation behind us. They’re used to being connected 24 hours a day.”

The agency is looking for ways to ”impart to these future drivers that it’s OK to not be connected when you’re operating a car,” he said.

GM’s OnStar, which has more than 6 million subscribers, has been testing applications that would let users make audio updates to their Facebook pages and have messages from the social-media site read to them while driving.

The system already provides crash-notification services as well as directions and information such as vehicle diagnostics.

Ford Sync

Ford has been selling Sync, based on Microsoft Corp. technology, since the 2008 model year.

Ford added features such as touch-command controls and voice-activated climate control last year and plans to add social networking, Web browsing and thumb controls similar to those on Apple Inc.’s iPod to 80 percent of its models by 2015.

BMW AG and Daimler AG also have added Internet and smartphone access this year to vehicles such as BMW’s 5-series sedan and Daimler’s Mercedes-Benz SLK roadster.

”A car is not a mobile device — a car is a car,” Strickland said. ”We will not take a backseat while new telematics and infotainment systems are introduced. There is too much potential for distraction of drivers.”

U.S. gasoline prices fall 5.5 cents to 7-week low
May 31, 2011 – 5:01 pm ET

The national price for regular unleaded gasoline declined 5.5 cents over the last week to $3.79 a gallon.

WASHINGTON (Reuters) – U.S. gasoline fell to its lowest level in seven weeks and diesel fuel dropped below $4 a gallon for the first time in two months, the Energy Department said on Tuesday.

The national price for regular unleaded gasoline declined 5.5 cents over the last week to $3.79 a gallon, the department said in its weekly survey of service stations.

Diesel fuel prices fell a nickel to $3.95 a gallon, falling under the $4 threshold for the first time since April 4.

Pump prices began falling shortly after the cost of U.S. crude dropped some $16 a barrel last month. Oil prices have recovered about $5, rising $2 on Monday alone on news on the shutdown of a major pipeline carrying Canadian crude to U.S. oil refineries.

Still, the full savings from the net decline in oil prices has yet to be passed on to consumers.

Hyundai/Kia Expected To Top Toyota/Lexus in May Sales
Koreans carmakers are rising in sales and respectability
by: David Kiley

Korean automakers Hyundai and Kia, which are both part of the Hyundai Motor Chaebol (Korean conglomerate) are expected to outsell Toyota and Lexus for the first time when all the sales are counted for the month of May. TrueCar.com, a leading website for new car pricing, trends and forecasting says that the Korean duo will report sales of between 115,000 and 116,000 in May, good enough for the number three spot behind General Motors and Ford, and ahead of Toyota/Lexus and Chysler/Dodge/Jeep.

Toyota/Lexus sales are expected to be down almost one-third from April, as well as down one-third from May of last year. The reason for the drop is a shortage of product due to the impact of the March earthquake in Japan on assembly and parts plants in that country. ”Inventory constraints finally hit the Japanese automakers this month but the recovery in supply appears quicker than first anticipated,” said Jesse Toprak, VP of Industry Trends and Insights for TrueCar.com. ”Current inventory shortages and perceived inventory shortages led to the lowest incentive spending in nearly nine years and the lowest selling rate of the year. This is a sizeable speed bump on the road to recovery.” So, is it just because of the earthquake that Hyundai and Kia are rising? Los Angeles based marketing consultant Dennis Keene says the tragedy definitely helped the Koreans, as well as GM and Ford, but that’s not the whole story. ”Five years ago, we would not be talking about Hyundai or Kia in this way even with the tragic event in Japan giving them this opportunity.” Hyundai Motor America CEO John Krafcik recently spoke with AOL Autos and said that he expected sales of Hyundai to get stronger throughout the year. ”We have worked very hard to design our new vehicles around the needs and wants of the American consumer, and the feedback we are getting is that all that work by our team is paying off,” says Krafcik, an engineer and former Ford and Toyota executive. ”We are holding our own and then some in one-on-one comparisons against our more established rivals…our owners are very happy with out vehicles and they are spreading the word.”

The two Korean brands are expected to be the only brands combining for a sales gain versus April. TrueCar expects them to post a 6.1% gain over April, and a whopping 43.4% sales gain over May of 2010. The website is forecasting slight sales dips at Ford and GM versus May, and flat sales versus May of last year. Hyundai and Kia are managed separately despite being part of the same Korean conglomerate. They do share an engineering and tech center in Michigan. But they market themselves differently, and make independent decisions about design and products.

Honda and Nissan, also impacted by the earthquake, are expected to take hits as well, down 26% and 7.2% respectively versus April. The overall industry is expected to down more than 8%. Why the dip? TrueCar says that consumer confidence is part of it, but notes that automakers have also been reducing the discounts on cars, which is causing some buyers to stay on the sidelines. The average incentive spending per vehicle will be approximately $2,017 in May 2011, which represents a drop of 13.1 percent from April 2011 and down 28.9 percent from May 2010.

Why are the automakers lightening rebates? Mostly it is because of the lost production at the Japanese companies due to the earthquake. The auto business is a supply in demand business, and with fewer vehicles on dealer lots to sell, the prices go up.

Bottom Line: The earthquake in Japan definitely helped Hyundai and Kia to pass Toyota and Lexus in sales in May, but the fact is that the Korean companies are attracting many more customers and prospects because of vastly improved vehicles.

New Car Sales Slow

There are signs of weakness in new-car sales this month, but demand for cars at auction remains high.

New-vehicle retail sales are off to a weak start in May due to high gas prices, lower incentive levels and some inventory shortages, according to J.D. Power and Associate.

May new-vehicle retail sales are projected to come in at 858,400 units, which represents a seasonally adjusted annualized rate of 9.6 million units. The retail selling rate is nearly 1 million units higher than it was in May 2010, but has dropped sharply from the 2011 year-to-date average of 10.7 million units.

Fleet sales are expected to be lower in May due to the inventory shortages and are projected to finish the month at 214,600 units, down 8 percent from May 2010.

The outlook for light vehicle sales in 2011 is beginning to bear the risk of the selling pace slowdown that is projected to occur during the next several months. J.D. Power has reduced the forecast for retail sales slightly to 10.6 million units from 10.7 million units. The forecast for total sales remain at 13 million units.

Finance Express has contracted with Frazer’s Used Car Dealer Software
04/07/2011

Rancho Santa Margarita, CA — Finance Express, the leading provider of web-based financial services and patented technology for independent auto dealerships, announced today that they have entered into a contract with Frazer Computing, Inc. Finance Express and Frazer Computing, Inc. will be working together to activate Frazer dealers on the Finance Express lender portal.
”Frazer has been an excellent provider of dealer management software for thousands of used car dealers. One of the valuable components of Finance Express is our patented technology which assists dealers and potential customers to obtain credit approval from competing lenders. We all know that having a lender community that will work with our dealers is very important, so that is why it seemed like a natural fit to team up with Frazer and their dealer base,” saysDavid Huber, President of Finance Express.
”We are very excited about this new relationship. Finance Express is already the preeminent source for matching dealers with lenders in our industry,” says Michael Frazer, owner and CEO ofFrazer Computing, Inc. Frazer went on to say, ”Integrating the FEX Lender Portal within Frazer will instantly provide our 6,900 active dealers quicker and easier access to an incredible number of lenders. The synergy from this relationship should encourage even more lenders to join the FEX Lender Portal, continuing to provide even more benefits to our customers. This figures to be a huge win for both Frazer customers and Finance Express lenders.”

About Finance Express
Finance Express is the leading provider of online services and web-based technology for the independent dealer market including a comprehensive DMS with functions such as dealer inventory management, credit application processing, electronic contracting, links to lending sources, dealer management tools, loan servicing and accounting systems and licensed escrow services. The comprehensive program provides dealers online access to a single, seamless solution and insures a safe and secure environment for participating lenders. For more information about Finance Express, visit their website at: http://www.financeexpress.com

About Frazer Computing, Inc.
Building on more than 25 years of service, Frazer Computing is dedicated to providing the used car industry with an outstanding Dealer Management System. Serving nearly 7,000 used car dealers from all 50 states, Frazer focuses on providing a feature filled, easy to use computer software system coupled with superb customer service. For more information about Frazer Computing, Inc., visit their website at http://www.frazer.biz

Legally Dealing – A Legal Blog for Dealerships Jeremy Kespohl
After-Market Warranty Companies
May 16, 2011

With the current economic climate, there has been a glut of new companies offering warranties covering vehicles. Your dealership may even have been approached by some of these companies trying to get you to sell their product. Unfortunately many of these companies are less than reputable and many are outright scams.

Anytime you are approached by a vendor who want you to sell their products, or who wants to sell their products to you, it is a must that you do your due diligence. As most anyone reading this is aware, there are legal consequences to doing business with another company, but because of state and federal regulation governing warranties, those stakes could be raised in this context. In addition to possibly damaging your dealership’s reputation, as I have stated in many of my articles, if a consumer is able to successfully bring a warranty action against your dealership, in addition to paying thousands of dollars in damages, you could be responsible for attorney’s fees that can reach into six figures in a worst-case scenario.

If you are approached by one of these companies about some type of business arrangement, there are a few steps you can take to help protect yourself. First, search the internet and look for articles or reviews of the company. This sounds simple, but if a Google search reveals that a warranty company is embroiled in litigation for not paying claims or defrauding customers, you probably don’t want to do business with them. Second, talk to others in the industry and see what their experience has been with the particular company you are evaluating. Third, check with organizations such as the Better Business Bureau and your state’s Attorney General and see if there are any complaints against the company related to their business practices. Finally, before you sign a contract or decide to do business with anyone, it is always advisable to speak with your attorney to discuss the potential impact of doing business with the particular company.

You may also be approached by consumers who are considering doing business with after-market warranty companies. Consumers regularly receive mailers from after-market warranty companies and these companies advertise heavily on radio and television. While the same steps listed above might be helpful for a consumer, the best advice you could give a consumer is to stick to extended warranty programs offered by the manufacturer of their particular vehicle or with companies that you do business with and would feel comfortable recommending.

Dealers fear used-car bubble

Auction prices soar, but some say retail demand isn’t on same pace
Arlena Sawyers
Automotive News — May 16, 2011 – 12:01 am ET

Already high used-vehicle prices are surging at auctions as dealers anticipate gaps in new-car inventories and snatch up used vehicles to fill their lots. Fears of impending new-vehicle shortages as a result of the March 11 earthquake have pushed up used-vehicle prices. In recent weeks those fears have created a buying frenzy, especially for late-model, fuel-efficient vehicles.

But Damon Schoen, wholesale director at Hamilton Nissan in Hagerstown, Md., and others say retail demand for those vehicles has yet to catch up with the wholesale demand. They warn that used-vehicle auction prices could drop sharply. Last week Schoen saw 2010 Hyundai Accents with 30,000 miles selling at auction for around $10,500 — about $2,000 more than he would have paid at the end of February, he says. His customers aren’t clamoring for small used cars, he says, because they would pay almost as much for a used one as a new one. And he acknowledges that he might have to rejoin the bidding if he runs low.

”I participated in the bubble process,” he says. ”I have enough of these little things gathered up. When we start selling a couple, I’ll be forced to go back to the well to replace them.” Michelle Primm, managing partner at Cascade Auto Group, which sells Audi, Mazda, Porsche and Subaru vehicles in Cuyahoga Falls, Ohio, typically buys the used vehicles she needs through auctions run by the manufacturers of her brands. But even those prices have ”overheated,” she says. In an effort to find used vehicles with lower prices she has expanded her search to include local classified ads for private sellers and vehicles that have been repossessed.

Primm says consumer demand doesn’t line up with the auction bidding because the general population does not understand the inventory problem facing the industry over the next few months. Dealers must plan ahead so they are ready, she says. ”Dealers plan 60, 90 or 100 days out. It’s what we’re good at.” Even so, some dealers and analysts warn that auction buyers could get stuck with vehicles for which they overpaid. Falling new-car prices or lower gasoline prices could prompt a drop in used-vehicle prices, they say. Since the Japan quake, rising new-vehicle transaction prices have, in turn, lifted used-vehicle prices. But that could change. Last week, after announcing that its North American factories would be cranking up production sooner than expected, Toyota Motor Sales U.S.A. announced regional cash, interest-rate and lease incentives on most vehicles. Nissan Motor Co. followed suit.

Up 10% in one month

But for now, wholesale used-vehicle prices continue to surge. In its June 1 edition, NADA Used Car Guide raises its suggested prices of used small vehicles by about 10 percent from May levels. And some nameplates will jump even more.

For June, the NADA Guide raises the price of a 2007 Toyota Prius by $1,950, or 15 percent from May, to $15,350 and a 2010 Honda Civic LX sedan by $1,675, or almost 12 percent, to $15,950. The increases are not limited to Japanese-brand vehicles. The NADA Guide raises the average price of the 2007 Chevrolet Aveo LS sedan by $750, or 14 percent, to $6,125, and that of the 2010 Hyundai Accent GLS by $1,175, or 11 percent, to $11,900. Typically, used-vehicle prices peak in March and decline from April through June, says Jonathan Banks, NADA Used Car Guide senior director of editorial and data services.

This year, he predicts, used-vehicle prices will peak in June and flatten on the high side in July as new-vehicle prices gradually rise because of lower incentives and higher sticker prices. ”We saw new-car incentives on small cars go down by about $400 from March to April. And we expect a similar move from April to May, which means used-car prices can go up,” Banks says.

ANOTHER REASON FOR INDEPENDENT DEALERS TO OFFER THE NIADA CPO PROGRAM TO ITS CUSTOMERS

Cadillac Revamps CPO Program

Cadillac is relaunching its certified pre-owned program to provide added confidence to customers seeking a used luxury automobile and help boost the resale value of Cadillacs.

Cadillac’s enhanced certified pre-owned program, being rolled out this spring, includes a more robust vehicle inspection system, a six-year, 100,000-mile limited warranty, 24-hour roadside assistance during the warranty period and courtesy transportation for warranty services.

Cadillac is bolstering the program with competitive financing options. For May and June, Cadillac will cover the first three monthly payments on interest rates as low as 1.9 percent for qualified buyers.

As part of the enhanced program, Cadillac and its dealers will provide every buyer of a Cadillac certified pre-owned vehicle with a 172-point vehicle inspection and reconditioning certificate that includes a road-test, validation of key mechanical components, up-to-date maintenance services and interior and exterior detailing. Customers also will receive a vehicle history report.

The limited warranty on Cadillac’s certified pre-owned vehicles covers most of the vehicle’s major mechanical components, including the engine, transmission, axles, struts, heating and air conditioning system and door and sunroof assemblies.

Cadillac is promoting the program through TV, radio, print and on-line advertisements.

Former General Motors CEO Stempel dies at 77
Mike Colias
Automotive News — May 9, 2011 – 9:37 pm ET
UPDATED: 5/9/11 10:21 pm ET

DETROIT — Former General Motors CEO Robert Stempel, who led the automaker during a turbulent period of recession and restructuring in the early 1990s, has died at the age of 77.

”Bob was a very popular chairman with employees, and his many accomplishments as a visionary engineer included leading the development of the catalytic converter, one of the great environmental advancements in auto history,” GM said in a statement.

”His knowledge of battery development led to the push for the EV1 electric car, and Bob continued to build his expertise in the electrification of the automobile after he left GM in 1992.”

Stempel died Saturday in Florida, the Detroit News and Detroit Free Press reported tonight.

Stempel worked his way up from an engineer in Oldsmobile’s chassis division in the late 1950s to stints as general manager for several brands, including Pontiac and Chevrolet, before being named chairman and CEO in 1990.

A true ’car guy’

He was celebrated as a ”car guy” when he replaced the outgoing Roger Smith. One day after Stempel became chairman, Iraqi dictator Saddam Hussein’s forces invaded Kuwait, triggering the Persian Gulf War and helping push the U.S. economy into a recession that would sap car sales.

Stempel later joked that he had ”one good day” as chairman, according to a 1992 Reuters profile.

Despite closing dozens of plants and cutting tens of thousands of jobs, GM lost $4.45 billion in 1991, Stempel’s first full year as chief executive.

He also agreed to a new contract with the UAW that gave laid-off hourly workers 95 percent of their pay. At the time, analysts said the pact made GM’s restructuring much more costly.

With GM’s board losing confidence in him and Stempel suffering from a heart condition, he resigned in October 1992.

Stempel later joined Energy Conversion Devices Inc., a Detroit-area maker of nickel-metal hydride batteries and solar panels. While at Energy Conversion, he forged a joint venture with GM to make batteries for the EV1 electric car, which was phased out in 2000.

Industry’s in upheaval, and Detroit 3 are on the muscle

Lindsay Chappell and Jason Stein
Automotive News — May 9, 2011 – 12:01 am ET

Detroit is up. Japan is down. Toyota is losing market share and General Motors is awash in profits.

Who’d-a thought?

This is clearly not the same plot the auto industry has been following for the past few years. This is a paradigm change in an American auto industry accustomed to decades of tough times for Detroit. ”The renaissance of the Detroit 3 is well on the way,” AutoNation CEO Mike Jackson told Automotive News last week. ”The profit results, product lineup and consumers’ opinion will allow the domestics to have market share growth for the second year in a row. We will see a remarkable recovery in market share as the domestics drive toward 50 percent.”

Flash back just five years: Detroit was the City of Gloom. Market share dwindled year after year. Ford Motor Co. suffered from poor quality and botched vehicle launches. Chrysler Group’s lousy performance was about to earn it a divorce and good-riddance from Germany’s Daimler. At GM, the buzzards were circling in the guise of stock speculator Kirk Kerkorian. All the while, the Japanese auto industry grew bigger, richer and more prominent in the United States. The term ”Big 3” was retired in favor of ”Detroit 3” to address the rise of Toyota Motor Corp.

Back to May 2011, and things are a little different. As in the-world-has-turned-upside-down different.
As the U.S. economy continues to recover, the Detroit companies are well positioned to profit from rebounding auto sales. The Japanese Big 3, meanwhile, can’t exploit that growth. They’re choked by a dramatic production collapse stemming from the March 11 earthquake. GM and Ford Motor Co. are now making boatloads of money, and death-threatened Chrysler Group which just reported its first quarterly profit in five years, is soliciting money from the private sector to repay government loans. Chrysler even said it’s running out of room for the 1,000 engineers it’s adding at its headquarters in Auburn Hills, Mich.

In April, Detroit’s market share was 46.5 percent, up 1.5 points from a year ago. Japanese brands were at 35.5, down 3.4 points. Toyota and Nissan Motor Co. expect to lose money for the next six months. In the United States, Japanese brand dealers are running out of inventory as the benefits of a U.S. recovery are passing them by. Could a new reordering of the industry be under way?

Japanese automakers often have overcome adversity in North America. But at the moment they have a very full plate. Last week, American Honda Executive Vice President John Mendel informed Honda’s dealers by letter that Honda’s ”overall production volume will be at significantly reduced levels as we continue production adjustments through the summer months.” Consoling the dealers for the loss of sales, Mendel said, ”You have overcome significant challenges throughout the years and yet, in the long run, you have all prospered. ”We will work our way through this difficult time and we will all be stronger in the end,” he wrote.

German, Korean brands up

It’s not just Detroit that’s thriving in North America. The Germans — BMW, Mercedes-Benz, Audi and Volkswagen — also are cleaning up. In April, the BMW brand outsold Mercedes (not including Sprinter vans), pushing ahead of Mercedes through the first four months as the top-selling U.S. luxury brand. Lexus, which held that sales title from 2000 through 2010, is running a distant third, and has no prospect of catching up because of production constraints. And Hyundai and Kia continue to snap up market share. The Koreans are introducing hot new models and are desperately searching for U.S. production capacity.
Sales of the small Hyundai Elantra, redesigned this year and now built in Montgomery, Ala., topped 22,000 in April — more than twice its volume from a year ago and nearly 13,000 more than the fast-selling Ford Fiesta. After a record 2010, Hyundai’s U.S. sales are up 31 percent and Kia’s 42 percent through April, in a market that’s up 20 percent. Combined, the companies accounted for nearly 10 percent of the U.S. market last month. For the first time the Koreans outsold the combined European brands in America. But as U.S. demand grows, Japan finds itself unable to produce even half enough.

Toyota CEO Akio Toyoda recently said it will take until the end of the year to fully restore vehicle output to normal levels — and this as U.S. consumers clamor for exactly the sort of fuel-efficient cars that made Japan rich. ”This month, next month, as we get into the summer, we’ll certainly be seeing inventories declining,” Randy Pflughaupt, Toyota group vice president of sales administration, said in a conference call last week after reporting Toyota’s April sales increase of just 1 percent, in an overall market that rose 18 percent.

Big change in small cars

In a man-bites-dog twist, Detroit’s big gains in April were powered by selling larger numbers of fuel-efficient cars and lower incentives. That reverses the U.S. industry’s familiar trends of recent years. In part because of impending shortages of vehicles, Detroit 3 incentive spending is at its lowest point in five years.
As the Japanese competition scales back on incentives and sales — Nissan postponed its annual May Tent Sale — U.S. automakers are toning down their discounting. Autodata Corp. reports that Chrysler’s average incentive spending per vehicle was $2,806 in April, a 23 percent reduction from a year earlier. Ford was down 20 percent and GM was down 14 percent. In April, as gasoline prices topped $4 a gallon in some markets, Ford, propelled by higher car sales and the popularity of its small Fiesta and mid-sized Fusion, reported first-quarter net profits of $2.6 billion, its best first-quarter result since 1998. GM last week also posted a quarterly operating profit of $2.0 billion, excluding special items — its fifth straight quarterly profit since emerging from bankruptcy.

In April, GM sold 25,160 units of the compact Chevrolet Cruze, whose Eco version is rated at 42 mpg on the highway. The Cruze was nearly 2,000 units behind Honda’s Civic but topped the Toyota Corolla by nearly 1,000 units. GM CEO Dan Akerson remarked at a recent industry gathering that when soaring gasoline prices spooked consumers in 2008, GM didn’t even have a competitive small car to sell. ”We’re finally seeing the Honda Civic buyer,” said Michael McGuire, dealer principal at McGuire Chevrolet-Cadillac in Newton, N.J. He said that in addition to older, traditional GM buyers looking to downsize, the Cruze appeals to younger people who generally have stuck to Japanese brands. UBS Securities analyst Colin Langan wrote in a research note this week that things should get better for GM as the year unfolds. Langan said GM stands to pick up 1.1 percentage points of market share at the expense of Japanese automakers because of Japanese production constraints. GM’s U.S. market share grew to 19.6 percent through the end of April, from 18.7 percent in the first-quarter of 2010, according to the Automotive News Data Center. Langan wrote: ”GM will be the biggest beneficiary of the upcoming Japan-related inventory shortages.”

Never say always

Not everyone believes the sea change is permanent. ”It’s not impossible that on a short-term basis you may see some market share variations, because of the impact that the earthquake has in the minds of people,” Carlos Tavares, chairman of Nissan Americas, told Automotive News. ”Monthly bumps may happen. But we need to judge on a full fiscal year basis.” But it is clear that for the first time in recent history, U.S. automakers believe they have the opportunity and the vehicle lineup to reclaim some of the market they have lost to the Japanese.
”What we need to do is really make sure that the quality, reliability and durability of our cars is an unexpected surprise for people,” Mark Reuss, GM’s North America boss said last week. ”It’s sort of a once-in-a-lifetime opportunity for us to get people into our cars and trucks and have them experience the excellence of the product that they may not have given us consideration for in the past. ”We’re taking it very seriously.”

Private Equity Firm Buys Byrider

Private equity firm Altamont Capital Partners has acquired J.D. Byrider, the Indianapolis-based used car sales and finance business.

With a long-term investment horizon, Altamont will provide strategic direction, experienced resources and additional capital to support the company’s growth and franchisee expansion initiatives. The acquisition of J.D. Byrider is Altamont’s first investment from its $500 million inaugural fund, which closed late last year. The firm is focused on acquiring and building middle-market businesses across a range of industries.

J.D. Byrider’s current President of Franchising Steven E. Wedding will assume the role of CEO, and the J.D. Byrider executive team will remain in place. James F. DeVoe, Jr. will remain a member of the board of directors and will serve as a consultant to the company.

Detroit and Korean automakers gain on Japanese as recovery rolls on.

April’s takes: Fuel, quake shake status quo
Jesse Snyder
Automotive News — May 3, 2011 – 5:02 pm ET

U.S. auto sales rose 18 percent in April as strong consumer demand for fuel-efficient vehicles overcame the twin drags of rising fuel prices and spot shortages. The seasonally adjusted annualized selling rate of 13.2 million was the third straight month above 13 million and fractionally higher than in March. But while fuel prices and lean stocks developing from Japan’s March 11 earthquake didn’t derail the auto sales recovery in April, it certainly shook up the status quo.

Detroit- and Korean-based automakers handily outpaced product-short Japanese manufacturers. At automakers with uncompromised inventory — General Motors, Ford Motor and Hyundai-Kia — cars sold much better than light trucks. Don Johnson, head of U.S. sales at General Motors, said cars drove the automaker’s 27 percent gains in April, noting the new Chevrolet Cruze compact nearly tripled the retail volume of the model it replaced, the Cobalt. Meanwhile, sales of two large SUVs fell: the Chevrolet Suburban down 31 percent, the Chevy Tahoe off 16 percent. Overall, GM cars rose 47 percent, trucks 11 percent. ”Consumers are continuing to rethink their vehicle choice,” Johnson said.

April was a ”missed opportunity” for Japanese automakers, short of some of their most popular fuel-efficient vehicles just when spiking fuel prices increased demand, said Jesse Toprak, vice president of TrueCar.com. ”Japanese automakers were not able to take advantage of a month in which natural demand was at a peak,” he said. ”Toyota could have sold 15 thousand more Prius hybrids if it had them.”

Major players: haves and have-nots

April results split sharply into ”haves” and ”have-nots.” Automakers that had vehicles to sell did well. Those without adequate stock fared relatively poorly. Japanese brands suffered. U.S. dealer inventories dwindled after assembly plant shutdowns and slowdowns because of parts shortages stemming from Japan’s March 11 earthquake and tsunami. Toyota Motor Sales gained 1 percent, American Honda 10 percent and Nissan North America 12 percent. April sales at Korean-based Hyundai-Kia, virtually unaffected by Japanese supplier woes, soared 47 percent. Detroit-based automakers, only lightly affected, did well, too.

General Motors jumped 27 percent. Chrysler Group gained 23 percent. Ford Motor sales rose just 13 percent overall, but the raw year-over-year comparison is deceiving. Last April’s numbers include Volvo (since sold) and discontinued Mercury. Mercury sister franchise Lincoln was down 1 percent in April, but the Ford brand gained 24 percent.

Porsche, Saab soar

April was a month of extremes among the smaller players in the U.S. market. Tight-inventory Japanese brands Mazda, Subaru and Suzuki posted single digit increases. But Mitsubishi more than doubled April sales to 8,081 units. Porsche volume jumped 82 percent and April sales more than tripled at Saab, which is no longer part of General Motors. Daimler sales rose 4 percent. Closer to the 18 percent average increase for the industry, Volkswagen of America sales rose 19 percent, BMW Group 20 percent and Jaguar Land Rover 16 percent.

Ford still No. 1 U.S. brand

U.S. sales jumped 24 percent in April for Ford brand, extending its comfortable lead as America’s best-selling marque so far this year. Chevrolet sales rose 26 percent in April to keep it second. After four months, Ford and No. 2 Chevrolet each is up 24 percent from a year earlier. Ford has sold 657,301 cars and light trucks. Chevrolet is second with 586,299 units and Toyota is No. 3, with 510,063. The positions are the same as in calendar 2010, but a reversal from 2008, when the order was Toyota, Chevrolet, Ford.

Incentives fall to pre-slump levels

Automaker per-vehicle incentives in April fell to pre-recession levels, say two companies that track them. TrueCar.com puts the industry average at $2,386 per vehicle in April, down 11 percent from a year earlier and the lowest month since January 2006. Edmunds.com, which uses a different tracking method, says April spiffs averaged $2,118, the lowest it has tracked since October 2005.

ByTrueCar.com’s reckoning, Hyundai-Kia spent the least of the seven largest automakers in April at $1,359 per vehicle, 33 percent less than a year earlier. Hyundai-Kia led the industry with a 47 percent increase last month. General Motors spent the most at $3,524, up 6 percent from both March and April 2010, TrueCar.com said. GM, while not providing specifics, disagrees. The automaker said its April spending was down about $400 from March.