Archive for the ‘Dealer News’ Category

Recently, I’ve heard several comments alluding to the fact that CRM (customer-relationship management) is dead, or at least is at a point where people are tired of talking about it. There is a notion among many dealers that vendors have over-promised and underdelivered. It might be dealers are expecting too much.

Ask for a definition of CRM and you’ll get 10 different answers. The problem is, automotive retail is a complicated business with a lot of moving parts. Add to that, dealers will have different goals or objectives for their CRM initiatives, and that makes measuring the return on investment difficult.

In the store, it’s easy to get bogged down in the details of the process, and if there isn’t a well-defined goal, dealership personnel get CRM-fatigue. Before long, you’re writing a check for a solution that sits on the shelf that never gets used.

Enough of the problems, what are some solutions? It’s not giving up on CRM — now, more thn ever, you need to find ways to drive both sales and service traffic. There are several simple solutions.

Here are some creative things dealers have told me they have done the last 12 months that have helped business. Nothing earth shattering — nevertheless, there may be some nuggets for you.

First, market to customers in your database. You already have the relationship with them. Offer something of real value on the service side. You can generate a ton of service traffic and repair orders with simple campaigns marketing to folks that haven’t been back to your store within the last year.

To do that you should find a solution that integrates easily with your dealer-management system. Being able to pull data from your DMS and integrate it with information in your CRM tool is invaluable.

Many of you are looking for used-vehicle inventory. CRM can help you do that. Create a list of vehicles you need, and then send targeted offers to people in your database that have those vehicles. Make it a special invitation, not a generic direct mail piece.

I know Cash for Clunkers probably is a dirty word right now in your stores. It was an intense program while it lasted and nobody wants to even mention the term now. But there has to be a way to continue leveraging those sales, and even the people who didn’t qualify who left the store without buying.

Offer a special service incentive for people who bought cars using the the program. Some dealers are planning a Cash for Clunkers after party a few months from now to generate service business. It doesn’t have to be a Clunkers party — it could be a party or picnic celebrating anything.

Tie into the local sports teams — whether it’s college, professional or high school. For example, offer free oil changes or car washes if the football scores 40 points. You can go in so many directions with this.

All of these things can be defined as CRM. The point is, be creative and aggressive now. Business is there, but it needs prodding.

Good luck, and if your store is doing something unique that is working, I’d love to hear about it.

After Kelley Blue Book’s relationship with AutoTrader.com ended prematurely this June, it immediately devised a strategy to take on the industry behemoths, AutoTrader and Cars.com.

Read the entire story here.

KBB is launching a pay-per-performance model (also called pay-per-lead) directly contrasting with the subscription models of Cars.com and AutoTrader. It’s a gutsy move, perhaps born out of some measure of desperation.

Kelley has the brand and the consumer visits, but it lacks the inventory and, some say, technological prowess to be successful. It is partnering with Vast, however, to provide it with the necessary technology. Vast’s goal is to create a network of lead providers that collectively will be powerful enough to force Cars.com and AutoTrader.com into the pay-per-lead model.

My guess is, dealers will continue doing business with Cars.com and AutoTrader in the subscription model, but certainly will play with Kelley and others pushing the pay-per-lead model.

What do think? Will Kelley succeed?

On the hunt for used vehicle inventory? Here are some tips from Consultant Tony Albertson, a used-car specialist with NCM and Associates, that he provided for a story in our Ward’s Remarketing 150.

Hire an offsite buyer to beat the bushes for vehicles. It’s OK to pay the buyer anywhere from $200 – $500 for each vehicle but tie the compensation to how fast the vehicle sells.

Provide specific instructions on which vehicles you need. Don’t let the buyer buy off the cuff.

Advertise everywhere you buy used cars.

“It’s what made Carmax famous,” Albertson says. “They will buy the used vehicle, even if the customer doesn’t buy a vehicle from them.”

Maintain close ties with other local dealers who might be wholesaling vehicles you need.

Leverage your customer database. Create a direct mail campaign to customers in your database offering to buy their vehicles.

You also can target your marketing to customers owning vehicles you need. Be sure to personalize the letters or emails for each customer, Albertson says.

Another critical piece — if you’re paying for inventory management software, such as AAX, VAuto or FirstLook, use it. It may take some effort, but it’s worth it.

Don’t give up on the auctions. If you’re not already using the online auctions and services, you likely will find it increasingly more difficult to secure used-vehicle inventory.

Sites such as Manheim’s OVE.com and Manheim Simulcast or AESA’s LiveBlock or DealerBlock allow dealers to conduct all of the pre-auction and pre-sale research, acquire inventory before it even reaches the auction and trade with other dealers.

AutoExec magazine, produced by the National Automobile Dealers Association, is folding. The publication is a victim of slumping ad revenue, changing readers’ preferences and auto industry turmoil, NADA spokesman David Hyatt said today.

When the Small Business Administration announced a new dealer floorplan loan program in early June, it was heralded by industry leaders as a breakthrough in solving the credit crunch plaguing the marine industry.

Since then, many dealers have complained that the program does them no good because they can’t find any SBA-approved lenders that offer floorplan financing.

Industry leaders continue to praise the program, however, and say dealers need to put more effort into educating the banks about floorplan financing and about their business.

“We really do feel the SBA floorplan loan program is a first step in improving access to credit for dealers,” says Cindy Squires, legislative counsel for the National Marine Manufacturers Association. “It is going to be a process of educating a lot of regional banks. “It’s not going to be a matter of just flipping a switch.”

As of July 1, dealer floorplan loans were available for a minimum of $500,000 up to $2 million under the SBA 7 (a) loan program. With a maximum repayment term of five years, the loans will come with a 60 to 75 percent government guarantee.

Jim Coburn, president of the National Marine Bankers Association, says dealers need to develop a game plan.

“Look for those who are SBA-approved, make an appointment to see them and tell them about your business and your industry,” Coburn says. “Have a business plan and have your data with you. Some of these banks don’t really know what floorplan lending is. It does take a lot of work on the dealer’s part to get this done. It is relationship building.”

Source Trade Only Today
- Melanie Winters

Technorati Tags: floor plan financing, Small Business Administration

SBA floorplan financing

When the SBA announced its dealer floorplan financing program on July 6, the industry described it as “the first step in improving access to credit for dealers.” Three weeks into the program, dealers are still finding it difficult to find banks willing to get involved with dealer floorplan financing.

Dealers trying to take advantage of the SBA floorplan lending program are encountering difficulties in finding local banks that can handle these loans. Even if they[dealers] do find these banks, dealers are saying the SBA approved branch banks are showing little or no interest in lending floorplan money to dealers, even with the 80 percent backing from SBA. Part of the reason for this is a lack of familiarity with what’s required in approving dealer floorplan lending plans.

To provide banks with more concrete information about the dealer floorplan lending program, SBA has completed a checklist and instructions for applying for a 7(a) loan as part of the dealer floorplan program. The Marine Retailers Association of America (MRAA) said in a recent dealer advisory that it expects more banks to look at the 7(A) loan program for dealer floorplans as the application process become better established and financial institutions are more comfortable in making these loans.

Dealers that have questions about the SBA approved banks should call their local field office at 916/735-1986 or e-mail their questions to: 7aquestions@sba.gov.

Source Boat and Motor Dealer

Technorati Tags: Finance, floor plan financing, Floorplan Financing, Small business, Small Business Administration

For any one looking for Chrysler Dealer list here is a down loadable Excel file which can be sorted by Dealer, Majority Owner, Address, Brand, State or Zip Code.

Chrysler Dealer Hit List Excel file

Technorati Tags: Chrysler, Chrysler Dealerships Closing LIST

Here are the the number of Chrysler Dealers per State on the list to be closed.

PHILIP NUSSEL

AUTOMOTIVE NEWS

MAY 8, 2009 – 1:02 PM ET

Just three days after dodging bankruptcy by restructuring its debt, Sonic Automotive Inc. today said it ended two quarters of losses by posting a $1.7 million profit.

The nation’s No. 3 auto dealership group credited the results to efforts to build local dealers’ market share in a shrinking market. Sonic also continued cutting costs and raised its target for cost reductions during the current year by an additional $10 million, to $135 million.

The $1.7 million first-quarter profit compared with net income of $12.6 million a year earlier and followed combined losses of $711 million in the previous two quarters. Revenue plunged to $1.18 billion, down 25 percent from the same quarter a year ago.

On Tuesday, Sonic avoided bankruptcy when bondholders allowed the Charlotte, N.C.-based dealership group to postpone a $90 million debt payment until 2012. On April 1, Sonic warned of a possible bankruptcy if it wasn’t able to restructure debt that would have matured this week.

Sonic’s profit came as U.S. vehicle sales rates fell to 27-year lows. Overall U.S. sales plunged 37.4 percent during the first four months of the year compared with the same four months of 2008.

“Our continued focus on executing the basic blocking and tackling of our playbook produced solid results in the most difficult automotive business environment in at least a generation,” Sonic President Scott Smith said in a statement. “Our advertising and Internet marketing initiatives resulted in 83 of our dealerships taking share by exceeding their local markets for the quarter. Our used-vehicle business continues to outperform the industry.”

Over the past six months, Smith said, Sonic has cut 10 percent of its work force. He added: “We now have fewer people making more money.”

Sonic said new-vehicle sales plummeted to 16,801 during the quarter, down 30 percent from the first quarter of 2008. Used-vehicle sales remain relatively stable at 15,155, compared with 15,782 sold a year ago.

Sonic ranks No. 3 on the Automotive News list of the top 125 U.S. dealership groups for 2008.

Source: Automotive News

Technorati Tags: Sonic Automotive

ARLENA SAWYERS

AUTOMOTIVE NEWS

MAY 4, 2009 – 12:01 AM ET

Last November, Bob Cockerham closed his Suzuki dealership in Rio Rancho, N.M. Its new-vehicle sales had plunged 60 percent from the previous year.

In January, Wells Fargo Auto Finance, the floorplan lender for Cockerham’s Car World Kia dealership in Santa Fe, N.M., told him it was canceling his loan agreement. The bank said the dealership was losing too much money.

Things looked bleak. Then, in February, David Swanson rode to Cockerham’s rescue.

Swanson operates Save Your Car Dealership, a Seattle company specializing in crisis management for dealerships on the brink of losing their inventory financing. Swanson, a former dealer, reviewed the financials at Cockerham’s Kia store and went to work.

Under Swanson’s guidance, Cockerham slashed his advertising budget by about 70 percent, to $14,000 a month. By changing vendors, Cockerham cut his data processing costs in half, to $7,750 a month, and his telephone expenses by more than 40 percent, to $4,100 a month. He switched his sales managers, who previously earned a salary along with commission, to straight commission.

None of Swanson’s advice was rocket science, Cockerham concedes. He said he knew he needed to make deep cuts to survive, but could not bring himself to do it.

Survival manual

David Swanson, founder of Save Your Car Dealership, says dealers must take these steps to cope with a down market.

• Streamline spending
• Focus on used-vehicle sales
• Monitor financial statements for errors
• Communicate closely with lenders
• Follow through on tough changes

‘Terrifying experience’

“It’s a pretty terrifying experience,” Cockerham told Automotive News. “David takes the emotion out of it. He calmly comes in and says, ‘Here’s what we’re going to do.’ ”

Swanson said Wells Fargo is reviewing the dealership’s streamlined budget. Added Cockerham: “We’re close to putting another deal together. David’s done a great job of convincing them of our long-term viability.”

Swanson, 51, said his four-year-old company now works with about 35 dealerships. He said he has gotten lenders to restore floorplanning for about 60 percent of the 120 clients he has represented.

Often, Swanson said, his biggest challenge is persuading dealers that they need to change with a changing market. Lenders care about a dealership’s cash flow, capitalization, liquidity and liabilities, he said – not a dealer’s wishful thinking.

“Lenders don’t want to hear about a plan to sell more cars,” Swanson said. “The economy isn’t going to get better in the near future. I tell my dealers to cut costs to match the lousy economy. Lenders want to see blood on the floor.”

Swanson said he typically works with dealerships for six to eight months to ensure they follow through on the changes he advocates.

He charges $15,000 to $35,000 for his services, depending on the size of the dealership and the number of dealerships involved in a single restructuring. He says half of the fee is paid upfront. The rest is paid if he is successful in restoring floorplan financing.

If financing isn’t restored, dealers don’t pay the rest of the fee.

Leonard Wantz said he hired Swanson last fall when his Chevrolet dealership in Taneytown, Md., faced disaster. Floor traffic had dried up, as had the retail financing provided by a local bank. The dealership’s inventory lender, which Wantz declined to identify, threatened to cut off financing.

Slashing jobs, ad budget

Wantz and Swanson slashed the dealership’s head count by almost 40 percent, to 27 workers. They cut ad spending almost 60 percent, to about $5,000 a month. With those and other reductions in place, Wantz said, his floorplan lender agreed to maintain his credit line.

“After 44 years in business, I thought it was coming to an end,” Wantz said. “But when David got involved, he painted a whole different picture.”

Swanson said his clients benefit from his own mistakes as a dealer. From 1991 to 2002, he owned two Nissan dealerships, a Hyundai dealership and a Subaru dealership, all in the Seattle area.

Swanson said he bought too many stores, expanded too rapidly and soon became overextended. He invested some of the dealerships’ cash in tech stocks. When the tech bubble burst, he said, his working capital was “decimated.”

Said Swanson: “I was young and stupid.”

Source: Automotive News