Volume 109, No. 11 June 11, 2012
Upcoming DealersEdge webinars Customers say salespeople their top
The Chicago Automobile Trade Association has estab- source for car-buying decisions
lished a partnership with DealersEdge to provide high- Contrary to a growing be- 2. Family/friend/word of
quality training and informational webinars that offer lief that social media soon mouth (18.7 percent)
the content to CATA member dealers at a significantly will replace traditional auto- 3. Consumer guides (18.4
discounted rate. motive dealerships, a recent percent)
The rate for CATA members for the weekly presenta- study found that the dealer- “People buy from people,”
tions is $149, half what is charged to users who do not ship salesperson still is the said Chris Travell , vice presi-
subscribe to DealersEdge. Webinars premiere on a near- most influential source of in- dent and strategic consultant
weekly basis. formation for car buyers. In for Maritz Research. “Social
Even for dealers who hold an annual membership with fact, salespeople led all other media can certainly support
DealersEdge, the new relationship with the CATA repre- choices — and by the entry’s the selling effort, but I be-
sents a savings because DealersEdge offers its Webinars greatest margin in five years. lieve it would be a mistake to
to its own members for $198. Regular annual member- Maritz Research’s New- believe that social media will
ship fees are $397, and normal webinar fees are $298 for Vehicle Customer Study, usurp it.”
non-DealersEdge members. released May 30, asked cus- Recommendations from
Once purchased, DealersEdge webinars and ac- tomers what sources of in- family and friends and word
companying PDF files can be downloaded and viewed formation they found most of mouth were ranked sta-
later—and repeatedly. No matter how many people watch influential in their buying de- tistically higher than in past
at your location, each connection costs a CATA member cisions. The top three sourc- years, while consumer guides
just $149. A telephone connection is not needed; and the es in the U.S. constituted 59 such as Consumer Reports
fee includes both PowerPoint slides and audio. percent of all responses: still remain the third most in-
To register for any of the DealersEdge webinars, go 1. Salesperson at the deal- fluential source of informa-
to www.cata.info. On the tan bar across the top of the ership (21.9 percent) See SaleSpeople, Page 2
screen, click on Education/Careers and follow the drop-
down menu to CATA-DealersEdge webinars.
Turning vehicle service into sales
Thursday, June 14 at 12 p.m. CDT The cars on America’s her vehicles for more than six
“How to Identify and Stop Internal Theft in the roads are older today than years — well past standard
Dealership” Internal theft is even more troublesome in ever before. A recent study warranties for most cars.
a dealership than in other businesses of the same size. by Polk found that the aver- But as vehicles grow old-
Auto dealerships handle a lot of money. Your profit mar- age age of registered cars in er, they develop more and
gins may be narrow, but the volume of funds that funnel the U.S. is almost 11 years more ailments, and in a down
old. The average car owner, economy, that is driving con-
See WebinarS, Page 2
meanwhile, holds onto his or See Service, Page 4
2 CATA Bulletin June 11, 2012
In Memoriam NHTSA booklet’s end sought
Edgar W. Pigg, who for 16 years operated Volkswagen Federal legislation introduced in the U.S. House of Rep-
Waukegan, Inc., and who was a founding member of the resentatives in May seeks repeal of an obsolete mandate that
American International Automobile Dealers Association, requires the National Highway Traffic Safety Administration
died May 17 at age 86. to print and distribute to all new-vehicle dealers an insurance
Mr. Pigg served in the Navy in World War II, then report on the cost of repairing new vehicles.
worked in corporate positions with Studebaker (1950- Under a 1972 law, NHTSA must send the “Relative Colli-
1959) and Volkswagen (1959-1969)before opening his sion Insurance Cost Information” booklet each year to more
dealership in 1969. than 17,500 new-car dealerships across the country. Dealers,
Mr. Pigg sold his dealership, which had Volkswagen in turn, are required to provide the information to their cus-
and Saab franchises, in 1985, then joined a longtime tomers upon request.
friend as a commercial realtor in Libertyville. He was a But in a recent survey of 815 of its members, the National
former member of the Lake Bluff Police Commission Automobile Dealers Association found that 96 percent of
and past president of the Lake County Chamber of Com- dealers reported that none of their customers had ever asked
merce. Mr. Pigg also was involved in the Lake County to see the booklet.
Chaplaincy Program, the Ralph Smith Foundation, and “The reality in dealer showrooms needs to be recognized,”
many aspects of the Methodist Church. said NADA President Phil Brady. “This government man-
Survivors include his wife of 58 years, Henrietta; date should be eliminated.”
daughter Katherine; sons Edgar Jr. and David; and six Under H.R. 5648, NHTSA still could make insurance loss
grandchildren. Memorial contributions appreciated to data available online if consumers in the market for a new
Grace United Methodist Church in Lake Bluff, (847) 234- vehicle find it useful.
9163 or www.graceumclakebluff.org. The NADA is urging dealers to help build support for
H.R. 5648, the Owens-Harper Obsolete Mandate bill, by
Webinars asking their U.S. representatives to cosponsor the legislation.
The representatives’ offices can be reached through the Capi-
Continued from Page 1
tol Switchboard at (202) 225-3121.
through the typical car dealership offer up an attractive
The federal government reportedly has spent hundreds of
target for otherwise valuable and thought-to-be trusted em-
thousands of dollars since 1991 to print and mail the booklet
ployees. Dealers are almost always surprised when what was
annually to all U.S. new-car dealers.
thought to be a trusted employee is discovered with their
hands in the till. Simple diligence and control systems have
proven to be very effective in keeping these opportunities Salespeople
to a minimum. Accountants from Crowe Horwath reveal Continued from Page 1
easy-to-install observation and control systems to keep your tion.
profits safe from dishonest employees. “What our family and friends say or recommend to us is
Thursday, June 21 at 12 p.m. CDT important,” Travell said. “Every manufacturer needs to have
“How to Fine-Tune the New-Vehicle Department a well-defined social media strategy. However, we still need to
to Spot Weaknesses and Supercharge Results” How remember the importance of human interaction in buying a
would a knowledgeable “outsider” measure and analyze this car.”
key profit center? Sometimes we are just too close to our
own businesses to get a clear picture of just what is going
right and where we are totally off track. But outside con- The CATA Bulletin is produced by the
sultants take a different approach, and one that can benefit Chicago Automobile Trade Association
you. They follow a process of investigation and observation 18W200 Butterfield Rd. Oakbrook Terrace, IL 60181-4810
that will lead them to what are often obvious problems that The CATA Bulletin is distributed via blast e-mail every other Friday
require addressing. Brooke Samples leads the webinar that except during the Chicago Auto Show, when it is not produced.
outlines just what she looks for as she dissects a dealership’s Listings of items for sale are subject to the approval of the CATA.
Candidates for employment must submit a full resume to the Editor.
new-vehicle department. What financial indicators does she Review past editions dating to 1998 or search by subject at
focus on? How does she take the financials and use this www.cata.info.
information to pinpoint potential problem areas? And what
David E. Sloan President, Publisher
observations does she employ to help her narrow down her Erik K. Higgins Editor, Director of Dealer Affairs
search for a more efficient sales process and greater profits.
June 11, 2012 CATA Bulletin 3
The struggle for automakers to solve car ‘obesity’ problem
Americans have a weight problem, mpg on the highway) of as much as sev- bon fiber.
with more than a third of us estimated eral mpg better than the so-called Eco The super-strong, ultra-light material
to fall into the obese category. But it’s a versions of competitors, and without has long been used in race cars and ex-
problem automakers are struggling with the added price premium. otic automobiles, such as the $1 million
too. Over the last several decades, the “Cutting mass was a major factor McLaren F1 supercar of a decade back.
typical automobile has added hundreds in getting there,” along with improved But it is a major challenge to produce,
of pounds, according to industry data, aerodynamics and powertrain refine- requiring extensive labor that has priced
as it has grown longer and added more ments, said John Curl, Nissan North it out of use by all but the most expen-
comfort, safety and convenience fea- America’s senior product planner for sive automobiles. But that may soon
tures. the Altima project. change.
Engineers are now struggling with It’s hard to find a manufacturer that The original McLaren F1 used a car-
how to cut all that added car flab. There isn’t putting a premium on cutting bon fiber “tub” that took 3,000 man
are a variety of reasons why, but the big- weight. Before retiring earlier this year, hours to produce. On the next-gen-
gest factor is fuel economy. The indus- Ford product chief Derrick Kuzak laid eration Mercedes-McLaren SLR it still
try’s general rule of thumb is that 100 out a goal of trimming as much as 750 took 400. With McLaren’s newest street
pounds equals one mile a gallon. And pounds off the weight of Ford’s mod- car, the MP4-12C, “believe it or not, we
with automakers facing tough new fuel els. got it down to four hours on this car,”
economy standards in 2016 and even But the process, which industry in- boasts chief designer Frank Stephen-
more stringent mandates for 2025, it’s siders have dubbed “lightweighting,” son.
becoming critical to end the auto obe- isn’t as simple as it might seem — espe- That model is still beyond the
sity epidemic. cially in the United States, where people reach of the typical motorist, at nearly
The new Cadillac XTS underwent equate size with luxury. $300,000. But carbon fiber will account
the automotive equivalent of liposuc- The rule of the automotive busi- for 44 percent of the material used in
tion. Though a full foot longer than the ness is that with every new model-year, Chrysler’s reborn Viper sports car, at a
compact Caddy CTS, the 2013 Caddy “consumers expect more features and quarter the price. And BMW believes it
sedan weighs about 100 pounds less, more and more safety equipment,” said could soon bring the cost of the mate-
thanks to some creative engineering General Motors designer Bob Boniface. rial down enough to use in models like
that includes the use of new, ultra-high- Even that little CD changer built into the $40,000 3-Series. It will make ex-
strength steel alloys. the dash adds 5 pounds of mass, Boni- tensive use of carbon fiber in its new
Porsche was able to slash nearly as face said. BMW i3 and i8 battery cars because the
much weight off the new, seventh-gen- Federal regulations further compli- lower weight will allow greater range.
eration 911 sports car through similarly cate the situation. Take the new roof The good news is that even the new-
creative engineering and the introduc- crush safety standard that went into est steel alloys are getting both stronger
tion of aluminum and even carbon fi- effect last year, effectively requiring and lighter, helping to meet new safety
ber. The 2013 Boxster is expected to see manufacturers to more than double the mandates while also reducing mass.
similar mass reductions. ability of a vehicle to survive a rollover. But analyst Hall is skeptical that mak-
And though it’s slightly larger than “You’ve got tough new safety stan- ers can pull several hundred pounds off
the old model, the new Nissan Altima is dards that add weight at same time you the typical car, never mind 750, because
79 pounds lighter than the outgoing se- have stringent new mileage standards,” of both federal rules and consumer de-
dan. The process wasn’t easy, company complains analyst Jim Hall. “At some mand.
engineers stress, and required an inten- point, somebody’s going to have to “The best makers will be able to do,”
sive focus on literally every element of blink.” Hall contends, “is manage the bloat.”
the new Altima’s design, down to the re- Perhaps, but Boniface and other in- Designers like McLaren’s Stephen-
engineered continuously-variable trans- dustry leaders don’t expect to see regula- son and GM’s Boniface are more up-
mission. The new model also switched tors back off anytime soon. Instead, the beat, though they admit it’s a challenge
to lighter aluminum for its trunk, roof pressure is on for the industry to come to deal with automotive obesity, much
and hood. up with alternative solutions, whether like it is for the mere mortal motorists
Nissan will achieve a significant pay- through creative engineering or the use who will have to squeeze inside their
off (the base 2013 Altima is rated at 38 of breakthrough materials, such as car- new automobiles.
4 CATA Bulletin June 11, 2012
Service most car owners prefer in- prepared with specific infor- him or her to try out a ve-
dependent shops over deal- mation and pitches before hicle that makes sense as a
Continued from Page 1 erships for their repair and the vehicle even arrives at the next new car. The most ob-
sumers to be more proactive maintenance work, primarily shop. If an advisor knows vious options are to offer
in how they service their ve- because of cost concerns; that an incoming customer the same vehicle in the most
hicles. dealerships are more likely to has just six months left on recent model year or even a
The Wall Street Journal use factory parts than after- a current lease, for instance, similar vehicle in a slightly
reports that searches on market parts. then the customer might be higher class. But if the driver
Google for terms such as That’s where service dis- interested in some of the pulls up a sedan with child
“auto repair how to” and counts can be helpful. Ads current “pull-ahead” promo- seats and toys clogging up
“how to change spark plugs” or online specials for oil tions that are available. the back seat, this could be a
have surged since the finan- changes, tire rotations, brake Who needs a new car? good time to get him or her
cial crisis hit in September inspections and general tune- It might be tempting to to consider the space and
2008. Of course, there still ups all are good ideas to en- try to convert as many ser- convenience of an SUV or
are many fixes that most car tice drivers for service, even vice customers as possible minivan.
owners simply cannot per- when their vehicles are run- into new-car buyers. But not Loyalty rewards
form on their own. ning smoothly. Franchise loy- every visit to the service bay Many customers are un-
According to Edmunds. alty discounts also can keep is an invite to bull rush driv- aware of the loyalty pro-
com’s internal monthly sta- customers from choosing ers into buying a new car. grams and incentives that are
tistics, visits to Edmunds’s not only local independent Customers are easily turned available at most franchise
repair shop pages have grown shops, but also competing off by overly aggressive tac- dealerships, so it’s a good
almost six times faster than dealerships in the area. tics that try to get them into practice to make sure they
the growth of visits to the Early bird gets worm a new vehicle when they just know that these programs
its homepage since January. Many customers take their aren’t ready, and that sort exist during their service vis-
And reports by Edmunds. cars in for services early in of behavior can damage a its. And while car buyers will
com’s participating dealers the morning, and that creates dealer’s reputation through decide whether to stick with a
show more service inquiries lines of drivers with time to reviews and word of mouth. brand for many reasons (not
and engagement on Dealer kill. Smart service advisors But there are two situa- the least of which is the qual-
Service Reviews than ever and salesmen can work these tions when it may well be in ity of customer service over
before. early-morning lines to engage the consumer’s best interest the life of their car), it never
The influx of vehicle re- drivers and learn about how to trade up for a new car: hurts for them to know that
pairs presents dealers with long they’ve owned their ve- 1) The current vehicle has a little extra cash incentive
more opportunities to en- hicles and some of the issues a relatively high market value awaits them.
gage car owners in their lo- and problems they might be on the used-car market and, Extended warranties
cal communities. Edmunds. having with those cars. in turn, could likely com- Everyone knows that bet-
com identifies some tips and This gives dealerships the mand a higher appraisal at ter health habits, advances in
best practices for dealers to opportunity to inform driv- trade-in. technology and better health
build and maintain connec- ers about extended warran- 2) The current vehicle has insurance all contribute to
tions with their customers, ty programs (more on that been diagnosed with major people living longer. But do
and improve their chances to later), parts discounts, and repair needs that approach they know that those same
turn services into sales. trade-in valuations. or exceed its market value. principles hold true for cars?
Get ’em to the garage Get good intel Service advisors can Factory and aftermar-
The first step to building Service advisors can get quickly and easily show car ket extended warranties can
and reinforcing the relation- a jump on car owners with owners how much their ve- stretch major repair coverage
ship with customers is secur- scheduled maintenance ap- hicles are worth through on- in vehicles for many more
ing that all-important face pointments by doing their line car-appraisal tools. miles and years than ever be-
time. That requires drawing research ahead of time. Ad- Loan ’em a keeper fore.
them to your service shop in visors can access customer If a customer is bringing Dealers should explore
the first place. and vehicle history and un- in a vehicle for lengthy re- these options with their ser-
A recent survey by Con- derstand the issues ahead of pairs, then offering a loaner vice customers to win — and
sumer Reports found that time. That allows them to be is a great opportunity to get keep — their business.