Friday, Dec. 20, 2013, 01:55 AM UPDATED 12:24 PMBy Auto Remarketing Staff
CARY, N.C. -
Big news within the certified pre-owned market. An all-new stand-alone pre-owned store concept from one of the largest public dealer groups. Used-car value retention.
The used models that attract the most shoppers. Major moves announced by the industry’s biggest players.
These were among the many topics in Auto Remarketing toward which readers gravitated in 2013. Based on analysis of traffic activity on AutoRemarketing.com, here are the Top 25 stories that generated the most reader interest in 2013:
25. Costco’s CPO Program Centers on Providing Value
SAN DIEGO (Feb. 26) — The concept of your local Costco as a resource for car-buying in addition to being a market’s goods-in-bulk outlet is not a new one. In fact, the Costco Auto Program has been around in one iteration or another for more than two decades.
But in the last few years, the program has expanded to include certified pre-owned vehicles.
To shed some light on this, Auto Remarketing talked to a couple leaders of the Costco Auto Program about the company’s in-roads within the CPO market. As Rick Borg, vice president of the Costco Auto Program, put it: “It goes back to our central core mission, which is creating value.”
And apparently, that value is spreading for dealers.
24. CPO Vehicles Targeted by Bill Debated in California Assembly
SACRAMENTO, Calif. (July 15) — The same state that passed a pair of laws last year that intensified regulation of buy-here, pay-here dealers now is taking up a measure that would modify how a certified pre-owned vehicle can be sold.
A bill that is in the California Assembly would include manufacturer’s safety recalls on the list of prohibited conditions for certified vehicles.
The measure, AB 964, would also add a required pre-sale disclosure for all used vehicles (including non-certified units) regarding manufacturer’s recalls and the other safety and warranty issues.
23. Top 10 Best-Selling Used Models in Q1
SANTA MONICA, Calif. (May 16) — Among the many Top 10 lists Edmunds.com included in its first quarterly Used Car Market Report, the website highlighted the leading used models purchased at franchised dealerships as well as the most-researched units at its website during Q1.
So which used model was scooped up most by purchasers at franchised stores? It was the Honda Accord.
Edmunds.com listed the Top 10 used-vehicle purchases in Q1 as follows:
1. Honda Accord
2. Honda Civic
3. Toyota Camry
4. Chevrolet Silverado 1500
5. Ford F-150
6. Nissan Altima
7. Toyota Corolla
8. Chevrolet Impala
9. Honda CR-V
10. BMW 3-Series
22. Mercedes-Benz USA Appoints New GM of Fleet and Pre-Owned, More
MONTVALE, N.J. — (May 1) Mercedes-Benz USA revealed a series of management changes, including naming a new general manager of fleet and pre-owned.
Appointed to the position is Kurt Cornell, who most recently served as an area manager for the Western region.
Cornell will be replacing Mark Webster in the fleet and pre-owned position, as Webster will assume Tracey Matura’s previous post as general manager for smart USA. Matura is being appointment regional general manager for the Central region, and will be responsible for all service, sales, marketing, operations and dealer relations for the company’s Central region in Chicago.
Next up, Andrew Noye, most recently area manager for the Northeast region, will assume the role of regional general manager for the southern region.
Bob Yeatman will now hold the title of regional general manager, western region, in Irvine, Calif. Most recently, Yeatman served as general manager, sales operations at MBUSA.
Blair Creed, most recently GM, Mercedes-Benz Manhattan, will be replacing Yeatman as general manager, sales operations.
Jay Schmid will take over Creed’s position as general manager, Mercedes-Benz Manhattan.
21. How Will the Government Shutdown Impact the Auto Industry?
CARY, N.C. (Oct. 3) — On the third day of the first partial U.S. government shutdown in 17 years, Congress will continue its negotiation efforts to pass a series of bills to fund the government. In the meantime, the country waits, as does the automotive industry.
The effects of the shutdown on the automotive sector are arising in a few different corners — perhaps most noticeably within the National Highway Traffic Safety Administration.
Dealers and consumers should not expect to receive any notices from the NHTSA as long as Congress remains at an impasse.
During any type of federal action as dramatic as a government shutdown, many wonder what the impact will be on the economy. In the case of this market, how will the partial shutdown affect auto sales?
Edmunds.com chief economist Lacey Plache explained earlier this week that auto buyers have separated the economy from Congress in the past, and the industry most likely has little to worry about.
20. Sonic to Launch Stand-Alone Pre-Owned Specialty Stores
CHARLOTTE, N.C. (Oct. 21) — Along with unveiling plans to roll out a “One Sonic-One Experience” guest experience initiative next year, Sonic Automotive announced that it plans to open stand-alone pre-owned specialty retail sales locations next year.
This pre-owned business will be run separately from Sonic’s existing new and used dealership sales operations, the company said. Sonic is planning to open its first pre-owned specialty retail store in the Denver market late next year, and intends on taking it national in coming years.
Scott Smith, Sonic president and co-founder, stated, “We have been preparing for this moment over the last several years and are excited to be in a position to share our plans. In particular, we are confident that our new model will not only enhance the value of the business for our stockholders and associates, but it will also deliver an experience not yet seen in retail automotive.
“It is an exciting time, and especially in the pre-owned market, which is roughly three times as big as the new retail market," Smith continued. "Approximately 41 million pre-owned sales occur in the United States annually, compared to a current annual sales rate of 15.4 million for new units. We believe the buying experience we will be offering will differentiate us from others in the retail automotive space.”
19. Used Prices Set to Fall; KBB Editors Name 10 Best Used Cars Under 8K
IRVINE, Calif. (Feb. 1) — With used prices expected to continue to decline after holding unusually high rates for the past few years, dealers may have more options when it comes to stocking used vehicles that would be more affordable to consumers.
Kelley Blue Book released a list of 10 Best Used Cars under $8,000 — with a variety of models from Japanese, Domestic, Korean and European manufacturers for buyers to choose from.
KBB.com officials contend that with “Americans looking to stretch their hard-earned dollars as far as they can go, many people find themselves checking out the used-car market instead of shopping new.”
The list touts some surprising finds: for example, the 2004 Mustang GT with a Kelley Blue Book Retail Value of $7,328, and the 2005 Volvo S60 with a Kelley Blue Book Retail Value of $7,390
18. ADESA Names 2 Executive VPs for US Operations
CARMEL, Ind. (March 6) — Reaching within its nationwide network, ADESA announced the promotions of two longtime employees for the roles of executive vice president of U.S. auction operations.
Named to the positions, which they will assume immediately, are Mike Caggiano and Pat Stevens. Both will continue to report directly to Tom Caruso, ADESA president and chief executive officer.
Caggiano will serve as executive vice president of ADESA’s eastern region, having most recently served as regional vice president of that region, since 2007.
Stevens will serve as executive vice president of ADESA’s western region, following his most recent tenure as regional vice president of the company’s central region, a position he held since 2008.
17. 13 Dealers Recognized as Social Media & Reputation Leaders; Digital Air Strike Rolls Out Social Media Mobile App
ORLANDO, Fla. (Feb. 11) — Digital Air Strike announced the winners of its first-ever Social Media and Reputation Awards at the NADA Convention & Expo.
The awards focused on calendar year 2012 and spotlighted 13 dealers and a handful of automakers as being “the best-in-class marketers on the social Web.”
In determining the winners, data was pulled together from dealer clients’ Facebook insights, top review sites, and via monitoring social Web mentions and YouTube views.
16. Sonic Stores Adjusting to Company-Wide True Price Strategy
CHARLOTTE, N.C. (July 24) — It very well might be the site that makes some dealership general managers cringe most — a customer leaving the showroom without making a purchase.
As Sonic Automotive continues to implement its True Price sales strategy, executive vice president of operations Jeff Dyke is OK with letting that customer leave without keys and a contract for a new ride as long as the store is adhering to what the dealer group has spent nearly four years to plan and orchestrate.
“We’ve trained the American consumer to go negotiate how to buy a car,” Dyke said about the retail vehicle market on Tuesday during a conference call when Sonic reported its second-quarter performance.
“When they say, ‘No, I need $500 off this number,’ we don’t have the room to negotiate $500 anymore. I’ve still got stores that are doing it, but we’re training and working to teach them how to overcome that,” Dyke said. “It’s OK to have a customer leave the showroom in order for you to stick to your strategy. We’ve got stores right now that are doing that and doing a great job of having the growth and margin that we need.”
15. 25 Used Cars Catching Consumers’ Eyes
IRVINE, Calif. (June 4) — In April, Ford dominated the list of most-researched used vehicles at KBB.com, claiming eight of the 25 spots. But in May, however, things were a little more balanced between the various brands making the list.
Ford and Honda led the way, each brand claiming five spots, with Toyota not far behind at four.
There were three Chevrolet models on the list and then eight brands with one model a piece making the list (BMW, Hyundai, Infiniti, Jeep, Lexus, Mazda, Nissan, Volkswagen).
14. Advertising Fraud Case Brings Up Compliance Issues for Dealers
RALEIGH, N.C. (Jan. 22) — A dealer has to be concerned with advertising regulation and rules while marketing his own vehicles, but also needs to be careful when enlisting the help of others. A recent case that dealt with a Louisiana-based marketing firm allegedly pitching false sales events and advertising at North Carolina dealerships focused on this very issue.
North Carolina Attorney General Roy Cooper said, “Using false promises and bogus prizes to lure customers is no way to do business. Consumers deserve straight-forward information when they’re preparing to make such a big purchase.”
He was referring to Level 10 Marketing, which as alleged in Cooper’s complaint, had sold advertising and sales packages to North Carolina auto dealers designed to increase sales of the dealers’ used-vehicle inventories.
Though this court case came down hard on the marketing firm involved, The Car Counselor to the automobile industry Keith Whann cautioned that dealers can bear the brunt of a out-of-dealership dishonest advertising campaign gone awry, as well.
Especially one that involves promoting weekend sales designed to clear out older inventory on a lot.
13. Webb Says Dealers Haven’t Lost Used-Car Focus
ORLANDO, Fla. (Feb. 10) — In looking at business cycles of the past, Tom Webb noticed that each time new-vehicle sales rose coming out of a recovery, franchised dealers often lost focus on the used-car side of the business.
But not this time around, said Manheim’s chief economist, noting the improvements in the dealer body.
“Each that time that lost focus was less than the time before as they became better operators. And I would suggest to you in this current recovery, they have not lost focus (on used cars) at all,” Webb said during Manheim’s press conference at the NADA Convention & Expo.
Just talk to the dealers on the showroom floor, he suggested.
“If you ask them what the most important function their new-vehicle department played for them last year, many are going to tell you, ‘it supplied me with used vehicles,’” he said.
12. Edmunds’ 2013 Best Retained Value Award Winners
SANTA MONICA, Calif. (June 12) — Edmunds.com released its third annual Best Retained Value Awards, which recognize the brands and new models that have the highest projected residual values after five years based on their average True Market Value price when sold new.
The site highlighted that Jeep won in the non-luxury division with a projected 50.6 percent residual value after five years, and Acura took the luxury crown with a projected five-year residual value of 45.1 percent.
“Jeep’s small lineup is led by two popular models — Wrangler and Grand Cherokee — that deliver big residual value for their owners. The Wrangler is especially vital to the brand because its retained value sits at an elite level matched by few other vehicles in any segment,” said Edmunds.com director of remarketing Joe Spina.
“Meanwhile, this is the second year in a row that Acura has won, and the brand clearly has done a great job distinguishing its value in a hypercompetitive luxury market,” Spina continued.
11. June Sees Biggest Used Vehicle Price Drop All Year
CHICAGO (June 24) — Dealers may see more customers on the lots looking for pre-owned cars as the month draws to a close.
That is, once consumers realize that late-model used-car prices showed the biggest month-over-month drop of the year to date in June, according to Cars.com.
In fact, a post from the site’s Kicking Tires blog indicated that the average price of 2010 to 2012 model-year used cars listed on Cars.com fell 1.4 percent to $22,188, which comes in at $320 less than in May.
“That’s the lowest average price so far this year, undercutting the prior low recorded just last month,” wrote Michael Hanley of Cars.com, who authored the post.
The post also highlighted a few models, in particular, that have seen significant drops and increases this month.
That said, Hanley explained these models were “tightly grouped”, with just a 1-percent difference separating the 10 cars with the biggest price drops, and a 5-percent difference among models with the biggest price increases.
10. 18 Vehicles with Best Retention Values After 2 Years
GAINESVILLE, Ga. (May 7) — Black Book highlighted two-year-old vehicles posting the top retention values. On this list of 18 models, Toyota secured the top three spots with the 2011 Tacoma Double Cab retaining 88.4 percent of its original value after two years on the road.
The Toyota 4Runner came in second on the list with 80.9 percent retention, and the Toyota FJ Cruiser at 77.7 percent retention.
Toyota has a total of five vehicles in the top 18 spots, the most of any manufacturer on the list.
Only two of the top 18 vehicles are domestic brands and models with the Ford Explorer fifth on the list with a 75.8 percent retention rate, and the Jeep Wrangler two spots later with 75.4 percent retention.
9. Cars.com Names Best Used Cars Under $10K
CHICAGO (March 12) — If a customer arrives on your lot and plans on spending about $10,000 for a used car, a new list from Cars.com may provide you some marketing ammo to help explain why your used cars stands out from the rest.
Editors with the site have listed their top 10 used cars recommended for consumers shopping in this particular pricing ballpark.
“Although the price gap between new and used cars has decreased, many shoppers are still going the used route,” said Patrick Olsen, editor-in-chief at Cars.com.
“We took a look at cars from 2006 or later and came up with the best 10 used cars that shoppers should be able to find for around $10,000,” he added. “To make our list, the cars had to pass crash tests and have key standard safety features. We also analyzed reliability, drivability and practicality.”
8. Charlotte-Area Dealership the Scene of Big Laughs in Viral Video
CONCORD, N.C. (March 14) — A North Carolina dealership was the scene of a Pepsi commercial that has been piling up millions of YouTube views and laughs, as viewers have tuned in to see the harried but hilarious reaction of a salesman sitting next to a disguised Jeff Gordon during a test-drive of a Chevrolet Camaro.
The video was filmed at Troutman Motors outside of Charlotte, N.C., according to the Independent Tribune, and features the NASCAR legend.
Granted, at least one website is suspecting the video of being completely staged and the surprised “salesman” of being an actor.
Faux or not, we’re calling it side-splitting and a good use of social media.
7. KBB Ranks Hottest 25 Used Cars
IRVINE, Calif. (Jan. 29) — The Michigan Wolverines and Kansas Jayhawks became the latest in a revolving door of teams taking the No. 1 spots in the NCAA men’s college basketball rankings this season.
But consistency seems to be the name of the game in the used-car market. The Honda Accord has continued its reign as the used car pulling in the most online traffic for Kelley Blue Book, and though there were some moves on the list, much of the 25 most-researched used vehicles on KBB.com in January held steady from December.
Same as last month, the Honda Accord and Honda Civic took spots one and two, respectively, and were followed by the Toyota Camry (No. 3), Ford F-150 (No.4) and Toyota Corolla (No. 5).
The Chevrolet Silverado 1500, which was No. 8 in December, moved up to sixth this month. It switched places with the Nissan Altima. Placing seventh again was the BMW 3 Series.
6. 10 Used Cars with Biggest Spikes in Online Traffic
IRVINE, Calif. (Aug. 1) — There’s a bit of an odd coupling when you look at the types of vehicles that have generated the most traction among used-vehicle shoppers on KBB.com.
But as Kelley Blue Book’s Arthur Henry points out, there are perfectly good reasons for that.
In the latest Hot Used-Car Report from KBB, Henry’s analysis indicates that the biggest moves in used-car popularity are being made by a blend of small, fuel-efficient rides and large utility vehicles.
Those two segment types are polar opposites on the gas-price and size pendulums, and there are also different market trends explaining why each is on top.
The 2009 Hyundai Accent — which would be of the fuel-friendly variety — saw the most positive month-over-month change in share on KBB.com (among 2007 to 2011 model-year units). Its used-car shopping activity growth was at 27.4 percent, which led all models in the data set.
Meanwhile, he also pointed out that there are traffic activity gains being spotted among full-size utility rides. For example, full-size SUVs had the second-highest growth of any segment at 3 percent, trailing only hybrid cars (up 4.7 percent).
5. IHS to Acquire Carfax, Polk
ENGLEWOOD, Colo. (June 10) — IHS Inc. has entered a definitive agreement to buy Carfax parent company R.L. Polk & Co., in a $1.4 billion transaction.
The deal must first go through customary closing conditions, including expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
“The acquisition of R.L. Polk brings extensive and complementary information and analytical solutions that would establish IHS as a vital strategic partner of the global automotive value chain,” said IHS president and chief executive officer Scott Key.
“R.L. Polk has a long history of providing critical information to the automotive industry,” Key said. “The combination with IHS Automotive creates a comprehensive capability that will significantly enhance customers’ insights and decision processes across the full vehicle lifecycle with analytics from product planning through manufacturing, sales and into automotive aftermarkets.”
R.L. Polk includes two divisions: Polk and Carfax. As Key put it, the company’s services are “complementary to existing IHS Automotive solutions and open up large adjacent markets.”
4. Schwartz to Become President of Both Manheim and AutoTrader
ATLANTA (March 25) — Auto Remarketing learned that Sandy Schwartz not only will serve as the president of Manheim, but will also assume the role of president of AutoTrader Group, which includes AutoTrader.com, Kelley Blue Book and VinSolutions.
Chip Perry, who has been with AutoTrader.com since its inception in 1997, left the company effective May 1, according to an announcement from Cox Enterprises.
Cox said Schwartz will continue reporting to Jimmy Hayes, president and chief executive officer of Cox Enterprises.
“I’ve had the privilege of being a part of the Cox organization for nearly three decades,” Schwartz said. “I’m excited to work alongside the talented teams at AutoTrader and Manheim, as we work together to more effectively collaborate on strategy, share industry knowledge and better serve our customers in the automotive sector.”
Schwartz rose to become president of Manheim in 2011. Prior to Manheim, Schwartz served as president of Cox Media Group where he was instrumental in bringing together newspaper, television, radio, direct mail and internet operations to create a more effective organization focused on growth.
3. NextGear Capital Debuts with DSC-MAFS Merger
CARMEL, Ind. (Feb. 1) — With the merger of Manheim Automotive Financial Services and Dealer Services Corp., a new inventory finance entity has been announced.
NextGear Capital is the new name for the merged lenders, following Manheim’s acquisition of DSC in 2012.
The floor plan company — which said it serves more than 17,000 dealers and 1,000 auctions throughout North America — will be led by president Brian Geitner, formerly the president of DSC.
Its headquarters will be in Carmel, Ind.
“Creating NextGear Capital is a visionary endeavor,” Geitner said. “We are building an industry-serving floor plan company on the solid foundations of two great industry leaders with strong cultures of customer focus, innovation and service.”
2. Why Car Shoppers Leave Dealerships without Buying
HOUSTON (Feb. 5) — Customer relationship management company CAR-Research XRM released its findings from its study that covers the top reasons car buyers leave the dealership without buying.
Perhaps giving dealers some insight into ways to close the deal with potential customers, the findings show that “the top reason customers leave without buying is that they are still shopping and have not been sold at that dealership.”
The study used a sampling pulled from January 2012 through December 2012 of 167,503 Interviews with customers from over 150 auto dealerships across the U.S., conducted by CAR Research XRM’s Certified Research Call Center.
“According to J.D. Power, today’s shoppers only visit 1.4 dealerships before purchase, down from 4.5 in 2005. Showroom visitors come to the first dealership they visit more ready to buy than at any other time in modern car sales history: In other words, it’s not about be-backs any more, it’s about being first,” said Patrick Kelly, CAR-Research president and chief operating officer, stressing the importance of the study results.
“And our own data from over four years shows that the ones that do leave for other dealerships left because of financing, inventory and price. Don’t let them leave for these reasons; it’s time to sharpen our processes and our sales skills,” he continued.
1. Honda Recalling More Than 750K SUVs and Minivans in US and Canada
TORRANCE, Calif., and MARKHAM, Ontario (Jan. 21) — Honda is recalling approximately 748,000 model-year 2009 through 2013 Pilot and 2011 through 2013 Odyssey vehicles in the United States and another 29,000 units in Canada.
The recall stems from the need to inspect and if necessary replace the driver’s side airbag. The OEM explained driver’s-side airbags in these vehicles potentially were assembled without some of the rivets that secure the airbag’s plastic cover.
If the rivets are missing, Honda said the airbag may not deploy properly, increasing the risk of injury in a crash.
The automaker said no crashes or injuries have been reported related to this issue in either the U.S. or Canada.