As Sheehy Auto Stores highlighted donations totaling $125,500 to 20 different charities, the Russ Darrow Group recently opened a new showroom specifically to showcase Kia certified pre-owned vehicles.
The group’s Kia Gallery, a new state-of-the-art facility, allows for a display of 12 vehicles on the showroom floor, a 28-stall service department and an eight-vehicle service drive.
The showroom at 1901 N. Mayfair Rd. in Wauwatosa, Wisc., also has a cafe, children's play area, Internet cafe, and a boutique featuring Kia logo apparel.
“The new building also features a customer viewing area to watch vehicles being worked on from the waiting room,” said Kevin Minley, general manager for the Wauwatosa Kia location.
“Customers can have complete confidence that their vehicle is being well maintained by Russ Darrow Kia certified technicians,” Minley continued.
“With the new building, we have increased the number of employees at the dealership,” he went on to say. “With the enhancements made to the vehicle-buying experience, we are confident we will increase the average number of Kia vehicles sold monthly by more than 25 percent.”
The dealership’s service hours were also extended as they now run from 7 a.m. to 6 p.m. on weekdays and from 8 a.m. to 5 p.m. on Saturdays.
Renovations also included paving the parking lot and updating sewer lines.
In the spring, the group said, the previous dealership building will be razed and a new body shop will be constructed on the site, adding another 15 to 20 employees at the dealership.
Sheehy Auto Stores’ donations to charities
Sheehy Auto Stores made donations of $125,500 among 20 charities throughout the communities they serve in Washington, D.C., Baltimore and Richmond, Va.
The donations are part of Sheehy's annual giving program for 2015 whereby each dealership partners with local non-profit organizations. The announcement coincides with the company’s 50th year anniversary celebration this year.
"Giving back to the community has always been an integral pillar of Sheehy Auto Stores,” president Vince Sheehy said.
“As we continue to grow as a company, we will maintain our commitment to supporting our neighbors and organizations that do much throughout the year to help those in need,” Sheehy added.
In the Washington, D.C. area, $69,000 was donated to charities including:
• Covenant House Washington ($4,000)
• Cystic Fibrosis Foundation ($7,500)
• Ecumenical Community Helping Others ($4,000)
• Fairy Godmother Project Southern Maryland Chapter ($5,000)
• Fauquier County Soccer Club ($8,000)
• The Good Shepherd Housing ($7,500)
• Homeaid of Northern Virginia ($2,500)
• Hospice of Charles County ($5,000)
• Housing and Community Services of Northern Virginia ($7,500)
• The Lamb Center ($3,000)
• SERVE ($10,000)
• Trail for Youth ($5,000)
Non-profit organizations in Baltimore that received $30,500 included:
• Anne Arundel Medical Center ($15,000)
• Anne Arundel County CASA ($7,500)
• Arundel House of Hope ($8,000)
In the Richmond market, $26,000 was distributed to:
• Alzheimer’s Association Greater Richmond Chapter ($6,000)
• Ashland Christian Emergency Services ($2,500)
• Hanover County Habitat for Humanity ($2,500)
• Mercy Mall of Virginia ($12,000)
• Young Life Hanover ($3,000)
As 2015 was wrapping up, Lithia Motors Inc. announced it added a new store to its lineup in Washington.
The dealer group bought Barton Chrysler Jeep Dodge Ram Alpha Fiat, located in Spokane, Wash.
Lithia management said the store will bring in $50 million in estimate annual revenues for the dealer group.
Bryan DeBoer, president and chief executive officer at Lithia, said, "We are pleased to expand our operations in the Spokane, Washington area. We have an established presence in the community with our BMW, Chevrolet Cadillac, Mercedes-Benz Sprinter, and Subaru stores. We look forward to furthering our customer relationships in the market as we welcome this store to the Lithia family."
This announcement comes after the dealer group purchased two stores in the Western U.S. back in October. Through this deal, Lithia bought Crown Chrysler Jeep Dodge Ram Fiat in Concord Calif., and Bennett Motors, located in Great Fall, Mont.
AutoNation finished 2015 off on a strong note as new-vehicle sales for the month of December, the fourth quarter and the full year were all up for the dealer group.
New sales increased by 9 percent year-over-year, coming to a total of 35,962 new vehicles in December.
For Q4, AutoNation retailed 89,764 vehicles for an increase of 6 percent when compared to the fourth quarter of 2014.
Lastly, the dealer group sold 343,753 new vehicles, outpacing 2014 by 7 percent.
And though the automaker finished the year off on the upswing for sales, AutoNation management expects to report a downturn in gross profit per vehicle when its full Q4 financial results are announced in January.
The dealer group currently expects to report a drop in both new and used gross profit per vehicle retailed in the range of $250 to $200 when comparing fourth quarter results to Q4 of 2014.
"The fourth quarter industry sales environment was more push versus pull. As a consequence, we expect to report significant margin declines for the fourth quarter in both our new and used retail unit sales,” said Mike Jackson, chairman, chief executive officer and president at AutoNation. “We have begun, and will continue through the first quarter, to take the necessary steps to align our costs, inventory, and pricing strategy to adjust to the current market. In 2016, we expect industry new-vehicle unit sales will continue to exceed 17 million.”
Taking a more in-depth look at the automaker’s new-car performance in December, the impressive new sales number of over 35,000 for the month can be contributed in part to significant retail discounts, AutoNation management pointed out, especially in the premium luxury segment.
New-car sales for the group’s operating segments in December break down as follows:
- 10,985 for domestic, up 16 percent year-over-year
- 15,985 for import, up 9 percent versus December 2014
- 8,992 for premium luxury, up 2 percent from December 2014
The same-store results also showed new-car sales increases. On a same-store basis, new sales spiked by 5 percent in December year-over-year.
Fourth quarter new retail sales broke down like this:
- 27,405 for domestic, up 10 percent versus fourth quarter of 2014
- 41,033 for import, up 4 percent year-over-year
- 21,326 for premium luxury, up 4 percent versus fourth quarter of 2014.
On a same-store basis, Q4 sales were up 3 percent year-over-year.
Lastly, check out the full-year new sales breakdown below:
- 107,356 for domestic, up 10 percent from 2014
- 161,108 for import, up 3 percent versus full-year 2014
- 75,289 for premium luxury, up 14 percent from 2014
On a same-store basis, full-year new sales spiked by 5 percent.
CarMax noted a slowdown in its stores’ foot traffic during its fiscal third quarter, resulting in a decrease in same-store used-vehicle sales.
However, the retailer still tallied an increase in overall used-car sales with its new rooftops added in the last year.
In fact, the company sold over 154,000 used units overall last quarter, resulting in its best-ever Q3 used unit sales total.
That averaged out to roughly 340 cars sold per month for each store.
Getting into specifics, CarMax president and chief executive officer Tom Folliard pointed out during the company’s mid-December conference call that although used unit sales in comparable stores fell by 0.8 percent in the third quarter, total used units increased by 3.2 percent.
“As you saw, we had a challenging third quarter, due primarily to slightly negative used-unit comps,” Folliard said.
“Our lower used-unit comps were primarily a result of modestly lower traffic in our stores, partially offset by better conversion,” he continued.
CarMax attributed the slowdown in traffic to the following:
- A decrease in supply of 5- to 10-year-old vehicles
- Very aggressive promotions and lease offerings on new vehicles that appear to pressure sales of zero- to 1-year-old cars
- An increase in the wholesale prices of SUVs and trucks, so some don’t represent a “good value” for its customers
- A shift to fewer lower-credit customers and more prime-credit customers
Eighty-four percent of CarMax’s sales were zero- to 4-year-old vehicles in Q3, compared to 74 percent a year ago. SUVs and trucks made up 23 percent last quarter, down from 25 percent by the same metric a year ago.
During the company’s conference call, one analyst asked if the lower number of SUVs and trucks sold was due to a higher number of leases, resulting in fewer of the vehicles making it back to auction and thus becoming available to CarMax. Folliard noted that too many leases couldn’t hurt CarMax’s options at the auction because there are far too many for dealers to take on.
“Well, it’s something we’ve lived through before, in terms of percent of new-car sales that are leased. I think the number now is around 30 percent,” Folliard said. “It’s been this high, at times, before. Generally, what that means is that two or three years down the road, those cars will come back to the market in kind of a more organized way, and dealers won’t be able to absorb the volume that comes back and a lot of those cars end up at auction.
“That’s what’s happened historically, and we’ve been able to take advantage of that in the past. I never look at a high-lease environment as a negative for us when you think of supply two or three years later,” he continued. “If you think about the cycle of people getting out of a new car, if it remains that people get out of that car every three to five years, it really doesn’t make any difference whether it comes back through a lease channel or it comes back as an individual car, eventually they end up in the open marketplace, and we have an opportunity to buy them.”
CarMax did point out that good examples of trucks and SUVs, at favorable prices, were hard to come by in Q3, due to their high values at auction. Folliard doesn’t believe it will be that way forever.
“Prices were pretty high during the quarter. As you know, we buy a lot of cars at the auction and our buyers are trying to make sure we always deliver a great value to our customers,” he said. “There were times during the quarter where we just didn’t think it was worth overpaying at the expense of giving a great value to the consumer.
“You know, I think this is probably short lived. Obviously it’s been driven by low gas prices. We’ve seen bigger increases in new-car sales as it relates to SUVs and trucks compared to the used-car market increases. But, you know, ultimately all of these cars will come back into the market at some point.”
Plenty of stores on tap
CarMax opened two stores in existing markets in the third quarter, including its sixth store in Houston and its second store in Minneapolis. The company also relocated one store to the Washington D.C. and Baltimore market, with two more joining the Boston market shortly after the close of Q3.
In addition to those two Bostonian stores opened in December, CarMax plans to open three more stores in its fourth fiscal quarter (which ends Feb. 29) and an additional 11 stores in the next fiscal year.
To check out CarMax’s full Q3 results, click here.
Larry H. Miller Dealerships announced several high-profile changes to its executive-level structure this week, including the hiring of a new vice president and two internal promotions in the area of search engine marketing and optimization.
Starting with the hire, on Monday LHM announced Veronika Egginton as its new vice president of digital development, where she will be responsible for overseeing the digital marketing department for LHM’s 54 stores. She will also be responsible for defining the digital strategy for each store and ensuring proper execution of all deliverables through her team.
Paul Nygaard, senior vice president of marketing LHM Dealerships, made the hiring announcements.
“Veronika’s vast industry experience and her process-driven approach to digital marketing will be valuable as she leads digital strategy for our group,” Nygaard said. “There are an abundance of innovative products available in the automotive industry, and having the ability to navigate, implement and track the success of these products is essential in this role.”
Egginton’s previous experience in the automotive landscape includes a variety of positions with Fiat Chrysler Automobiles, where she served as an area sales manager for the Fiat/Alfa Romeo West Business Center, the Jeep incentive and events marketing manager and digital marketing manager in Phoenix, as well as the manager of digital media optimization for FCA US in Auburn Hills, Mich.
She also spent several years as an account manager for Microsoft, focusing on the Ford Motor Company and General Motors accounts. Egginton also managed accounts with Lufthansa, Red Bull, and Citibank for the WPP Group in both Dearborn, Mich., and Frankfurt, Germany.
She attended the Ludwig Erhard Business School in Karlsruhe, Germany, and the German Academy of Direct Marketing in Frankfurt.
Nygaard also announced the promotion of Doug Peterson and Taylor Christensen, who will take on the positions of director of search engine marketing and director of search engine optimization, respectively.
“Doug and Taylor have each proven to be strong leaders and skilled marketers and I look forward to their continued growth and leadership in their new roles," Nygaard said.
Petersen previously held the position of digital marketing manager for LHM Dealerships. Before joining LHM, he held a variety of management positions with the Ken Garff Automotive Group. Petersen graduated from Utah Valley University in Orem, Utah with a bachelor’s degree in business administration and management.
Christensen, LHM’s new director of search engine optimization, previously served as the company’s digital marketing manager, providing SEO and SEM strategy and services for dealerships in Colorado and New Mexico. He also previously spent time with the Ken Garff Automotive Group, serving as the digital media manager as well as a marketing analyst for Eagle Gate College. Christensen graduated from the University of Utah with a bachelor’s degree in marketing.
For more information about LHM Dealerships, visit its site here.
As part of an effort that unites rival ACC schools in the Tar Heel state, Auction Direct USA announced that it will present a $1,500 donation to the “Million Meals Challenge” on Dec. 1.
So what is the Million Meals Challenge? In short, it’s a collaborative partnership between Harris Teeter and four North Carolina universities — Duke, UNC, N.C. State and Wake Forest — to rally food donations and monetary support for the North Carolina Food Banks. The goal: provide one million meals for North Carolinians.
Auction Direct, a partner of UNC’s athletics department, will make the donation in partnership with University of North Carolina Athletics and Learfield Sports’ Tar Heels Sports Properties.
“Auction Direct is a proud partner of UNC Athletics, and we are excited to partner with them again to support of the Million Meals Challenge,” said Michael Guerrein, Auction Direct’s marketing director. “The Big 4 Million Meals Challenge directly benefits so many in our local community, and we are honored to give back in support of these efforts.”
The $1,500 check will be presented by Auction Direct at its Raleigh dealership at 9:30 a.m. on Dec. 1, along with representatives from UNC, the NC Food Bank and Harris Teeter.
To learn more, get involved or make a donation, click here.
A recent study commissioned by the National Automobile Dealers Association reveals that vehicle trade-in values could decline by an average of $1,210 if legislation were to pass that forbade dealers from selling used-vehicles with open recalls.
The J.D. Power study, which NADA commissioned, is titled “An Economic Assessment of Trade-In Value Reduction Caused by Preventing Auto Dealers from Selling Passenger Vehicles with any Open Recall.”
It estimates that the value of some vehicles could decline by as much as $5,713.
The report was commissioned in response to proposed legislation earlier this year from Sen. Richard Blumenthal, D-Conn., titled as the “Used Car Safety Recall Repair Act,” that would ground used-vehicles with open recalls from being sold or leased until a remedy has been enacted. The act was voted down during a U.S. Senate Committee on Commerce, Science, & Transportation markup hearing this summer.
Jonathan Banks, the author of the report and the executive analyst at the Used Car Guide division of J.D. Power, says, among other issues, that the unknown amount of time to reach each individual remedy really throws a wrench in the pricing and remarketing process.
"Assuming a repair delay that is shorter than the actual repair delay is a risky proposition for a dealer, and thus they are more likely to act as if they believe the range of repair delays will be on the high end of the range of repair delays observed in the past for recalls of similar scale and complexity," Banks explained. "In a hypothetical scenario, a lack of clear information could reduce the trade-in value offered to a consumer by hundreds of dollars if a trade-in manager were to overestimate a 30-day recall delay by an additional 30 days."
The report reached that $1,210 average price decline by weighing the average based on both in-brand trade-ins and out-of-brand trade-ins, the latter of which has to factor in the additional costs incurred from holding a vehicle until the repair can be made by transporting the vehicle to an in-brand dealer.
If you’d like to download the full report, click here.
Mazda North American Operations is collaborating with four nonprofit organizations for its Mazda Drive for Good event that runs throughout the 2015 holiday season.
Running from November 23 to January 4, MNAO is partnering with St. Jude Children’s Research Hospital, American Red Cross, American Heart Association and Mazda Foundation (USA) Inc.
Customers who purchase or lease a new Mazda during the event will be able to designate $150 to one of the four national nonprofits or choose from 46 other local organizations.
Mazda also plans to donate one hour of charitable services from its employees, dealers and business partners across the nation for every vehicle test drive during the event, to be acted upon in the 2016 calendar year.
"Mazda Drive for Good isn't about selling cars. It is about giving back and building awareness," said Jim O'Sullivan, president and chief executive officer at MNAO. "Many people may think that we are building awareness for Mazda, but part of our goal is to build awareness for our nonprofit partners, that helps them long term, not just during the Mazda Drive for Good event."
Consumers will have access to a dedicated website for the campaign here.
Thirty-three percent – that’s the increase in lease maturities expected to possibly return to market in 2016 compared to this year – which translates to roughly 800,000 additional units on a year-over-year basis.
That’s according to J.D. Power’s estimates provided by Larry Dixon, the senior manager of market intelligence at NADA Used Car Guide.
Perhaps the most interesting angle of these anticipated lease returns, as mentioned in Auto Remarketing’s recent analysis of used-vehicle supply increases, is that the majority of vehicles expected to come back in 2016 don’t exactly fall in line with what’s selling right now.
According to Dixon, the off-lease supply in 2016 will be split as follows:
- 56 percent cars
- 44 percent trucks
But if you look at the broad-segment breakdown of current year-to-date new-vehicle sales, you’ll see that the opposite is the current trend in shopping interests:
- 56 percent trucks
- 44 percent cars
Let’s dive a bit deeper into those figures.
Compact and midsize cars, in terms of those two segments’ total share of lease maturities for 2016 to 2017, will average 33 percent. As Dixon points out, these two segments have experienced particularly soft pricing in both the new- and used-vehicle markets.
J.D. Power’s current year-to-date figures for those two segments, for used vehicles up to eight years in age, reveals a depreciation rate of 14.6 percent, compared to the overall market depreciation of 11.7 percent.
And Dixon says dealers can expect additional softness in used-vehicle prices next year as these off-lease vehicles return to market and inflate supply.
As expected, the vehicles returning next year will be predominantly three years of age, falling in line with what is typically the most-popular lease term.
Data from J.D. Power’s Power Information Network (PIN) reveals that lease terms between 36 and 41.9 months made up 79.4 percent of the lease originations made in 2013. That share stands at 80 percent CYTD.
Penske Automotive announced Tuesday it has added four new franchises to its lineup.
The dealer group has acquired Audi Eatontown, Porsche Monmouth, Jaguar Monmouth and Land Rover Monmouth, which are all located in Monmouth County, N.J.
Penske management pointed out this is one of the wealthiest counties in the U.S.
Penske purchased the franchises from the Schneider Nelson Auto Group. The four new stores are expected to sell approximately 2,400 new and used vehicles annually, generating revenue of approximately $175 million on an annualized basis.
Penske Automotive Group Chairman Roger S. Penske said, "We are pleased to welcome these four new dealerships to the Penske family. The strong reputation and commitment to serving the customers of the New Jersey/Greater New York area for decades complement the company's existing footprint in the northeastern United States, while enhancing our premium/luxury brand mix."
This news comes after Penske reported used sales were up 7.7 percent in the third quarter. The group has maintained that pace all year, with a similar jump – 7.8 percent, to be exact – in overall used retail units sold in the first three quarters of the year compared to the same period in 2014.
