January 2013

NADA UCG: Economic Factors Contributing to ‘Plateau’ In the Auction Lanes

McLEAN, Va. - 

A variety of social and economic factors seem to be affecting the wholesale market, says NADA Used Car Guide, including dropping consumer confidence and Social Security tax increases. 

NADA UCG reported these factors are contributing to the current “plateau” in the lanes.

Over the course of the current week, NADA expects used prices across all segments to remain flat as AuctionNet wholesale prices are expected to remain essentially unchanged compared to their two-week averages.

The overall industry average is also expected to remain unchanged versus last week.

“After an early uptick in average wholesale prices in November and December (due in large part to the effects of Hurricane Sandy) wholesale prices increased sooner for the spring selling season than they historically have in the past,” officials said.

“This early rise along with Social Security tax increases has caused a bit of a plateau in the wholesale market. The consumer confidence index dropped eight points from 66.7 in December to 58.6 in January. After consumers grow accustomed to less take-home pay and begin to receive their tax refund checks, expect average wholesale prices to begin increasing again in the middle part of February through March, at which time consumer activity should pick up,” NADA UCG further explained.

Breaking the numbers down by segment, used prices for the large SUV segment are expected to decline the most over the course of the this week, falling 0.3 percent, or $75.

The luxury car segment is also expected to decline slightly, predicted to decrease by 0.1 percent, or $25.

On the other hand, the compact utility and midsize van segments are both positioned to see small growth over the course of the current week, as prices there are expected to creep up by 0.2 percent, or $25, apiece.

All remaining segments are expected to remain unchanged versus their two-week average, officials concluded.

Four- and two-week AuctionNet wholesale average prices are created by collecting all AuctionNet records for vehicles up to five years of age for a specified period of time.  Prices are then adjusted for changes in mileage and mix.

Current week prices are based on NADA's proprietary used-vehicle value model which includes assumptions for new-vehicle prices, used-vehicle supply, gasoline prices and other economic factors.

NADA Segment Average AuctionNet® Wholesale Price 2-Week v. Current
4-Week Average 2-Week Average Current Week % Change $ Change
Compact Car $10,650 $10,925 $10,925 0.0% $0
Compact Utility $15,300 $15,550 $15,575 0.2% $25
Industry Average $16,250 $16,425 $16,425 0.0% $0
Large Pickup $20,775 $21,075 $21,075 0.0% $0
Large SUV $28,575 $29,050 $28,975 -0.3% ($75)
Luxury Car $23,925 $23,875 $23,850 -0.1% ($25)
Luxury Utility $27,500 $27,550 $27,550 0.0% $0
Mid-Size Car $12,850 $13,175 $13,175 0.0% $0
Mid-Size Utility $19,175 $19,150 $19,150 0.0% $0
Mid-Size Van $15,525 $16,000 $16,025 0.2% $25


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Age 16 Meant License and Job at a Store for TIME Dealer of the Year Award Nominees

ORLANDO, Fla. - 

About the time many of these TIME Dealer of the Year Award nominees received a driver’s license at age 16, they were at a dealership working, too.

In the next group of profiles, these store executives all share what’s important to them — in and out of the showroom.

The awards program, which is produced in cooperation with the National Automobile Dealers Association and sponsored by Ally Financial, aims to recognize the nation’s most successful auto dealers who also demonstrate a long-standing commitment to community service.

All of these dealers are profiled on a special website for the award: allydealerheroes.com/nominees/all.

Auto Remarketing plans to share some of these nominee profiles from allydealerheroes.com between now and when the winner is announced during the NADA Convention and Expo that runs next month in Orlando, Fla.

Frank DeLuca, DeLuca Toyota, Ocala, Fla.

“At DeLuca Toyota, we attempt to treat every customer as an honored guest in our home,” nominee Frank DeLuca said. “My company slogan is, ‘Toyota makes the car … DeLuca makes the difference.’”

DeLuca, a Florida native, graduated from William R. Boone High School in Orlando, Fla., in 1964 and Orlando Junior College in 1966, where he earned an associate’s degree in business and was a member of Alpha Phi Epsilon. Since he was 16 years old, he has always had a passion for cars and worked at a dealership run by the father of a high school classmate.

From washing and detailing cars part time, he worked his way up to sales after college. “I had an interest in learning all aspects of the auto business,” DeLuca said. He was eventually named general manager of Williams Brothers Mazda in 1975 before embarking on his own dealership venture in 1978. At that time, DeLuca Toyota sold approximately 37 to 50 new and used vehicles a month, and today, it presently retails more than 4,000 vehicles annually, according to DeLuca. In December, the company will begin construction on a new state-of-the-art 73,800-square-foot facility equipped with a movie theater in the customer lounge, café, salon and rooftop putting green.

“It has been rewarding to have started my retail automotive career from a very humble beginning at an extremely young age and to be blessed to have developed those humble beginnings into a successful automotive business,” De Luca said. Never forgetting his roots, DeLuca focuses his altruistic efforts on giving children, families and charities the resources and opportunities they need for a brighter future. He has established several scholarship funds, including the Carole A. DeLuca Endowed Memorial Scholarship and the Frank DeLuca STEPS Scholarship.

DeLuca has been a member of the Ocala-Silver Springs Rotary Club since 1979, serving a stint as president and receiving numerous awards for his community service. He was named Philanthropist of the Year by Ocala Magazine in 2011 and received the In Honor of Excellence award from the March of Dimes for his work as chair of the March for Babies initiative. “It touched my heart in a way no other accolade has,” DeLuca said. “I witnessed the struggles of babies, and I saw hope in the faces of parents.”

He added, “Giving back not only feels good, but it’s also the right thing to do.”

DeLuca was nominated for the TIME Dealer of the Year Award by Barbara Miller, executive vice president of the Central Florida Auto Dealers Association. DeLuca has two children and five grandchildren with his late wife Carole. After 39 years of marriage, Carole passed away unexpectedly to heart disease in 2006. DeLuca has once again recaptured happiness with his recent marriage to his new wife, Michelle this past April.

Richard Diver, Diver Chevrolet, Wilmington, Del.

“I have always had a passion for the business and took every opportunity to learn as much as I could from the grassroots level, working my way up from the bottom through each department,” said Richard Diver, a third-generation dealer. “I've been very aware of — and committed to — maintaining the family legacy of not only being one of the leading automotive dealerships in the state, but, even more importantly, one of Delaware's most respected business names.”

Three days after Diver’s 16th birthday, he began washing and detailing cars at the family dealership, working there during summer vacations throughout high school and college to gain experience in each department. He graduated cum laude from Deerfield Academy in Deerfield, Mass., in 1979, and received an economics degree from Dartmouth College in Hanover, N.H., in 1983, where he was a member of Heorot/Chi Phi fraternity. After graduation, he began his fulltime career at the dealership.

According to Diver, under his management, the dealership’s employees enjoy recognition from General Motors for high customer enthusiasm and consistently receive accolades from the factory staff for their way of doing business.
In addition to these successes, the community’s response to a company tragedy stands out in his mind. “The most memorable event that I can recall in my 29 years of fulltime dealership involvement had nothing to do with recognition or award but the genuine outpouring of support from so many after the devastating fire that nearly destroyed our business in 2000,” Diver said. “From the moment we became front-page news, the offers of help from politicians, community leaders and, most importantly, generations of customers to rebuild got us through the darkest days in our company's history.”

And that’s a testament to Diver Chevrolet’s commitment to the Wilmington community, having supported various charities, as well as educational programs for area youth organizations. Diver received the Outstanding Leadership Award from Junior Achievement of Delaware in 2010, and he actively supports the Delaware Breast Cancer Coalition and the American Cancer Society. He is a former member of the advisory board for the Ronald McDonald House of Delaware and has underwritten the Share a Night Holiday Tree Lighting for the past several years, which provides a free night for all families staying at the house that evening.

Diver was nominated for the TIME Dealer of the Year Award by Marlene Petrylak, executive director of the Delaware Automobile and Truck Dealers’ Association. He and his wife, Deborah, have three sons.

Gary Dan Futrell, York Gary Autoplex, Nashville, Ark.

“My relationship with my employees and their dedication to me and to this company has been the most rewarding part of my job,” nominee Gary Dan Futrell said of the dealership he inherited from his grandfather, York Gary. “To this day, like my grandfather, I hate being away from the dealership because it is just like home."

A 1985 graduate of Nashville High School in Nashville, Ark., Futrell likes to say that he was “literally born in the car business.” His grandfather and mentor purchased the dealership in 1966 and Futrell began spending time there as soon as he could walk. “I had an instant and early love for the atmosphere at the dealership,” Futrell remembered. He worked part-time washing cars after school and during summer breaks and sold his first new car when he was a senior in high school. Upon graduation, he moved into sales.

Futrell was soon promoted to general manager and, when he was 27, his grandfather succumbed to prostate cancer, leaving Futrell to run the business on his own. “When my grandfather passed away in 1993, the majority of our employees had been with him since before I was born,” he said. “They remembered me as a young boy and had watched me grow up in the dealership. They had taught me everything I knew about cars — how to drive them, fix them, care for them, sell them. Each and every one of my grandfather's employees stayed with me when I became dealer/owner and remained with me until their death or retirement.”

In the area of community service, Futrell continues to carry on the legacy of his grandfather, who was greatly admired throughout the area. He has contributed his time and leadership to the City of Nashville Chamber of Commerce, Rotary club, Howard County Airport Commission, Nashville Industrial Economic Development Commission and Arkansas Game and Fish Foundation. His work as a board member for the Howard Memorial Hospital resulted in recruiting new surgeons and securing financing for a new facility which helped save the hospital, according to Futrell. He also assists transportation and driver’s education at four local high schools and offers York Gary scholarships.
Futrell was named Man of the Year by the Nashville Chamber of Commerce in 2005 and was given a special community appreciation award by the city council in 2009 during a surprise, emotional ceremony that recognized his company’s challenges during the downturn of 2008 and 2009. “It was one of my most meaningful awards,” he said. "The other would be my children telling me that I am the best dad ever as I tuck them in every night.”

Futrell was nominated for the TIME Dealer of the Year Award by Dennis Jungmeyer, president of the Arkansas Automobile Dealers Association. He and his wife, Donna, have two children.

Edward Garcia, Garcia Infiniti, Albuquerque, N.M.

“The Garcia Automotive Group is dedicated to delivering the best overall customer vehicle sales and service experience in each and every market we serve,” said nominee Edward Garcia of his family’s business. “We view each consumer interaction as an opportunity to create a relationship and future loyalty, and not just as a single transaction.”

And it is that philosophy that has fueled the company’s growth from the family’s original business, Toby’s Truck Parts, to an enterprise that encompasses 15 dealerships in New Mexico and Texas. Garcia is a 1986 graduate of Albuquerque Academy in Albuquerque, N.M., and earned a bachelor’s degree in business from Southern Methodist University in Dallas in 1990. He started his automotive career in marketing and sales operations for Toyota/Lexus USA.

In 1993, Garcia returned to the family business as operations manager for Garcia Honda and, with his brother, Toby, purchased a struggling Infiniti dealership in Albuquerque in 1995, which they successfully turned around. “The next several years I spent in the trenches trying to develop and implement personnel, systems, strategies, relationships and facilities which would enable our little group to expand efficiently,” he said.

Garcia’s philanthropic efforts support educational, athletic and charitable programs in the communities his dealerships serve. He and his family are also committed to preserving the cultural, artistic and architectural heritage of New Mexico. To that end, he is a board member and on the collections committee for the Spanish Colonial Art Society at the Museum of Spanish Colonial Art in Santa Fe and a sponsor of the National Hispanic Cultural Center Foundation, hosting a golf tournament to benefit the group. His quest is to “accumulate, preserve and eventually display through public and educational resources unique and disappearing artifacts of cultural and historic significance related to the multi-ethnic heritage of New Mexico,” he said.

The Garcia Automotive Group also offers scholarships through Central New Mexico Community College and is working with the University of New Mexico’s Anderson School of Management to underwrite a student entrepreneurship contest. The company has been a major donor to the New Mexico Alliance for Hispanic Education Scholarship Fund and supporter of the United Way, 4-H, Children’s Cancer Fund of New Mexico, Children’s Opera at Santa Fe Opera and El Paso Zoo, to name a few.

“I have been given the opportunity to play a small role in the progress and prosperity of the families of our team members and our community,” Garcia said. “The ‘award’ which really means most in my life is being a successful father and protecting my family’s name and automotive reputation.”

Garcia was nominated for the TIME Dealer of the Year Award by Charles Henson, president of the New Mexico Automotive Dealers Association. He has one son.

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Carvana Launches 100 Percent Online Used-Car Retailer in Atlanta


With technology advancing and new programs and offerings being launched daily in the mobile and digital world, it is hard to find something you can’t do online these days. Customers can ever browse, finance and buy a car entirely online.

Carvana, backed by DriveTime, has launched a completely online car retailer in Atlanta, touting what it calls a convenient car buying process as well as next-day delivery.

With a focus on mid-market and luxury vehicles, Carvana will launch its services in the Atlanta metropolitan area.

That said, with physical plant operations in Winder, Ga., the company contends it has the capacity to serve cities throughout Georgia and the surrounding five states. 

The company also said it plans to expand rapidly across the U.S.

"We have the ambition and fresh perspective of a start-up paired with the experience, infrastructure, and knowledge gained from our prior work and partnership with DriveTime," says Carvana president, Ernie Garcia. "We are excited to introduce an entirely new concept into the car industry and breathe new life into the car-buying experience."

The Winder facility currently holds an 150-car inventory with plans to increase this on a monthly basis throughout the year.

All vehicles in inventory are less than three years old and include an Experian Autocheck report, officials said.

In addition, a majority of the vehicles maintain their original manufacturer warranty and come with full disclosure of any functional or cosmetic damage.

"All Carvana vehicles are backed by a seven-day, no-questions-asked Test Buy return policy," the company stressed.

Carvana.com features high-definition 360-degree interior and exterior views, "where consumers can take a vehicle for a virtual spin."

"Carvana's online platform simplifies the financing process by allowing consumers to manipulate down payment and monthly payment options to instantly formulate a payment plan unique to them," officials explained, touching on the financing elements of the site.

The company also cited a recent survey to illustrate the increasing amount of consumers looking to buy a vehicle online.

According to a survey conducted by Accenture's Automotive Industry Group, 88 percent of potential car buyers want clearer online pricing and 94 percent would consider purchasing a car entirely online, from search to delivery.


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Top 15 Brands for the Female Shopper's Purchasing & Browsing Experience at the Dealership


Mercedes-Benz has once again swept the top spots in the annual report from Women-Drivers.com that highlights what women consider the top car brands.

The luxury carmaker’s dealers were not only lauded as the best for the female shopper’s purchasing experience, they also claimed top honors for the browsing experience, as well.

But Mercedes-Benz wasn’t the only automaker whose dealers earned kudos from Women-Drivers.com; several other brands got high praise from female shoppers, including two that cracked the top five for both lists.

So how do the site’s annual awards work?

Women-Drivers.com said it monitors thousands of reviews from consumers annually to see what women are saying about their purchasing and browsing experiences at new-car dealerships.  

The site compiles the scores based on these reviews. Dealers can earn a Women Satisfaction Index score on Women-Drivers.com that ranges from 1.0 (lowest) to 5.0 (highest). Those earning between a 3.8 and a 5.0 earn designation as CERTIFIED Women‐Drivers Friendly, the site said.

As for why “browsing” is measured, the site offered this explanation: “Women now account for over half of all car purchases; however, they influence and initiate an estimated 80 percent of them. One of the reasons the company captures the ‘browsing’ is that on average women visit three  dealerships when in the market for a new vehicle; the higher a dealership’s browsing score is a critical indication that consumers were treated well and will return to this dealership to buy.”

Women-Drivers.com president and car-buying advocate Anne Fleming said: “When a woman walks into a dealership that treats her with respect and engages her during the buying process, the dealership is out to gain a purchase from that customer. It’s pretty simple, respect plus customer engagement equals sale and potential future purchases. And clearly, these dealerships get that.”

According to the site, there is a “positive correlation” between the WSI and customer satisfaction index, with many dealers having WSI scores seeing a positive impact on CSI.

Breakdown of Top Brands’ Dealers

On the purchasing experience side, Mercedes-Benz earned “an almost perfect” 4.90 WSI score. Lexus was No. 2 having received a score of 4.83.

Chrysler Group brands Dodge (4.78), Chrysler (4.76) and Jeep (4.75) rounded out the top five, which Women-Drivers.com said is “quite a testimony to this family of brands, and how well the in-store buying experience is for their women shoppers.”

Overall, the average brand had a WSI score of 4.46 on the purchasing side. Women-Drivers.com noted that the high-ranking automakers “ranked consistently high with women customers who were very satisfied with the engagement and treatment by the sales person, their overall dealership experience, as well as the financing process.”

As for the browsing experience ratings — which would be comprised by “women customers who went to a dealership but did not purchase that day” — top-ranked Mercedes earned a score of 4.59.  

Jeep (4.53) and Lexus (4.10) cracked the top five on this list, as well, placing second and fifth, respectively.

In third was Mazda (4.38) while Chevrolet was fourth (4.24).

On average, brands earned a WSI of 4.01 for the browsing experience.

“These top brands ranked consistently high with women customers who were very satisfied with the engagement and treatment by the sales person and their overall dealership experience,” the company said. “The higher a dealership’s browsing score, the higher the probability that women will return there to purchase.”

The complete set of rankings is as follows:

The Top 15 Brands for Purchasing Experiences at Dealerships
1. Mercedes-Benz: 4.90
2. Lexus: 4.83
3. Dodge: 4.78
4. Chrysler: 4.76
5. Jeep:  4.75
6. Lincoln: 4.72
7. Acura: 4.55
8. Chevrolet: 4.51
9.  Buick: 4.48
10. Honda: 4.39
11. GMC: 4.38
12. Toyota and Mazda: 4.36
13. Cadillac: 4.35
14. Ford and KIA: 4.33
15. Hyundai: 4.23

The Top 15 Brands for Browsing Experiences at Dealerships
1. Mercedes-Benz: 4.59
2. Jeep: 4.53
3. Mazda: 4.38
4. Chevrolet: 4.24
5. Lexus: 4.10
6. Chrysler: 4.07
7. GMC: 4.02
8. Hyundai: 3.99
9. Acura and Ford: 3.97
10. Dodge: 3.92
11. KIA: 3.82
12. Volkswagen: 3.67
13. Audi: 3.44
14. Buick & Cadillac: 3.37
15. Toyota: 3.26

*The site notes: “Some brands are not represented in this report because they were no longer being marketed in 2012, or, due to lack of statistically significant data.”

Women-Drivers.com also provided the following graph to illustrate some of its findings:


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Toyota Recalling More Than 1 Million Units in Two Separate Campaigns

TORRANCE, Calif. - 

Toyota Motor Sales USA said Wednesday that it will conduct two separate safety recalls involving approximately 752,000 Corolla and Corolla Matrix vehicles and approximately 270,000 Lexus IS vehicles.

The automaker explained the airbag control module for the supplemental restraint system in the Corolla and Corolla Matrix vehicles from the 2003 and 2004 model-years could have been manufactured with application-specific integrated circuits that are susceptible to internal shorting. 

Officials said these ASICs could experience an internal short that creates abnormal current flow and increased heat.  If this occurs, the OEM indicated there is a possibility that the ASIC could become damaged. 

In some instances, the front airbag(s) and/or seat belt pretensioners could inadvertently deploy, according to the automaker

The second safety recall involves the front wipers on certain Lexus IS vehicles from the 2006 through 2012 model-years where the wiper arm nut might not be sufficiently tight.

If movement of the wipers is restricted by an external load, such as a buildup of heavy snow on the windshield, officials said one or both of the wipers could become inoperative.

Toyota said owners of vehicles covered by these safety recalls will receive an owner notification letter via first class mail in the near future.

Any authorized Toyota or Lexus dealer will perform this recall at no charge to the vehicle owner.

Detailed information is available to customers at www.toyota.com/recall and the Toyota Customer Experience Center at (800) 331-4331 or www.lexus.com/recall and Lexus Customer Satisfaction at (800) 255-3987).

Toyota had more recalls than any other manufacturer last year. The National Highway Traffic Safety Administration said the automaker recalled 5,330,643 units in a dozen campaigns during 2012.

Next closest in the amount of vehicles recalled according to federal data was Honda, which asked for 3,363,343 units through 16 different campaigns.

The agency indicated that Ford had the most individual recall campaigns last year with a total of 24, which covered a total of 1,398,837 units. General Motors was next with 17 campaigns for 1,476,319 units.

While Toyota’s recalls covered more vehicles than the 2012 campaigns of all three domestic OEMs combined, senior market analyst of automotive insights Alec Gutierrez pointed out the badge still won Kelley Blue Book’s overall brand winner for the recently announced 2013 Best Resale Value Awards. 

Furthermore, Toyota bounced back in 2012 to reclaim the global sales title with 9.75 million vehicles sold globally. After a handful of difficult years marred by recalls and natural disasters, Gutierrez explained how Toyota turned its business around so rapidly.

“Simply put, Toyota got back to the business of being Toyota,” Gutierrez said. “The brand focused on addressing recalls quickly to quell any concerns for ongoing reliability issues. Toyota focused on introducing new and redesigned vehicles that delivered superior fuel economy. The brand also continued to maintain discipline by minimizing incentive spending and fleet sales, which helped Toyota maintain its industry-leading position in terms of value retention.

“Looking ahead, we believe that Toyota is well positioned to maintain its leadership role in global sales, and continuing to challenge GM and Ford for the top sales spot in the United States,” he went on to say. “Toyota is in a solid position to continue to grow global sales volume, and based on its latest batch of redesigns and introductions, we believe that Toyota may give GM a run for its money in the race for U.S. sales supremacy. 

“If Toyota continues to focus on reliability, fuel-efficiency and value retention, the brand should continue to grow both in the United States and abroad,” Gutierrez concluded.

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Manheim Sets Spanish-Language Auctions


Manheim customers have spoken, and the company is listening.

Manheim California has announced its first-ever Manheim en Español auction, set for this Friday. The auction said the event is aimed at meeting the needs of its growing Spanish-speaking dealer base.   

Designed in collaboration with Spanish-speaking dealer customers in Southern California, the sales will be held weekly and conducted exclusively in Spanish, the company said.

“The concept of an entirely separate sale geared especially for our Spanish-speaking dealers came directly from customer feedback,” said Tom Wemhoff, general manager of Manheim California. “Spanish-speaking dealers make up a large segment of our customer base and we’re excited to build a sale that meets their specific needs.”

While any dealer can participate in the weekly sales, Manheim noted that auctioneers, ring men, block clerks and various departmental staff will all conduct the sale entirely in Spanish.

Also at the auction will be Chivas soccer girls, soccer shoot-out promos, soccer teams LA Galaxy and Chivas promo giveaways, and a live Mariachi band.

Scott Hurst, market vice president for Southern California and Nevada said, “We couldn’t be more excited about this opportunity to host a weekly auction that caters to a valued customer base in Southern California.”

The Manheim en Español auctions will take place each Friday at 9:30 a.m. The company said each will offer 250 to 300 units, most likely in the $10,000 and under range. 

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