2 dealer groups – One in Maryland the other in Connecticut look to combat slow sales with growth of body shop business

These two join other dealers and groups that have returned to body shops as a hedge against poor new vehicle sales. After many years of flight from the body shop business, more and more car dealers are looking to this often overlooked and little appreciated profit center that in many cases is a great fit for the new car and truck dealership. According to an article appearing in The Capitol, a newspaper in Annapolis, Maryland, Criswell Performance Cars of Annapolis will be opening a new $7 million body shop this fall. Meanwhile, Harte Auto Group with a number of dealership locations, mostly in Connecticut, will increase the size of his body shop in Hartford from 1,800 square feet with a newly renovated space of 25,000 square feet – previously the location of their Suzuki store. The cost of the Harte body shop is reported by The Hartford Currant to be $3 million. Criswell in Maryland is placing a big bet on the body shop business. Their new facility will occupy 44,000 square feet, will house 60 bays, six detail areas, four prep stations and three drive-though paint booths. George Criswell is reported to have said that he is expecting to handle 500 cars per month and ultimately employ 44 people at the new shop. Harte’s expanded body shop business will include space to work on 24 vehicles at a time and will include two paint booths. Greg Harte, the dealership’s V.P. was quoted in the article as saying that their current body shop volume is around $700,000 per year, but that with the expanded facilities this could grow to $3 million per year over the next two years. Not too long ago, DealersEdge sponsored a TeleSeminar featuring John Sweigart from The Body Shop @ - at which he discussed new management techniques for dealership body shops that were changing the perception of body shops in the dealership environment. The live session, A New Template for Body Shop Profitability, was very popular and the recording of the event has attracted much interest since. Sweigart discussed why dealers have grown reluctant to stay in or enter the body shop business and how a change in management strategy can often overcome the poor performance of the past, while creating a powerful moneymaker. Other dealer groups have proven that, when managed properly and efficiently, the collision repair business can be a huge profit center and a great hedge against slow business cycles.

More buyers prefer Asian brand vehicles - J.D. Power

Westlake Village, California - A new study by J.D. Power and Associates has found that 63 per cent of shoppers considered buying an Asian brand in 2008, up from 60 per cent in 2007, while those considering a domestic brand decreased from 58 per cent in 2007 to 55 per cent in 2008. Those who cross-shop the two are more likely to purchase an Asian brand, and most often cite retained value, reliability and gas mileage as primary reasons. Those who purchase a domestic brand instead of an Asian brand most commonly cite a desire to “buy American” as the primary reason, followed by rebates and incentives offered, and vehicle price. The study also found that 80 per cent of vehicles rejected by shoppers are only rejected after the shopper has visited a dealership. Reasons include another dealer with better service, limited availability of the specific vehicle on dealer lots, and lack of professionalism among dealership personnel. “Given today’s challenging automotive market, both sales and service experiences at the dealership are particularly critical in the decision-making process of shoppers,” said Tom Gauer, senior director of automotive retail research. “Sales personnel can play a key role in improving close rates by viewing customer visits as an opportunity to demonstrate a vehicle’s value and by successfully matching shoppers with the new vehicle that best suits their needs.” Those who cite gas mileage as a reason for rejecting a vehicle have increased from 17 per cent in 2007 to nearly 20 per cent in 2008. Nearly 40 per cent of all shoppers cite price as the most influential reason for not purchasing a vehicle. “Interestingly, nearly 40 per cent of all shoppers who reject a vehicle because of price say they can afford the vehicle, but don’t believe the vehicle is worth the price,” Gauer said. “This presents an opportunity for dealership personnel to focus on demonstrating the different features contributing to the vehicle’s total value to these shoppers, which can eventually lead to increases in close rates.”

Toyota to display CNG Camry Hybrid at Los Angeles

Portland, Oregon - Toyota Motor Sales (TMS) USA has announced that it will display a compressed natural gas (CNG) Camry Hybrid concept vehicle at the Los Angeles Auto Show in November. The company made the announcement at its Sustainable Mobility Seminar in Oregon. “With the combination of plentiful long-term supplies in North America, improved and more efficient recovery methods, favourable pricing and clean-burn/low emissions characteristics, CNG has become a prime energy source for the future,” said Irv Miller, group vice president, TMS Corporate Communications. “With this concept, we are confirming our interest in using CNG within our broad and comprehensive R&D scope.” In 1999, Toyota marketed a CNG-powered four-cylinder Camry to fleet customers in California. As gasoline was relatively inexpensive, customers did not want a vehicle that required special refuelling techniques and a limited refuelling infrastructure, and the program was discontinued a year later. Currently, there are only about 1,000 CNG refuelling stations in the U.S., less than half of them open to the public. “Natural gas and an expanded retail-friendly CNG infrastructure could be seen as a model for future hydrogen infrastructure,” Miller said.

Pickup truck sales will hit bottom in 2010

Northville, Michigan - A new report by global forecasting and advisory company CSM Worldwide says that it expects the U.S. pickup market, the “engine of profitability” for the U.S. Big Three automakers, to continue to shrink in 2009 and 2010 to about half the segment’s 2001 sales peak of 3.3 million units, despite launches of the all-new Dodge Ram and Ford F-150 this fall. “Each new shock to the economy, including the return of $4.00 per gallon gas and turmoil in the financial services industry, further undermines consumer confidence and delays the recovery in overall vehicle sales,” said Charles Chesbrough, CSM senior economist. “But as shocking as today’s headlines are, the real story remains the very weak housing market, high fuel prices, inflation and the limited availability of credit.” He noted that pickup sales are particularly sensitive to fuel prices and housing. New home construction in the U.S. fell to a 17-year low in August, and house prices have yet to stabilize. Foreclosure rates will continue to be high into 2009, and according to CSM, average home prices, already down 10 per cent from their peak, may need to fall another 13 per cent to return to the stable growth trend of the 1990s. CSM said it expects the pickup segment will bottom out at 1.7 million units in the next two years, a drop of nearly 40 per cent from 2007. The company sees the overall pickup segment starting a slow but steady recovery by 2011, but even by 2014, volumes will be only about 2.1 million units.

Bloggers rate Toyota, GM, Honda ‘greenest’ automakers

Westlake Village, California - A new survey by J.D. Power and Associates has found that Toyota, General Motors and Honda have a higher than average number of positive mentions among bloggers for their environmental sustainability. The company based its research on analysis of 40 million blog posts collected during the past six months. J.D. Power and Associates Web Intelligence Division, which specializes in blog research and consumer-generated media for market insight, has released its first comprehensive look at consumer conversations about environmental sustainability, global warming, purchase trends and user demographics, as captured from online blogosphere conversations. GM, Honda and Toyota emerged as pacesetters and scored in the top quadrant for both volume and the percentage of positive mentions. Toyota leads GM in the total volume of posts, accounting for 14 per cent of all posts regarding automotive brands and sustainability; GM is a close second in post volume, with 11 per cent of all posts. However, GM received a higher percentage of positive mentions between January and June 2008, ranking 49 per cent compared with 46 per cent for Toyota. Honda’s rate of positive mentions is 53 per cent, but the brand receives only 7 per cent of mentions in the pacesetter quadrant. Nissan outscores all other automotive brands in the percentage of positive discussion with 56 per cent, but receives only 2 per cent volume in the pacesetter group. Ford accounts for 8 per cent of discussion, but less than half of all comments are positive in nature. “It is not unexpected that Toyota is mentioned frequently in the blogosphere by environmentally conscious consumers due to the success and popularity of the Prius,” said Chance Parker, vice president and general manager of the Web Intelligence Division. “What might be more surprising to some is the strong showing that GM has made within the blogging community that is concerned with environmental sustainability. All of the effort that GM has made to market its hybrid vehicles and future powertrains, such as the electric technology that will be featured in the Volt, appears to be resonating with consumers.”