A Recipe for AutoNation: Considering Different Franchises

Mike Jackson, chairman and CEO of AutoNation, and moderator of a panel discussion at our recent J.D. Power International Automotive Roundtable, gave a quick appraisal of whether AutoNation would consider acquiring franchises belonging to three automakers, whose executives participated in the event’s panel discussion.* Below are Jackson’s comments about Chevrolet; Chrysler Group brands, including Fiat; and Hyundai:

“When it comes to Detroit products, our portfolio strategy is basically one-third Detroit; one-third Asian; and one-third—premium luxury—overweighted very much to the Germans.

“When I look at General Motors, I say, there will always be a Chevrolet and I absolutely am in the market for Chevy stores in metro markets. We’re a metro player. Continue reading ›

Fleets and Leasing Will Still Have a Role in U.S. Auto Industry

Automaker sales and marketing executives and retailers gave their views on product allocation, fleet sales, leasing and more during an afternoon session at the recent International Automotive Roundtable. Panel moderator Mike Jackson, chairman and CEO of AutoNation, the largest public automotive retailer in the U.S., led the Q&A. This second post features some more excerpts from panel members:

Panel Members:

Alan Batey —Vice President, Chevrolet Sales and Service, General Motors Company

Reid A. Bigland —President & CEO, Dodge Car Brand & Head of U.S. Sales/President and CEO, Chrysler Canada, Chrysler Group LLC

Stephen W. Wade —President, Stephen Wade Auto Center and 2011 Chairman, National Automobile Dealers Association (NADA)

Dave Zuchowski —Executive Vice President, National Sales, Hyundai Motor America

Q: Mike: Reid, what’s the future role of fleet sales going forward? You were over-dependent during the crisis. Is that fair to say? And where do you think you will be able to get?

Reid: Right. Last year, our retail sales increased 43%. Total sales were up 26%. Our ratio of fleet sales dropped dramatically throughout 2011.

Q: Mike: At the worst, it was what?

Reid: We were probably 33% or 35% fleet. But I have always said that fleet is still an integral part of our business plan. There’s no such thing if you think about it as a bad customer. There’s just a bad deal. And if somebody wants to buy one car, all of a sudden that’s a good customer. Somebody wants to buy five—that’s a bad customer. It’s just a matter of managing the residuals, accounting for that risk, and making sure that they don’t have long-term damage to brand your particular products. If you can balance that, then fleet can be a real asset for your company—a money maker. Continue reading ›

Automotive Landscape for OEMs, Dealers Remains a Little Bumpy but Bright

2012 International Automotive Roundtable Panel with Moderator Mike Jackson (right), AutoNation CEO and Chairman

Sales and marketing officials from General Motors Co., Fiat-Chrysler and Hyundai Groups joined NADA’s 2011 chairman and presented their viewpoints of important issues and answered questions during a panel discussion at the 2012 J.D. Power International Automotive Roundtable earlier this month.

The following three posts include excerpts from a Q&A session about dealer allocation, fleet sales, leasing and more led by panel moderator Mike Jackson, chairman and CEO of AutoNation, the largest public automotive retailer in the United States.

Panel Members:

Alan Batey —Vice President, Chevrolet Sales and Service, General Motors Company

Reid A. Bigland —President & CEO, Dodge Car Brand & Head of U.S. Sales/President and CEO, Chrysler Canada, Chrysler Group LLC

Stephen W. Wade —President, Stephen Wade Auto Center and 2011 Chairman, National Automobile Dealers Association (NADA)

Dave Zuchowski —Executive Vice President, National Sales, Hyundai Motor America

 Product Allocation Needs to Be as Equitable as Possible

Q: Mike Jackson: Does the panel believe that the manufacturer should limit the number of cars a single franchise can receive—a cap on quantity in any given market?

Dave: We look at it a different way because of our shortages. We’ve had dealers ask: Shouldn’t there be a minimum stocking effort so we have critical mass to represent the line? That’s something we are looking at. In terms of capping dealer availability, it works against the turn system. Continue reading ›

Pent-up Demand, Access to Consumer Credit Spur US Auto Sales in February

Pent-up demand due to the continued replacement of an aging vehicle fleet, along with a rebound in leasing, easier access to consumer credit and long-term financing, are driving new-vehicle sales momentum this month, according to a monthly sales forecast update based on analysis from J.D. Power’s Power Information Network® (PIN) and LMC Automotive.

Our . . . Continue Reading Pent-up Demand, Access to Consumer Credit Spur US Auto Sales in February

A Foreign Businessman’s Observations from China

Geoff Broderick

What’s the first thing most first-time visitors notice when de-planing through the gates at Shanghai’s Pudong airport, or Beijing’s Capital airport? It’s the size of the place. Everything is big, even by American standards: big halls, big seating areas, big restaurants, long queues and people everywhere.

What’s the second thing a foreigner notices upon arrival? There is so much coming-and-going—with people moving in all directions (their shoes loudly clacking against the ground), groups of people gathered together engaged in shrill conversation, and the constant call of the airport’s public address announcer calling out flight update information—everything appears to be occurring in a state of perpetual pandemonium.

But once you become adjusted to the pace and din of China—inside the airport and outside during day-to-day living—the pandemonium becomes much easier to understand and digest. It is chaotic, to be sure, but it is an organized chaos, with its own unique Chinese ebbs and flows. Continue reading ›

Automakers Change Their Strategy in China Market

Marvin Zhu, a senior analyst with LMC Automotive, who writes for China Automotive Monthly published by J.D. Power Asia Pacific, offers insight about the changing strategies of automakers in China.

Automakers in China are changing their way of thinking in a market that is diversifying. Foreign brands are starting a new campaign to expand capacity.Volkswagen Group is going to set up new plants in Ningbo and Xinjiang, while Nissan Motor Co. will add a Dalian plant for Infiniti. General Motors, Ford, PSA, Hyundai, Honda, BMW and Toyota Groups are all going to have new plants ready for vehicle production in 2012. As these companies’ performance in other markets is expected to be less than robust, the booming Chinese market is much more of a sure bet. Continue reading ›

Perceived Reliability Still Lags Actual Dependability for Some Brands

Raffi Festekjian

Several major nameplates have performed well in dependability, but still face challenges with customer perceptions of their models’ reliability, when analyzing results from J.D. Power’s 2008 Avoider and VDS Studies* in comparison with the same studies in 2012.

Although Buick, Cadillac, Ford, Hyundai and Lincoln have achieved consistently strong levels of . . . Continue Reading Perceived Reliability Still Lags Actual Dependability for Some Brands

Dependability of Three-Year-Old Vehicles Reflects High Quality of 2009 Models

 

David Sargent

During late 2008/early 2009, in the middle of one of the roughest recent economic recessions in the United States,* initial quality of new vehicle models (2009 model-year) was especially strong, based on results in our 2009 Initial Quality Study (IQS). This high initial quality for 2009 models has translated into high levels of vehicle dependability for 2009 models that are now three years old , according to our 2012 Vehicle Dependability Study (VDS).

This strong performance is encouraging because it means that the gap between new-vehicle initial quality and long-term dependability continues to narrow. Long-term dependability, as defined by original owners’ evaluations of problem incidence in their three-year-old vehicles**, averages just 132 problems per 100 vehicles (PP100) in 2012 and has improved by 13% from the 2011 average of 151 PP100—which is the lowest problem rate since the study was introduced in 1990. Continue reading ›

Three Premium Brands Rank Highest in Long-Term Dependability

Three premium nameplates rank highest in long-term dependability, according to our 2012 Vehicle Dependability Study (VDS). At the individual brand level, Lexus ranks highest, receiving a score of 86 PP100, which is an improvement of 21% from 2011. In addition, the Lexus LS has the fewest problems in the industry, with just 72 PP100. . . . Continue Reading Three Premium Brands Rank Highest in Long-Term Dependability

Toyota Group Models Earn Most Long-Term Dependability Awards

At the corporate level, Toyota Motor Corporation continues to perform well in long-term dependability and garners eight segment-level model awards—more than any other automaker this year, according to our 2012 Vehicle Dependability Study (VDS), which is based on responses from more than 31,000 original owners of 2009 model-year vehicles after three years of ownership.

The Japanese automaker’s models with the fewest problems in their respective award segments are: the Lexus ES 350 (in a tie with the Lincoln MKZ); Lexus RX 350; Scion tC; Scion xB; Toyota Prius; Toyota Sienna; Toyota Tundra; and Toyota Yaris. Continue reading ›