Smaller Is Bigger - American International Automobile Dealers

Transcription

Honda at 50 14 | Top 12 International Vehicles 17 | 2009 in Review 26
The Magazine of the
Volume 3 Number 4
winter 2010
Presorted Standard
U.S. Postage
PAID
Merrifield, VA
Permit No. 1502
AutoDealer
TM
Smaller Is Bigger
Shrinking Engine Technology’s Role
in the Auto Industry
REGISTER TODAY!
AIADA’s 40th Annual Meeting and Luncheon
Monday, February 15, 2010
11:30 am–1:30 pm Orlando, Florida
Registration available online at
www.AIADA.org or call 1-800-GO-AIADA
Special Keynote Speaker
JOHN KRAFCIK,
President and CEO of
Hyundai Motor America
Tickets:
$75 per ticket
or a Table of 8
for $500
AutoDealer
TM
contents
V ol u m e 3 N u mb e r 4
w int e r 2 0 1 0
The Magazine of the
President
Cody Lusk
director of public relations
Libby Krum
Production Editor
Hannah VanderBush
Design Consultant
Larnish & Associates
Contributing Writers/photographers
Melanie Batenchuk, Marty Bernstein,
Les Jackson, Jim Koscs, Rachel Robinson
14
Smaller Is Bigger: The Industry’s Replacement
for Displacement PAGE 11
features
For more information about AIADA,
topics addressed in this issue, or for
additional copies of AutoDealer, please contact
AIADA Publications at [email protected]
or 1-800-GO-AIADA.
Honda at 50: VP John Mendel Sees a Bright
Future PAGE 14
Game Changers: 12 International-Brand Cars and
Their Impact on the Auto Industry PAGE 17
Board of directors
Mr. Russ Darrow
The Russ Darrow Group
Chairman
Mr. Rick DeSilva
Liberty Subaru
Chairman Elect
Mr. Jim Smail
Smail Auto Group
Vice Chairman
Mr. Don Herring
Don Herring Mitsubishi
D E P ART M ENTS
From the Chairman’s Desk PAGE 4
2009: A Look Back PAGE 26
Mr. Brad Hoffman
Hoffman Auto Group
Mr. Greg Kaminsky
Toyota of El Cajon
17
CO L U M NS
In the News
Losing Out Big Time
PAGE 5
Mr. Jeff Morrill
Planet Subaru
View from the Hill
First Session of 111th Congress Winds Down
Mr. Jim Hudson
Jim Hudson Automotive
Group
Immediate Past
Chairman
Mr. Ray Mungenast
Lexus of St. Louis
Ms. Peggy Proko
Peters Auto Sales
Dealer Involvement
Thank You L.A.N. Members
Mr. Larry Kull
Burns Kull Automotive
Secretary/Treasurer
Mr. Robert V. Rohrman
Bob Rohrman Toyota
PAGE 7
Mr. George Brochick
Penske Automotive
Group, Inc.
Mr. Dave Conant
The CAR Group
Mr. Allen Courter
Honda Auto Center
of Bellevue
Mr. Jack Fitzgerald
Fitzgerald Auto Malls
Ms. Jenell Ross
Ross Motor Cars
PAGE 6
5
Partner Spotlight
Your Best Customers Are Informed Customers
PAGE 10
Dealership Discovers New Tool for Saving Money
Mr. George A. Sharpe, Sr.
The Sharpe Collection
PAGE 21
Mr. Brad Strong
Strong Volkswagen
Dealer Spotlight PAGE 22
Mr. Morrie Wagener
Morrie’s Imports
Valery Voyles, Ed Voyles Automotive Group
Kent P. Stevinson, Stevinson Automotive
Mark Politte, Stanley Subaru
Dennis Hardin, Hardin Honda
21
AutoDealer wi n t e r 2 0 1 0 | 3
from the chairman’s desk
A
t the beginning of
every New Year, Americans are inundated
with countless retrospectives and “year in
review” programming by the media.
This is a time when we traditionally like to take stock of the past 12
months, celebrate our victories, and
analyze our missteps. That being said,
2009 is one year that most car dealers
would just as soon forget.
As an industry,
we are more than
ready to put the
past behind us and
move on to 2010.
We have weathered
the recession and
all its symptoms as
best we could, and
we are finally seeing
the first tentative
signs of economic
recovery. New roadready models are
being displayed at
car shows, sales are stabilizing, and
consumer confidence is, at least, no
longer in a free fall.
This time last year, there wasn’t
much optimism among dealers.
The questions we had boiled down
to, “How much worse will this get?”
Today, we ask each other, “How quickly
will this get better?”
When I took over as chairman of
AIADA last January, I was worried not
just about my own business, but about
our industry as a whole. I wondered
what impact AIADA would be able to
have in Washington, and if it would be
enough to see dealers through to 2010.
I wondered what brands and auto
makers would survive the year. You can
bet I wondered what had possessed me
to accept the chairman’s position during such a turbulent time!
4 | AutoDealer w i n t e r 2 0 1 0
Today, as my time as chairman
draws to a close, I can confidently say
that AIADA went above and beyond
for dealers in D.C., and that there is no
place I would have rather been than at
our association’s helm this past year.
Again and again I was floored by the
dedication of our board of directors,
and by the energy and activism of our
membership. Truly, we were one united team in the face of hardship, and it
helped us all survive.
2009 may never be fondly remembered by auto dealers, but I hope we
can all look back and be satisfied with
what we managed to do for our industry this year. Our advocacy efforts led
to landmark legislation, like Cash for
Clunkers, and secured new access to
credit for dealers. We fought off “Buy
American” legislation that would have
damaged our economy further and
hurt international nameplate retailers,
and we arranged a historic number of
visits to legislators’ offices, and visits by
legislators to dealerships.
This February, at AIADA’s 40th
Annual Meeting in Orlando, I will
hand over my gavel to incoming Chairman Rick DeSilva, confident in our industry’s continuance and in the direction of our association. The past year
was in many ways a trial, but we made
it through stronger, smarter, and more
united than ever before. The future is
bright, and international nameplate
dealers are moving forward.
Until then, may every dealer and
dealership employee have a very, very
happy New Year.
ru s s da r row
AIADA Chairman
The American International Automobile Dealers Association is the only
national lobbying force in the United
States dedicated exclusively to the
economic and political interests of
America’s international nameplate
automobile dealers. AIADA was
founded in 1970 in order to increase
awareness of the international nameplate automobile industry’s value to
the U.S. economy. The association
serves as an advocate for the industry
before Congress, the White House,
and federal agencies. It focuses its
lobbying efforts on trade and anticompetitive restrictions that limit the
availability of international nameplate
automobiles, full repeal of the Death
Tax and other tax measures, affordable health care, labor issues, energy,
fuel economy policies that constrict
consumer choice, and other industryrelated matters.
AIADA Affinity Partners
in the news
Losing Out Big Time
B y I n v e s to r ’ s Bu s i n e s s da i ly
T
rade: The U.S. prides
itself on its open economy and free markets. But
a closer look at the data
suggests backsliding on
major competitiveness indicators. If it’s
not reversed soon, there will be no hiding the decline.
Tuesday, Cato Institute economist
Daniel Griswold took issue with U.S.
Trade Representative Ron Kirk’s congratulatory claim that the U.S. is “the
most open market in the world.”
Actually, it slipped from No. 2 in
2000 to No. 26 in 2007, the last year for
which data are available, in Cato’s 2009
Economic Freedom of the World annual report.
“If an Olympics were held for the
most open economy, the United States
would be out of medal contention,”
Griswold wrote, citing tariffs, regulatory barriers, and other factors.
It’s reportedly down to No. 28 in
2008 data, and getting worse. Given
that size of government, freedom to
trade internationally, and regulation
are the criteria used in Cato’s index,
you can bet that the U.S. ranking will
drop even lower in 2009.
It puts the U.S. behind Hong Kong,
Singapore, the United Arab Emirates, Chile, the Netherlands, Ireland,
Switzerland, Slovakia, and Estonia,
all nations that have seen their living
standards rise based on an aggressive
strategy of free trade.
Chile’s experience is relevant.
Its standard of living skyrocketed
after it began signing pacts a decade
ago. It no longer calls itself a Third
World country.
It was obvious last April when two
volcanoes blew up in South America
at the same time, one in Colombia and
the other Chile.
News photos at the time showed the
Chileans evacuating through the ash
in gleaming late-model SUVs, while
the Colombians hauled mattresses,
chickens, and their worldly goods on
their backs, escaping on foot. Not long
ago the two countries were virtually
identical, but free trade has made Chile
a different country.
Even so, the U.S. has isolated itself
on trade, signing just 10 free-trade
pacts with 17 countries since 1994. Today, three signed U.S. treaties, with Colombia, Korea, and Panama, languish
in Congress.
We’re lagging in capturing fastgrowing markets abroad. The National
Association of Manufacturers this
year found that among the top global
exporters accounting for 80 percent of
world trade, the U.S. is the biggest underexporter, ranking dead last at 15th
out of 15, exporting the lowest share of
its manufactured goods abroad.
It’s significant because exports accounted for the bulk of U.S. growth
last year. “The United States actually
exports only half as much of its manufacturing production as the average for
other major manufacturing nations,”
NAM Vice President Franklin J. Vargo
said in testimony to Congress.
This translates into lost jobs, lost
opportunity, and lost global clout. The
U.S. Chamber of Commerce says the
U.S. is forfeiting 585,000 American
jobs by forgoing free-trade pacts—and
yet the Obama administration has
done nothing but talk about them.
Competitiveness isn’t lost through
a single event; rather, it’s lost over time
as the effects of many bad policies are
felt. Right now, on trade, the U.S. is
going in the wrong direction. It could
turn things around quickly by getting
back on the free-trade bandwagon. AD
Licensed from Investor’s Business
Daily for republication in AutoDealer.
v i e w fr o m the h i ll
First Session of 111th Congress Winds Down
2
009 was a challenging year
for America’s international
auto dealers. As Congress
moves into 2010, AIADA
continues to monitor several legislative issues.
Financial Regulatory Reform
Debate Continues
In mid-December, the House passed
H.R. 4173, the Wall Street Reform and
Consumer Protection Act of 2009. The
legislation included an amendment
authored by Rep. John Campbell (RCalif.) that excluded dealers from the
bill’s proposed Consumer Financial
Protection Agency (CFPA). Efforts by
Rep. Mel Watt (D-N.C.) to strip out
the exclusion were beat back by Rep.
Campbell and the efforts of AIADA’s
dealer advocates. During the debate,
AIADA issued an Action Alert to
members of the Legislative Action
Network (L.A.N.); AIADA Chairman
Russ Darrow took the issue head on in
his weekly “Russ off the Cuff ” column;
and President Cody Lusk sent a letter
to members of the House of Representatives, urging their opposition to
Watt’s measure. Ultimately, H.R. 4173
passed, although Rep. Watt withdrew
his amendment from consideration.
No change was made to the legislation and the CFPA dealer exclusion
remained intact. The bill will next be
taken up by the Senate where AIADA
will again seek to maintain the auto
dealer exemption.
Don’t Slam the Door on the
Global Economy
As the United States works its way
out of an economic crisis, many on
Capitol Hill are growing more concerned about “protecting” our nation
from international trade. In reality,
95 percent of the world’s consumers
live outside the U.S., which means we
6 | AutoDealer w i n t e r 2 0 10
must keep the door open to international trade. To date, over 90 pieces
of “Buy American” language have
been inserted into federal legislation.
AIADA remains a strong advocate of a
global economy, and is committed to
ensuring the U.S. remains a team player for international nameplate dealers
and their manufacturers.
Also during his recent trip to South
Korea, many Democrats on Capitol
Hill were disappointed when President Obama expressed willingness to
move a pending free trade agreement
forward in 2010. Senators and House
members introduced legislation that
would require renegotiation of all
pending trade agreements reached under the Bush administration. AIADA
will continue to fight to keep the door
open to free trade.
The Death Tax: Dead or Alive?
Dealers and other small business owners have kept a watchful eye
on legislation aimed at altering the
scheduled 2010 repeal and subsequent
return of the Death Tax in 2011. In
December, the House passed the
Pomeroy Estate Tax bill (H.R. 4154)
to repeal the estate tax at 2009 levels
at a 45 percent rate and a $3.5 million
exemption per spouse. Because such
levels are not indexed for inflation,
over time more small business owners
would fall victim to the tax. Earlier in
the year, Senators Jon Kyl (R-Ariz.) and
Blanche Lincoln (D-Ark.) introduced
their estate tax reform plan that would
provide couples with a 35 percent rate
and a $5 million per spouse deduction.
For now it looks like a stalemate but
AIADA will keep up the fight for a full
permanent repeal of the Death Tax.
Dealer Financing Still Tough
Throughout 2009, AIADA worked
to extend Small Business Adminis-
tration (SBA) loan provisions of the
American Recovery and Reinvestment
Act through the 2010 fiscal year. Soon
after the quick economic decline in
October 2008, many of the banks that
had traditionally carried dealer inventory loans began shunning auto dealers, prompting Senate action to seek
more dealer assistance from the SBA.
AIADA is working with Congress to
extend and enhance the SBA 7(a) loan
program for auto dealerships in order
to assist with floor plan lending.
Dealers’ Rights Language
Becomes Law
Before the House and Senate recessed for the holidays, both passed
federal omnibus spending legislation,
which included language to restore
the rights of auto dealers’ selected for
closure by GM and Chrysler earlier
this year. Provisions included language
for neutral, nonbinding arbitration, as
well as a mandate that within 30 days
GM and Chrysler must provide dealers with the criteria used to terminate
them earlier this year.
Health Care Dominates
December
Staying until just before Christmas,
the Senate finally passed health care
legislation. The House had passed their
health care bill weeks earlier. AIADA
joined the Small Business Coalition for
Affordable Healthcare and dozens of
other organizations in a letter to the
House and Senate to outline the problem the legislation poses to small businesses. Some of those items included a
small business health insurance tax, an
employer mandate, lack of affordable
health care plans, a public option, and
other various burdens and costs that
would hit small businesses hard. AD
de
nvo
nn
t t
De
a al leerr Ii n
o llvveemme e
Thank You L.A.N. Members
A
s we close out 2009,
AIADA extends our
thanks to the dealers
who have worked hard
to make an impact on
Capitol Hill. By joining the Legislative
Action Network (L.A.N.) and participating in the Dealer Visit program,
these dedicated dealers have done
their part to advocate on behalf of our
industry.
The following dealers reached out
in 2009 with the assistance of AIADA
and connected with their members
of Congress through the Dealer Visit
program:
Mr. Mark Hedgepeth
Nalley Honda
Brunswick, Ga.
Rep. Jack Kingston (R-1st)
Mr. Lee Payne
Planet Honda & Hyundai
Golden, Colo.
Rep. Ed Perlmutter
(D-7th)
Mr. Shau-wai Lam
DCH Paramus Honda
Paramus, N.J.
Rep. Scott Garrett (R-5th)
Mr. David Williams
Wesley Chapel Toyota
Wesley Chapel, Fla.
Rep. Ginny Brown-Waite (R-5th)
Mr. Emanuel Bugelli
Gateway Mazda
Aurora, Colo.
Rep. Mike Coffman (R-6th)
Mr. Marshall Jespersen,
Mrs. Peggy Proko
Dover Auto World, Peter’s Auto Sales
Dover, N.H
Sen. Jeanne Shaheen (D)
Mr. Justin Perry
Perry Nissan
Columbia, Mo.
Rep. Blaine Luetkemeyer (R-9th)
Mr. Ed Lewis, Mr. Patrick Janes
Staunton Auto Group
Staunton, Va.
Rep. Bob Goodlatte (R-6th)
Mr. Travis Ostrom
I-95 Brunswick Toyota
Brunswick, Ga.
Rep. Jack Kingston (R-1st)
Mr. Roger Elswick
Community Toyota Kia
Baytown, Texas
Rep. Gene Green (D-29th)
Mr. Tony Terry,
Mr. Mark Dalton
Terry VW Subaru
Lynchburg, Va.
Rep. Bob Goodlatte (R-6th)
Top: Rep. Donna Edwards greets staff at
DARCARS in Silver Spring, Md.
Ms. Tammy Darvish
DARCARS Toyota and Lexus
Silver Spring, Md.
Rep. Donna Edwards (D-4th)
Mr. Andreas Mozoras
Unicars Honda
Indio, Calif.
Rep. Mary Bono Mack (R-45th)
Mr. Steve Middlebrooks
Heyward Allen Toyota
Athens, Ga.
Rep. Paul Broun (R-10th)
Mr. Bo Scott
Regal Nissan
Roswell, Ga.
Rep. Tom Price (R-6th)
continued on page 8
Bottom: Emanuel Bugelli discusses the
auto business with Rep. Mike Coffman.
dealer involvement
Left: Dealer Ed Lewis
explains issues impacting his
business during an employee
town hall meeting.
Top: Dealer Marshall
Jesperson takes N.H.
Sen. Jeanne Shaheen on
a tour of his dealership.
Bottom: Rep. Ed
Perlmutter talks to Parts
Manager Kyle French
about the financial credit
crisis.
continued from page 7
Mr. Jim Brown, Mr. Dave Alicea
Classic Toyota
Mentor, Ohio
Rep. Steven LaTourette (R-14th)
Mrs. Jenell Ross
Ross Motor Cars
Centerville, Ohio
Rep. Mike Turner (R-3rd)
Mr. Alan Wildstein
Alan Jay Toyota
Sebring, Fla.
Rep. Tom Rooney (R-16th)
Mr. Morrie Wagener
Morrie’s Mazda
Minnetonka, Minn.
Rep. Erik Paulsen (R-3rd)
Mr. Otto Belovich
Cherry Capitol Cadillac Subaru
Traverse City, Mich.
Rep. Dave Camp (R-4th)
Mr. Greg Hapke
Acura of Memphis
Memphis, Tenn.
Rep. Steve Cohen (D-9th)
Mr. Dennis Hardin
Hardin Honda
Anaheim, Calif.
Rep. Ed Royce (R-40th)
Mr. Jim Robertson
Jim Roberston Toyota
Kirksville, Mo.
Rep. Blaine Luetkemeyer (R-9th)
Mr. Stefan Smith
Lexus of Memphis
Memphis, Tenn.
Mr. Jason Courter,
Mr. Al Courter
Honda Auto Center of Bellevue
Bellevue, Wash.
Rep. David Reichert (R-8th)
Mr. Aaron Wallace,
Mr. Tyler Wallace
Ralph Schomp’s BMW
Littleton, Colo.
Mr. Kenny Myers
Dobbs Honda
Memphis, Tenn.
Mr. Walt Gutierrez
Toyota of Newnan
Newnan, Ga.
Rep. Lynn Westmoreland (R-3rd)
Mr. Jim McDonald,
Mr. Mike McDonald
McDonald Automotive Group
Littleton, Colo.
Ms. Valery Voyles
Ed Voyles Honda
Marietta, Ga.
Rep. Phil Gingrey (R-11th)
Mr. Dustin Fleishman
Team Nissan
Marietta, Ga.
Rep. Phil Gingrey (R-11th)
8 | AutoDealer w i n t e r 2 0 10
Mr. Dave Wilson
Preston Automotive Group
Preston, Md.
Rep. Frank Kratovil (D-1st)
Mr. Martin Taylor
Taylor Buick Nissan
Lancaster, Ohio
Rep. Steve Austria (R-7th)
Mr. Jim Norton
Jim Norton Toyota
Tulsa, Okla.
Rep. John Sullivan (R-1st)
Mr. Patrick Moore
Rusty Wallace Toyota
Morristown, Tenn.
Rep. Phil Roe (R-1st)
Mr. Myron Bernard
Bachman Bernard
Greeneville, Tenn.
Rep. Phil Roe (R-1st)
Just say Show Me The
CARFAX at Manheim.com
®
Now you can cherry-pick your inventory
at Manheim.com! Just use the new
Carfax auction Quick Check.™
With one click of the mouse you’ll see
valuable information from CARFAX that
will give you a competitive edge.
Start Your FrEE trial todaY!* Call 866-810-3172
*For new CARFAX Dealer Subscribers only. ©2009 CARFAX, Inc. All rights reserved.
s pooltvl ei g
D e paalret rn eI rn v
mhetn t
advertisement
Your Best Customers Are Informed Customers
Help Your Customers to Understand the Advantages of Full Synthetic Motor Oil
I
n order to educate your customers about synthetic oil,
it is vital to first understand
what they are looking for in
a motor oil—and then highlight key facts so they really understand
the benefits of choosing full synthetics.
Below are some of the benefits that
synthetic oil can offer your customers:
Trusted Brands
According to a Harris Interactive
study, consumers place a high emphasis on having a brand of motor oil
in their vehicle that meets the latest
industry and manufacturer standards.
Additionally, they are concerned that
the oil they use helps maximize fuel
economy. Offering
your customers a highquality full-synthetic
motor oil can help
address both of these
concerns.
Motor Oil Must
Work Harder
Today’s engines are
smaller than those of
the past. While they
may be either turbo
charged or supercharged to increase
power efficiency, these
smaller engines must
work harder for the
same performance of
previous, larger engines. This means that motor oil must
work harder in order to protect metal
parts from wear and heat—especially
since smaller engines typically have
tighter tolerances than larger ones.
Overall Performance
High-quality full synthetic motor oil outperforms conventional and
synthetic blend motor oil in nearly all
10 | AutoDealer w i n t e r 2 010
aspects of engine protection. Synthetic
motor oil contains key additives that
help reduce wear and provide better engine protection against friction
and performance-robbing deposits
compared to conventional oils. These
advantages can enhance performance
and efficiency and may lead to better
fuel economy over the life of the engine.
high-speed rotating, spinning, and
reciprocating engine parts, thinning
the oil. High-quality full synthetic
motor oil may resist shear under heavy
loads better than conventional oils.
This resistance helps synthetic motor
oil maintain its viscosity grade and
film strength, enabling it to offer better
engine protection and withstand more
extreme engine conditions.
Cleaner Engine
Synthetic oil also contains additives that help keep the engine cleaner,
including dispersants that grab and
hold dirt and contaminants in suspension before they can build up during
engine operation. Synthetic motor oil
also contains detergents that help keep
high-temperature surfaces clean and
free of varnish.
Stronger Resistance
to Sludge
Finally, sludge deposits can form
inside an engine under a variety of
operating conditions, from short trips
and stop-and-go traffic to extended oil
drains and winter conditions. Sludge
can block oil passages, plug filters,
and cause serious engine problems.
High-quality synthetic motor oil is
formulated to provide an extra level of
protection from the formation of these
and other deposits inside the engine.
Pennzoil and Quaker State offer a
full line of motor oils that meet or exceed the specifications of most vehicle
manufacturers. Pennzoil Platinum Full
Synthetic motor oils provide the highest level of cleaning, protection, and
performance. Quaker State Ultimate
Durability full synthetic motor oils
help defend engines against frictionrelated wear.
Stronger Resistance to Burn-off
At high temperatures, oil can also
burn off, which depletes the oil level
and leaves behind thicker oil that drags
on performance. Full synthetic motor
oil resists burn-off much better than
conventional motor oil.
Stronger Resistance to
Oil Oxidation
Oil oxidation occurs when blow-by
gases, high temperatures, and motor
oil mix. This can cause the oil to thicken and lead to deposits that can reduce
engine performance. High-quality full
synthetic motor oil resists oxidation
better than conventional oil, resulting
in oil that flows more smoothly and
is easier to pump through the engine,
providing cleaner engine operation.
Stronger Resistance to
Oil Shear
As motor oil travels through the
engine, some of the oil molecules can
be sheared, literally cut in half, by
For more information on Pennzoil
and Quaker State synthetic motor oils,
contact Mike Burns, OEM/Automotive
Dealer Manager at 817-301-7884, or
via e-mail at Michael.W.Burns@Shell.
com to learn more about the Pennzoil
and Quaker State programs and services
available for AIADA members. AD
D
Diesel
Direct injection and clean diesel technology
allow this engine to propel the VW Touareg
SUV while delivering fuel economy in the
mid-to-high 20s.
Smaller Is Bigger
The Industry’s Replacement for Displacement
BY
A
L ES J ACKSON, AIA D A CONTRI B UTIN G E D ITOR
utomotive engines are
very complex assemblies
of pistons, rods, valves,
camshafts, crankshafts,
and other moving parts,
all of which are carefully machined,
tightly fitted, and bathed in oil during
operation. They must start and run
in extreme temperatures and on all
road conditions. Above all, they must
produce enough power to move the
vehicle in a safe and effective way.
Not long ago, there were only a few
practical ways to generate sufficient
power to propel a vehicle. The easiest
was to increase the size and displacement of the engine because more—and
larger diameter—cylinders equaled
more power. Another method involved
tweaking the output of engines by
increasing their ability to rev higher,
adding more fuel delivery and turbocharging. However, these practices were
more expensive and limited engine life.
A third approach was the diesel engine,
but weight and cost limited its widespread use.
Advances in several technologies
changed everything. The two greatest
advances—fuel injection and computer management systems—allowed
engineers far more precise control over
engine operating characteristics. Metallurgical advances introduced to production during this period also paved
the way for lighter and stronger blocks
and cylinder heads. Heavy, cast iron
engines have largely been replaced by
aluminum alloys that not only reduce
weight, but also allow faster warm up
and increase overall reliability.
The past few years have witnessed
unprecedented increases in both power
and fuel efficiency with the advent of
Direct Injection, Electronic Engine
Management, and Variable Valve Timing technology. These technologies
have revolutionized drivetrain engineering while delivering unprecedented
low levels of emissions and increased
fuel economy.
Direct Injection
Gasoline vapor is highly explosive,
but the fluid itself doesn’t burn easily.
Therefore, the finer the droplets of gasoline that enter the cylinder, the more
efficient (and powerful) will be the
explosion when the spark plug fires.
While carburetors and earlier fuel injection systems performed adequately,
relatively large amounts of fuel were
wasted in incomplete combustion.
Direct injection uses very high fuel
pump pressure and precision injectors
to more evenly disperse micro-droplets
of fuel into the cylinder. To understand
how it works, picture the spray of fuel
from a conventional injector as a very
fine mist similar to something like a
perfume bottle. By comparison, direct
fuel injection produces a mist far finer
than that. It’s closer to a vapor than a
mist, which allows it to burn more efficiently to extract the maximum energy
from the fuel. More energy extraction
means more power and less fuel required to achieve it.
Direct injection appeared in the
European and Japanese automotive
continued on page 12
markets in the late 1990s, first from
Mitsubishi and followed immediately by Nissan. In 2000, VW and Audi
equipped several models with the technology. BMW introduced a system in
2003 and MINI began using the technology in the Cooper S in 2007. Toyota
installed direct injection in the Lexus
GS300 in 2005. Today, Ferrari, Porsche,
and many other manufacturers are using direct injection systems.
Allowing emissions levels to be
more accurately controlled is a significant benefit of direct injection.
The gains are achieved by the precise
control over the amount of fuel and
injection timings, which are varied according to the load conditions. In addition, there are no throttling losses, such
as wasted fuel during the moments
between throttle input and engine
response, when compared to a conventional fuel-injected or carbureted
engine.
Direct injection may be accompanied by other technologies such as variable length intake manifolds, exhaust
gas recirculation, and valve timing depending upon manufacturer and basic
engine design requirements. Direct
ignition technology is used by Honda,
for instance, to achieve 166 horsepower
from a 2.4 liter engine displacement.
Doing so yields over 24 MPG highway
in the new Element while maintaining
a LEV-2 emissions rating.
Electronic Engine Management
Making an engine run properly involves many parameters that constantly
change with temperature, vehicle load,
and other outside forces—particularly
the control of emissions output. Today’s engines are controlled by powerful computer systems which are part of
the electronic management system.
Electronic engine management
replaces the traditional throttle plate
(which regulates engine speed by restricting incoming air) by controlling
fuel delivery and ignition timing. Doing so requires considerable processing and memory, as direct injection
plus the engine speed management
must have very precise mathematical algorithms for good performance
and driveability. The technology, while
understood several decades ago, is
relatively new in vehicles because it had
to wait for computer chips to reach a
stage of complexity and reliability suf-
Modern engine advances, seen here in the Honda
Civic, have increased power and fuel efficiency.
ficient for automotive applications.
While the vehicle is being operated,
the engine management system continually selects one of several combustion
modes. Air-fuel ratio (normally optimized at 14:1 by weight) is constantly
adjusted for operating conditions.
When maximum power is required, the
ratio is altered to a greater percentage
of fuel, and engine timing is changed
to utilize the extra input. Maximum
power is seldom needed, however, and
engine management systems can make
other running conditions far more
fuel-efficient.
One method maintaining fuel efficiency is known as “ultra lean burn”
and is used for light-load running
conditions, coasting, and similar
situations. Fuel is not injected at the
intake stroke but rather at the end of
the compression stroke so that a very
small amount of fuel/air is placed near
the spark plug. Known as a stratified
charge, the resulting flame front is
kept away from the cylinder walls for
low emissions and heat loss. Ultra lean
burn would have been impossible to
accomplish with carburetors or conventional fuel injection just a few years
ago.
The advent of digital electronics allowed engineers to design engine management systems that are fast enough
to do away with the conventional coil
and distributor. Using special spark
plugs that contain their own ignition
coil, high voltages are not routed all
around the engine but are created only
at the point where they are needed. Reliability, engine response, fuel economy,
and emissions have all benefitted from
this seemingly simple—but in reality
quite complex—technology. Engine
temperature can be controlled precisely, greatly reducing the amount of
uncombined oxygen in the exhaust.
Engine management systems limit
the maximum RPM that the engine
is allowed to reach, momentarily cut
ignition during sequential gearbox upshifts, control turbocharger wastegates, allow for additional fuel when
the engine is cold, adjust running
parameters when lower octane fuel
VVT
variable valve timing
Engines utilizing variable valve technology,
such as that seen here in a Toyota Corolla,
boast greater fuel efficiency and power over
a wider rev-range.
is introduced, control variable valve
timing, and maintain error codes in
software to help technicians diagnose
problems.
Variable Valve Timing
Not long ago, variable valve timing was considered wishful thinking
by engineers due to mechanical, electronic, and cost limitations. Today, it is
commonplace in vehicle design. Engine
intake and exhaust valves are opened
by lobes on the camshaft using various
linkage designs ranging from pushrods
to overhead arrangements. The profile
(the rotational position and shape of
the lobes on the camshaft) is traditionally optimized for certain engine RPM,
where maximum efficiency takes place.
This is a tradeoff, however, and it normally limits low-end torque and maximum horsepower.
Variable valve timing allows the
cam timing—and sometimes lift—to
change, which results in greater efficiency and power over a wider revrange. Variable valve timing makes it
possible to draw in large amounts of
air and fuel at high engine speeds and
far less at lower engine speeds. Some
systems advance or retard the timing
of the intake or exhaust valves while
others switch between two sets of cam
lobes at a certain RPM. The end result
is smoother operation, more power,
and greater fuel efficiency.
The concept of variable valve timing
hearkens back to steam engines. Some
early aircraft engines also adapted dual
cam arrangements for takeoff/pursuit
or for economical cruising. Fiat first
worked with the technology in the late
1960s, followed by Alfa Romeo. It was
introduced by Honda in 1983 in their
motorcycle engines, and other Japanese
manufacturers were working on development at the same time. Nissan’s 1987
300ZR model was equipped with variable valve timing in 1987 and by the
end of the decade a number of Honda
and Acura models (CRX, Civic, NSX)
were also fitted. The early 1990s saw
BMW, Diamler, and others working on
programs for upcoming engines. Today, Hyundai, Lexus, Mazda, Mitsubi-
shi, Kawasaki, Nissan, Porsche, Subaru,
Toyota, Volvo, and VW have engines
utilizing variable valve timing.
Diesel
It has long been known that diesel
engines are 30 percent more thermally
efficient than gasoline engines. This
translates directly to power, so a diesel
engine one-third smaller in displacement than a comparable gas engine
will produce the same amount of power and greater torque. Unfortunately,
diesel engines for automotive applications were heavy, noisy, and produced
malodorous smoke and higher emissions than their gasoline counterparts.
This is no longer true, thanks to
the advances in fuel delivery and combustion management. Today’s diesel
engines are far lighter in weight and
the clattering noises so often associated with their operation have largely
been silenced. A look at the exhaust
coming from today’s diesel automotive
engines reveals . . . nothing. Smoke and
odors are a thing of the past. Emissions
have been reduced to less than that of
gasoline engine counterparts thanks
to exhaust scrubbing and catalyst approaches such as “blueTec,” a technology shared by Mercedes-Benz, VW,
Audi, and Chrysler.
Diesel engine research and development is being performed on a large
scale in Europe and Asia, as purchases
of diesel powered passenger vehicles
are nearing 50 percent of total sales.
In the U.S., less than 1 percent of passenger vehicles sold are diesel powered
but the public’s understanding of—and
interest in—the technology is rapidly
increasing.
Where to Go From Here?
The future of automotive engines
is clearly one of smaller and smaller
size without compromise in power
output or driveability. In fact, power
and smoothness are increasing with
every new model being offered. In the
future, smaller engines will give designers a larger choice of body shapes, and
drivetrain engineers will be able to fit
components more efficiently and costeffectively.
Recent advances in engine design
and emissions reduction are sure to
keep the internal combustion engine
in widespread use for the next few
decades as development of hybrid and
electric drivetrains continues. Consumers benefit, and will continue to
benefit, from these advances every day
in fuel savings and low maintenance
costs. AD
Honda at 50
VP John Mendel Sees a Bright Future
As it celebrates its 50th year, Honda is pondering its past
as it looks to the challenges of the future.
B Y M ARTY BERNSTEIN, AIA DA CONTRI BUTING EDITOR
ABOVE: Honda recently
introduced its new crossover model, the Crosstour,
to praise from reviewers.
RIGHT: John Mendel at
the launch of the Honda
Insight.
S
ince 1959, Honda’s business strategy has been solid and stable. Its focus and drive to provide quality products enabled the company to grow from
sales of 365,865 cars in 1982 to over 1.4 million
in 2008. Honda was also the first Japanese auto
maker to produce cars in the U.S., with this year’s production and sales reaching 15 million.
But like many of its fellow auto makers, Honda’s sales
are in the red for the 2009 calendar year. Although the company’s October 2009 sales were only down by five units from
October 2008, sales are down 22.6 percent for the year. In
particular, the company has reported a 58 percent sales drop
for its long-standing Accord model.
Despite its challenges, Honda has not been idle. A new
model, the crossover Crosstour, was introduced in September to praise from many reviewers and will reach dealers
next year. A new concept vehicle, the two-seat hybrid CR-Z,
will go into production for the second half of 2010. Plans
have been announced to makover aging models, new technological advances in fuel economy have been promised,
and marketing programs have been expanded—all based on
the premise that better days are ahead.
AutoDealer recently spoke with John Mendel, American
Honda Motor Co. executive vice president of American
sales. He is responsible for U.S. sales for Honda and Acura
divisions and other support departments. He spoke frankly
about the challenges of selling vehicles during a bad economy, competition from fellow auto makers, fuel economy, and
what makes Honda’s dealers unique.
JM: Those who did finance had excellent credit ratings.
Generally speaking, it was an above average customer who
had good credit and had no problems with cash, which really shocked a lot of people.
Making and Selling Automobiles During
a Recession
AIADA: How will 2009 end and what do you predict for
2010?
JM: It’s difficult to predict where the marketplace is going. We do not forecast the marketplace, but from a planning
assumption, not wildly different from where we are this year.
Certainly we’d love to see the marketplace strengthen a bit,
but the uncertainty that we’ve come to live with during the
last year to 15 months will not give us a lot of power to reach
11 or 12 or 13 million units. When will it get back to normal? But then, what is normal these days? The new normal
could be somewhere in the 12 to 14 million range.
AIADA: Among consumers, Honda has a
reputation for lasting quality. Has that perception changed in recent years?
JM: One of the things that amazes me since
coming to Honda is the number of letters I receive that
say, “I’ve owned six Hondas. All of ‘em got over 300,000
miles, and I never had to do a thing to it! My current one
has 272,000 on it and I need a water pump—frankly, I had
higher expectations from Honda.”
AIADA: The Cash for Clunkers program gave Honda a
nice lift. What will be the impact going forward?
JM: We saw what $3 billion in incentives did in August,
which helped align everyone’s inventories. The Cash for
Clunkers thing was a very interesting study in automotive
buying because going into it, the strong general consensus
was, “Boy I can’t wait to see these credit apps. These are
probably people who couldn’t afford to buy cars over the
past couple of years.” Coming out of it, however, the majority of dealers are telling me a large portion of the customers
were cash buyers.
AIADA: And what about those Cash for Clunkers customers who did finance?
A Competitive Marketplace
AIADA: Honda has faced increased competition in its
core models from Toyota, Nissan, Hyundai, and Kia. How
critical is that for you?
JM: That’s good to see. Healthy competitors help the
customers and help us. There’s nothing worse than an irrational, beleaguered competitor. They are getting their
houses in order and the competition is getting
tougher, which we frankly welcome.
AIADA: How does Honda meet
your customers’ value perceptions and expectations?
JM: Honda serves as a
safe haven for customers
because in difficult times,
it allows them to invest in a
vehicle that has high resale
value. We don’t discount
them in the market, we don’t do
fleet, we don’t do big cash rebates,
or cash-on-the-hood. They reward us for
that. I believe it’s why we have been able to
grow marketshare.
Early Honda vehicles,
such as the N600,
helped set the stage for
the company’s reputation for quality and
reliability.
AIADA: Really?
JM: The first time I got one of those, I thought, “You’ve
gotta be kidding me!” Then it soaked in that the consumer
has incredibly high expectations from Honda on a number
of different fronts. One of them is that a Honda runs, and
runs, and runs, and runs, and never gives up.
Fuel Economy and Alternative Fuel Vehicles
AIADA: Honda has lost some of its edge in fuel economy ratings. What’s being done to return to better times?
JM: We’ve always led in fuel economy; we are proud of it
and will lead again. Consumers and dealers are very adept at
being able to tell the full Honda story as opposed to just the
fuel economy story.
AIADA: There are rumors the CR-Z concept will be in
the marketplace next year as a hybrid. True or false?
continued on page 16
The CR-Z concept car
is expected to join the
hybrid marketplace.
JM: True. That car will really surprise you when you
drive it. It’s very sporty and lots of fun. Very good dynamically. A lot of consumers, when they’ve seen the concept at
shows over the past year, have said it evokes images of the
former CRX. We have high expectations for it from consumers and they won’t be disappointed.
AIADA: Is the Insight hybrid going to be an important
vehicle for you?
JM: It’s a great value and consumers are continuing to
discover the Insight. It’s a phenomenal vehicle, leaving you
wanting for nothing which gives you all the benefits of a hybrid system and great fuel economy.
Moving Forward to 2010 and Beyond
AIADA: Where will Honda’s growth come
from in the months and years ahead?
JM: Our growth will come from our balanced portfolio of vehicles. Honda has not
swung dramatically in getting off cars into
trucks, or trucks into cars. We’ve been consistent in selling a balanced mix from a balanced
portfolio of vehicles.
cords. Customers came to us because that is what we are
known for.
AIADA: Will alternate fuel vehicles gain in importance?
JM: As we add new vehicles I believe you will see an
expansion of the hybrid line-up. We are always looking at
new alternatives—smarter, better, cleaner, leaner, and better
sources for energy—and will continue to push the envelope
in every vehicle we have.
Honda’s Dealers and the Retail Marketplace
AIADA: Where are Honda’s best retail markets?
JM: We do very well, as you might imagine, on both
coasts. We are bi-coastal but we have some
very, very strong markets in-between. Chicago
is a very good market for us, as is Texas—
particularly Dallas. Florida has always been
pretty strong for us. The traditional domestic
strongholds and manufacturing markets such
as Detroit and Cleveland continue to be tougher markets, although we are starting to come
around a little there too.
AIADA: After the Cash for Clunkers program ended, new car sales dropped. What are
AIADA: Are the usual leaders going to
your dealers doing to generate business given
maintain their dominance?
the economic realities?
JM: Certainly we started with Civic, Pre
JM: Prior to Clunkers, dealers had gone
lude, and Accord, which was the core of our
Honda Vice President
John Mendel
back to the basics of our business: calling cusbusiness. We never lost sight of how importomers for referrals, spending a lot of phone
tant that core was. Even when we worked into
time, farming off-lease vehicles, and followingthe truck market, we worked very hard to
up Internet leads. Our dealers are back to cultivating busimaintain our core business around Civic and Accord.
ness with basic sales techniques that have made us successful
AIADA: Yet trucks, crossovers, and smaller vehicles have over the years.
been added. How does this change add balance?
AIADA: And I assume that includes dealer service and
JM: As we added new vehicles and got into trucks such
fixed operations too, correct?
as Odyssey, Pilot, CR-V, and Ridgeline, we’ve always worked
JM: Yes. Sales sells the first car, but service sells the next
to maintain the people who brought us to the dance—our
five. With many franchises, much of the shop’s gross was
customers. And now we’ve developed the Fit, a very credible
from warranty and get-ready work, so the factories were the
vehicle in the marketplace. So the answer to your question
best customers. Honda’s dealers, I suspect, never had that
is we are well positioned both on the Honda and Acura side
opportunity. To build fix-ops and service you have to do it
to take advantage of whatever the industry throws at us. Go
the old fashioned way by really working on maintenance and
back a year ago, when gas prices hit $5 per gallon. In one
repair to weld customers to your store. AD
month we sold 52,000 Civics, 12,000 Fits, and 38,000 Ac-
Game
Changers
12 international-brand cars and
their impact on the auto industry
Even with rising fuel economy standards, customers still demand
luxury, performance, and compelling design. International brands
are well situated to blend these attributes because they’ve been
doing it masterfully for decades.
With that in mind, AutoDealer has assembled its list of a
dozen models that have significantly impacted the U.S. auto
market over the past 40 years. Some models launched new
segments, while many influenced competitors and the industry
as a whole.
Holding the list to 12 meant some noteworthy models had
to be left out. Some of them are on the “honorable mention”
list. Also, this list focuses on passenger cars. The main dozen
are all still in production in some form. Most have sustained
success since their introductions, and all offer lessons in longterm relevance.
BY
>>
J I M KOSCS , AIA D A CONTRI B UTIN G E D ITOR
Game Changers
1968 TOYOTA COROLLA
1973 HONDA CIVIC
1976 Honda Accord
In the late 1960s, the
Volkswagen Beetle was the
top-selling small car, as well
as the top-selling international
vehicle, in the United States.
Many buyers, though, were
ready for a more modern and
conventional small car. Car
enthusiasts rightly point to the
Datsun 510 as a significant
model for its technically
sophisticated chassis and
performance potential. But the
Toyota Corolla had a far greater
influence on the general car
market—globally and in the
U.S.
The Corolla established
new standards for quality,
reliability, and value. It also
gave entry-level car buyers
the benefit of continuous
and rapid improvement. The
second-generation model
arrived in 1970 and became
the second-best-selling
international auto in the
U.S.; a larger 1.6-liter engine
came in 1971; and the thirdgeneration model arrived three
years later. In terms of sales,
only the Honda Civic has been
a consistent rival to the Corolla
in the U.S. The latest model,
introduced for 2009, is the 10
generation to carry this storied
nameplate.
Honda’s first economy car,
the tiny two-cylinder N600,
proved too small and too
slow for American drivers and
roads. Its successor, the 1973
Civic, was still very small at
just under 140 inches long.
Likewise, its 50 horsepower
1.2-liter four-cylinder engine
and 12-inch wheels seemed
undersized in a land where a
“midsize” car could weigh up
to two tons. But with its peppy
performance, nimble handling,
impressive quality, and
generous standard equipment,
the first Civic quickly won
fans. The Civic essentially
scaled up the pattern set
by the original British MINI
in 1960; a space-efficient
“two-box” design with a
transverse four-cylinder engine
and front-wheel drive. The
Civic’s 40 MPG highway fuel
economy helped cement the
car’s success when, in the fall
of 1973, war in the Middle
East triggered an oil embargo
against the United States.
“Essentially, the 1973
Civic helped redefine Honda
as a ‘car company’ to many
Americans,” said Honda/Acura
spokesman Chris Martin. In
1975, Civic sales topped
100,000 for the first time,
aided by a new station wagon
model.
The Civic’s success and
Honda’s reputation for building
high-quality economical small
cars paved the way for the
success of the first Accord. It
also was small, as a 2,000-lb.
front-wheel drive hatchback
with a 68-horsepower engine
and the length of the current
Honda Fit. But the Accord’s
combination of virtues,
including a sophisticated
chassis, made it a small
car people wanted to drive.
Standard equipment was far
more generous than the typical
domestic small car or compact
and included AM/FM stereo
radio, rear defroster, rear
wiper/washer, and a remote
hatch release. There was no
“stripper” model. A roomy,
comfortable interior with highquality materials added to the
Accord’s appeal.
The Accord’s original CVCC
engine, introduced in the
previous year’s Civic, met
emissions standards without
a catalytic converter, used
leaded or unleaded fuel, and
helped establish Honda’s
reputation for advanced yet
reliable engine technology. Two
years later, when an upscale
LX model was added, Accord
sales soared to 120,000.
Honorable Mentions
1970 Datsun 240Z: The first “Z” was not only a halo car for Datsun/Nissan,
but a flag bearer for the Japanese auto industry in general, strongly
signaling that it could build much more than economy cars.
1980
VOLKSWAGEN JETTA
It is difficult to find a list
of “most significant cars”
that does not include the
Volkswagen Golf, which was
introduced to the U.S. in
1975 as the Rabbit. But when
VW introduced the Jetta, a
sedan derived from the Rabbit,
the new model became the
brand’s most important car in
the U.S. market. The Rabbit/
Golf was a breakthrough
car for Volkswagen, which it
used to graduate from the
decades-old Beetle. Built
in Pennsylvania from 1978
through 1988, it was also the
first international vehicle mass
produced in the U.S.
However, American buyers
have long been fickle about
hatchbacks. Although based
on the same mechanical
package as the Rabbit, the
Jetta conveyed a more upscale
image, which propelled it
to success. The Jetta went
on to become the bestselling European nameplate
in the U.S. VW has fully
and consistently supported
Jetta’s upscale image with
performance and luxury
features generally not seen
in other compacts, a formula
successfully adopted by Mazda
for its Mazda3.
1971 Toyota Celica: The first international alternative to domestic
“ponycars,” the Celica was the forebearer of a wide range of sport coupes
that followed. Although discontinued, its basic concept continues in
Toyota’s Scion tC.
Game Changers
1982 BMW 3 SERIES
The BMW 2002 and its
immediate successor, the
1977 320i, were icons for
driving enthusiasts. But it
was the second-generation 3
Series—known as “E30” to
BMW buffs—that broadened
the car’s appeal and saw
the model bloom into a fullfledged car line that would
eventually account for nearly
half of the brand’s U.S. sales.
The E30 3 Series may have
ridden a 1980s wave of
“yuppie” demand, but this
model stood on its own merits.
It was the first 3 Series to
offer a six-cylinder engine in
the U.S. and the first to offer
a four-door sedan, convertible,
and all-wheel drive. BMW
expanded both luxury and
performance features in this
generation of the 3—including
the first M3 in 1989—making
it the de facto standard for
sport sedans.
“With the introduction
of the E30 we saw not only
driving enthusiasts, but also
the general public start to
recognize that fun to drive
and practical do not have to
be mutually exclusive,” said
Joe Wierda, BMW of North
America brand manager for
the 3 Series.
1985 Nissan Maxima
1986 Mercedes 300E
Before Nissan’s Infiniti
luxury division, there was the
Nissan Maxima, a car that
did much to inaugurate the
“near luxury” segment. Born
in the late 1970s as a deluxe
version rear-drive Datsun 810,
the Maxima became a distinct
model by 1982. It was the
1985 Maxima, however, that
drew the blueprint for nearluxury sedans that followed:
front-wheel drive, powerful V6
engine, plus all the luxuries
and technology the market
segment could bear. Despite
the first Maxima’s compact
dimensions, a 154-horsepower
V6 engine, roomy interior,
and a plethora of amenities
put this Nissan in a different
league than similar-size
sedans. Features like power
seats, power sunroof, available
leather, and a digital touch
entry system were more
in league with European
luxury models. Later models
in this generation offered
automatically-adjusting
and driver-adjustable shock
absorbers, technology not
widely seen until years
later. The first Maxima also
foreshadowed the luxury
and performance that
characterized top-range
midsize sedans years later.
Honorable Mentions
1982 Audi 5000: The 1982 Audi 5000 proved that an aerodynamically
efficient car need not look like a jellybean. Its influence was seen
throughout the industry for many years.
In the 1980s, the MercedesBenz S-Class was the zenith of
luxury, and the new, compact
190 gave Mercedes dealers a
true entry-luxury model. But
it was the middle child, the
all-new 300E, which made a
deeper impact in 1986 and
would also go on to give the
middle Mercedes series its
“E-Class” nomenclature. The
new “124” series E-Class
range was dynamic and sleek,
whereas its “123” predecessor
had been boxy and somewhat
dowdy.
The 300E was instantly
and overwhelmingly praised
by automotive media, some
of whom lauded it as the best
driving sedan in the world.
It was also a major hit with
customers and would soon be
joined by a coupe, wagon, and
convertible. The 1986 E-Class
introduced handling and safety
advances too numerous to list
here, along with the brand’s
first 4MATIC automotive
all-wheel drive system. The
first 300E set a high bar for
technical achievement and
driver satisfaction, leaving a
long-term impact on the auto
industry.
1986 Acura Legend
Honda beat fellow Japanese
carmakers to the luxury-brand
business with an entire new
division, Acura, including
two 1986 models—the small
Integra and the midsize
Legend. With a $20,000 base
price, the Legend offered
a roomier, more powerful
alternative to European
four-cylinder entry-luxury
models. Feature content
also set a higher standard
for perceived value. The
Legend garnered excellent
reviews, which, bolstered by
Honda’s established reputation
for quality and reliability,
assured early success. Acura
reinforced that reputation
by scoring highly in industry
quality surveys.
Acura spokesman Chris
Martin shed some historical
light on the Legend’s debut:
“Though some popular media
still expressed skepticism
about the viability of a
Japanese luxury brand, Motor
Trend disagreed, saying, ‘We
think the odds of Acura’s
success are heavily in Honda’s
favor, for the Legend is a
terrific debut automobile.’
From that point on, luxury
benchmarks would not
automatically carry a European
nameplate.”
1982 Volvo 242 Turbo: After decades selling safety, Volvo launched a
performance sedan and deftly taught the industry how to sell safety with
fun-to-drive attitude.
Game Changers
1990 Lexus LS 400
1992 Toyota Camry
Toyota and Nissan launched
their luxury brands for 1990,
and the top models from
both camps—Lexus LS 400
and Infiniti Q45—were
roomy, V8-powered, and
priced well under European
V8 sedans. Lexus’ offerings
were aimed at customers of
both European and domestic
luxury cars, whereas Infiniti
seemed to target BMWleaning buyers. Of the two,
the Lexus made a bigger
impact. With a $35,000
base price at launch, the
first LS 400’s performance,
luxury, feature content, and
quality set new standards and
brought a heightened sense of
competitiveness to the luxury
category. Silken ride quality,
standard V8 performance, and
meticulous attention to interior
detail firmly established the
Lexus credo. The LS would
go on to dominate the top
rankings in vehicle quality and
customer satisfaction surveys.
“The inspiration for
Lexus began with Toyota
Chairman Eiji Toyoda,” said
Lexus spokesperson Allison
Takahashi. “It was his vision,
and the fact that his name is
on the side of the building,
that breathed life into Lexus
and gave it a philosophical
direction.”
In 1983, Toyota replaced
the reliable but old-tech
Corona with the front-wheel
drive Camry, a modern
competitor to the Honda
Accord. Boosted by the
brand’s reputation for value
and quality, Camry found
quick success. Like the
Accord, the Camry would grow
with successive generations.
In 1992 its third generation
model the Camry beat the
Accord to meet the EPA’s
measurement for midsize
room. The move to midsize
extended the customer base,
and the Camry—offering fourcylinder and V6 models, plus a
wagon—became positioned to
target domestic stalwarts like
the Ford Taurus. Maintaining a
focus on retail sales supported
the vehicle’s high resale
value, which was a dwindling
attribute among domestic
models at the time. Following
a few aggressive sales battles
with Accord and Taurus in
the late 1990s, Taurus faded
and Camry went on to duke
it out with Accord. Today,
facing intense competition
in the midsize segment,
where an unprecedented 10
nameplates earn Consumer
Reports’ “recommended” tag,
the Camry remains the sales
leader.
Honorable Mentions
1987 Range Rover: The Range Rover had already been in production for
17 years when it debuted in the U.S. in 1987. Yet, despite its “old”
technology, this elegant Brit ignited the luxury SUV category.
1995 Subaru Outback
Subaru in the 1990s was
an all-wheel drive innovator,
but had a somewhat muddled
marketing message. A
breakthrough arrived in
1995—the Legacy Outback.
Billed as “The World’s First
Sport Utility Wagon,” the
Outback began as a cosmetic
treatment on the Legacy
wagon. A marketing campaign
anchored by “Crocodile
Dundee” movie actor Paul
Hogan situated Outback as a
kind of “anti-SUV,” a message
that resonated with outdoororiented customers. The
Outback thus played a crucial
link to the emergence of the
car-based crossover SUVs a
few years later.
“By identifying and
addressing several consumer
‘dissatisfiers’ associated with
traditional truck-based SUVs,
such as poor fuel economy,
handling, and value, the
Outback expanded the brand’s
appeal, positioning Subaru
for growth and leadership in
this new segment,” said Tim
Mahoney, senior vice president
and chief marketing officer,
Subaru of America.
Outback—now in its fourth
generation for 2010—remains
one of the brand’s best sellers.
2004 Toyota Prius
There may be no better
display of public acceptance
as when a product’s name
becomes synonymous with
its purpose. Say “Prius,” and
nobody has to ask if it’s a
hybrid. The first Prius arrived
in the U.S. in 2000 and met
quick acceptance with “green”
drivers, including Larry David
on the HBO television series
“Curb Your Enthusiasm.”
The second-generation Prius,
however, which arrived in
2004, had a far more powerful
impact. Much credit goes to
its model-exclusive design,
which flaunted the driver’s
“green” leanings. The secondgeneration Prius was also a
more practical and betterdriving vehicle than the
first, expanding its appeal.
It was named Motor Trend
Magazine’s Car of the Year in
2004, and a recommendation
from Consumer Reports
helped erase any reservations
about its complex gas/
electric hybrid powertrain.
Perhaps most telling of this
model’s ongoing influence and
success is that the Prius now
outsells a number of popular
conventional midsize sedans.
1996 Toyota RAV4: Other compact crossover-type SUVs (Honda CR-V
and Subaru Forester) were on the immediate horizon, but the RAV4
arrived first to launch what would become a huge vehicle category,
spanning several segments.
advertisement
n eI rn svpooltvl e
ig
D epaalret r
mhetn t
Dealership Discovers New Tool for Saving Money
R
andy Maca, Parts and
Service Director for
Autobarn VW, Mazda
& Subaru of Countryside, one of the largest
dealerships in the Chicago area, has
a new tool that makes saving money
for the dealership as easy as writing a
repair order—the Automated Rental
Management System (ARMS®) application from Enterprise Rent-A-Car.
Available at No Charge
Available to dealerships at no
charge, the ARMS® application creates
seamless electronic communications
between service advisors and Enterprise. Service advisors are able to create
an electronic purchase order for a
rental car at the same time they are initiating a repair order for service, which
helps to significantly reduce errors and
avoid unnecessary delays. “Combined with our dealer management system, the ARMS® application helps us better analyze and manage the rental process on every level.
Saving money for your
dealership is as easy as
writing a repair order with
the ARMS application.
And, our service department saves
money by better managing the number
of authorized rental days,” said Maca.
“We know exactly what the car rental
cost will be for every customer, every
time.”
Enhance Customer Service
According to Maca, his customers’
service experience is also enhanced.
“Because all of the renter’s informa-
The ARMS® Application from Enterprise Rent-A-Car
The ARMS application helps service departments save money by better managing the
rental process.
tion, along with the number of days
authorized, is sent to Enterprise electronically, the rental car is ready when
the customer arrives for the service
appointment. With nearly 300 customers each month renting a service loaner
vehicle, customer satisfaction is a high
priority.”
One of the ARMS® application features that Maca finds most useful is the
“notes” section that enables the service
advisors to easily customize information about an individual customer’s
situation, which is communicated
directly to Enterprise.
Easy to Learn
Learning to use the ARMS® application was fast and easy for the
10-member Autobarn service team—
even for those who do not consider
themselves to be computer savvy. In
addition to personally training each
member of the Autobarn service team,
the local Enterprise office is available
for questions or to provide ongoing
assistance.
Save Time
“The best thing is that instead of
spending hours matching purchase
orders and repair orders with work
orders, I have more time to manage
the service department. It adds up to
saving me the equivalent of a couple
days each month and that makes a big
difference to my bottom line,” said
Maca, who has been using the ARMS®
application for about five months. “My
job is a lot less stressful thanks to this
simple-to-use tool.”
For more information or to arrange
a demonstration of the ARMS® application, please go to www.ARMSDealership.com or e-mail ARMSDealership@
erac.com. AD
dealer spotlight
Dealers Check In
Kent P. Stevinson
Stevinson Automotive
Frederick, Colo.
Kent Stevinson’s first “official” dealership job entailed sweeping the lot of his father, Chuck Stevinson’s auto dealership at
the age of eight. Today, he is president of Stevinson Automotive. Together, his dealerships have been recognized with the
Toyota President’s Award on 11 occasions, the Elite of Lexus
award 15 times, the Toyota Board of Governor’s Award three
times. He also received the Time Magazine Quality Dealer
Award in 2000.
Over your career, what manufacturers have most impressed
you, and why?
Toyota is certainly a manufacturer
that we respect and admire, for many
reasons. Chief among them is Toyota’s
amazing commitment to continual improvement. They are probably the most
consistent brand I know of, and are
very, very focused on what they want
to achieve.
We genuinely admire Lexus for their
product quality, and for their ability
to enter and compete in a market once
dominated by European brands. I think
the level of success Lexus has achieved
in just 20 years is nothing short of
remarkable, and a strong testament
to the quality and value of the Lexus
brand.
I admire Porsche for their design
and engineering excellence, and for
having such an intimate understanding
of their customer. The bond between
Porsche and its customer is unlike any
other I’ve seen in the automotive business. I think Porsche is certainly one of
the first and finest automotive “passion
brands” I know of.
And I admire Jaguar for their perseverance. We’ve been in the Jaguar business for over 35 years. Through good
times and bad, Jaguar keeps going. Under their new ownership, this perseverance is now responsible for some of the
best products Jaguar has ever brought
to market, with more on the way.
What is the smartest choice
you have made as a dealer?
Taking the gamble on Lexus. I was
32 years old when we committed to
become one of the original dealers.
We invested $5.5 million dollars on a
new facility—that was a lot of money
in 1988—on a Japanese luxury brand
that no one was sure the public would
embrace. Today, Lexus is a remarkably
successful brand. But when Toyota
first envisioned building a luxury automobile capable of competing with
Mercedes, BMW, and Jaguar, there were
many industry pundits who were certain they’d fail.
When did you first get involved
with AIADA and why?
We joined AIADA in 1975, primarily because we recognized the need
for international dealers to have an
organized voice within our own industry and in Washington. I realized
how truly important AIADA was to
our future success when the Clinton
administration attempted to limit the
importation of luxury automobiles to
the United States. Had it not been for
the supremely coordinated response of
AIADA and its members, I can’t image
where we might be as a business today.
What is one thing you wish
lawmakers knew about your
dealership?
I wish all lawmakers really understood how inextricably linked the automotive industry is to the economic
fabric of our nation. Our industry has
an immeasurable economic impact
at every level, right down to the local
community. When dealerships close,
jobs are lost and the local community
suffers. It’s only after a dealership is
gone when people begin to understand
how much the dealer was investing in
the local economy. Sadly, we’ve witnessed this first-hand here in Colorado.
dealer spotlight
Valery Voyles
Ed Voyles Automotive Group
Marietta, Ga.
As president and CEO of Ed Voyles Automotive Group in the greater
Atlanta area, Valery Voyles oversees five dealerships, including four
international franchises – Honda, Hyundai, Kia, and Acura. Running the
dealership is a family affair, one that she and her brothers, who act as
vice presidents in the company, inherited from their late father. Ed Voyles
Honda has received Honda’s President’s Award four times, while Ed
Voyles Acura has been recognized with the Precision Team Award—
accolades which are reserved for the top 15 percent of dealers nationwide.
How are you using technology
to improve your business?
We have a strong Internet presence
and we have a dedicated Internet Sales
Department at each of our stores. We
are constantly updating and upgrading
our Web sites. We are in the process
of upgrading our phone system and
we had a software upgrade two years
ago. Both our sales and service departments are required to keep current on
any new technological advances (Bluetooth, MP3 Players, iPods, etc.) that
may be incorporated into any of our
vehicle lineups.
How have you dealt with the
economic slow-down?
We have always operated our organization on a much “leaner” basis than
most others in this industry. We have
never really been the type to spend
money because we make money. My
dad was extremely frugal and we
have tried to run our business
in the most economic way possible. We did make adjustments
to our expense levels in all areas of dealership operations. As
our unit sales declined in 2008
into 2009, we have continued to
make certain our operations are
“right sized” while maintaining a strong focus
on taking care of our
customers and employees. We understand that
recessions do not last forever and we
are well positioned to take advantage of
a recovering industry.
What methods do you use to
attract and retain the best
employees?
Fortunately, we have a wonderful
group of individuals that work for us
and have been with us for a number
of years. My dad believed that in order
to provide good customer service, you
must start with happy employees, and
we have strived to make our dealerships a great place to work. Compared
to most in our industry, we do not have
a high turn-over rate. I have General
Managers that have worked for me for
15 plus years. Some of my sales associates and technicians have been with us
for 20 plus years, which is a testament
to the environment our leadership
provides.
How are you active in
your local community?
We are very active in our
local community. We partner with the United Way
campaign each year and we
work with the American Red
Cross and Salvation Army
as well. In 2007, the
Voyles Family was
honored by the
March of Dimes for
our commitment to
not only the March
of Dimes, but to the community. With
donations from my parents prior to
their deaths, St. Joseph’s hospital was
able to open the Ed and Dora Voyles
Breast Cancer Center. My father was
actively involved with the Shepherd
Center and I currently serve on their
Advisory Board. In addition, I serve
on the Advisory Circle for the Cobb
Energy Performing Arts Centre, and I
am a Special Appointee on the Cobb
Chamber Board of Directors. I also
serve on Boards for the Georgia Cancer Foundation, the Wellness Center,
and Cumberland Academy. Our most
recent activity with community is the
Teacher of the Year initiative which
we started with the Cobb Chamber of
Commerce two years ago. For the Cobb
County and Marietta City School districts Teachers of the Year, we provide
them with a free vehicle for a year.
What is your personal
“dream car”?
My personal dream car is a 1972
Oldsmobile 442 Convertible, which
probably sounds like an odd choice.
My dad had an Oldsmobile franchise
and we had lots of them on the lot. Of
course, I was not old enough to drive
yet and when I was old enough to
drive, they were no longer in production so I always wanted one for that
reason.
dealer spotlight
Mark Politte
Stanley Subaru
Trenton, Maine
Mark Politte joined the automotive world in 1994, working for Ford. In
2005, he purchased his own dealership, Stanley Subaru, which has received Subaru’s President’s Award two of the past four years. The dealership participates in several community events and in the last five years
has actively supported over 20 local charities through hours, financial
support, goods, and services—work he says is critical to Stanley Subaru’s
long term success in its small community.
Who or what first got you into
the auto retail business?
In my various jobs with Ford I spent
time in more than 400 dealerships
across the country. The passion and
willingness of many dealers to share
experiences is what solidified my desire
to own my own store. My father-inlaw, Dick Stanley, gave me the courage
to take the leap. After a 32 year career
with GM he opened Stanley Subaru in
1999. I was in Maine visiting him on
the day the first truckload of Subarus
arrived. I enjoyed it so much that I
spent every vacation after that at the
dealership working until 2004, when
he decided he was ready to retire and
asked me to buy the store. I was excited
and appreciated the opportunity, but
explained to him that I didn’t have the
money, to which we replied, “You’re a
smart kid. You will figure it out.” Six
months later, I had sold my house and
successfully begged, borrowed, and
stole from every bank that would listen
to be able to purchase the dealership
outright. Thankfully, the credit market
was dramatically different and banks
were happy to lend.
The leap from my comfy corporate
job to full blown ownership was a dramatic change and there were several
times early on that I cursed the guys
above for not teaching me enough. The
reality is they all gave me the support
I needed, especially my father-in-law.
The most important thing they taught
me was there are some lessons you just
have to learn for yourself.
How has the recent restructuring of the automotive industry
changed the way you do
business?
Changes in the auto industry
haven’t changed how we do business,
but it has changed the conversations
on the showroom floor. Shoppers are
looking for reasons to buy beyond the
product. Styling, capacity, and fuel
economy are all important, but buyers want to have a reason to feel good
about the company that provides that
product. Fortunately for us, Subaru has
a great story to tell.
How are you using technology
to improve your business?
We embrace changes in technology
and work to incorporate them into
our processes. One area technology
has helped us change dramatically is in
how we communicate with guests. You
have to be able to customize how you
communicate with guests and tailor
it to meet their needs. We will communicate with you any way you wish.
Whether it is a traditional letter, an
e-mail, a cell phone, a text message, or
through social media sites, we have the
bases covered.
employees?
I don’t worry about attracting the
best employees as much as making the
employees I have be the best they can
be. We invest in our people and provide them with an environment that
lets them leverage their talents, rewarding them for achievements. If you
believe in the people you have, express
your confidence, continuously train
them to keep their skills sharp, and enable them to leverage their talents, the
retention takes care of itself.
What was your most
memorable sale?
I sold my father a new Subaru. He’s
not a new car buyer and it took me
three years to convince him. I never
worked so hard for a sale.
What is your personal
“dream car”?
I have a couple. A 1987 Land Rover
Defender 90, and 1989 Porsche 911
Cabriolet.
dealer spotlight
Dennis Hardin
Hardin Honda
Anaheim, Calif.
A graduate of USC, Dennis Hardin spent several years working for a large
accounting firm before taking over his father’s dealership in 1973, where
he has remained ever since. Dennis currently serves on the Board of
Directors of the Orange County Council of the Boy Scouts of America, in
addition to his previous service on community boards and commissions.
His dealership has received the Honda President’s Award, Hyundai Southern California Sales Leader Award, and the Time Quality Dealer Award.
In August, Dennis hosted his Congressman, Ed Royce, for a tour of his
dealership and a visit with his employees as part of AIADA’s Dealer Visit
Program.
Who or what first got you into
the auto retail business?
My father was a junior partner in an
Oldsmobile-Nash dealership in South
Gate, California when I was born in
1947. I had planned a career in public
accounting, and after graduating from
USC, I went to work for Arthur Andersen & Co in downtown Los Angeles
in the commercial audit department,
specializing in aerospace manufacturing, retail, and health care. When my
father called one day to tell me that he
was considering getting out of the car
business, and to impress on me that if I
had any intention of changing careers,
this was the time, my wife and I talked
it over that same night. We liked the
idea of being in business for ourselves,
so I called my father the next day and
told him I had decided to join him. My
father and I were partners for 33 years,
until he passed away in 2002.
How have you dealt with the
economic slow-down?
With the slowdown of new car sales,
we are paying more attention to both
used cars and service. We are also focusing more on growth franchises such
as Hyundai and redirecting our financial and personnel resources to these
dealerships, in which the return on
investment is now greater. We are seeking to outperform our competitors so
that when future desirable franchises
become available, we will be among the
first to be considered.
employees?
Since compensation in any economic climate must be competitive
and performance based, we remain
prepared to pay top dollar to attract the
best employees. We offer our top performers the most desirable franchises
with the greatest potential for growth
and try to identify those whose talents
and skills can be further developed. We
look for people who are not afraid of
hard work and who are willing to take
some risks. Our policy is to continually
expand, thus creating new opportunities to attract and retain the best employees.
We are closely connected to our local
communities because we provide both
employment and services for many
members of our communities.
What is your most
memorable sale?
The first energy crisis hit Hardin
Oldsmobile hard in August of 1974.
Oldsmobile was strongly associated
with large, low-fuel-economy cars, and
our sales plummeted from 70 cars per
month in August to 12 in September.
The Honda Civic had just been introduced, but we were only receiving four
or five per month. Thus, we went for
days without an “up.” Under these dire
circumstances, the bishop of our congregation walked into the showroom
When did you first get involved
with AIADA and why?
As GM declined and Honda began
to gain market share back in the ‘90s,
it became apparent that our primary
interests should be with brands outside
the U.S. Our political interests with
Honda were different from those we
had had with GM, and we have found
that AIADA has represented our interests well.
What is one thing you wish
lawmakers knew about your
dealership?
I would hope that lawmakers would
better understand that car dealers are
independent businessmen whose interests differ from those of manufacturers.
and bought the largest (Oldsmobile
98) car we had off the showroom floor.
This sale restored my confidence that
these hard times would pass, and they
did.
2009: A Look Back
2009 Chairman
Russ Darrow
January 20: Fiat and Chrysler
strike a deal giving the Italian
manufacturer a 35 percent
stake in exchange for access
to technology and overseas
markets.
January 26: Dealers and
industry leaders gather in New
Orleans for AIADA’s 39th Annual
Meeting and Luncheon. The
Chairman’s gavel is handed
from 2008 Chairman Jim
Hudson of South Carolina to
2009 Chairman Russ Darrow of
Wisconsin.
January 31: International auto
sales are down 26 percent from
January 2008.
February 17: GM and Chrysler
request nearly $22 billion in
U.S. government loans.
March 17: H.R. 1550, the
Consumer Assistance to
Recycle and Save Act of 2009,
is introduced by Rep. Betty
Sutton (D-Ohio) and calls for the
creation of a federal Cash for
Clunkers program. The original
bill includes a condition that
only American-made vehicles
would be eligible for the
program.
Tana Motors
Nano
Honda Accord
U.S. jobs, and gives the U.S.
government majority control of
the automaker.
April 30: Chrysler files for
bankruptcy protection.
April 30: The Honda Accord
overtakes the Ford F Series
Pickup Truck as the top selling
vehicle in the U.S. market for
the first time in 2009.
May 13–14: More than 200
international nameplate dealers
gather in Washington, D.C.. to
lobby Congress and discuss the
state of the industry at AIADA’s
3rd Annual International Auto
Summit.
May 15: GM and Chrysler
announce they will close
hundreds of dealerships across
the country.
May 21: S. 1135, the Drive
America Forward Act of 2009,
is introduced in the Senate
by Sen. Debbie Stabenow
(D-Mich.) to create a federal
Cash for Clunkers program.
Rep. Sutton introduces a new
version of her own Cash for
Clunkers legislation in the House
that does not include a “Buy
American” provision.
March 23: Tata
Motors launches the
Nano, slated to be
the world’s cheapest
car at less than
$2,000.
June 9: H.R. 2751, the
Consumer Assistance to Recycle
and Save Act (CARS), is passed
by the House by a vote of 298
–119.
April 27: GM
presents its
reorganization plan, which
slashes debts, cuts 21,000-plus
June 18: After intense lobbying
by AIADA and other dealer
groups, the Senate approves
Cash for Clunkers legislation,
AIADA’s 3rd Annual
International Auto Summit
which is then sent to the
President’s desk.
June 24: President Barack
Obama signs the CARS Act of
2009 into law.
July 17: Dealers began receiving
CARS program registration codes
and information from NHTSA.
July 24: At approximately 7 a.m.
EDT, NHTSA announced its final
rules and the CARS program
officially opened.
July 31: In response to data
showing that the original $1
billion appropriated for the
CARS program was nearly
exhausted, the House approved
legislation by a vote of 316–
109 to extend the program with
an additional $2 billion.
August 6: By a vote of 60–37,
the Senate approves the $2
billion CARS program funding
extension.
August 24: At 8 p.m. EDT, the
CARS program officially ends.
The program is credited with
helping U.S auto sales exceed
1.2 million during the month of
August.
August 31: Thanks to the
CARS program, U.S. auto
sales were up 9.4 percent over
August 2008. Eight of the
federal program’s top sellers are
international makes. Overall,
international nameplates occupy
seven of the top ten slots for the
month.
September 30: Reflecting the
post-Cash for Clunkers fall out,
September auto sales drop 41
percent from August.
October 28: Ford picks China’s
Geely as preferred bidder for its
Volvo Cars unit.
October 31: Dealers across the
country breathed a sigh of relief
as auto sales begin to stabilize,
remaining unchanged from
October 2008 figures.
November 30: The auto market
showed signs of further stability
as sales numbers reflected
consistency with November
2008 figures.
December 31: International
brands finish the year having led
domestic brands in market share
by an average of 11.2 percent
during each month of 2009.
Cash for Clunkers
Get the Most Out of Your Membership!
Save on motor oil & lubricants, logo’d
apparel, lighting, credit card processing,
and more!
We leverage the buying power
of over 10,000 franchises to offer
exclusive products and services
—all focused on driving value for
your business.
Transparent pricing, unbeatable
coverage, and service from the
best-in-class providers!
Free best-practices training that will save
you time and money!
Unique member benefits from partners
you may already use!
START SAVING TODAY!
Take advantage of our premium Affinity Partner offers.
Visit www.aiada.org/memberbenefits or call 1-800-GO-AIADA

Smaller Is Bigger - American International Automobile Dealers

Transcription

Similar documents

More Information

Honda CB450 Restoration

BF250 (250hp Outboard)

HELP THEM HELP YOU! - American International Automobile

EU7000is - K2 Development Technologies

UMK425 Bike Handle - Honda Power Equipment

Window Sticker

MADE IN THE USA - Saylor

SHADOW AERO 2009