Earlier this week, one of our Best and Brightest wondered how Chrysler and GM’s collapse into receivership would affect minority dealers. He wondered if political correctness would color the Presidential Task Force on Automobiles decisions about which dealers get the axe and which don’t. Ford is proactively addressing the issue by launching a new program that allows roughly a quarter of its minority-owned dealers to buy their store from Ford for a $1. For some reason, the Detroit Free Press fails to mention the amount of money Ford has invested in these dealers. Anyway, in a letter to the 64 eligible minority dealerships (out of 255 Ford Motor Minority Dealers Association members), FoMoCo says the “I’ll buy that for a dollar!” deal’s only good “if you are able to provide adequate operating capital at the time of the buy-out.” Good luck with that. On the other hand, the offer expires September 30. A LOT’s going to happen between now and then: cash for clunkers, GM’s C11, Chrysler’s dissolution, etc. A smart man might have a weapon under there. If he did I’d have to pin his head to the panel. I mean, a smart man would wait to see how this plays out before signing anything.

According to Frank Herbert, fear is the mind killer. Well, it’s certainly a sales killer. And now that Hyundai’s cut through the FUD to rack up some U.S. sales with its CYA buyer protection, we’re witnessing an international outbreak of MSMD (monkey see, monkey do). Stateside, Ford has lost—I mean launched its Advantage Program. GM offers customers Total Confidence (as if). And now, from the Land of Hope and Glory, Autocar reports that Volvo and Honda will pay for British buyers’ wheels for one year should they get the boot. Of course, to qualify, you have to employed first, then buy the car, then become unemployed. Kinda like betting against yourself. Anyway, if it’s a Honda, you need to be on the dole for at least three months before you get your car payment relief. If it’s a Volvo, we’re only talking about the C30, S40 and V50 models. In both cases, future deadbeats have to finance through the cars’ respective in-house lenders. Look for Honda USA to implement the plan here STAT. Meanwhile, why do I get the feeling that all these programs are opening the door to some serious fraud?

One of our moles has emailed ALL the dealer paperwork on GM’s Total Confidence program. Blogger, editorialist and aspiring car reviewer (knees must) that I am, I shall leave it to you, our Best and Brightest, to dissect the offer and how GM dealers might sell the plan (or simply give up and sign the opt-out sheet). Michael Karesh, former TTAC partner and ongoing TrueDelta operator, has done some stellar work uncovering the flaws in the residual guarantee part of the Total Confidence program. If you want the inside skinny via Michael’s Delta force, click here. If you want the read the real deal, jump.

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If an automaker shuts down one of its New Hampshire dealerships, it is currently required by law to buy back inventory and parts. Fair enough, right? Well, the AP (via Forbes) reports that New Hampshire’s senate is considering a “dealer bill of rights” that would force OEMs to buy back stock and parts even if the local dealership goes under voluntarily. Local lobbyists say 14 dealers failed in 2008, and many weren’t provided fair compensation by their respective manufacturers. The Alliance of Auto Manufacturers claims to support buybacks for voluntary closures in principle, but says the bill’s language leaves it open to abuse. The AAM also charges that the bill would require manufacturers to pay for renovations done 15 years prior to closing, a protection that exceeds those of any other state. The bill also prohibits franchise agreements which limit the dealer’s legal recourse, gives the manufacturer the option to buy the dealership, inequally distribute or price vehicles between the state’s co-franchisees, or coerce the dealer to buy a certain vehicle model in order to gain access to another model. Numerous other protections for dealers fill out the comprehensive bill, which dealers and legislators say is necessary in the curent auto market.

Many a member of TTAC’s Best and Brightest have publicly pined for the day when they can order their new car over the internet, bypassing those son of a bitch bastard dealers [not paraphrasing]. Our contacts within the Chrysler Listens consumer advocate board report that the three-headed marketing mavens are sounding out the possibility of losing all those pesky middle men and women eating into their [theoretical] profit. Not one, not two, but three polls sound out the possibility of online ordering or, to use their phrase, “reservation.”

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Bloomberg (and a lot of other good-news-hungry outlets) are reporting that a recent surge in used car prices indicates that new car sales may soon rise. The theory: a falling supply of used cars and a glut of new cars will lead buyers back to the new car F&I guy. Of course, that assumes that there’s a falling supply of used cars. For that assumption, the MSM turns to . . . new car dealers: “A survey by Wachovia Securities analyst Rich Kwas showed that 42 percent of dealers report ‘too little’ used-car inventory.” Yes, well, they would do, wouldn’t they? As new car sales plummet, franchised dealers’ supply of used trade-ins declines by, oh, roughly the same amount. Or more. 

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Good news, everyone! A finance company whose risky investments in auto and real estate loans required it to beg for $6B in bailout cash is at the ready to teach you the secrets of smart financial planning. According to a release at PR Newswire, GMAC “has bolstered its effort to provide consumers with personal finance education with a $20,000 grant to InCharge® Education Foundation, Inc. (ICEF). The funding will be used to co-sponsor a series of financial literacy courses throughout the country in 2009. The courses, named ‘Smart Edge by GMAC,’ are designed to help people make better financial decisions by providing them with information about budgeting, real estate and automotive finance, insurance, credit reports, credit scoring, and other tools.” Lesson number one? Pay your CEO $11.6M even if you’ve been bleeding red ink all year. Lesson number two? Savagely screw over the people your business relies on.

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Regular readers of this site know that I’m math challenged. To paraphrase Blanche Dubois (tragic heroine, not TV psychic), I have always depended on the calculations of strangers. Which is one reason I NEVER sign ANYTHING at a dealership without having my good friend Steven Lang give it the once over. Of course, that’s looking at the car sales paperwork from the customer side. Pity the poor Chevrolet dealer. Given the farrago of sales incentives, discounts, cash-back deals, financing offers, etc. how do they set a price? Seriously. Even a dealer who wants to give his customer the best possible deal has the devil’s own time establishing what that actually means. Check out this Top Secret(ish) Powerpointery and tell me that Roger Smith’s no-haggle Saturnalia wasn’t the way forward. Oh well, too late now. And, as we reported last night, there’s more post-bailout deals a brewin’. Good luck with that. [Thanks to you know who you are.]

Credit Suisse First Boston (CSFB) has had a look at Chrysler, Ford and GM inventories vs. the Seasonally Adjusted Annual Rate of Sales (a.k.a. SAAR), and it’s even uglier than we thought. Given that The Big 2.8 have already cut WAY back on production AND increased incentives, it seems that the US new car market is suffering from the worst case of constipation since WWII. CSFB’s analysis gives us further reason to doubt GM’s motives in declaring a 45 percent production increase for the second quarter of ’09. Whatever the reasoning behind GM’s announcement, it has nothing to do with market reality. These numbers also cast the chortling IHS Global Insight analyst—who bashed Honda for its inventory problems—in a slightly different light. But I’ll save those bon mots for after the data dump . . .

* Big 3 inventories fell by about 3% from Jan to Feb, compared to the normal seasonal increase of about 2.5%. Despite the favorable move in absolute stocks, the overstocked level worsened, owing to a dismal sales level that lowered our estimate of the number of vehicles dealers should be holding.

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GM intends on increasing vehicle production in the second financial quarter, from 380k to 550k. I know: it’s a major WTF moment. There is no evidence whatsoever that the U.S. new car market is headed for recovery. If anything, the opposite is true, what with home foreclosures and unemployment rising like steam from a New York City manhole. Not to mention the headline of The Detroit News story wherein this information resides: “GM Dealers Balk at Ordering New Vehicles.” The article reports that GM’s orphaned HUMMER, Saturn and Saab dealers aren’t ordering any more vehicles (duh), and current inventory levels at the other stores are, to use the old Bentley power output description, “adequate.” No wonder GM spokesman Chris Lee said “that [production] number could be adjusted.” Still, you’d kind of hope GM PR could do better than that, what with more than a decade of spinning bad news into gold (for the executives anyway). And so they do . . .

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Or die trying given the late unpleasantness of all things economic. But the model that Euroda, a group of 4,000 Opel/Vauxhall dealers, is attempting is innovative enough to attract some attention. Under the arrangement, member dealers would donate €150 per vehicle sold over the next three years. Euroda would use the estimated €400m to buy a minority stake in Opel/Vauxhall, which cannot secure support from European governments without better long-term viability plans. Euroda seems to be acknowledging the symbolic nature of the effort, telling Automotive News [sub] that even taking a minority stake sends “a clear signal of support” to the government, worker and customer stakeholders.

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U.S. News and World Report is reporting to the world the news that US car dealers are working a new angle: buy one, get one free (BOGOF). OK, a buck.

Seattle NBC-affiliate KING5 reports on one such offer from Washington’s Bill Pierre Ford. “General manger Curt Bush dreamed up the unique promotion. If you buy a super duty truck at a sticker price of $50,000, you get a Ford Focus for $1.” If the Fords don’t interest you, Pierre’s dealership network is doing the same thing with Chevrolet products. “On Pierre’s Chevy lot next door, you can buy a Tahoe and get an Aveo for $1.”

But the tactic is not unique to Washington state. Reno, Nevada CBS-affiliate  KTVN found a similar offer in their area. “At Reno Mazda-Kia, if you buy a 2008 Sorrento at full price, you can get a Spectra for $1,” they report. “The price tag for the Sorrento is about $28,000.”

We’ve seen similar reports elsewhere: Buy-one-get-one-free Dodge Rams in Florida, for instance, or an Illinois deal offering a Chrysler PT Cruiser for $1 when you buy a Chrysler Pacifica at full price.

Gee! They’re giving them away! Well, obviously not.

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Germany’s Lidl chain of low-cost grocery stores has begun selling Opel Corsas and VW Polo Crosses online, reports The Age. In partnership with German distributor ATG-Automobile, Lidl is selling the subcompact commuters at about 25 percent below the suggested retail price (11K euros for the Corsa, 14K euros for the VW), offering Germans a new, low-cost way to cash in on Germany’s clunker-culling measure. Some argue that the online sales approach has been tried without success, as Germans prefer to do business with a dealership. “I think it will be very difficult for Lidl,” says Ferdinand Dudenhoeffer of Gelsenkirchen’s Center for Automotive Research. “People don’t want to buy high-value products from a discount grocery store.” Noting that Quelle, a German online marketplace, tried to sell cars online about five years ago, Dudenhoeffer says “it didn’t work, even though their site was visited fairly heavily.” As the automotive industry reinvents itself, however, OEMs will look to every possible sales outlet, transforming the dealer-only approach that has defined the business for years. Whether this approach pays off remains to be seen.

Less than sixty days ago, I wrote about my brother’s seemingly quixotic quest to purchase a year-old Pontiac G8 at something less than sticker price. Time after time, he’d been placed on endless hold, denied test drives, and generally treated with the type of courtesy normally reserved for guest stars of “To Catch a Predator.” After more than ninety days of intermittent searching, the best price we’d been able to find was a sorta-invoice deal from a dealer in Texas, more than a thousand miles away. Did I mention his trade-in? It was a 63k-mile Mazda RX-8 which was on its second rotary engine thanks to an autocross motor implosion and which also featured a fascinating array of scratches, rocker-panel dents, and impact-wrench-installed suspension upgrades.

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