About two months ago, we heard that Chrysler’s “prototype” Motor Village dealership in the Los Angeles area had been hit with a complaint [PDF] from the California New Car Dealer’s association, arguing that it violated state laws against manufacturer-owned dealerships. The store, a test bed for what Chrysler terms “new retail concepts,” is in fact a partnership between Chrysler and LaBrea ChryslerJeep, making it appear to fit a legal loophole allowing OEM partnerships in retail ventures. But the CNCDA argues that Chrysler is undercharging for rent on the dealership building which it owns, and according to Automotive News [sub], the California Department of Motor Vehicle’s New Motor Vehicle Board just voted unanimously to open a formal investigation into the situation. And the stakes couldn’t be much higher, as AN reports:

If the DMV finds that Chrysler violated state law, the automaker could have its business license in California suspended or revoked.

Ruh-Roh!

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Speaking at Nissan’s Smyrna, TN electric car factory, Transportation Secretary Ray LaHood noted that his staff is working with Congress to make federal tax credits for plug-in car purchases available as a rebate on the dealer level, saying

We’d like for people to get a $7,500 rebate on the day they buy the Leaf. We’re doing a lot of talking about it. When you give people that incentive to buy a battery-powered car, they’ll do it. We know these incentives help.

Speaking to Automotive News [sub], LaHood even went as far as to argue that the new direction for the tax credits, which were previously only claimable when filing taxes, would be successful for the reason that it would make the credits more like the Cash For Clunkers program. Apparently LaHood has completely forgotten how riddled with waste, inefficiency, fraud, confusion, delays, unintended consequences and all-purpose madness that program was. And that’s just scraping the surface. Foolish as it is to subsidize vehicles during the “fleecing the early adopters” phase of a new technology rollout (perhaps we should be saving stimulus for the inevitable “trough of disappointment”?), making those credits available at the dealer level is even worse, increasing the hype and incurring C4C-like downsides along the way.

Ford’s arduous Lincoln turnaround is having another one of those awkward moments, as Ford and its dealers seem to once again be at odds about how to go about fixing Lincoln. And though it’s tough to tell what exactly is going on in Ford’s fandango with Lincoln dealers, it’s easy to see that it ain’t good. For starters, last week, Automotive News [sub] ran a blog item that noted

In just a few weeks, a group of Lincoln dealers will converge on Detroit for an invitation-only brand meeting with Ford Motor Co.

Mark Fields, Ford’s president of the Americas, promises that the meeting in early June will spell out some specifics about Ford’s plan to reignite its luxury brand.

But some dealers have put their invitations in the round file.

One says he won’t “waste” his money on airfare, adding that when Ford has “actual future product to show us, then I’ll go meet with them.”

One Lincoln dealer with a stand-alone store did not get an invitation, but he doesn’t care.

So, clearly things don’t sound happy in Lincoln Land. And what does Ford have to say to the non-attending and uninvited dealers? Ford’s Alan Mulally personally delivered a response the next day at Ford’s annual shareholder’s meeting…

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Detroit’s brand managers, particularly those at the resurgent premium and luxury brands, have made West Coast sales a high priority as they seek to bring new buyers into once-moribund brands like Buick and Cadillac. California, in particular, is a huge market for luxury and premium cars, and it’s generally an edgier, more youthful market that has long shunned domestic offerings. Everything from “lifestyle events” to no-cost hybrid drivetrain options on Lincoln MKZ have been introduced in an effort to get California’s copious yuppie population interested in Detroit luxury, but the results just haven’t shown up yet. According to Ford’s Mark “MKF” Fields [via AN [sub]], only about 25% of MKZ buyers were tempted by the free-hybrid deal in March, and meanwhile, the San Francisco Chronicle reports that the Golden Gate City has just lost its final domestic auto dealership, a Ford/Lincoln store. Detroit may be California dreaming, but the Buicks and Lincolns of the world are still a long way from gaining ground in the West Coast.

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Saab has started paying suppliers again (although production hasn’t restarted yet), and CEO Victor Muller is once again all popped-collar confidence as he dismisses the “speed bump” that he blames on negative publicity. But behind Mueller’s yacht-club breeziness and talk of “true Saabs,” major changes are afoot in Saab’s business model. Saab’s deal with Hawtai, the product of a desperate search for support in the midst of a liquidity crisis, has changed how Muller sees the global car business, and as a result he’s shopping what may be Saab’s last meaningful asset: Western dealerships. Muller explains his thinking to Automotive News [sub]

We laughed when the Japanese came. We laughed when the Koreans came. But we will not be laughing when the Chinese come. The Chinese are like a steamroller. It took 67 years to build up our dealer network. It is the biggest asset not on our asset sheet, and these guys buy into it for free. If they make the proper cars, can you image how much simpler it will be to push product through the distribution network that is already there? It is like a railway network that is already there.

Bertel and I have a running bet about whether the first actual Chinese import to the US (not a converted glider) will be a Chinese brand or one of the western brands… but it’s not much of a bet because neither of us can ever commit to picking one brand that seems most likely to bust America’s Chinese car cherry, and our “bets” change on a weekly basis. In any case, though, think it’s safe to say that neither of us saw Saab as playing much of a role in any of the scenarios we’ve discussed.

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Electronics retailer Best Buy raised a few eyebrows when it began selling Brammo electric motorcycles alongside its flatscreens and Xboxes a few years back. Two years after that agreement was announced, however, Brammos are sold at only three West Coats Best Buys (one here in Portland, OR, two in California) and Brammo is expanding its own dealership network independently of the big box chain. Was Best Buy’s Brammo experiment a disappointment? If so, it’s not stopping the retailer from pursuing other electric vehicle opportunities, as Best Buy’s mobility and transportation honcho Chad Bell tells Automotive News [sub] that it’s talking to electric car firms about a possible retail deal.

We are having conversations with some of the startups. I would say the conversations are going well. We are very excited about several partnerships that we can’t talk about yet. We probably get more traffic in a weekend than some of these dealers do in a month. The benefits for a small automaker trying to cobble together a sales and service network are obvious.

Speaking at the New York Auto Show today, GM CEO Dan Akerson defended his inconsistent approach to sales incentives, telling the AP [via The Washington Examiner]

I feel pretty good about that. I think we’re in pretty good shape. I don’t want to be a predictable competitor. I don’t want the other guy to know exactly what I’m doing.

For some context,

GM surprised the industry — and Wall Street — when it raised discounts by $400 per vehicle in January and February. Most automakers didn’t raise them because demand for new vehicles has been rising in line with supply…

GM pulled back on its incentives in March, spending $600 to $800 per vehicle less on the deals. But it was too late for some investors, who shied away from the company’s stock because higher rebates lower car companies’ profits.

But does Akerson’s upside, the element of surprise, outweigh the downsides of his hot-cold incentive strategy?

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Exactly a week ago, Fiat said it would up its stake in Chrysler “within weeks,” and according to the Detroit News, the deed is now done. Having earned 5% of Chrysler’s equity by building a FIRE-family engine in the US (for use in the Mexico-built Fiat 500), Chrysler had to confirm that it has brought in $1.5b in non-NAFTA foreign revenue, and (according to Chrysler’s LLC agreement [PDF])

[execute] one or more franchise agreements covering in the aggregate at least ninety percent (90%) of the total Fiat Group Automobiles S.p.A. dealers in Latin America pursuant to which such dealers will carry Company products

in order to bring its stake up from 25% to 30%. We already know that Fiat will achieve this goal by rebadging Chrysler vehicles as Fiats for Latin American markets, a move that is technically compliant with the letter (if not the spirit) of the LLC agreement. But, it turns out that Fiat still had to get the Treasury to amend its agreement in order to bend the rules just a little bit more.

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Reuters reports that auto market research firm CNW Research is projecting April transaction prices to be the highest in 15 years, when measured as a percentage of MSRP. According to the report, early April sales show average transaction prices hitting 87% of MSRP, the highest such level since 1996. By comparison, transaction prices were running at around 77% of MSRP during the industry’s down year of 2009. Looser credit (subprime sales are up 92% from last year), tsunami-related production delays and lower supplies of used cars, particularly small cars, are all given credit for contributing to the rising prices, although bailout-era capacity reductions clearly set the stage for this comeback. And with tsunami-related interruptions still working themselves through the system, demand could push prices higher still. But, says CNW principal Art Spinella, don’t look for the manufacturers to reap all of the rewards of rising transaction prices.

Dealers are the primary beneficiary of these dwindling discounts since they are using fewer of their own dollars to close a deal than was necessary just a few years ago

Ford Motor Company has benefited immensely from its investments in its Blue Oval Brand, improving sales and profits, while wrapping its entire operations in an aura of invulnerability. But underneath all the Ford-branded success lies a problem that, more often than not, has been conveniently swept under the rug: Ford’s luxury offerings are in chaos. The last time we checked in on Lincoln, Ford was trying to convince dealers that Lincoln’s future product would be competitive in the tough luxury market… without disclosing any details that might give salesmen hope that future Lincolns will be something other than an obviously tarted-up Ford. But as tough a sell as that is, Lincoln’s dealers seem to be even more worried about the more prosaic elements of Ford’s luxury brand turnaround…

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The 2011 Model Year will probably not go down as one of the better lineups in the Chrysler brand’s history, consisting of only four models from three nameplates. But, according to Automotive News [sub] it will probably be one of the most exclusive and rarest years for the Chrysler Group, which includes Chrysler, Dodge, Ram and Fiat, as the 2012 model-year will go into production as soon as dealers receive the “one or two buildouts” of 2011 vehicles.

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Every state in the union has its own laws regarding a manufacturer’s ability to sell cars, with some states banning the practice outright and others merely preventing OEMs from competing with their own dealer networks. California falls into this latter category, as the California New Motor Vehicle Board bans manufacturers from owning dealerships within ten miles of other same-make independently owned stores. But that apparently did not stop Chrysler from opening a dealership in Los Angeles which, according to a petition filed by the California New Car Dealers Association, is within ten miles of not one, but three independent Chrysler stores.

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From the “yeah, that will work” file comes word that Chrysler is pushing dealers to hire more salespeople in order to make its five-year plan goal of increasing US-market sales by 45% this year. Spokesman Peter Grady tells Bloomberg via a leaked memo to dealers

While it’s still early in the calendar year, now is the time to act. Hiring additional personnel in preparation for the spring market is essential for success in 2011.

But aren’t the newly updated Chryslers supposed to sell themselves? Seriously though, the real problem with this plan isn’t simply that it reeks of desperation… it’s that Chrysler is going to have to do more than just increase its number of dealers. After all, isn’t quality as important to a sales force as quantity?

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With automakers keeping the incentive pedal pinned to the floor as they entered the new year, a price war has been brewing in the US market for a while now. Hyundai USA CEO John Krafcik has called the trend “a step backward for the industry,” pointing out that nearly every automaker had struggled to regain pricing power coming out of nearly three years of industry-wide weakness. But with GM and Detroit leading the way with high (if “targeted”) incentives, matched by uncharacteristically high incentives from import-brand rivals like Honda and Toyota, it seemed that nothing could prevent a volume-pumping, but profit-sapping price war in the US. At least until Japan was hammered by earthquakes, tsunamis and nuclear accidents. Now, with manufacturers and suppliers still struggling to understand the full impact of production shutdowns and reduced inventories, TrueCar has projected current price trends forward, and finds that supply interruptions could reduce supply to the point where prices actually start coming up again. Check out TrueCar’s spreadsheet on supply and pricing projections in XLS format here, or hit the jump for a few highlights.

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The Federal Trade Commission has announced that it will be holding a series of round table discussions aimed at investigating misleading dealer practices in the areas of sales, financing and leasing. According to the Commission’s release, the round tables will

gather information on consumers’ experiences when buying or leasing motor vehicles. The roundtables will explore consumer protection issues related to the sale, financing, and leasing of the consumer vehicles consumers most often use – cars, SUVs, and light trucks.

For many consumers, buying or leasing a car is their most expensive financial transaction aside from owning a home. With prices averaging more than $28,000 for a new vehicle and $14,000 for a used vehicle from a dealer, most consumers seek to lease or finance the purchase of a new or used car. Financing obtained at a dealership may provide benefits for many consumers, such as convenience, special manufacturer-sponsored programs, access to a variety of banks and financial entities, or access to credit otherwise unavailable to a buyer. Dealer-arranged financing, however, can be a complicated, opaque process and could potentially involve unfair or deceptive practices.

The National Auto Dealer’s Association says [via Automotive News [sub]] it will attend the round tables and represent dealers’ efforts to “increase financial literacy” and “promote regulatory compliance.” Auto dealer finance was one of the only finance sectors exempted from the Consumer Financial Protection Act, despite protests from the Pentagon.