One of the many theories for Mahindra’s absolute botching of its long-anticipated US launch is that the Indian automaker was too busy last year acquiring its diesel-4×4 soulmate, Ssangyong. Both firms got their start building Jeep CJs, both specialize diesel-powered vehicles, but while Mahindra focuses on trucks and old-school SUVs for the developing world, Ssangyong has more experience with crossovers and MPVs as well as sales in mature markets like Europe. Together, they make an Asian invasion of diesel-powered 4x4s far more likely to succeed in the US, and Automotive News [sub] reports that the plans are already in the works. According to Chairman Yoo Lee [via AN [sub]], Ssangyong sees itself selling about 20k units in the US

two-to-three years from now – but within five years at the latest.

If true, this explains why Mahindra backed out of its deal with US distributor Global Vehicles: rather than cobbling together a sales network for pickups alone, Mahindra needs to plan for an independent dealer network in the states that’s capable of selling Mahindra pickups and SUVs, Ssangyong’s brand-new Korando crossover (reviews here and here) and possibly even REVA EVs. Think of it has one-stop shopping for all your developing-world 4×4, diesel and tiny electric car needs.

Bloomberg [via Automotive News [sub]] reports that all 130 planned Fiat USA showrooms will not be opened until September. Initial rollout plans had called for “around 165” dealers, but that number has been dialed back, possibly due to overlap. It’s not clear if the delay will affect Chrysler’s goal of selling 50k Cinquecentos this year, but it probably will considering

About a dozen Fiat franchises have started up and a total of 20 may be open by the end of February, said Laura Soave, head of the Fiat brand for Chrysler.

About 30 to 40 will be open by the middle of March, she said. Chrysler said in September that it wanted Fiat showrooms running by the end of February, adding that it would allow some dealers to open later.

“It’s a tiny bit behind,” Soave said today.

The Barcelona Reporter, er, reports that a new law passed by Spain’s parliament

allows dealerships a full refund from manufacturers for unsold cars and, in some cases, to charge carmakers for sales teams’ labour and other related expenses… Car manufacturers will have to repay dealerships for any cars they fail to sell after three months, under the new law.

In the event carmakers’ contracts with distributors expire or are cancelled, they must also pay for layoffs at salesrooms and compensate them for lost custom.

Proponents argue that the law, which was bundled with a number of economic measures, would protect Spain’s 150k dealer jobs which, they argue, exist “at the whim” of manufacturers. Needless to say, the OEMs are not amused, and the association of foreign automakers who build cars in Spain (ANFAC) hints that investments by members like Ford, Nissan and Volkswagen will have to be reconsidered in light of these new rules. And even within Spain, the measure is drawing controversy. Industry minister Miguel Sebastian complains

How will a German, Japonese or French (car manufacturer) understand this law if I do not even understand it myself?

In other “Spain hates cars” news, Auto Motor und Sport reports that the country has also approved a new urban speed limit of 30 km/hour (about 18.6 MPH) in order to reduce pedestrian deaths.

Wards Auto reports that Ford now has more dealerships than Chevrolet “for the first time in years.” Not that this is a sign of growth on Ford’s part… it simply cut fewer dealerships (62) last year than Chevy, which wiped out some 372 at the behest of the government and its consultants. Chevy, meanwhile, has struck back at Ford by offering its version of Ford’s SYNC system… some 3 years after Ford built the only real brand in what is now the crowded field of in-car connectivity options. Of course, Chevy hasn’t released a date or price for MyLink sales, but at this point, what’s the rush? Besides, Ray LaHood is going to really roll up his sleeves and take on the “epidemic” of distracted driving any minute now… right?

Automotive News [sub] reports:

Sixty-four dealerships that were terminated during Chrysler’s 2009 bankruptcy reorganization sued the U.S. Treasury Department today, seeking at least $130 million.

The suit, filed in the U.S. Court of Federal Claims here, alleges the government violated the Constitution by taking the stores’ franchises and their state legal rights without adequate compensation.

Lawyers for the plaintiffs say that more dealers could come on board, as the 64 suing dealers represent only eight percent of Chrysler’s cull. Neither Treasury nor Chrysler (which is not named in the suit) have commented. The suit, which can be read in its entirety in PDF format here, claims violation of Fifth Amendment rights, arguing that:

[the dealer cull] served the public purpose of promoting stability to the financial system of the United States… This is a loss that should not, however, be borne by a few individual dealers but, by reason of its broad and salutary public purpose, must in fairness and justice be borne by the public as a whole.

Automotive News [sub] reports that Global Vehicles, a firm with a contract to distribute Mahindra pickup trucks in the US, has dropped its lawsuit in US court in an apparent attempt to rescue its distribution deal. The contract between Mahindra and GV called for British arbitration of disputes, and apparently the British arbitration panel required that all claims be handled through it rather than in US courts. The dropped suit would have required Mahindra to press forward with its US launch regardless of pending arbitration. Mahindra, meanwhile, has said it is looking outside of its deal with GV for a US distributor, so it’s not clear if GV’s olive branch will even make a difference.

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Automotive News [sub] reports that Mercedes-Benz has agreed to take over Smart car distribution in the United States from Penske Automotive Group after about three years of operating as a Penske-run distribution channel. Beginning in July, Mercedes will take over all of Smart’s US-based operations because

1. It needs the small-car volume to meet new corporate average fuel economy standards that take effect in the United States in the 2016 model year.

2. Daimler AG integrated Smart into the Mercedes-Benz car unit September. The United States is the only market where Smart and Mercedes operate separately.

But the impact of this deal isn’t limited to ownership and operations, as AN [sub] reports that the four-door car being developed by Nissan for Smart USA has been canceled.

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Ford’s been fixing Lincoln for so long now, it’s almost surprising that things on the dealership level are still so broken. But, as Ford told its dealers at last weekend’s NADA convention [via Automotive News [sub]], it’s time to put up or become a former Lincoln dealership. By the end of this year, every Lincoln dealer must comply with a few of Ford’s “more than reasonable” expectations, to wit:

• Offering what Lincoln calls “owner privileges.” That includes providing a free car wash and loaner vehicle to owners who come in for service
• Having a dedicated service manager and dedicated sales staff for Lincoln, Bokich said. That applies specifically to Lincoln dealers paired with Ford stores.
• Having only the word “Lincoln” appear on all franchise signage, not Mercury. Ford discontinued the Mercury brand as of Dec. 31.
• Having at least 30 percent of used-vehicle inventory be certified pre-owned vehicles.

You know, those do sound like reasonable standards for a luxury brand dealer network… and if a Lincoln dealer doesn’t like them, well, Ford is looking to trim the network by 100 stores or so anyway. Still, isn’t Lincoln’s problem pretty conclusively product-related? There’s no word from Ford’s boffins on that front, which means some dealers may be happy to leave the Mercury sign up and become one of those used car lots that still has an Oldsmobile sign up. Yes, Lincoln needs a top-notch dealer experience (and an own-brand sales manager to keep marks away from the Taurus) to make Lincoln viable, but demanding it without even hinting at future product is to ask Lincoln dealers to make an incredible leap of faith.

Chrysler’s bailout-era dealer cull has ended up being something of a nightmare, with a number of dealers successfully fighting for reinstatement as federal investigators look into possible criminal wrongdoing. And whereas GM has basically rolled back much of its dealer cull, Chrysler has consistently used arbitrary calculi for closing dealers and has resisted giving dealers the opportunity to reclaim their franchises. Now, the dealers that have won reinstatement in congressionally-mandated arbitration hearings are facing a new threat: relocation. Automotive News [sub] reports that Chrysler’s method of dealing with reinstated dealers is to force them to relocate wherever Chrysler wants them to go. Chrysler has filed a request in a Michigan District Court, asking for the ability to relocate some 20 dealers in 6 Midwestern states, a move it says it must undertake in order to protect its non-culled dealers. But, having picked the winners and losers among its dealers only to see some of them reinstated, shouldn’t these reinstated dealers be afforded the same rights as the dealers who weren’t culled in the first place?

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Though the US auto market is up 11 percent this year, Honda’s sales are up only 3.6 percent compared to last year’s weak performance. That means the Motor Company isn’t even keeping up with the growth rates of such maligned brands as Lincoln (+7.4%), Chrysler (+16%) and Mazda (+9.8%). But Team Honda isn’t sweating the details. After all, the Civic and CR-V are nearing the end of their model cycles, while the Accord is a year and a half from its replacement. And, as Honda USA’s Executive VP John Mendel tells Automotive News [sub], at Honda

Tyler Durden over at ZeroHedge reports on the untold story of GM’s increasing delivery numbers: they’re sitting on lots.

Hidden deep in today’s disappointing GM November sales release is a number that all GM longs may want to quickly forget, or else pay serious attention to. But first, earlier today, GM reported slightly disappointing sales numbers: the newly IPOed company sold 168,739 cars in November, a 11.4% increase to November 2009, which came in below expectations of a 13% rise. That’s mostly noise. What isn’t, however, is the linear rise in GM’s auto inventory safely stashed away at dealers, i.e., unsold….

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GM was the first automaker to experiment with new-car sales on Ebay, in a grand experiment that resulted in an undisclosed number of sales (estimated at between 20 and 50 actually sold through eBay). GM’s Mark LaNeve insisted at the time that the program led to sales not logged through Ebay, but then he was booted from GM about a week after GM’s Ebay experiment fell apart. Which makes Tom Loveless, the head of Kia’s US sales operation a brave man; with only this single, discouraging precedent, Bloomberg reports that Kia is diving into Ebay sales… and unlike GM, it’s not limiting the experiment to California.

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Well, it depends on the car being sold, doesn’t it? TTAC commenter and Hyundai salesman dwford writes in with a prime example too get the conversation started: the 201;0 Hyundai Elantra (sold at full MSRP).

MSRP: $17,760
Invoice: $17,472
Holdback: $511
Dealer Cash: $750
Total gross profit: $1549

That’s 8.7% of MSRP

From that, the dealer pays: My commission: $100, a portion of my weekly salary and related taxes, the cost of the detailing for delivery, any floorplan expenses if the car has been here longer than 90 days, and then a percentage of the costs of running the store – electric, heat, rent, phone, etc. Couldn’t tell you what that all adds up to.

The dealer could potentially earn extra profit from the sale of financing, extended warranties etc., but let’s keep it simple and talk about front end profit.

Born in 1977, Mr Goodwrench was a marketing brand used to sell GM parts and service at franchised dealers. Now, after 33 years in service to The General, Mr Goodwrench is passing on to join Pontiac, Oldsmobile and HUMMER in GM’s crowded brand graveyard. Automotive News [sub] reports that

As Automotive News [sub] reports, GM has gone ahead and finalized the 500 dealer cuts that made up its bankruptcy-bailout-era dealer cull, despite resistance from some 22 members of the US House of Representatives. And despite the congressional pressure, a damning SIGTARP report, and an ongoing criminal investigation, GM hasn’t changed its tune about cutting dealers, telling AN [sub] that delaying dealer cuts

would only divert our collective attention at a critical time and would ignore the independent decisions of arbitrators and individual settlement agreements between GM and its dealers

Meanwhile, just what affect has the dealer cull had on surviving dealerships? Are they thriving? Well, not exactly…
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