One’s imagination often runs away with itself, usually late at night and after a lengthy immersion in suds or, if it’s your thing, Pinot Grigio. Well, I’m sad to report there’s no Coors Banquet left in this house, and high-falutin’ vino isn’t my style.

What got my mind working overtime last night wasn’t proudly American hooch, but a chance visit to a local GM dealer — one where I’d hoped to stumble upon a unicorn. As rare as a backbone in politics, this mythical creature regularly fills my thoughts, leading me on a (so far) fruitless voyage of discovery. I’m talking about a base model Chevrolet small car.

Obviously, it’s not a situation unique to General Motors. Nissan emblazons the ($9,988) base price of its Canadian-market Micra across the front of many dealers around here, and I think I’ve seen a single example in the wild. Nearly all buyers throw an extra few grand at Nissan for the SV trim — power windows and doors, A/C, etc — and most do it because there’s no S models on the lot and they’re easy targets for upselling.

If only I had the means of creating my ideal car company from the ground up, I thought… (Read More…)

Hyundai Motor America and its U.S. Genesis division sent messages to Hyundai dealers this week, alerting them to the formation of an independent Genesis dealer network. Hyundai’s recently created luxury marque wants space between it and its value-focused sister division, and that means the need for standalone stores.

Shared showrooms simply won’t cut it anymore.

Right now, Genesis customers in the United States can purchase models at roughly 350 Hyundai dealers, but not for long. The plan calls for just 100 standalone stores as a starting point. If you’re a Hyundai dealer with dreams of selling a higher class of vehicles, this is your opportunity — but your chances of being selected might not be as high as those dealers already selling the brand. (Read More…)

The company that sells SUVs together stays together.

So it goes, or is likely to go, with Lamborghini. Keep in mind that the Volkswagen Group supercar manufacturer has already seen massive sales growth. During the half-decade before Stephan Winkelmann took over as boss at Lamborghini in 2005, the brand was selling only 800 cars on an annual basis. But by the time Winkelmann was done a decade later, Lamborghini was averaging 2,300 annual sales. In 2016, Lamborghini sold 3,457 vehicles around the world, including more than 1,000 in the United States.

Those figures will soon seem paltry because the unfortunately named Urus SUV will double the brand’s volume. But what does such a massive change do to Lamborghini’s operations? (Read More…)

Imagine a traditional luxury car buyer — yes, some still exist — walks into his or her local Cadillac dealer to check out the radically refreshed 2018 XTS. Naturally, the old XTS is hanging out in the parking lot, quietly serving as potential trade-in. After entering the dealer, a salesperson ushers our buyer over to a virtual reality machine to check out the many glories (and options) that await in the new model.

On the way to that machine, the buyer passes zero Cadillacs. There’s not a CTS or CT6 or hot-selling XT5 in sight. An unlikely scenario? Perhaps. A little weird? Certainly to a repeat (read: aged) buyer. It seems small Cadillac dealers definitely felt that way, as low-volume sales locales soundly rejected head office’s plan to do away with traditional showrooms and physical cars.

As a result, Cadillac has given the ominous-sounding Project Pinnacle a makeover. (Read More…)

German luxury automaker BMW is seeking to establish a joint venture with China’s Great Wall Motor. The prospective deal focuses specifically on electric vehicles, according to sources familiar with the matter. A cooperative relationship with Great Wall would be BMW’s second in the world’s largest auto market – and a necessary one, as China forces all foreign automakers to team up with local partners in order to do business within the country.

Great Wall Motor Co. is China’s largest SUV maker by volume, and witnessed a nearly 20-percent rise in its share price on Wednesday after Asian media outlets reported it was in talks to partner with BMW. (Read More…)

Hyundai’s Genesis Motors offshoot intends to finalize its transition into an entirely separate U.S. dealer network within the next three years.

The process of building an undetermined number of distinct Genesis outlets has not yet begun, but it’s clear the brand is well aware of the limitations with which it’s currently operating.

“The reality is, many, many luxury customers tell us they love our products, they’re amazing, but I’m not going into a Hyundai store to buy it,” U.S. Genesis boss Erwin Raphael tells Automotive News.

No kidding. (Read More…)

“We have been working more closely with our dealers to evolve their businesses and through that process,” Mazda tells Automotive News, “some new dealers have chosen to begin working with us, while others have made the decision to leave the Mazda brand.”

Mazda has been open about its goal of earning 2 percent of the U.S. market while being forthright about the brand’s intentions to do so only on solid ground. This means fewer discounts, a premium vibe, and the kind of higher margins that make dealers happy.

On the dealer side of the equation, Mazda now wants those dealers to improve. In some cases, that means a new location. In others, a new exterior design is necessary. More thoroughly trained staff members is key, as well. But it’ll be slow going. Of Mazda’s roughly 600 dealers, the brand acknowledges that some have forsaken the automaker, though Mazda won’t say how many. Since the efforts to revamp dealers began last year, only 26 have been upgraded so far. By the end of the decade, Mazda believes roughly one-sixth of its network will have undergone a remodel.

In the meantime, Mazda is getting further away from reaching its 2-percent goal. (Read More…)

After the reveal of Fiat Chrysler Automobile’s Dodge Demon at the New York Auto Show, I thought all the hooplah would be over. We all did. Little did I know Automotive News’ editorial board would pen a screed calling for the Demon’s banishment from American roads, which then caused others to cry foul at the bylineless editorial, and subsequently triggered Larry Vellequette — the author of the original piece — to double down on his thoughts, name attached.

In the last piece, Mr. Vellequette claims, “It is still a stupid idea for Fiat Chrysler to outfit the Dodge Demon as a high-performance drag racer and then sell it to the motoring public in a form that makes it inherently more dangerous off the track.”

He’s not wrong. Drag radials come fitted to the Demon from the factory, and he claims they’re “prone to lose traction in even a light morning mist under that much torque — regardless of electronic intervention.” I won’t argue with that.

But I will argue with the logic upon which Mr. Vellequette bases his call for exorcising this Demon from America’s roads, and who he thinks should do something about it.

(Read More…)

At least 20 Fiat and Alfa Romeo dealers in California have filed protests against Fiat Chrysler Automobiles after the manufacturer altered franchise agreements last December. Dealers objected to the changes, claiming it placed the struggling brands at a further disadvantage.

While the grievances vary between dealers, the protests revolve around a few key issues. FCA’s obligation to provide vehicles to the franchisees, the legal standard dealers must meet to sell those units, alterations to the definition of parts or accessories and how that might enable third-party distributors, and the constantly changing language surrounding dealer responsibilities were all common themes among the filed complaints.  (Read More…)

Cadillac’s rollout of Project Pinnacle has been, let’s face it, a categorical mess. The program faced an immediate backlash from dealerships when General Motors explained it would categorize them based on sales projections and require an adherence to a higher standard of customer service. This was followed by smaller dealers refusing to take Cadillac’s buyouts, forcing the company to delay Pinnacle’s launch on two separate occasions.

The most recent postponement was so dealers could have more time to understand the program’s finer details — or so Cadillac claimed. However, now the automaker is altering portions of the incentive program so that dealers receive payments sooner and are eligible for partial bonuses even if they fall as much as 15 percent short of monthly sales goals. Caddy is also easing on some of those high standards it demanded of dealers and eliminating the appeals process for those deemed noncompliant. (Read More…)

The cornerstone of every healthy relationship is frank and frequent communication. Last year, consumers wanted more sport utility vehicles, but automakers still had too many cars rolling off assembly lines. Caught in the crossfire were forlorn dealerships that were incapable of providing the trucks and crossovers that customers cannot seem to get enough of.

At the 2017 National Automobile Dealers Association Conference & Expo, this issue is apparently weighing so heavily on the minds of America’s automotive purveyors that it wouldn’t be surprising if gray matter began leaking out of their ears and onto the expo floor.  (Read More…)

Ford Motor Company’s parts division, Motorcraft, has undergone a massive overhaul intended to improve dealer sales and reduce overhead costs. Executives from the Blue Oval spent much of 2016 focusing on how to boost the profitability of their dealers’ service centers and body shops while addressing concerns with the division.

Their solution involved expanding coverage on older model vehicles, expansive pricing reductions, and a monumental decrease in parts complexity — making for a leaner, more efficient Motorcraft. (Read More…)

“I’ll tell you something,” the grizzled used car veteran said to me menacingly from across his massive, oaken desk. “The internet has ruined this business.”

Tell me something I don’t know, old man.

It’s a variation of the same thing I’ve heard for five years. The car business used to be a place where men of little to no education or intelligence could make veritable fortunes, simply by preying upon the ignorance of their customers. Pre-internet, it was completely realistic to make $4,000 of front-end gross profit on the sale of a used car — and sometimes even more! Pull up a chair across from the more tenured sales guy at any Cadillac store, and he’ll gladly spin you a yarn about that one time he made $10,000 in gross on a little old lady who was on a fixed income, and he’ll laugh as he’s telling it.

Of course, he’ll have plenty of time to tell you this tale because he’s the guy who doesn’t take ups and instead lives on his book of referrals — and those are dying faster than the baby boomers who made them an integral part of the car business in the first place.

But now? Why, that rotten internet and all of its information has made it impossible for dealers to screw customers. Or has it?

(Read More…)

There are 350 Hyundai dealers in the United States currently offering vehicles from the automaker’s new Genesis Motors brand inside Hyundai showrooms. It’s a model Genesis wants to change — simply too many stores for a fledgling auto brand; too much affiliation with proletarian Hyundai.

It’s also entirely unlike the non-dealer model Genesis Motors began employing in Canada on Monday, November 21, 2016. Genesis began business operations 48 hours ago with no physical locations whatsoever.

Dealers? Pfft. Someday.

Not today. (Read More…)

With Amazon teaming up with Fiat Chrysler Automobiles to sell cars online in Europe and companies like Lynk & Co wanting to destroy the dealer model, it’s had to know exactly what the future of car buying will look like. Retailers are equally confused, so the National Automobile Dealers Association hired a consultant to study the future of U.S. dealerships.

The study’s findings hinted at leaner times and the dark cloud of an autonomous transportation network looming in the distance.

(Read More…)