November 10, 2015
VW Struggling to Keep Dealers Happy as Scandal Widens
According to Automotive News, Volkswagen AG’s goodwill offer of $1,000 to the owners of cars caught in the emissions scandal comes as the company wages a behind-the-scenes effort to soothe another powerful constituency: its U.S. dealers. The company is offering cash and no-interest loans to its roughly 650 dealerships that are stuck with cars that can’t be sold but are taking up precious space in their lots. It is also encouraging dealers to offer pre-scandal prices on trade-ins and promising to make up the difference in value. The automaker has responded with extra incentives for both dealers and consumers for the gasoline-powered 2016 models that are still on sale. And it announced Monday an additional “goodwill package” to owners of diesel-powered cars with 2.0-liter engines under investigation by EPA $500 on a prepaid Visa card, $500 in dealership credits and three years of free roadside assistance. “They’re a very nimble team, and they are fast to react to the changing climate,” Alan Brown, chairman of Volkswagen’s U.S. dealer network and the general manager of Hendrick Volkswagen in Lewisville, Texas, said of the VW corporate reaction. Read more about how dealers are being impacted by VW’s emissions scandal here.
EPA Expands Road Emissions Testing
Concerned that cheating on vehicle emissions could be prevalent across the automobile industry, regulators in the United States and Canada are significantly expanding their on-the-road emissions tests to cover all makes and models of diesel cars, reports The New York Times. The tests, which come in the wake of Volkswagen’s admission that it installed software on more than 11 million cars to evade emissions standards, are being conducted randomly and in real-world conditions, rather than in traditional laboratory settings, to increase the odds of catching cheaters. “We are very anxious to find out if there are any other programs out there,” said Christopher Grundler, director of the office of transportation and air quality at the Environmental Protection Agency. The move by the EPA is a significant expansion of its testing regimen, which previously did road testing for pollutants mainly on large trucks. It also makes road-test spot checks of older cars to ensure that their pollution-control mechanisms are still effective. Tests are also being performed in cooperation with regulators in Canada and California. For more on the EPA’s decision to expand its emissions testing, click here.
New Honda R&D Facility Invests in Future Tech in the Heart of Silicon Valley
The critical role of advanced technology has forced traditional automakers to embrace it in a much more aggressive manner. For example, reports Forbes, Honda currently operates fourteen research and development facilities in the U.S., but the company recently held a grand opening for its newly expanded research and development center in Silicon Valley. The grand opening served two purposes — one, to launch the refreshed 2016 Accord, and two, to offer a sneak peak at the automaker’s future in-vehicle technology development happening in the heart of America’s tech community. Honda’s refreshed 2016 Honda Accord is a welcome update to the company’s highly refined midsize sedan. Silicon Valley was a fitting location to introduce the refresh since the latest iteration of the Accord comes packed with new technologies including Android Auto and Apple CarPlay, two features that allow you to link your smartphone to your vehicle. On trims EX and higher, these technologies will be displayed on a large 7-inch capacitive touchscreen display. Read more about how Honda is expanding its American R&D footprint in Silicon Valley here.
Rising Incentives, Growing Concern
As U.S. auto sales roared ahead in October, so, too, did incentives, a development that is starting to raise some eyebrows in the industry, reports Automotive News. October's strong sales were "clearly supported by incentive actions," Wells Fargo's David Lim wrote in a research note, adding that industry data suggest "sales are being 'purchased'" by the manufacturers. That note of concern marks a shift from the environment automakers have enjoyed since the industry's recovery began in 2010. Over the past six years, consumers have been streaming into showrooms in search of replacements for their aging vehicles and lured by new models and new technologies. Incentives have always been a part of the equation, but manufacturers haven't had to push discounts to drive volume higher. Automakers show no signs of easing up on discounting. Manufacturers play down the impact of the incentives, noting that transaction prices are still edging higher, and their profit margins remain healthy. U.S. sales of new cars and light trucks climbed 14 percent last month, to 1.46 million vehicles. Sales of pickups, crossovers, SUVs, minivans, and other light trucks increased 22 percent, aided by low fuel prices. Read more about how incentives are impacting the auto industry here.
Toyota, Lexus Top Cars.com's 2015 Worry-Free Index
According to Cars.com, if the prevalence of automotive reliability and dependability studies are any indication, consumers care a lot about how well their cars will hold up. It's easy to see why: The average car on the road is a record 11.5 years old, according to IHS Automotive. That's more than enough time for an unreliable choice to ravage your finances. Surveys have shown that when it comes to buying a car, shoppers still want reliability more than any single other factor. That's why Cars.com created the Worry-Free Index, which crunches a lot of data to find the cars most likely to give you peace of mind (and peace of wallet) when it comes to repairs and maintenance. The site is featuring the most worry-free cars for 2015. Cars.com editors are confident that the cars on this list will provide the most worry-free ownership experience based on users' reported reliability, low expected maintenance and repair costs, and strong warranties. The Toyota Avalon Hybrid, a car that didn't have enough consumer reliability scores to qualify in 2014, earned 304.9 out of a possible 350 points, making it the most worry-free car for 2015. Read more about Cars.com’s worry-free index here.
WEBINAR: Increase Sales, Gross, and CSI Through an Interactive Buying Experience
Coming right off Digital Dealer in Las Vegas, don’t miss this opportunity to listen to an abbreviated, 20-minute version of one the most popular presentations presented to the top management of OEMs and Dealer Groups. Ali Mendiola, Senior Manager of Business Development, Dealertrack technologies, will share projected automotive shopping habits of today’s online consumer and how dealers can leverage technology advancements and staff to address new car shopper’s expectations. Plus, learn how to review best practices on how dealers are increasing CSI, sales, and gross profit by integrating website tools and tablet selling techniques into the sales process. Join us Tuesday, November 17th for this no cost webinar. To register for the 10:00 a.m. EST session, click here. To register for the 4:00 p.m. EST session, click here.
Around the Web
Mercedes-Benz Starts Internship Program for Refugees [Autoblog]
How One Dealership Group Switched Up Its Recruiting Strategy [CBT News]
Crazy Custom Cars at SEMA [USA Today]
5 Ways to Avoid Crashing Your new $1.3M Supercar [Forbes]