GM March sales up 21 pct as incentives draw buyers

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By TOM KRISHER (AP)

DETROIT — Sales of General Motors Co. cars and trucks rose 21 percent last month compared with a dismal March last year, a sign that U.S. auto sales are benefiting from an incentive war touched off by Toyota.

GM said Thursday sales of its four core brands — Buick, GMC, Chevrolet and Cadillac — rose 43 percent on strong demand for redesigned vehicles like the Chevrolet Equinox midsize crossover and Buick LaCrosse luxury sedan.

Meanwhile, Hyundai's sales rose 15 percent to 47,000 vehicles, propelled by sharply higher demand for its newly released Sonata sedan and its Tucson small SUV.

It's likely that higher incentives from GM and other automakers drove traffic to showrooms. Toyota Motor Corp. raised its rebates and low-interest financing deals last month to counter publicity about safety-related recalls, and other automakers were forced to respond.

GM says it sold 188,546 vehicles last month, up from the 156,380 it sold in March of 2009 as it was receiving government aid and heading into Chapter 11 bankruptcy protection.

The company, which is shedding Pontiac, Saturn, Saab and Hummer, sold just over 27,000 vehicles from those brands in March of last year, but that dropped to about 3,100 last month because few cars and trucks remain on dealer lots.

Last month Toyota boosted interest-free financing, low-priced leasing and free maintenance in an effort to bring customers into showrooms as it dealt with the recall of more than 8 million cars and trucks around the world.

Toyota has been forced to recall cars and trucks mainly due to reports of unintended acceleration. The company is fixing gas pedals and floor mats in many of its top sellers including the Camry midsize sedan, a top-selling car in the U.S.

A top Toyota executive said on Wednesday that the automaker's sales would rise 40 percent in March and that some of those deals would extend into the spring. The company's sales fell 9 percent in February, before it launched its aggressive incentives. The broader industry's sales climbed 13 percent that month.

The automaker is to update its incentives on Monday.

Toyota's March surge likely outpaced the U.S. industry. Sales of new vehicles as a whole climbed 23 percent in March, according to market research firm J.D. Power and Associates.

Although auto sales have been steadily recovering, automakers have been raising their spending on incentives due to the shaky economy. Automakers are spending less on incentives now than they did a year ago, according to data from the auto Web site Edmunds.com.

Sales tanked in March of last year as the economy slowed, layoffs rose and GM and Chrysler headed into bankruptcy protection. Last March was among the worst auto sales months in decades.

AP Auto Writers Dee-Ann Durbin in Detroit and Dan Strumpf in New York contributed to this report.

GM claims sales dominance with Chevrolet Equinox

General Motors, which badly needs some more hits, has one where it counts -- in the hot small crossover segment, declares GM Vice Chairman Bob Lutz.

Small crossovers are the new sweet spot in the auto industry. So having a shortage of the Chevrolet Equinox is a great sign that GM is on the way back, Lutz says.

With Equinox,"we have broken through the barrier," he says. With sister vehicle GMC Terrain, "we dominate the segment" when it comes to purchase intent, he told the J.D. Power and Associates conference in Orlando yesterday.

GM sold 9,513 Equinoxes in January, Autodata figures show, and conceivably would have sold more if the model wasn't in short supply. By contrast, Toyota sold 7,894 RAV4s and Honda sold 9,672 CR-Vs. Check out our great selection of Chevrolet, Buick, Caddilac, and GMC today at www.BradhsawGreer.com

Cash for Clunkers' Program Set to End Monday at 8 p.m.

By Dana HedgpethWashington Post Staff Writer Thursday, August 20, 2009; 5:04 PM
Transportation Secretary Ray LaHood announced that the popular "Cash for Clunkers" program will end at 8 p.m. on Monday because the $3 billion allotted for trade-ins has been largely spoken for.

Intended to bolster the auto companies and encourage consumers to buy fuel-efficient cars, the federally sponsored buyer incentive program proved to be wildly popular, attracting far more auto buyers than originally projected.


"It's been a thrill to be part of the best economic news story in America," LaHood said in a statement Thursday. "Now we are working toward an orderly wind down of this very popular program."

Dealerships have been swamped with consumers looking to trade in their clunkers for a voucher worth up to $4,500 toward the purchase of a new, more fuel-efficient vehicle. Under the program, which kicked off July 24, dealers essentially front the money for the cash incentive with the understanding that the government will reimburse them once they file the necessary paperwork online and the deal is approved. But many dealers said they have not been reimbursed by the government and are becoming more cash-strapped.


Transportation officials said paperwork representing 457,000 sales, worth about $1.9 billion, had been turned in to the government. Just under 40 percent -- or 170,000 -- of the applications have been reviewed so far, accounting for $145 million in payouts. But a large number of those are incomplete or have inaccurate information, which means the application is sent back to the dealer to be re-submitted, according to a senior administration official who briefed reporters Thursday.

Officials initially thought money for the program would last at least through Labor Day.
The National Automobile Dealers Association cautioned its members Thursday to not take more trade-ins, warning that there may be no more money left after the government processes thousands of backlogged applications.


"We are making dealers aware of the fact that [the Department of Transportation] has said that once the money is gone, that's it," said NADA Chairman John McEleney. "If there are more deals submitted than what the funds can support, there's a risk involved" that the dealer won't be reimbursed.

"There's [thousands of] vehicles being sold a day, so it doesn't take long to accelerate what's left pretty quickly," McEleney said. "The more conservative approach is for a dealer to sit back and wait so you don't make the situation any worse than it is in terms of exposure."


Another problem is that dealers have to pay off the loans they took out to buy vehicles from automakers once they sell the vehicles. But many dealers are now stretched so thin that without the reimbursement from the government they can't pay off their loans, and they are reluctant to sell more cars.


To try to help deal with this, General Motors said it will help cash-strapped dealers starting Thursday by advancing them a 30-day, interest-free loan for the rebate funds they are waiting to get from the government. The company said it is providing the funds so dealers have enough liquidity to run their businesses. The money has to be repaid within 30 days or GM will take it back from the dealer's account with the automaker, officials said.


"These dealers have hundreds of deals they're waiting to get reimbursed on from the government," said John McDonald, a GM spokesman. "What people don't realize is it is really tough on dealers to come up with this much money and deliver these cars if they're not getting paid."

GM has said it will increase its third- and fourth-quarter production because of demand from the clunkers program. Other automakers, including Ford, Chrysler and Toyota have said they would also increase their productions due in large part to the clunkers program.

To deal with the onslaught of paperwork, transportation officials said they expect to triple the number of workers processing forms by the end of this week to 1,100. The Department of Transportation said it has reviewed 167,000 applications, out of 458,000. They say they've also held web seminars to help dealers understand how to fill out the paperwork properly.


On his radio address Thursday, President Obama said the clunkers program had "been successful beyond anybody's imagination. And we're now slightly victims of success because the thing happened so quick, there was so much more demand than anybody expected, that dealers were overwhelmed with applications."


"I understand dealers want to get their money back as soon as possible, but the fact of the matter is this is a good-news story; they are seeing sales that they have not seen in years. And they will get their money, but we've got to process it properly." He called it a "high-class problem to have -- that we're selling too many cars too quickly and there's some backlog in the application process. It is getting fixed."

Staff writer Peter Whoriskey contributed to this report.

With Senate Vote, Congress Refuels 'Clunkers' Program

By Dana Hedgpeth and Perry Bacon Jr.Washington Post Staff Writers Friday, August 7, 2009


The government's "Cash for Clunkers" program won a much-anticipated extension Thursday night as the Senate voted to give an additional $2 billion in funding to the popular initiative aimed at boosting stagnant auto sales.


The 60 to 37 vote follows House approval of a similar measure last week and appears to save the government plan from an unexpected early shutdown. The White House supports extending the program, and the new funds are predicted to last until Labor Day, Transportation Department officials have said.


"Cash for Clunkers" appeared to be in jeopardy last week just days after its official launch. Congress had appropriated $1 billion for the program, which offers vouchers worth up to $4,500 for drivers trading in their gas guzzlers for more fuel-efficient vehicles. But the program drew so much interest that it almost ran out of funds well before its expected expiration in November.

Transportation officials warned lawmakers late last week that the plan faced suspension.
In a statement Thursday night, President Obama praised the swift passage of the Senate bill, calling the program "a proven success." Obama could sign the bill as early as Friday.


The Senate vote came after lawmakers considered and rejected several amendments to the legislation, including one from Sen. Tom Coburn (R-Okla.) that would have allowed trade-ins to be donated to charity. The current bill requires that the cars be junked.


"Today's vote is a victory for families and businesses all across the nation," Sen. Debbie Stabenow (D-Mich.) said after the vote.


Seven of 40 Republicans crossed party lines to support the measure, while four Democrats voted against it. Auto dealers welcomed the prospect of additional money for the program, which has helped draw customers in droves.


"With the additional $2 billion, even more 'clunkers' will be taken off the road and replaced with more fuel-efficient vehicles," John McEleney, chairman of the National Automobile Dealers Association, said in a statement Thursday night. "Extending the 'clunkers' program benefits the environment and the economy. It's the best kind of stimulus."


Dealerships said they continued to see interest as the program ends its second week.AutoNation, one of the largest vehicle retailers in the country, said consumer traffic was up 35 percent over this time last year at its 225 dealerships in 15 states.


Since the program started, AutoNation has taken in 3,500 clunkers. To keep up with anticipated demand from the program, company executives ordered 45 percent more vehicles in the second quarter from major automakers, including Honda, Ford and Toyota.


"Cash for Clunkers is a huge success," said Marc Cannon, a senior vice president at AutoNation. "It is doing everything they said it would do: creating dealer traffic, clearing out inventory and getting more fuel-efficient cars on the road. This is what the American consumer and psyche needed."

On Wednesday, the Transportation Department published new figures showing that a total of 184,304 trades had consumed $775.2 million of the $1 billion originally appropriated. The Toyota Corolla is the best-selling new car under the clunker program. After the Corolla, the top sellers are the Ford Focus, Honda Civic and Toyota's Prius and Camry.


Of the new vehicles not manufactured by the Big Three, according to a preliminary analysis by the Transportation Department, "well over half" were made in United States. Of the trade-ins, more than 80 percent were trucks, the government said, with Ford's Explorer and F-150 pickup topping the list. The average miles per gallon of the new vehicles is 25.3, compared with the trade-ins that averaged 15.8 miles per gallon.


The program, however, has been plagued by troubles. Consumers were confused as to which cars qualified. Dealers said they have spent hours trying to log on to the government's Web sites to put in paperwork on the deals they completed. Some dealers said they ran into problems collecting government payments.


Transportation officials say they have resolved those issues by adding computer capacity and beefing up contracted staff to help run the program. Some auto analysts and economists are skeptical about the program's long-term impact.


"The Cash for Clunkers at this point is like one of those energy drinks," said Anthony Sabino, a professor of law and business at St. John's University in New York. "It gives you a short-term boost, then you crash and you fall back into the doldrums."

For your best Cash for Clunker deal, visit www.saturnofasheville.com, www.saturnofgreenvillesc.com, or www.saturnofsparatanburg.com for the fuel efficient cars from Saturn with a 5 year 100,000 mile powertrain warranty.

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• Congress OKs $2B refill of 'cash for clunkers' (huffingtonpost.com)

Penske's Saturn: The Post-Modern Auto Company

Auto companies have traditionally been engineering and manufacturing businesses, rather than marketing and retail businesses. Henry Ford, for example, insisted dealers pay for his Model Ts as soon as they left the factory door. But what made sense in Henry's time, and reached its apotheosis with the huge River Rouge plant, the most vertically integrated automobile factory in the world, has become a liability today.

Auto plants cost staggering amounts of money to build and to run. And in an era where the manufacturing process no longer delivers major differentiators in terms of the finished product -- all vehicles have to meet similar safety and fuel economy mandates, and the cost and quality differences between the best and the worst are getting smaller all the time -- that's money many auto industry insiders wished they no longer had to spend. Especially as what largely defines an auto company these days is not where its products are made, but how its brands are perceived by consumers.

A Boxster is still a Porsche, even though it is built in Finland by Valmet. A Grand Cherokee is still a Jeep, even though it is built in Austria by Magna Steyr. Right hand drive Mercedes C-Class and BMW 3 Series models are still seen as German cars, even though they are made in South Africa.

Which is why Roger Penske's Saturn play is a stroke of genius. With Saturn, Penske has the opportunity to create the first truly post-modern auto company. Penske's Saturn doesn't own a single factory, design studio, or proving ground. What it does own -- and all it needs to own -- is the intellectual property of the Saturn brand.

It's hard to imagine a more perfect candidate to become a post-modern auto company than Saturn. Envisioned by GM chairman Roger B. Smith as an import fighter because of advanced manufacturing techniques that included a highly automated plant and plastic body panels, Saturn succeeded not because the original car was good -- actually, it wasn't even remotely competitive with anything from Toyota or Honda -- but because it was cleverly sold and marketed. Saturn consumers bought into the defining promise of the brand -- no haggle pricing and great customer service -- rather than the physical attributes of the vehicle.

Although GM has agreed to build Saturns for Penske for at least two years, future Saturn models may be sourced from a variety of automakers around the world (the latest rumor has Penske talking with Renault). Saturn could simply rebadge another manufacturer's existing model, paying for U.S. market certification costs and minor cosmetic changes, or it could commission an automaker to design, engineer and manufacture a complete new vehicle. Either way, it could bring new models to market for way less capital cost than a traditional automaker.

Finding someone with spare factory space to build Saturns won't be hard: The world's automakers currently have the capacity to build 92 million vehicles a year, but will be lucky to build 60 million in 2009, says respected industry forecaster CSM Worldwide. And with the global economy expected to recover slowly from recession, there's going to be plenty of spare capacity around the world for a long time yet.

All Penske's Saturn has to do to succeed is sell cars and trucks that deliver on the promise of the Saturn brand. The actual vehicles can be made anywhere, by anyone, and as long as they are competitive with the mainstream players in their respective segments in terms of performance, economy, quality, and equipment levels, it almost doesn't matter what they are, because the

Saturn brand is mostly defined by a classy purchase experience. And if there's one thing Roger Penske knows how to do with class, it's selling cars and trucks.
Posted by Angus MacKenzie

Mercedes, Lexus, and Saturn top ranking of U.S. dealerships

Todd Agostini is glad that luxury auto sales are down right now. The sales manager at the Jaguar dealership in Cherry Hill, N.J., Agostini says that Jags take a discerning eye to appreciate. And the heady times before the credit crunch were bringing in too much riff-raff--customers who didn't fully understand the brand or thecars themselves.

"We couldn't stand selling cars to people who really didn't have any business in our car," says Agostini. "Not that we didn't like the people at all, but it hurts the brand."

It sounds elitist, but Cherry Hill is the No. 17 Jaguar dealer in the country, and No. 1 for used Jaguar sales. The dealership has been able to remain profitable, so far, in an auto market with new-car sales down 36% from last year.

It's partly the cars that keeps customers coming, sure, but it's also the experience those customers have in the showroom. While General Motors ( GMGMQ.PK - news - people ) and Chrysler are closing roughly 1,100 and 800 dealerships nationwide, respectively (and surviving dealerships conjure ways to attract their customers), Jaguar joins several other luxury brands in shining through the recession's haze.

Mercedes-Benz, Lexus and Jaguar are the top three brands when it comes to consumer satisfaction at their dealerships. Along with Saturn and Land Rover, they round out the top five in our list of the best dealerships in the country.

Behind the Numbers To generate our list of the best car dealerships this year, we used data provided by Pied Piper Management, a California-based marketing firm. The numbers were collected between July 2008 and June 2009 using 3,531 anonymous shoppers at dealerships of every automotive brand, nationwide. The prospective car buyers were questioned on many aspects of their experiences at the dealerships, from whether a salesperson smiled to whether they were offered a brochure to whether they planned to purchase a vehicle from that particular showroom.

Pied Pier analysts then used that information to evaluate how effectively a dealership sells cars, to compare particular sales processes to industry benchmarks and to identify deficiencies in certain brands. Each brand was then given a score as a factor of overall sales effectiveness, with a higher score meaning better sales rates, as well as a greater likelihood of brand-exclusive dealerships.

Nine of the 10 highest-scoring brands on our list are in the luxury category; Saturn is the lone exception. Only one of the luxury brands, Cadillac, is from an American automaker.

Fran O'Hagan, president of Pied Piper, says luxury brands are more effective with auto sales because their salespeople earn higher commissions per sale and are willing and able to devote more time and attention to individual shoppers.

Longo Toyota, a dealership near Los Angeles, for instance, is the largest dealership in the U.S. It sells more than 15,000 new cars a year, and shoppers there know that if they want to buy a Camry, they can choose from multiple colors and options and drive one off the lot that day. It's all about the transaction, O'Hagan says.

It's not so with luxury dealerships. "They attract a different type of person," O'Hagan says. "The visit may take two or three times longer than at Longo, but the salesperson is happy to devote that time. People who want to make their living selling Jags or Mercedes tend to be a different type than the people who make their living selling something at a higher volume."

Indeed, Agostini says his typical buyer has already bought two or three vehicles at the Cherry

Hill dealership, and routinely invites salespeople to dinner or to week-long vacations at beach houses nearby.

Changing the Face of Car SalesThe industry average for sales effectiveness has increased dramatically across all types of dealerships, according to Pied Piper, thanks to an economy that forces salespeople to be more vigilant on the showroom floor, O'Hagan says.

The nature of what a salesperson must be in order to close a sale, especially in the luxury sector, has changed, too. While it's still true that shoppers buy from people they like, salespeople are facing a much more educated and sophisticated buying public.

It's not enough to know the product--they've got to convince a prospective buyer that a

Mercedes, say, is better than a Lexus, when so much specific, in-depth information is widely available for both types of cars.

"Product knowledge is dramatically less important than it used to be," O'Hagan says. "It's much more [a question of] 'What can the salesperson do for me?'"

Come and experience the Saturn difference at Saturn of Greenville, Saturn of Asheville, and Saturn of Spartanburg.