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CATA Bulletin
January 23, 2012

 

Data is king for vendor TrueCar

January 23, 2012

Knowledge, Sir Francis Bacon observed in the 16th century, is power. For TrueCar, knowledge comes from the data it extracts from dealer DMS systems.
 
But dealers who use TrueCar are not obligated to provide the Internet auto shopping service with open access to their customer data. Instead, they can limit details to customer name and address, and vehicle identification number. 
 
Indeed, one dealer said, “all they ask for is confirmation that the car is sold, so they can collect their $299” for leads that turn into sales.
 
Dealers who use TrueCar should have their office managers review what access the dealership provides to the vendor.
Protecting the personal information of customers also helps dealers abide with privacy and safeguarding rules.
 
Note that the Chicago Automobile Trade Association is not involved in any communications that urge dealers to avoid or sever a relationship with TrueCar.
 
The lead generation service counts a reported 5,200 dealership franchises in 49 states. But TrueCar has suspended service in some states and changed its fee structure in others, amid charges that it violates advertising regulations and other state laws. The Illinois attorney general’s office has not issued an opinion on TrueCar’s practices.
 
Earlier this month, TrueCar said it will drop fees that it charges participating Viginia dealers when they sell autos from TrueCar leads. State regulators there had ruled that the fees violate Virginia’s ban on bird-dogging—paying fees to third parties for leads that turn into sales.
 
Instead, TrueCar will charge participating dealers a subscription fee not tied to sales. The company did not announce terms of the subscription plan. Illinois does not have bird-dog laws or brokering laws—another contention against TrueCar.
 
The CATA appealed to the Illinois attorney general that TrueCar might be violating state advertising regulations by using the term “invoice” and failing to include a vehicle stock number or all costs in the advertised vehicle price.
 
That invites a bait-and-switch, some say, when a consumer who has been quoted a specific price arrives at a dealership to find the vehicle already sold or otherwise unavailable, and the dealer then tries to sell a different vehicle.
 
In a statement, the company said: “TrueCar is not a broker, traditional advertiser or lead generation company. We do not arrange or negotiate sales for dealers, nor do we advertise vehicles for sale. Rather, TrueCar is an Internet marketing company—the dealer’s window through the Internet to customers searching for vehicles.”
 
 

3 reasons to be optimistic about 2012 sales

January 23, 2012

By Mark Scarpelli, Metro Chicago NADA Director
 
I read a story last month that made me even more optimistic about this year. It was about a young woman in Bakersfield, Calif., who recently got a job as a cashier and receptionist at a Mazda-Mitsubishi dealership. Within a few months, Jade Tolentino was promoted to an accounts payable position and, after putting it off for quite some time, bought a new SUV using her employee discount and today’s incredibly low finance rates.
 
When asked why she did it, the 24-year-old said, “It was a step I felt I needed to take.” Translation: this is one example of pent-up demand—and pent-up demand is what is expected to drive up sales this year.
 
Thankfully, stories like hers are becoming more common these days, as dealerships begin hiring again and consumer spending picks up. Both trends are good news for our industry, and enough reason for NADA Chief Economist Paul Taylor to forecast that we will sell about 1 million more cars and trucks in 2012 than we sold in 2011. Paul is predicting sales of more than 13.9 million units this year, driven by three factors: aging vehicles, affordable credit and aggressive incentives.
 
Together, these three “A’s” have the potential to make 2012 a much better year, Taylor said. As we know, more consumers are shopping out of necessity to replace their old cars and trucks. Interest rates on new car loans are at historic lows. And both domestic and international auto manufacturers are preparing to wage an aggressive battle to capture U.S. market share by rebuilding their inventories and offering competitive sales incentives.
 
A decline in gasoline prices also could push car buyers to consider a wider range of vehicles in different segments.
 
If Paul’s forecast is correct—and he has a very good track record for accuracy—dealers and consumers could be in for a very good year. Stories like Jade’s could be repeated all over the country, a reminder to us all that the American dream of owning a car—one of the most important factors in sustaining employment—is still alive and well.
 
In legislative and regulatory news . . .
 
• The long-awaited Driven Management Guide, “A Dealer Guide to Federal Excise Tax Compliance,” is completely new, expanded, and up-to-the minute, and has been posted to NADA University’s Resource Toolbox. This guide addresses common FET issues, and enables truck dealers to apply the tax correctly or to make reasonable assessments in instances where the rules are unclear.
 
The guide has been written for NADA by FET experts Mark H. Sidman and Rose-Michele Nardi of Weiner Brodsky Sidman Kider PC. NADA U is providing the guide as a fully downloadable publication, including an interactive Form 720—and offering it in individual chapters with tests so that it is a completely trackable educational resource for those ATD members who want to be able to train employees on the intricacies of the FET rules. The guide, located in Resource Toolbox, Driven, Legal/Regulatory, is free of charge to members.
 
In other NADA news . . .
 
• An email with the subject line “Complaint from your customers” may be a scam, according to an urgent alert issued by the Council of Better Business Bureaus. The Council is warning businesses and consumers that the return email address, riskmanager@bbb.org, is not an address the BBB uses. The fake email is signed with the address of the Council of Better Business Bureaus, which is the national office of the BBB system, but links to a non-BBB website. “Do NOT click on the link,” BBB spokesperson Kelsey Owen warns.
 
• The 2010 NADA Convention and Expo, held in Orlando, Fla., received the prestigious Gold 100 award from Trade Show Executive magazine. The NADA gathering was ranked as one of the largest U.S. trade shows in 2010 based on net square feet of paid exhibit space.
 
“The Gold 100 ranking places the NADA Convention and Expo with an elite group of trade shows across the country,” said Steve Pitt, NADA vice president of conventions and expositions. “We’re honored to be recognized as part of this elite group and setting the gold standard for the trade show industry.”
 
• A two-month reduction in fleet supply and continued strong demand pushed AuctionNet® wholesale prices over the first half of December up by a considerable 2 percent relative to November, according to the NADA Used Car Guide.  This result dramatically exceeds the historical average of about one-half of 1 percent for the period.
 
At a segment and model year level, lighter fleet volume and sought-after CPO stock continue to push up 2009-2011 MY prices more than their older counterparts.  Mid-size vans and SUVs are outperforming most other segments with month-to-date price growth averaging just below 3 percent.
 
Assuming current levels hold, wholesale prices will finish the year up by 3.6 percent. Compact and near-luxury car appreciation is leading all other segments at 9.5 percent and 6 percent, respectively.
 
 

Consider 'adopting' a school to attend 2012 Chicago Auto Show

January 23, 2012

Dealerships can plant a benevolent seed with students by sponsoring a school group’s visit to the 2012 Chicago Auto Show. The measure can be a community relations plum and establish customer loyalty with young consumers.
 
Under the Adopt-A-School Program, a dealer can purchase tickets at $7 each for students in a group. There is no minimum or maximum potential group size. See the flyer at www.CATA.info for full details and to register.
 
High schoolers at or near driving age are logical students for a dealership to pair itself with. There are hundreds and hundreds of high schools in the Chicago area, probably more than one within each dealer’s relevant market area.
 
Bill Stasek, proprietor of Bill Stasek Chevrolet in Wheeling, last year sponsored more than 100 students each from nearby Buffalo Grove High School, John Hersey High School in Arlington Heights, and Vanguard School in Wheeling. Accompanying chaperones are admitted at no charge.
 
“The schools look forward to the auto show so much, and they wouldn’t be able to go without this program,” Stasek said. “They really appreciate it, so it creates a lot of goodwill with the schools.”
 
In the program, dealers contact a school’s principal or assistant principal to arrange the weekday field trip. Stasek met the groups at McCormick Place and even popped for lunches for everyone.
 
Dealers interested in “adopting” a school should contact the CATA’s Donna Young for more details, at (630) 424-6045.
 
 

CATA closed Feb. 3-19 for Chicago Auto Show

January 23, 2012

The office of the Chicago Automobile Trade Association will close in Oakbrook Terrace Feb. 2 and not reopen till Feb. 20.
 
Far from taking a two-week cruise, the CATA staff will relocate to McCormick Place to produce the 2012 Chicago Auto Show.
 
Because the CATA office will be closed, association members must make the following adjustments:
 
• Dealership personnel responsible for securing any forms provided by the CATA—odometer statements, used-car buyer’s guides, used-car limited warranty statements, and emission control equipment statements—must place orders by Jan. 30 to ensure the orders can be processed by Feb. 1. Don’t be caught with an empty supply shelf.
 
• Use of meeting rooms at the CATA is suspended Feb. 3-17.
 
Calls to the CATA office will automatically be forwarded to CATA staff at McCormick Place.