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CATA Bulletin
November 25, 2013

 

Curtain to lift on Sunday sales?

November 22, 2013

Illinois Sen. Jim Oberweis, R- Sugar Grove, who intends to introduce legislation to revoke the state’s Sunday closing law for dealerships, stated his reasoning at the Nov. 20 meeting of the Chicago Automobile Trade Association board of directors.
 
Since gaining elective office this year after six attempts, Obeweis said “three to five people” have asked him why they can’t buy a car on a Sunday. The new senator said he thought to himself: “That’s insane. Why would that be?”
 
Illinois is one of 22 states that restrict dealers from selling automobiles on Sundays. Then-Gov. James Thompson signed the legislation in 1982, but the law faced several court challenges before taking effect in November 1984.
 
“Fundamentally,” said Oberweis, “I’m a guy who thinks government should be as little involved in our lives as possible. In the long run, this (law) is something that is not good for our state.”
 
The CATA directors, all new-car dealers, think otherwise.
 
Dealers sought the law decades ago as a way to retain the highest caliber employees; workers who didn’t want to work Sundays weren’t long for the store, and the same is true today.
 
“The backbone of our business is the people who work for us and their families,” said Mike McGrath Jr. “To attract good people, it’s a competitive advantage to have Sunday off.”
 
Oberweis remembered a time when barbers were forced to close on Sundays. He said, “Barbers now cut hair on Sundays, and consumers love it.”
 
Dave Sloan, the CATA president, pointed out that buying a car is more complicated than getting a haircut. “Banks aren’t open on Sunday,” Sloan said. “You can’t close on a house on Sunday. We need to be closing on these (car) deals when the banks are open.”
 
Other directors cited higher operating costs and the threat of employee unionization if the Sunday closing law was rescinded, and they noted the number of hours dealerships already are open. “There are 144 other hours a week for (consumers) to buy a car,” said CATA Chairman John Webb.
 
Also, consumers often use Sundays to visit dealership lots for unfettered looks at the vehicle models and available options.
 
Oberweis suggested he is looking for legislation he can champion in the General Assembly, where Democrats have veto-proof majorities in both chambers. He said: “I have no chance of solving big issues with Democrats versus Republicans. I can do nothing, or I can try to pass what I can get support for.”
 
In other news, Oberweis just announced plans to run in 2014 for the U.S. Senate.
 
 

CATA donates $5,000 to tornado relief causes

November 22, 2013

Directors of the Chicago Automobile Trade Association voted Nov. 20 to donate $5,000 towards relief efforts for victims of tornadoes in central Illinois days earlier. The funds will be directed equally to the American Red Cross and the NADA Foundation's Emergency Relief Fund.
 
The Red Cross opened shelters in Illinois, Indiana and Ohio. Red Cross emergency vehicles are distributing meals and relief supplies, and health care is available at emergency aid stations in some areas.
 
The NADA fund offers assistance to dealership employees who have been affected by unforeseen emergencies and natural disasters, such as hurricanes, tornadoes, fires and floods. Since 1992, the fund has provided $5.4 million to more than 8,000 families in 28 states. This year, the fund has helped people affected by tornadoes in Oklahoma, the fertilizer plant explosion in Texas, and floods in Colorado.
 
The Nov. 17 storms that ravaged areas of the Midwest also damaged at least two car dealerships: a used-car store in Washington, Ill.; and Eriks Chevrolet, in Kokomo, Ind. The independent dealership, previously known as John Bearce Ford, recently became a used-car store operating under John Bearce Cos.
 
Illinois Gov. Pat Quinn declared seven counties across the state disaster areas.
 
 

CFPB, NADA take center stage in Washington, D.C., in November

November 22, 2013

By Mark Scarpelli, Chicago Metro NADA Director
 
Richard Cordray, director of the Consumer Financial Protection Bureau, provided the agency’s semi-annual report to Congress in testimony to U.S. Senate Banking Committee on Nov. 12. During questioning from the Senators, Cordray admitted that the CFPB needs to provide more transparency on its methodology, but expressed concern about dealers setting auto loan rates.
 
“Like Congress, the NADA is still waiting for the CFBP to share the methodology it uses to determine that statistical discrimination exists in the auto lending,” said NADA President Peter Welch.
 
Welch stressed that many factors outside of race can impact an interest rate such as the amount financed, vehicle class, whether the car is new or used, the size of the down payment, term of the loan, time of the month and  automaker sales incentives, etc.
 
“Without understanding the bureau’s computer modeling there is no way to determine if the CFPB’s conclusions are reliable or come to a resolution that protects the affordability and accessibility that dealers can offer their customers today,” Welch said. 
 
Six of the 22 members on the Senate Banking Committee signed a letter to Cordray on Oct. 30 expressing concern about the CFPB’s guidance issued last March “that could curtail a pro-competitive feature of the indirect vehicle financing market and to request greater transparency for the bureau’s activity related to this matter.” They are Ranking Member Mike Crapo, R-Idaho; Kay Hagan, D-N.C.; Heidi Heitkamp, D-N.D.; Joe Manchin III, D-W.V.; Jerry Moran, R-Kan.; and David Vitter, R-La.
 
In March, the CFPB — without public comment or formal rulemaking — issued guidance that pressures lenders into compensating dealers arranging financing with flat fees and eliminating any discretion dealers have to “meet or beat” a competitor. Since then, the CFPB has refused to release any of its research that supports the need to force these changes in auto lending.
 
After multiple bipartisan requests from both the House and Senate, the CFPB admitted recently that there was no analysis performed as to how moving to flat fees will help or harm consumers.
 
“The NADA shares the CFPB’s goal of eradicating discrimination. There is no room for discrimination in the car business or any other business,” Welch said. “In the name of fair lending, the CFPB’s actions will eliminate a customer’s right to negotiate a better interest rate. That is akin to eliminating the ability to negotiate a lower sticker price on a car or truck.”  
 
Welch said consumers benefit from the current system of dealer-assisted financing because consumers can shop at more than 17,000 franchised new-car dealerships that have the ability to “meet or beat” interest rates offered by their competitors. “The current system yields credit that is widely available and competitively priced,” he said.
 
In other NADA news ...
 
• Dealers and their managers planning to attend the 2014 NADA Convention & Expo in New Orleans should register as soon as possible and book one of the few remaining hotel rooms. Thirty-three out of 36 hotels in the NADA convention block are sold out. Only three hotels have rooms available: Embassy Suites, Hyatt Regency and Omni Royal Crescent.
 
“With numerous conferences and events scheduled in New Orleans over the same dates as the NADA convention, hotel rooms are filling up quickly and there’s limited space,” said NADA Convention Chairman Desmond Roberts. “The NADA’s hotel rates are guaranteed to be the lowest in town.”
 
The NADA convention is Jan. 24-27. Dealers and their managers who register by Jan. 16 will receive at $75 discount from the on-site rate. For more information or to register, visit www.nadaconvention.org.
 
• The NADA has unveiled its second annual industry report on car and truck dealership employee compensation, benefits, retention and turnover, and hours of operation and work schedules.
 
The 2013 Dealership Workforce Study Industry Report was produced in partnership with DeltaTrends, and was designed to help dealers meet their No. 1 challenge: recruiting, hiring and retaining top talent. The report helps dealers meet that challenge, with hard data culled from 290,000 car and truck payroll records, and cogent analysis by DeltaTrends, the automotive retailing industry’s leading provider of workforce metrics, guides and trends, and HR best practices.
 
“This is by far the most comprehensive and timely study on the dealership workforce ever produced, and serves as a tremendous resource to help dealers ‘step up their game’ to gain an edge on the competition,” said NADA Chairman David Westcott.
 
To purchase the 2013 Dealership Workforce Industry Report, contact NADA University Online at (800) 557-6232 or complete the form at www.nadauniversity.com/workforcestudy. The opportunity to participate in the 2014 study will open to NADA and ATD member dealers at the 2014 NADA Convention & Expo in New Orleans, Jan. 24-27.
 
 

Member-discounted tickets to 2014 auto show on sale now

November 22, 2013

Tickets and vouchers that admit the holder to the 2014 Chicago Auto Show free or at a reduced price can be ordered by CATA members using the order form.
 
The passes promote goodwill with customers and even can help persuade a prospect to close a deal. Two kinds of passes are available, General Admission ticket and Weekday Discount voucher. The former, which costs CATA members $600 for 100 tickets, admits the holder to the auto show free, without a box-office wait.
 
The Weekday Discount voucher costs members $100 for 100 and admits the holder for $6 during the week. Regular admission is $12.
 
A minimum 100 passes must be purchased with either order. All CATA members in good standing will receive a package in early January that includes, among other things, 200 complimentary Weekday Discount vouchers.
 
 

The power of mom, and how marketers can best reach her

November 21, 2013

It’s no secret that our world is ever-evolving, with new forms of technology sprouting up at every corner. Overall it’s important for marketers to keep mothers and other female consumers in mind when devising marketing campaigns. It certainly is a segment to watch and cater to, given the female’s heightened role as a purchase decision-maker.
 
Oaklee’s Family Guide, the official family guide of the Chicago Auto Show, hosted a Marketing to Moms seminar on Nov. 5 at the Chicago Automobile Trade Association that focused on reaching the “mom market” and encouraging them to feel comfortable when visiting dealerships.
 
Women increasingly are becoming the sole decision maker when it comes to purchasing cars. According to research by Cooper Tires, women make 65 percent of new-car purchases and 45 percent of light trucks and SUV purchases. Women also request 65 percent of the service work for their vehicles. This segment certainly is one that deserves extra attention.
 
Oaklee’s Family Guide offered several tips on how to connect with the mom market.
 
Define the market
 
Not all moms are created equal. They don’t live in the same area, have the same amount of children, or are the same age. The ages of their children also has a large impact on how to market to them; a mom teaching her child to drive may concentrate more heavily on the car’s safety features, whereas a mom driving multiple children to soccer games may rate equipment storage space high on her list.
 
Additionally, many mothers today feel as though marketers are ignoring their needs, and 73 percent of moms feel that brands do not understand what it’s like to be a mom. Hence, it is extremely important for dealerships to define their mom market prior to implementing a campaign.
 
Decision-making styles matter
 
The first step in the car-buying process should be to have an informal conversation and understand where each particular person is coming from. The salesperson should get to know the person and whether she is a working mom or a homemaker. There is a big difference between moms who have been working their whole life versus moms who are just starting their career, for example. Determining these pertinent details up front will better help the salesperson understand the customer’s needs and be able to draw natural ties between her lifestyle and a particular vehicle’s features and benefits.
 
It used to be that the “traditional” family model included a working dad and a mom who stayed at home full-time to care for their kids. That is not the case today; in fact, 72 percent of moms with children under the age of 18 are working, and 33 percent of dads are taking on the role of what used to be the “traditional” mom. It’s important for marketers to recognize that moms have many different roles and ensure that is portrayed in their messaging.
 
Additionally, there are gender-based differences to consider. Men tend to make decisions based on logic; women tend to make their decisions on emotion, backed by logic. It is critical to get moms emotionally invested by asking questions such as, “How does that make you feel?” Many moms may also ask their children to weigh in on the decision before making a purchasing decision, so it’s just as important to connect with the children as it is with mom.
 
Transparency and word of mouth
 
Women tend to thrive on word-of-mouth reviews. Marketers must allow this to feed through social media and online review systems such as Yelp. Moms often check online before making a purchase decision and feel better about that decision when they see positive ratings about that particular product.
 
Building a community of advocates is something that is essential for every company or brand. It’s imperative to ensure variety in the messages distributed to the community and make the communication consistent (i.e., develop a content calendar). Information can be sent using many different channels including social media, direct mail, email and cold calls; however, the best practice is to ask your customer’s preference. Sending helpful information such as safety tips or how often to change tires are ways to build trust with customers and remind them that you care and can provide as a helpful resource. 
 
General social media strategies 
 
Social media today is a way of life. It is critical for every dealership to maintain a social media presence and to provide updates regularly.
 
Social media is great for advertising and engaging consumers. Dealerships can create simple contests to drive engagement, such as “share this photo and get $5 off your next visit” or via utilizing social media advertising to reach a specific target audience.  
 
Additionally, customers should be encouraged to write reviews and, when they do, assure them they will be responded to publically and quickly, to provide credibility. As previously mentioned, women tend to turn to social media for advice like asking their Facebook friends which family vehicle they recommend, for instance, as they rely on word-of-mouth assurance before making a purchase.