Chicago Automobile Trade Association
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CATA Bulletin
April 27, 2015

 

State's Sunday closing blue law safe after 3 Illinois bills falter

April 24, 2015

Three bills attempting to undo Illinois’s 31-year-old ban on Sunday vehicle sales all stalled in committee April 21, effectively stopping the legislation during the state legislature’s spring session.
 
According to the General Assembly’s schedule, the bills would have had to win three successive votes in the Senate and pass to the House by April 24. No vote was taken on any of the measures. The General Assembly is scheduled to adjourn May 31.
 
Senate Bill 1780, the most far-reaching of the three proposals, would lift Illinois’s blue law that prohibits new- and used-vehicle sales on Sundays. SB 1835 would allow for the sale of motor vehicles by licensed dealers for not more than two hours on Sundays. And SB 1706 would permit Sunday sales of motor vehicles if the licensed dealer is a person who observes religious worship on a day other than Sunday.
 
Illinois Sen. Jim Oberweis (R-Sugar Grove), who introduced all three of the current proposals, also introduced legislation last year to open dealerships on Sundays, but that effort similarly faltered.
 
CATA Chairman Colin Wickstrom, who spoke at the April 21 committee hearing, said the dealer industry advocated for the Sunday blue law in the 1980s in order to attract quality salespeople who wanted to spend Sundays with their families. Consumers, Wickstrom added, never complain about the Sunday closing.
 
"Consumers actually enjoy looking around our lots on Sundays, at their leisure and without any pressure," he said.
 
Wickstrom added that because more than 84 percent of new-car purchases now involve financing from banks that are closed Sundays, the law is more important today than when it was enacted.
 
Desmond Roberts, president of Advantage Chevrolet Hodgkins and Bolingbrook and a director of the National Automobile Dealers Association, also spoke at the hearing in support of the state’s Sunday closing law.
 
 

New NLRB "ambush" rule cuts time for unionization process

April 24, 2015

A new election rule of the National Labor Relations Board that took effect April 14 speeds up the process by which employees can unionize.
 
Under the new NLRB rule, employees could potentially organize a union in less than two weeks, compared to the previous average of 38 days between the time a petition is filed and the election is held. Business groups who say the rule does not give them enough time to prepare for union elections refer to it as the "ambush" or "quickie" election rule.
 
"Shortening the time frame before an election robs employees of the ability to gather the facts they need to make important and informed decisions like whether or not to join a union and denies employers adequate time to prepare," Jay Timmons, president and CEO of the National Association of Manufacturers, said when the rule was finalized in December. 
 
Labor officials say the new rule will prevent management from unnecessarily delaying union elections.
 
"[This] means corporate bosses will have fewer opportunities to cheat you out of your right to join together," said Mary Kay Henry, president of the Service Employees International Union.
 
But David French, senior vice president of government relations at the National Retail Federation and a detractor of the new rule, said: "These rules are similar to the ‘hurry-up offense,’ where one side hopes to catch the other off-guard with misdirection and a hurried pace. In this case, employers will be put on constant defense and always placed at a disadvantage."
 
Christopher Jolie, an attorney with the CATA’s labor counsel, Franczek Radelet P.C., said employers can enhance their ability to deal with the new rule and the expected increase in union organizing by studying the NLRB’s recently issued guidance memorandum and FAQs on the new rule.
 
Employers, Jolie said, should also consider the following steps to prepare:
 
• Designate a team that is responsible for dealing with the new rule once a petition is filed. For example, this team would be responsible for reviewing all NLRB correspondence; communicating with the NLRB; preparing documents (employee lists, statements of position, etc.) to be submitted to the NLRB; and preparing for a hearing.
 
• Designate another team (tightly coordinated with the team described above) that is responsible for campaign issues if a petition is filed. For example, this team would be responsible for gathering information on the petitioning union; developing a plan for communicating the employer’s position on third party representation; assessing vulnerabilities and on-going evaluation of campaign strategy.
 
Once a petition is filed, both teams would be busy at the same time. Given the compressed time frame under the new NLRB rule, Jolie said employers should begin preparing now in order to successfully respond to a simultaneous NLRB petition and campaign.
 
 

Consumers want changes to car-buying process, study says

April 24, 2015

Just 17 of 4,002 people in a new study said they prefer the current car-buying process. The rest said they want significant changes, particularly in the test drive, deal structuring, financing paperwork and service phases.
 
The "Car Buyer of the Future" study, released March 31 by AutoTrader.com, identifies which changes consumers desire, the underlying reasons behind those desired changes, and the benefit to dealers and manufacturers in adopting to tomorrow’s car buyers. In addition to identifying the changes that consumers do want, the study also dispels some commonly held beliefs about the future of car buying.
"While there is good work going on right now to adapt decades-old sales processes, consumers are telling us that we as an industry are not moving fast enough," said Jared Rowe, president of Autotrader. "By recognizing — and embracing — the need for change, we have a tremendous opportunity to surprise and delight our consumers."
 
Dispelling Myths about the Future
Some commonly held beliefs about the future of car buying are that salespeople will be less important in the future; that consumers don’t want to negotiate; and that lowest price will always win. In fact, the latest study shows the opposite.
 
Myth #1: Salespeople will be less important in the future. In fact, the dealership and its salespeople will continue to play a very important role in the car-buying process. Eighty-four percent of consumers in the study indicate that they want to buy a car in person. 
 
Further, 43 percent see the dealership as a place to learn. At the dealership, consumers want to validate information they found online and learn about the following: specials, offers, warranty and service.  
 
Myth #2: Consumers don’t want to negotiate. More than half, 56 percent, of consumers prefer to negotiate, according to the study, and two of the most influential groups in car buying — millennials and females — also prefer negotiating over flat rate pricing.  This is because consumers do not yet trust flat rate pricing, and they feel that they have to negotiate to get a fair price. 
 
Myth #3: Lowest price will always win. While price is important to consumers, the dealership experience can trump lowest price; 54 percent say that they would buy from a dealership that offered their preferred experience over lowest price. Also, 73 percent report that they are willing to drive farther for a great salesperson, versus 65 percent who are willing to drive to get the lowest price. 
 
According to the study, the biggest changes need to come in four main areas:
 
1. Test Drives: While 88 percent of consumers say they will not buy a car without test driving it first, the majority report that they do not prefer the way test drives currently are conducted (an accompanied test drive with a salesperson). Instead, they want more convenience and less pressure while test driving, such as having the ability to test drive multiple vehicles across brands in a single place and taking a test drive with a product specialist instead of a salesperson. 
 
2. Deal Structuring: Negotiating will be a part of the car-buying process for the foreseeable future, but surveyed consumers indicate that they would like to see a big change in the way they go about negotiating the deal structure. 
Of those who liked the idea of online deal building, more than half, 56 percent, want the ability to start the negotiation on their own terms — preferably online — and 45 percent would like to remain anonymous until they lock in the deal structure. 
 
3. Financing Paperwork: Nearly three-fourths of consumers, 72 percent, want to complete the credit application and financing paperwork online. The key factors driving this desire are to save time at the dealership (reported by 72 percent of those who favor online paperwork), and to have less pressure while filling out paperwork (reported by 71 percent of those who favor online paperwork). 
 
A separate study conducted in 2014 by Cox Automotive showed that the time buyers spend in the F&I office averages 61 minutes, more than two-thirds the total amount of time they want to spend at the dealership (90 minutes). Moving paperwork online and enabling consumers to complete it on their own time would greatly enhance the in-dealership experience and cut down on the time they spend in the dealership on the day of purchase. 
 
4. Service:  When it comes to servicing their vehicles, 83 percent of consumers indicate that they would like to have the ability to access a network of local service centers that honor service agreements. The key factor driving this desire is convenience. 
 
Of those who prefer local service networks, 76 percent want to go to a service center nearby, and 63 percent want to be able to service the vehicle anywhere. 
 
The benefits for dealers and manufacturers who adapt, the study found, are clear. Dealers and manufacturers who focus on creating — and ultimately deliver — a better shopping and buying experience can reap significant benefits, according to the study:
 
• Nearly three-fourths (72 percent) of consumers say they would visit dealerships more often if the buying process were improved. 
 
• Two-thirds (66 percent) of consumers say that they would be much more likely to buy from a dealership that offers their preferred experience. 
 
• More than half (53 percent) of consumers would buy a vehicle more often if the buying process were improved. 
 
"The sales environment is expected to remain strong across new, used and CPO cars over the next few years, and it is exciting to see that we have several ways to enhance the consumer experience for the benefit of all involved — buyers, manufacturers and retailers," said Autotrader’s Rowe.
 
 

Offering too much can befuddle shoppers

April 24, 2015

Offering the proverbial "largest selection of vehicles" can backfire on dealerships if customers feel overwhelmed by it all, said Neil Hoyne, head of customer analytics for Google.
 
According to conventional wisdom, dealers displaying acres of inventory provide more to pick from and consequently increases sales. But it can work the opposite.
 
"By giving people more choices, they can get confused and end up buying less," Hoyne told dealers attending Cox Automotive’s 2015 Digital Summit at the so-called "Googleplex," the search-engine giant’s sprawling California headquarters. The more-is-worse phenomenon applies elsewhere in automotive sales and marketing.
 
For instance, online car-configurator tools are designed to let consumers pick from assorted offerings — including trim levels, paint colors and aftermarket add-ons — to "build" a car to their specifications. That gives them a digital representation of their potential purchase.
 
But some configurators ask too much, Hoyne said, pointing to one, "Build a Corolla," which asks users up to 60 questions as they customize their cyber vehicle.
 
"You’d think they’d love it, but by the time they’re through with the process, they’re fatigued," he said, citing Google analytics.
 
That’s assuming they make it to the end. Some quit before the 60th question. In contrast, shoppers seem to like configurators offering default categories based on popular choices. It pares the selection process.
 
"People end up spending almost $2,000 more on a vehicle when choices were opted in for them," Hoyne said. "Defaulting is easier for them than having to make too many choices."
 
Google analytics has detected another anomaly that at first seems good but actually is bad. It involves high click rates. Under ideal circumstances, those are website positives.
 
Not always though. "If your site makes it more difficult for people to find what they are looking for, and they go through a lot of pages because of that, your click rate might go up," Hoyne said.
 
But so will customer frustration, not an ideal state of mind to put a car shopper in. An engaged customer efficiently clicking towards a purchase is one thing. An irked user stumbling through a clunky website is something else.
 
Hoyne shares two other Google findings from its automotive-market tracking.
 
One, digital display ads particularly influence shopping behavior earlier in the deliberation process. Two, consumer polls preferably offer multiple-choice options rather than ask open-ended questions. The latter can elicit weird responses.
 
Hoyne recalls a survey that asked: "When you buy your next vehicle, what will it be?"
 
Replies included a Schwinn bike, Boeing plane and "That question is a disgrace to America."
 
 

Dealers improve recall service

April 24, 2015

U.S. auto dealers did a better job of satisfying people who brought in cars and trucks because of recalls, which soared to a record in 2014, according to a J.D. Power study. 
 
The customer service index for recall-related work rose to 789 points out of 1,000 from 777 a year earlier.That was higher than the 781 score for repair visits. 
 
"Even though recalls can create a large influx of customers into the service department and really strain capacity, automakers are better prepared to handle recalls than they were a few years ago," Power’s Chris Sutton said.
 
Automakers recalled about 64 million vehicles in the U.S. last year, more than double the previous record set in 2004, according to federal regulators. 
 
The study was based on responses from more than 70,000 owners and lessees of 2010- to 2014-model vehicles collected during November and December. 
 
 

Congratulations! (April 2015)

April 24, 2015

Ernest Semersky, proprietor of The Porsche Exchange, in Highland Park, is one of just 28 dealers nationwide to be named a 2015 Porsche Premier Dealer.
 
Land Rover Lake Bluff is one of 16 dealerships named to the 2014/15 Land Rover Pinnacle Club, for reaching the highest levels of business excellence, sales and customer service.
 
Winners of Honda Financial Services’ 2014 Council of Excellence Award include AutoNation Honda O’Hare (Des Plaines), Bill Kay Honda (Bourbonnais), and Valley Honda (Aurora).
 
McGrath Acura of Westmont and Muller’s Woodfield Acura (Hoffman Estates) are winners of the 2014 Council of Excellence Award, presented by Acura Financial Services, for providing premier financial solutions to their clients.
 
Arlington Heights Ford, Bull Valley Ford (Woodstock), Buss Ford-Lincoln (McHenry), Haggerty Ford (West Chicago), Wickstrom Ford-Lincoln (Barrington), and Willowbrook Ford are winners of Ford Motor Co.’s latest President’s Award.
 
The Autobarn Mazda Evanston and CJ Wilson Mazda, in Countryside, are among the recipients of the 2014 Mazda President’s Club Award.
 
 
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