Chicago Automobile Trade Association
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CATA Bulletin
May 22,2017

 

Barbecue for the Troops kicks off 2017 campaign

May 19, 2017

Area dealers hope to cross the half-million-dollar mark this summer in funds raised for USO of Illinois, after raising about $420,000 for the nonprofit over four summers. The 2017 campaign began at a launch party at the CATA on May 17.
 
The kickoff was preceded by a panel discussion about the growing importance of mobile marketing.
All the funds are used for USO programs that support deployed troops, military families, wounded, ill and injured troops and their caregivers, and families of the fallen.
 
The campaign culminates July 15, when it is hoped 100 area dealerships will host Barbecue for the Troops events. Dealership representatives at the "boot camp" launch were equipped with USO banners, posters, and donation tear pads, and computer links to campaign graphics.
Jessica Dolan, vice president of development for USO of Illinois, encouraged dealers to place banners in clear view near the street in front of their store.
"People will drive by and pull in to ask what you’re doing for the USO," Dolan said. "It is a very recognized logo, and people want to help the USO."
Chicago has been the only market in recent years where dealers have hosted USO Barbecue for the Troops events, but NADA Chairman Mark Scarpelli, a dealer principal in Antioch, is encouraging dealers across the country to host an event on July 15.
Some of the planned fundraising activities include:
 
• Car Wash, with dealers asking for donations
• Lunch special for employees and their families and friends. They can leave the brown bag at home and eat in, to support the troops
• Cornhole/Bags Games. No American barbecue is complete without a cornhole/bags tourney!
• On Demand DJ, with donations made for song requests
• Social Media Donations. Enlist employees to promote the dealership’s USO Barbecue for the Troops through their Facebook, Twitter, LinkedIn and similar accounts, to collect additional donations through an event page.
The USO has for 76 years provided Americans with a tangible way to express appreciation and gratitude for the dedication and sacrifice of the nation’s troops and their families. 
The Chicago Automobile Trade Association has arranged for radio advertising and is working with many radio, print, television and social media partners to develop an aggressive promotional campaign leading up to July 15.
All CATA messaging will direct individuals to www.DriveChicago.com to find participating dealers nearby. Host dealers will be highlighted on DriveChicago, with links to information on specific events. 
Dealers who want to join the fundraiser should contact the CATA’s Tim McBride or Jennifer Morand, both at (630) 495-2282.
 
Panelists at the mobile marketing presentation discussed new strategies and tactics — including fresh content marketing ideas, video examples and email solutions — with the ultimate goal of converting more leads into quality customers. 
 
"Customers are getting more exacting with search parameters. ‘I want this car, in this color, with these options and trim level,’ " said panelist Mike McDonnell, chief executive of Automotive Internet Media. "If you don’t offer that, you lose them."
 
Other panelists included Craig Steensma, CEO of eshots; Kevin Keefe, the principal of Brilliance Honda, in Crystal Lake, and Brilliance Subaru, in Elgin; and Mark Bilek the CATA’s senior director of communications and technology.
 
Consumer use of mobile devices is accelerating. Just four years ago, the time spent using mobile was about equal to time at a desktop computer. Today, mobile leads about 2-to-1. Dealers must make sure their websites accommodate that.
 
Listings are more condensed on a mobile site, but the list, for instance, needn’t describe a vehicle’s color when showing a picture achieves that. A picture might look good when viewed vertically, but what about horizontally?
 
Steensma recounted a story about Facebook co-founder Mark Zuckerberg meeting a website developer, then throwing the developer out of his office with the command, "Don’t come back to my office until you have a mobile strategy!"
 
Use of social media is an effective path to achieve name recognition through branding. And social media clicks can cost as little as 25 cents each, compared to $4 for a pay-per-click.
 
Bilek noted that dealers tend to spend more on advertising at the end of a month, as they try to meet sales goals. "But that’s when it costs more to advertise," he noted, "and people are shopping all month."
 
"Search engine optimization is dead," McDonnell declared. "It now is content marketing. Don’t just advertise, provide content."
 
 

7 dealers vying for 5 CATA director seats

May 19, 2017

Seven candidates, including one incumbent, have been nominated to fill five openings on the board of directors of the Chicago Automobile Trade Association. Each term lasts three years beginning next month.
A summary of the candidates’ qualifications was mailed May 18 to CATA dealer members, and election ballots will be sent May 26 to those dealer members whose association dues are up-to-date.
Completed ballots must be received by 12 p.m. June 9 by the CATA’s auditing firm, Crowe Horwath LLP, which will tally the submissions. Results will be announced at the June 13 golf outing at Cog Hill Golf & Country Club in Lemont.
The incumbent, Bill Haggerty (Haggerty Buick-GMC, Villa Park; Haggerty Chevrolet, Glen Ellyn; and Haggerty Ford, West Chicago), is seeking his third and final term on the board. A director can serve a maximum of three, three-year terms.
Additional nominees include John Crane, proprietor of 10 Hawk franchises in Bridgeview, Forest Park, Joliet and Oak Lawn; Fred Marks (Classic Kia-Toyota, Waukegan); Anthony M. Loquercio (Elgin Hyundai); Steve T. Phillipos (Chevrolet of Homewood); Jason Roberts (Advantage Chevrolet, Boliingbrook and Hodgkins); and Richard Wickstrom (Wickstrom Ford-Lincoln and Wickstrom Chrysler-Jeep-Dodge-Ram, Barrington).
A committee of current and former CATA board officers nominated the candidates. The CATA board totals 15 directors.
 
 

Why are U.S. auto sales slipping?

May 19, 2017

When news leaked out May 16 that Ford would cut 10 percent of its salaried workers, it underscored how the auto industry’s strong sales are slipping after years of consecutive growth since the Great Recession. 
In April, the industry reported a 4.7 percent sales drop, according to industry tracker Autodata. General Motors, Fiat Chrysler and Ford showed declines of 7 percent or more in sales. Japanese car companies also were off in the North American market, although not as much. 
As vehicle demand has ebbed, automakers find themselves dealing with bloated inventories. At the end of April, GM had enough vehicles to last 100 days; the ideal level is 60 days. 
The lower sales affect both sedans and high-margin SUVs and trucks, which have been benefiting from lower gasoline costs. The most sluggish lines are small and midsize cars, which larger vehicles overshadow.
And due to government regulations, it’s not as simple as simply shutting down most small car production capacity. Automakers "have to sell small cars to meet industrywide auto emission standards," said John Augustine, chief investment officer of Huntington Bank. 
Declining sales have led to factory layoffs. GM will furlough 1,100 workers at its Lansing, Mich., plant for at least five months. Fiat Chrysler has laid off 3,200 workers at its facilities in Toledo, Ohio, as it retools its operations. 
This development, if it continues, could put the industry at odds with President Donald Trump, who is pushing to bring industrial jobs back to the U.S. 
The auto sector’s ebbing fortunes contrast with the rises in consumer optimism, boosted by steady job growth and low unemployment. During the first quarter, however, gross domestic product turned in its weakest growth in three years at a 0.7 percent annual pace, as consumer spending barely rose and companies spent less on inventories. 
Of course, carmakers’ suddenly bumpy road may be temporary. Low fuel prices, a strong employment picture generally and the arrival of summer, traditionally a good season for car sales, may turn things around.
Still, Detroit is hardly in a festive mood nowadays. "We are very cognizant that we operate in a cyclical industry and we are in the eighth year of expansion," said Chuck Stevens, GM’s chief financial officer, at a recent company earnings call for analysts. "We are very focused on acting like we’re in a downturn."
 
Here are the roots of the slump:
 
Demand has peaked. There was a record vehicle sales volume in 2016 of 17.55 million units. But the National Automobile Dealers Association forecasts that volume will slide to 17.1 million in 2017, which still is on the high side historically. And that will come despite a barrage of discounts -- about about $3,900 per vehicle, or around 10 percent of the suggested retail price, according to research firm J.D. Power. That’s the biggest discount level since the recession.
 
Why the demand falloff? It may simply be that, for now, everyone who wanted a car bought one. Low inflation and interest rates, along with cheap gas, may have pushed more buyers into the market than would typically want new wheels. 
 
During the recession and its aftermath, many owners held onto their vehicles. So then they traded in the old ones, creating a glut, which further plumped up the over-supply. Morgan Stanley analysts predict that used car prices will fall by up to 50 percent by 2021.
 
Credit reversal. Low interest rates led to more available credit for auto buyers. One aspect was an explosion in long-term loans, to six years or so. That’s a long time to be committed to a vehicle, and consumers end up paying more over time in interest. 
 
Further, reminiscent of the housing boom and bust, lenders loosened standards, and auto loan generation ballooned 56 percent since 2009, with a third of it subprime, noted Lincoln Capital Research. 
 
As a result, car loan delinquencies (90 days or more past due) have climbed to their highest levels since 2008. The upshot is that many lenders are reexamining their lending policies, which could bring a credit contraction. Hence, the easy-money spigot likely won’t be open wide for autos for too much longer.
 
Problems overseas. Although most U.S. multinationals did better offshore in 2017’s first quarter, Detroit automakers made very little money outside of North America. General Motors was the best of a bad lot. Beyond North America, GM had difficulty breaking even, with decent performance in China offset by South American and European losses. It has put its European brands, Vauxhall and Opel, up for sale.
 
Ford garnered all its net income in North America. Italian-controlled Fiat Chrysler, despite its London base, made 80 percent of its earnings in North America. 
 
In a research note, Bank of America Merrill Lynch analysts Michelle Meyer and Alexander Lin warn about "weakness ahead for the auto sector, but there is the lingering question of how quickly the story will evolve." Thus far, they add, the industry’s shaky state is "manageable" for the economy as a whole.   
 
That’s cold comfort for Detroit.
 
 

OSHA reverses position on injury and illness recordkeeping enforcement

May 19, 2017

The Occupational Safety and Health Administration this month announced it has reversed its prior position that employers can be cited for up to five years after an alleged injury or illness recordkeeping violation occurs. Employers now can be cited for only up to six months after the occurrence of an alleged injury or illness recordkeeping violations.
The reversal follows President Trump’s signing on April 3 of House Joint Resolution 83, a Congressional Review Act joint resolution of disapproval of a 2016 Obama administration rule. The CRA enables Congress to eliminate certain rules with a simple majority vote in both houses and prohibits the promulgation of a substantially similar rule without the express consent of Congress.
The National Automobile Dealers Association lent its support to H. J. Res 83 and strongly critiqued OSHA’s prior position in comments filed earlier in 2016. For more information contact regulatoryaffairs@nada.org
 
 

Share MyDealership.org today

May 19, 2017

By Mark Scarpelli, 2017 NADA Chairman
 
American dealerships are local. They are diverse. They are modern. They save people money. And they create jobs. 
These are five facts of life in the auto retail business, and they are now powerful mantras at the National Automobile Dealers Association. 
Auto dealers have known the consumer benefits of the dealer franchise system since its inception, and we’re proud to spread the word with a new national campaign: MyDealership.org.
This initiative aims to help local dealerships — as well as state and metro new-car dealer associations — showcase the benefits of America’s auto dealers and the more than 16,500 dealerships across the nation. 
This is a movement to educate others about our business, whether it’s the general public, policymakers, opinion leaders, journalists, OEM executives and stakeholders throughout the auto industry. 
You may be thinking, "How is this effort different?" 
MyDealership.org is unique because it does not come from the dealer perspective. You will not see me in any of the five featured videos which, by the way, is a hallmark of the campaign — along with the newly launched website. The testimonies and stories that you will see are straight from the mouths of real customers: customers who have benefitted through lower prices on sales, finance, and service. It also comes from the perspective of real dealership staff, who benefit from gainful employment at all levels and acknowledge the great opportunities for advancement. 
Finally, you will get the perspective of local community leaders, who also benefit when local businesses like ours plant roots and contribute to the tax base. 
MyDealership.org is a smart campaign. It capitalizes on social media platforms and public service announcements, assuring that our messages reach as many people as possible. The site also highlights data that outlines the economic advantages and job creation at dealerships in each state. 
But the facts and testimonies are just one piece. The true strength of the campaign lies with all of you! I am calling on each and every one of our members to share MyDealership.org today, if you haven’t already. The ads are designed to be used by any dealer on their own websites, in their marketing or in their dealerships. 
Use this campaign to your advantage and target your state legislators and your local media. NADA has also created a toolkit where you can access and download the videos and banner ads directly: www.MyDealership.org/toolkit.
Finally, why is this campaign so important today? 
During the NADA’s 100th anniversary convention in January, I told thousands of attendees in New Orleans that I would serve as the gatekeeper for this industry. Above all, that means being the gatekeeper between Washington’s policies — whether well-intentioned or not — and your doors. 
As we’ve seen over the past few years, the consequences of federal regulations can negatively impact not just us, but our customers — including higher prices, fewer inventory choices, and less convenience. 
Gatekeeping also extends to our manufacturer relationships. The NADA is encouraging our OEMs to enact programs that help dealers strengthen our relationships with customers, not weaken them. This campaign will not only educate the public on multiple levels but it will showcase the strong relationships we have built with customers over the past century. 
Let us all be a gatekeeper for our great industry. Share MyDealership.org today and share the good news: You are local, you are diverse, you are modern, you save people money, and you create jobs! 
 
Mark Scarpelli is principal of Raymond Chevrolet and Kia in Antioch.
 
 

Congratulations! (May 22, 2017)

May 19, 2017

Seven area dealerships are winners of Fiat Chrysler’s 2017 Customer First Award for Excellence: Bettenhausen Motor Sales (Tinley Park), Heller Motors (Pontiac), Liberty CDJR (Libertyville), Napleton’s River Oaks CJDR (Lansing), Prescott Brothers (Mendota), River Front CDJR (North Aurora), and Wickstrom CJDR (Barrington).
Bill Hartigan (Heritage Cadillac, Lombard) and Frank Laskaris (Cadillac of Naperville) are two of 20 winners of the 2016 Cadillac Dealer of the Year Award.
BMW of Schererville (Ind.) is among 33 winners of BMW’s 2017 Center of Excellence award, for top customer satisfaction and overall operational superiority.
Honda Financial Services gave its 2016 Council of Excellence Award to Valley Honda, in Aurora (11-year winner); and to Bill Kay Honda (Bradley) and Pauly Honda (Libertyville), both 1-to-9-year winners.
Wayne Druktenis (Circle Buick-GMC, Highland, Ind.)Tom Van Prooyen (Schepel Buick-GMC, Merrillville, Ind.), and Stephen "Woody" Woodring (Woody Buick-GMC, Naperville), are three of 22 dealers named 2016 Buick Dealer of the Year winners. Van Prooyen and Woodring also are among 22 winners of the 2016 GMC Dealer of the Year award.
Muller’s Woodfield Acura was named an 11-year winner of Acura’s 2016 Council of Excellence award. Joe Rizza Acura, in Orland Park, was a 1-to-9-year winner of the award.
Chevrolet bestowed its 2016 Dealer of the Year award to 50 U.S. dealers, including Mike Anderson (Mike Anderson Chevrolet of Merrillville, Ind.), and Curtis Pascarella (Phillips Chevrolet, Frankfort.
Planet Honda (Matteson), Team Honda (Merrillville, Ind.) and Valley Honda (Aurora) were named to the 2016 list of Honda Masters Circle winners.
Honda Genuine Parts & Service recognized four area dealers for its inaugural award, the 2016 Council of Parts & Service Professionals: Continental Honda, Countryside; Honda Superstore of Lisle; Bill Kay Honda, Bourbonnais; and Muller Honda of Gurnee.
Toyota of Naperville was named among the Top 50 dealers for 2016 of certified used vehicles.
Lexus of Merrillville (Ind.), Lexus of Naperville, Lexus of Orland (Orland Park), McGrath Lexus of Westmont, and Woodfield Lexus (Schaumburg) are among the 2016 Elite of Lexus Dealers.
Continental Honda, in Countryside, and Valley Honda, in Aurora, were named Honda President’s Award winners for 2016. Valley won the award for a tenth consecutive year.
2016 Acura Precision Team Award recipients include Continental Acura of Naperville (20-year recipient); Acura of Libertyville, McGrath Acura of Westmont, and Muller’s Woodfield Acura, in Hoffman Estates, (all 15-year recipients); and Arlington Acura in Palatine (6-year recipient).
Winners of Ford’s 2016 President’s Award include Arlington Heights Ford, Buss Ford-Lincoln (McHenry), Fair Oaks Ford-Lincoln (Naperville), Heller Ford Sales (El Paso), Wickstrom Ford-Lincoln (Barrington), and Willowbrook Ford.
Imperial Motors Jaguar of Lake Bluff is one of 16 winners of the automaker’s 2016/17 Pride of Jaguar award.
Gerald Kia, in Naperville, is one of 19 winners of Kia’s 2016 President’s Cup award.
Fletcher Jones Audi, in Chicago, is one of 12 dealers named to Audi’s 2016 Magna Society Elite. Magna Society members for 2016 include The Audi Exchange (Highland Park), Audi Westmont, Continental Audi of Naperville, and Hoffman Audi (Hoffman Estates).
CJ Wilson Mazda, in Countryside, was named a recipient of this year’s Mazda President’s Club award. 
 
 
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