CATA Bulletin a biweekly newsletter

official Web site of CATA dealers Volume 100, No. 17 September 1, 2003

Mars dickers, Facing uproar, FCC pauses till ’05 on Venus doesn’t implementing new fax rule for businesses Businesses won a reprieve from a or business has given express permis- Mars doesn’t mind negotiating cumbersome Federal Communications sion to receive unsolicited facsimile ad- and is confident he deserves more. Commission ruling that would have vertisements.” Venus is satisfied with what she is fined businesses for sending faxes to If businesses or associations violated offered, unsure of what she consumers unless a consumer gives the proposed rule, the FCC could as- deserves and fearful of bargaining. explicit consent first. sess penalties of up to $11,000 for each This is the message of “Women The Telephone Consumer Protection fax. In addition, the person who re- Don’t Ask,” a book to be published Act was to have taken effect Aug. 25. ceived an unwanted fax could sue for by Princeton University Press. The FCC on Aug. 18 moved to extend $500 for each violation, with the pos- Women’s reluctance to negotiate that date to Jan. 1, 2005, to reconsider sibility of receiving triple damages if arises even when it comes to the matter in the wake of waves of ob- the business knowingly broke the law. commonly negotiated items like jections. Non-profit associations objected automobiles, wrote the authors, The FCC proposed the rule last fall, loudly to the FCC, arguing against the Linda Babcock, an economist at but the rule’s exact wording was not requirement that they get written per- Carnegie Mellon University and a published until July 25. In addition, mission before faxing any “advertise- leading scholar of negotiations, most observers focused on the rule’s ment”—including notice of an upcom- and freelance writer Sara telemarketing provisions, which set ing meeting or seminar that charges a Laschever. limits on when a business can call fee—to their own dues-paying mem- According to a survey by the people at home. bers. Dohring Co., for example, women The provision concerning unwanted Small businesses, which rely heavily are 40 percent more likely than faxes begins at paragraph 185 of the on faxes, also railed against the pro- men to accept the first car price a FCC’s 225-paragraph report on the new posed rule, saying it would be too bur- dealer offers. In another survey, 20 rule. densome. percent of women said they never Since 1992, businesses can send “It’s inconvenient, it’s a lot of pa- negotiated. faxes to recipients with which they have perwork, and it’s a lot of time,” said The authors advise women to an “established business relationship,” Steve Bokat, general counsel for the seek out information about prod- regarded by the FCC as customers who U.S. Chamber of Commerce. ucts and prices on the Internet bought something from the business in The rule change would have forced before they go to the store, for an the past 18 months or made an inquiry businesses to secure the recipient’s per- informed worker or customer is the in the past three months. Those peri- mission in advance. Express consent best bargainer. ods expire if the fax recipient requests would have had to (1) be in writing; The book, while sometimes not to be contacted by the fax sender. (2) include the recipient’s signature, in prone to sweeping gender generali- The July report by the FCC reversed electronic or digital form; and (3) zations, carries a central theme: course, concluding “that the established clearly indicate the recipient’s advance women are far less likely than men business relationship would no longer consent to receive any facsimile adver- to initiate a negotiation. be sufficient to show that an individual tisements from a business. 2 CATA Bulletin September 1, 2003

Japanese models dominate Consumer Don’t miss chance to be a STAR Reports list of best-value used cars Are you a STAR? No, not a “star,” in the traditional sense. However, you can belong to STAR, an NADA ini- Japanese-made autos dominated a list of best-value used tiative to simplify computer operations and cut related vehicles, accounting for 15 of the 18 bargains identified by IT costs. Consumer Reports magazine. STAR is an acronym for Standards for Technology in The other three vehicles were U.S. models. Cars made in Automotive Retail. Formed in May 2001, it is a nonprofit, Germany, Sweden, Korea and elsewhere were no-shows on industry-wide initiative to create voluntary information the list. technology standards in the automotive industry. Magazine edi- tors chose cars Consumer Reports’ The standards are necessary because proprietary tech- top used vehicles nology requirements make communications among manu- that “proved reli- facturers, dealers and customers needlessly complex and able, performed 1996 Honda Civic EX, $6,000 costly. well in Con- 2001 Honda Civic EX, $9,500 Let’s say you have a multi-franchise dealership. By sumer Reports’ 1999 Protege ES, $6,000 definition, you deal with multiple manufacturers. Of ne- tests when new, 1996 Infiniti G20, $5,500 cessity—because of the proprietary technology linking and offer excel- 1998 Mazda Millenia S, $8,500 1996 Camry XLE V6, $7,500 each manufacturer to your dealership computer system— lent value for the money.” 2000 Toyota Camry XLE V6, $12,000 you communicate essentially the same information to each 1996-2000 Honda Accord LX V6 The con- manufacturer, but in a different way, with different equip- 1995-1998 Honda Odyssey ment. sumer-advocacy 1999 Lincoln Town Car Executive Doesn’t it make sense to standardize the technology group which 1996 Acura RL, $10,000 we use to exchange business information and to make publishes Con- 2000 Acura RL, $19,000 that technology available to everyone who should use it? sumer Reports 1996 Toyota Avalon XLS, $8,100 The creation and implementation of nonproprietary, gave a nod to the 2000 Toyota Avalon XLS, $18,000 Internet-based standards would benefit your dealership 1999 Lincoln 1997 Mazda Miata (avg. not available) by reducing your technology costs and saving you time Town Car Execu- and effort, all while increasing your operating efficiency. tive for being feature-rich and for depreciation that brought STAR is composed of dealer organizations, automo- it to an average sales price of $11,000. tive manufacturers and retail system providers which pro- Prices in the study reflect average dealer asking prices, vide dealership computer systems and services. STAR based on average mileage for the model year. members develop industry standards and research emerg- For about $6,000, a Honda Civic EX or a 1999 Mazda ing technologies for the benefit of dealers. Protege ES offer reliability and economy, editors said. For Standards development is accomplished by Special In- lower miles, the report suggests the 2001 Honda Civic EX, terest Groups devoted to infrastructure, data transfer and at $9,500. extended mark-up language (XML, the language of the Consumer Reports described the 1996 Infiniti G20 as a Internet). sporty, “well put-together” car for those with more limited STAR needs dealers as members. It needs your input means, at about $5,500. and business experience. You have to ensure that your dealership information technology infrastructure can sup- port Internet-based applications that manufacturers and The CATA Bulletin is published by the Chicago Automobile Trade Association other have already begun to implement. To learn more 18W200 Butterfield Road about STAR’s work and how you can participate, visit Oakbrook Terrace, IL 60181-4810 the STAR Web site at www.starstandard.org/ 630-495-CATA [2282] phone 630-495-2260 fax This information was adapted from “STAR: Standards The CATA Bulletin is published and mailed every other Friday for Technology in Automotive Retail,” an NADA man- except during the Chicago Auto Show, when it is not published. Listings of items for sale are subject to the approval of the agement bulletin. Copies of the bulletin can be ordered CATA. Candidates for employment must submit a full résumé to from the NADA by calling 800-252-6232, ext. 2. Or, or- the Editor. der an electronic version at www.nada.org/mecatalog/ Review past editions or search by topic at www.cata.info/ Cost is $2.50 for NADA members, $5 for nonmembers, Jerry H. Cizek III President, Publisher plus shipping. Erik K. Higgins Editor, Director of Dealer Affairs said Walter McManus of said.

September 1, 2003 CATA Bulletin 3

Amid industry’s deluge of image vehicles, not all ‘halos’ are golden

A popular refrain from some PT Cruiser, while initially very success- automakers is, “If we could only get the Halo vehicles on the horizon ful in the market, have experienced a customers into the dealerships. Once Chevrolet SSR Oct. ’03 down side of having a stylish and they see and drive our product, they Pontiac GTO Nov. ’03 unique design: Once everyone has a would be ready to buy.” One way to Ford GT March ’04 unique vehicle, how unique is it any- get people into dealerships is through Dodge Charger March ’05 more? an image or “halo” vehicle. Lexus HPX Concept March ’05 As a result, both and VW Microbus July ’05 In the past, the halo market was DaimlerChrysler are working furiously Pontiac Solstice Dec. ’05 populated by higher-priced, lower-vol- to launch enhancements to and/or vari- CSM Vehicle Forecast Service ume sports cars. However, the segment ants of the vehicles—e.g., turbo- is by no means limited to sports cars charged engines and convertibles. and increasingly has included offerings United States (1998 calendar year, pre- On the other hand, automotive his- from cars to trucks to crossovers, all sumably when the most initial show- tory is littered with cautionary tales on with various volume scenarios. room traffic would be created), overall image vehicles. Ford had its share of Furthermore, automakers are Volkswagen division sales increased by recent struggles with the short-lived ratcheting up investment in the design, 51 percent relative to the previous year. Lincoln Blackwood and the Ford development and production of image Of that increase, roughly 80 percent Thunderbird. Notwithstanding design vehicles for the so-called halo effect was directly attributable to Beetle sales issues with both vehicles, perhaps just that is generated. The theory—that the while the remainder (just under 14,000 as important was the fact that Ford ex- popularity of an image vehicle will rub units) was comprised of incremental perienced significant production prob- off onto other vehicles in a company’s Volkswagen division sales. lems early on in the launches, which lineup and hopefully increase overall While the Beetle gained significant precluded a “big splash” in dealerships. brand image—seems simple enough. attention, it did not seem to vault the Simply stated, in order to sell them, you But is it? overall brand to new sales highs. A have to be able to produce them. In the not-so-distant past, image ve- comparable analysis is difficult to per- Another case includes the slow-sell- hicles typically were low-volume offer- form with the PT Cruiser. While the ing Pacifica, once hyped as a vehicle ings. In North America, vehicles such Chrysler division registered significant that could create a halo effect in as the Dodge Viper and Plymouth gains during the launch of the PT Chrysler dealerships. DaimlerChrysler Prowler comprised the extreme low- Cruiser in the 2000 calendar year, the officials now tout the Pacifica as a end of the volume spectrum, at 2,000 overall brand also undoubtedly ben- likely recipient of a halo effect that will to 3,000 units a year. The Chevrolet efited somewhat from the demise of the be created by the forthcoming German- Corvette encompasses the upper end of Plymouth brand around the same time. engineered Chrysler Crossfire. the production range, with 22,000 to Despite of the difficulty in equating While the image vehicle concept is 35,000 units a year. the halo effect to increases in overall relevant and its presence can, if well However, the introduction of the brand sales, automakers are increasing executed, improve a brand’s exposure Volkswagen Beetle in 1998 model year efforts to launch the “next big hit.” With in the market, not all image vehicles and the Chrysler PT Cruiser in 2001 the advent of the crossover utility ve- are created equal. There are a plethora changed the volume landscape signifi- hicle, one could view the of new vehicles slated for the market cantly. Instead of generating a halo ef- Murano and Infiniti FX35/45, with in the coming months and years, all de- fect with oftentimes unattainable, high- their unique design and flexibility, as signed with the hope of creating a valu- priced vehicles, both Volkswagen and vehicles that could create a halo effect able halo effect. There undoubtedly DaimlerChrysler generated significant in their own right. will be both winners and losers, and the buzz with well-designed, unique offer- Several image/halo vehicles have hit competition will be intense. ings priced reasonably for the masses. the U.S. market during the past few The key for both automakers and the Notwithstanding the positive buzz years, and some have performed better companies who work with them is to and improvement in brand perception than others from a sales perspective. maintain a fairly rational eye on the an image vehicle can create, it is diffi- Some image vehicles currently on the outlook for any particular vehicle and cult to quantify the volume impact of market include the Hummer H2, Nissan work to execute a launch as free from the halo effect. For example, in the first 350Z, Chevrolet Corvette and Dodge problems as possible. Seems simple year the Beetle was launched in the Viper. The aforementioned Beetle and enough. But is it? 4 CATA Bulletin September 1, 2003

AIADA wants ‘chicken tax’ on NADA body shop seminar table at coming WTO meetings in Rosemont Sept. 18-19 With U.S. trade negotia- specific proposals such as A seminar to improve body shop sales and pinpoint tors preparing for the fifth the chicken tax are not ex- areas of opportunity will be hosted by the National World Trade Organization pected at the Sept. 10-14 Automobile Dealers Association at the Hyatt Regency Ministerial Meeting in two meetings in Cancun, O’Hare in Rosemont. weeks, elimination of the 25 . But the AIADA is “How to Drive More Business Through Your Body percent chicken tax on im- lobbying for the topic in the Shop” meets Sept. 18-19. Body shop managers, general ported pickups is being upcoming multilateral trade managers and dealers will identify where body shop pushed by the American In- round. business comes from and where to find it, discover ternational Automobile “Eliminating the tariff dealer-proven marketing techniques, and learn how to Dealers Association. would enhance and foster lead a team to new levels of productivity. In a letter to U.S. trade ne- competition in the light truck The speaker, Robert Rick, is vice president of gotiators, the AIADA com- segment—the fastest grow- training and development for ABRA Auto Body & mended the country’s push ing motor vehicle segment— Glass in Minneapolis, Minn. His company has imple- for an agenda of trade liber- and benefit American con- mented a body shop sales training program which alization by advocating a sumers through greater se- increased average sales and closing ratios. “zero-for-zero” approach as lection, lower prices, and en- A special registration for NADA 20 Group members a negotiating objective. hanced value,” according to and NADA Dealer Candidate Academy students and Under such an agenda, all an AIADA statement. alumni is $595 for one person, $465 for each additional tariffs on imported products The ministerial meeting is person. Standard registration for NADA members is would be eliminated over a the midpoint in the current $695 for one person, $565 for each additional regis- specified time—including round of trade negotiations trant. Nonmember registration is $995. the 25 percent import truck begun in Doha, Qatar, and To register, call the NADA toll-free at 800-252- tariff. expected to conclude in 6232, or register on-line at www.nada.org/seminars/ Detailed negotiations on 2005.

NADA convention adds Gen. Tommy Franks Marketplace

Gen. Tommy R. Franks, recently developed and executed a highly This newsletter periodically retired commander-in-chief of the effective military operation to oust publishes the names and brief U.S. Central Command, will address Saddam Hussein from power. In credentials of candidates for the National Automobile Dealers addition, he has coordinated opera- positions at area dealerships. The Association’s annual convention and tions in 20 other nations during his CATA does not verify any infor- exposition in Las Vegas on Feb. 2. career, including the war on terror- mation on a candidate’s résumé, The four-star general will offer ism in Afghanistan. and the listing of a candidate his views on world events at the Among his military commenda- should in no way be considered a convention’s General Session. The tions are four Legion of Merit recommendation or endorsement convention lasts Jan. 31-Feb. 3. medals, three Bronze Stars and three by the CATA. “Gen. Franks has devoted his life Purple Hearts. Dealerships are urged to check to defending our freedom and way Dieter Zetsche, CEO and presi- the references of anyone they of life, and we’re honored that he dent of DaimlerChrysler, also is consider for employment. will join us at our most important confirmed to speak during the event of the year to share his unique convention. Advance registration insights into global issues,” said continues through Dec. 19. Alan Starling, NADA chairman. Additional convention informa- As commander of coalition forces tion is available at www.nada.org/ www.cata.info in the war with Iraq, Gen. Franks convention/ or at 703-827-7407.