Auto Sales Expected to Lift US Car Dealership Numbers Inch Higher
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Volume 115, No. 17 August 27, 2018 BBQ fundraisers net $182K A record 115 area new-car dealerships raised a combined $157,000 during July fundraisers for the USO of Illinois, and Turtle Wax donated an addi- tional $25,000 toward the Barbecue for the Troops campaign. The $182,000 collected from the campaign helps USO of Illinois serve more than 325,000 active duty, guard and reserve military and military family mem- bers annually through three program areas including SEE BBQS, PAGE 4 USO of Illinois President Alison Ruble, left, accepts the donation from CATA directors Tony Guido (next to Ruble), Ray Scarpelli Jr., Bill Haggerty, and Kelly Webb Roberts, and Turtle Wax CEO Denis John Healy. US car dealership numbers inch higher Police alert nation’s dealers Despite predic- “Since 2010, the dealership network about Chicago fraud ring tions that car dealer- has set a new normal pattern of stability.” ship numbers will fall The Chicago Police Department has appealed — Mitch Phillips, Urban Science’s coming decades, that’s to dealer associations across the country, asking global director of data not happening now, them to share information with their member according to Urban dealers about a national theft problem originat- Science’s mid-year of 18,213, reported ence calls “stability.” ing in Chicago. Automotive Franchise the Detroit-based firm However, unlike the “We are requesting that motor vehicle deal- Activity Report. which helps automak- rooftop uptick, the ers throughout the nation exercise extraordinary It shows an in- ers decide where to lo- franchise count de- diligence in verifying the identity of customers crease, however slight, cate — and sometimes creased slightly, from who attempt to purchase vehicles via the inter- in the number of U.S. where to eliminate 32,029 to 32,024 from net and have them shipped to the Chicago area dealerships. — dealerships. January to July. (which includes the city of Chicago, its suburbs, As of July 1, there The number of “Since 2010, the and northern Indiana),” according to the Chi- were 18,252 dealer- franchises, or brands, dealership network cago police notice. “We are seeing an epidemic ships (rooftops), a a dealership sells also has set a new normal of vehicles being purchased via identity theft 0.2 percent increase experienced a period pattern of stability,” and shipped to the Chicago area from around from the Jan. 1 total of what Urban Sci- SEE ROOFTOPS, PAGE 2 SEE FRAUD, PAGE 4 Auto sales expected to lift in May, Edmunds projects 2 CATA Bulletin August 27, 2018 Used-car price index reaches record high in July BBB accepting An index that tracks used- price appreciation in used close the second quarter in car prices hit a record high in cars is partly a function of a a stronger position than ex- Torch Award July, as strong demand and strong economy at its peak,” pected. limited inventories continued Manheim said in a news re- In addition to consumer nominations to impact the market. lease, adding that more con- demand, Manheim noted Nominations for the Manheim said this month sumers are choosing used that concerns over potential 2018 Torch Award for that wholesale used-vehicle vehicles over new models. import tariffs, which could Marketplace Ethics, the prices climbed 1.51 percent Analysts have expected lead to higher prices for new Better Business Bureau’s on a seasonally-adjusted ba- used-car prices to drop as vehicles, have driven pricing most prestigious award, sis in July. The increase in more vehicles come off trends this summer. will be accepted through prices lifted the Manheim leases and arrive on dealer “Higher prices and the re- Aug. 27. Five winners will Used-Vehicle Value Index to lots. However, robust sales lated declining level of sup- be named, based on the 136.9, the highest level ever have lifted prices in re- ply create a psychological companies’ number of recorded by the auto auction cent months, even though feedback loop for consum- employees. company. The index is also wholesale prices typically ers, encouraging buying now Businesses must be lo- up 5.1 percent in the past fall in the spring and sum- with the expectation that cated in northern Illinois. year. mer. Manheim said used-ve- prices may be higher later,” Recent winners include “The strange summer hicle prices in July helped to the company said. Mancuso Motorsports, in Chicago, and Advantage ship numbers have increased “With a stable dealer Chevrolet of Boling- Rooftops at relatively modest rates. Yet count, the throughput record brook. CONTINUED FROM PAGE 1 some predictions call for a is controlled by the sales vol- Judges will evaluate the says Mitch Phillips, Urban significant drop both in the ume,” Phillips said. “With entrants using five criteria: Science’s global director- number of dealerships and the current range of 2018 • Leadership Commit- data. “The data shows that the number of owners in sales forecasts being slightly ment to Ethical Practices 98 percent of local markets coming years. less than 2017, throughput is • Communication of had virtually no net change.” For example, a Cox Au- forecasted to fall around 11 Ethical Practices The most significant net tomotive corporate-strategy units to 937 units.” • Leadership Practices dealership increases oc- study anticipates 9,000 roof- Urban Science maintains to Unify the Organization curred in Florida (10) Texas tops selling an average of a census list of current new- • Organizational Com- (7) and New York and Ohio 930 vehicles a year by 2034. vehicle dealerships in the mitment to Performance (both 5) and Minnesota and That reduction is attrib- U.S. Management Practices Tennessee (both 4). uted to fewer sales of per- The data comes from a • Organizational Commit- Hardly a fun fact, but sonal vehicles as the age of variety of sources, including ment to Ethical Human what Phillips calls “an inter- mobility evolves and the ad- feeds from automotive man- Resource Practices esting observation” is that vent of self-driving cars ap- ufacturers as well as phone Full details are on a California, “typically on the proaches. and field verification. The BBB website, most active list, was the state There are about 9,000 company has collected the www.nominatefortorch. that lost the most dealerships dealership owners now. By information since 1990. com. to date in 2018.” 2030, Cox forecasts there Dealership numbers nose- will be 1,000. That’s attrib- The CATA Bulletin is produced by the dived in the recessionary uted in part to ongoing con- Chicago Automobile Trade Association 18W200 Butterfield Rd. Oakbrook Terrace, IL 60181-4810 years of 2009 and 2010, par- solidation. ticularly as General Motors Throughput (average The CATA Bulletin is distributed via blast email every other Friday and then-Chrysler yanked sales per dealership or sales except during the Chicago Auto Show, when it is not produced. Listings of items for sale are subject to the approval of the CATA. thousands of franchises as divided by dealer count) is Candidates for employment must submit a full resume to the Editor. part of bankruptcy reorgani- expected to decrease slightly Review past editions dating to 1998 or search by subject at zations. this year, Urban Science said. www.cata.info/publication/bulletins. Since those so-called Throughput is considered a David E. Sloan President, Publisher “overdealered” days, dealer- major profit indicator. Erik K. Higgins Editor, Director of Dealer Affairs August 27, 2018 CATA Bulletin 3 Some carmakers see sedans as gateway to luxury brands In the Age of Ute, the future of despite the latter’s identity crisis. The at a time when the mainstream Ford mainstream sedans is in flux: Detroit aging RDX, for example, was the sec- brand is abandoning sedans. automakers Ford Motor Co. and Fiat ond-best selling luxury compact SUV. However, auto analyst Rebecca Chrysler Automobiles are largely “Our customers understand quite Lindland of Kelley Blue Book said exiting the passenger-car market to well what’s similar between Acura and that’s not a bad thing. concentrate on profit-rich SUVs. Honda,” said Robinson. “They under- “Import luxury brands have ben- But for foreign automakers, se- stand the good resale value and that efited because their sedans are still dans are not only profitable, they’re there is a similar corporate approach popular. It makes sense for them,” seen as an opportunity. Sedans as between vehicles.” she said. “But Ford isn’t making well as SUVs are important founda- While the RDX is aimed at the profit on small cars. There is an op- tion stones for their luxury brands red-hot SUV market, Honda execu- portunity here for both Ford and — and introductory gateways to tives don’t see its customers as coming Lincoln to turn things around. With higher-priced models. As domestic exclusively from Honda SUVs, which a new lineup of crossovers, Ford can automakers leave sedans, some auto are booming. They say that the af- attract younger buyers — because insiders wonder if they are ceding fordability of an entry-level Honda they are not doing it now.” a competitive advantage to full-line Fit subcompact sedan may bring a Ford sedan sales are half those of foreign automakers. new customer to the Honda portfolio Honda, so with the market shift to Take Honda, which depends — but when their life circumstances crossovers comes a chance to start on less-expensive Honda-branded change, they might be interested in a over. offerings to feed new customers to luxury crossover. “I think domestic Ford buyers will luxury-brand Acura. “The inflow from Honda is criti- welcome the body style that Ford is “That’s one of the reasons why cal to us,” Robinson said.