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 Throughput (average The CATA Bulletin is distributed via blast email every other Friday and then- 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. “I’ve never talking about,” she said. “There is an Acura exists, in order to have a home thought of the inflow in terms of opportunity here if they get the right for people looking for something sedan versus SUV. With both Civic and product on the showrooms — and more than a Honda,” Gary Rob- Accord, it has to do with finances, with Lincoln is not going to lose out.” inson, Acura’s senior manager for age, with lifestyle considerations, so it’s Industry insiders agree that Ford product planning, said at the launch not just customers going from Civic risks alienating enthusiast buyers if it of the all-new RDX crossover in (sedan) to ILX (compact Acura sedan), moves away from its Focus and Fiesta Canada this summer. or Accord to TLX (mid-size Acura ST performance models. Such buyers The RDX begins the reboot of sedan). It’s very much people changing are missionaries for the brand and an Acura brand that lost its way in segments depending on what they are likely would migrate to competitive the last decade. Yet, even as Acura interested in at the time.” alternatives like Honda’s Civic Si or struggled with its identity in a hotly Hyundai has followed the Honda Volkswagen’s GTI. contested luxury market, its Honda model by introducing its Genesis Brinley, the IHS auto analyst, sees brand continued to bring hundreds premium brand to the U.S. market with Fiat Chrysler Automobiles’ premium of thousands of new customers a the G70/G80/G90 sedans after build- brands like Alfa Romeo as vulner- year to the Honda-Acura product ing customer loyalty for its mainstream able in the U.S. market because FCA’s portfolio. Hyundai brand with its popular Ac- entry-level brands are so weak. “One of the advantages that a cent/Elantra/Sonata sedan lineup and is a powerhouse. Not only is mainstream brand has is the full SUVs. it one of the fastest-growing brands lineup of vehicles, and the ability to “Genesis will offer at least six in the industry, but it’s the rare main- grow with its customers,” says IHS models including SUVs by 2021,” said stream brand that is cross-shopped senior auto analyst Stephanie Brinly. Genesis’ U.S. chief Erwin Raphael. against premium makes. Still, Jeep “That’s the best way to start brand “Sedan customers are very important does not play in sedan markets. loyalty.” to Genesis at this stage of our exis- and Chrysler have no entry- Complementing strong SUV tence, as we currently offer sedans in level offerings — either sedan or sales (HR-V, CR-V) with a stagger- three luxury segments.” SUV. ing 750,000 sales between its three Like Acura and Genesis, the premi- And Alfa’s natural source of entry-level sedans (Fit, Civic and Ac- um Lincoln brand is looking for a fresh customers, Fiat, barely registers in the cord) last year, Honda buoyed Acura start in the U.S. market — but does so U.S. market in sales. 4 CATA Bulletin August 27, 2018

tute a waiting period before Dealers prioritize communication Fraud shipping the vehicle. by lenders as interest rates climb Continued from Page 1 “This will help protect the country. The vehicles are both the dealership and inno- As interest rates rise, dealer their respective categories. usually valued at $50,000 or cent persons whose identities satisfaction with their lender For the fourth year in a more. are being stolen. In every inci- partners is increasingly reli- row, Mercedes-Benz Finan- “The transactions usually dent that we have investigat- ant on quick and meaningful cial remained atop the cap- start via an internet search. ed, there are several red flags communication with credit tive luxury segment amid Credit applications and other that the dealership should staff, according to the 2018 some volatility among the paperwork are either filled have caught prior to shipping J.D. Power Dealer Financing lenders ranked below it. out on-line or sent to the the vehicle. The Chicago Po- Satisfaction Survey released “Our commitment is al- dealership via FedEx after lice Department is fielding at this month. ways to listen to feedback they are requested to be sent least three requests a week to “Satisfaction declines by from our dealer partners and to an address in the Chicago investigate and recover ve- 163 points, on a 1,000-point use it to identify where we area (oftentimes a vacant hicles that were purchased via scale, when dealers are not can continue to improve in building). The offenders cre- identity theft and shipped to able to reach the credit staff,” our quest to deliver excep- ate a phony email account Chicago from out of state. Jim Houston, senior director tional experiences to them in the victim’s name as well “In most cases, the credit of the automotive finance and our mutual customers as a fake driver’s license application was initially ap- practice at J.D. Power, said in every day,” Geoff Robinson, with the victim’s informa- proved and the vehicle was a news release. “Additionally, vice president of Mercedes- tion, and they use Google shipped. Upon further review if lenders can communicate Benz Financial Services, Voice or other applications of the credit application, in- the best contact for dealers said in a company press re- whose phone numbers are consistencies were identified to reach out to for non-tra- lease. “While we are proud not traceable. The offenders and the credit was declined. ditional questions, the reso- of these results, the scores oftentimes seek to arrange We have recovered vehicles lution time decreases, which demonstrate what we already their own transportation for shipped to the Chicago area will, in turn, increase dealer know: Our industry never the vehicles to be shipped. from several states including satisfaction.” stands still, and so we must “This is an elaborate Utah, Florida, Texas, Dela- Mercedes-Benz Financial seek opportunities for con- scheme that can be stopped ware and Pennsylvania. Services, Volkswagen Credit, tinuous improvement, strive if dealerships conduct a Questions or concerns can Citizens One Auto Finance, to deliver the highest levels thorough examination of be directed to Chicago Po- and TD Auto Finance were of service, and convey excel- online loan applications and lice Sgt. Keith Blair at keith. the highest ranked lenders in lence in everything we do.” related paperwork and insti- [email protected].

aside and band together to achieve a in from social media: Wives nominated BBQs common goal, this time to support the husbands who served overseas, parents Continued from Page 1 USO of Illinois and local military.” nominated children who are active duty USO centers, military family programs Guido and other CATA directors military, and friends nominated deserv- and community connection programs. and Turtle Wax CEO Denis John Healy ing friends. “Local new-car dealers continue to presented a ceremonial check to USO Ultimately, Christa Oody won the up the ante each year of the USO Bar- of Illinois President Alison Ruble on grand prize, having nominated her becue for the Troops program,” said Aug. 16 at Clark After Dark, a popular husband, Sgt. James Oody. In Christa’s CATA Chairman Tony Guido. “While I USO street festival dubbed “Summer’s submission, she wrote, “Like all service am awed by its growing success, the fact Last Hoo-ah!” members, James sacrificed so much and that the USO Barbecue for the Troops In addition to the community fund- carries the burden of war.” program continues to gain momentum raisers, the CATA and the USO spread The Oodys’ Ultimate Backyard Bar- each year doesn’t surprise me. awareness of Barbecue for the Troops becue will include mouth-watering bar- “As a dealer myself, I know firsthand via a #BBQ4Troops social media con- becue fare from Real Urban Barbecue, the impact dealers have within their test in which the public was encouraged a special visit from Chicago Blackhawks communities; they rally others like not to nominate an individual they deemed alumnus Brian Campbell, and a Rookie many can. While it’s true dealers com- worthy of the Ultimate Backyard Bar- Racing Experience, compliments of pete for business, they put that rivalry becue. Nearly 150 nominations rolled Turtle Wax.