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Rechtin checks pulse of ultra-luxury market
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Mon, 10 Sep 2012|
Each August, the car-loving elite visit Monterey, Calif., for the Concours d'Elegance weekend. This year's event allowed West Coast Editor Mark Rechtin to take the pulse of the ultra-luxury market from the 18th fairway at Pebble Beach.
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As the world's 1% and those aspiring to join them gathered at this year's Pebble Beach -- weekend. Tina cars was a celebrated as much as the lovingly restored additions. After all it's rare scene is so critical on the street let alone three quail gathering on site. It's a weekend where the celebrities aren't nearly as celebrated as the rare automotive icons that recover. But Pebble Beach has also evolved into a marketing opportunity for carmakers eager to reach the world's elite crucial as Europe's economy swirling turbulent fiscal waters. Auto executives seemed to have a mantra for survival. Balance balance. Very balanced and China China China but really how bad is it all expressing concern luxury auto makers seem confident of being able to ride out the storm. -- -- happy is an immense pressure we could just see that Obama cannot but -- billions of the German -- the United States where they're really trying to ratchet up the cells from it. From that aspect -- you know we have got a massive market of China as a massive demand for products in China. I'm for increasing demand for products in the United States where there were drive the displacement engines. The whole member of a profit. At Lambert meeting last year's orders for the event or are keeping the assembly lines running right now. But as for future orders that's another story. Sort of European market for us is it important as a key market as an -- life and showed no. We have always liked it which is not working and all of you to visit our for Chrysler that taxation and the fiscal polices -- controls. But on the other hand we have markets which are working better than expected to -- -- the situation. Is better than 2011 -- They US is going back. Asia Pacific region is pretty much on the same level as last yet. And I really have the Middle East which is really strong. Bentley which struggled through 2008 US crisis appears now to be rebounding -- with his -- on the open in New York. She's going to be three new yet to sign and symptom of economy and -- -- And there's some themselves memos and put on China in fact include live it was a markets yourselves if you continues the other places in your. But this -- also by the end of drew I hit a citizen and he's made twenty successful songs Porsche executives say they have learned their lesson from the last fiscal crunch and are handling global inventories accordingly. He meant and and and supply balance is very important proportion -- -- -- at the moment because of China. Because of so strong markets in Asia and Russia. And the continuing growing of further volume in the position of course in the United States to come to balance the situation -- -- -- in -- and then in New York. Aston Martin which once had too many cars for too few dealers is -- dealers at a furious pace including nine war in China this year. We are in fact then expanding around the world and of course is -- that we have not balance not flexibility in terms of growing -- the business. By mobile device segment I'm like country. Traffic around -- peninsula was little lighter this year than last perhaps indicating a certain reduction in attendance. However as of Saturday night auction prices and already exceeded last year's total clearly the 1% isn't worried. For -- beach for Automotive News TV I'm mark wrecked him.
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Toyota's Lentz: 'It's really a three-horse race'Hello and welcome to part two of our video series with North American cheat on Jennifer bond. In addition we speak with 2.0 as Jim land. This 57 year old joined the auto maker in 1982. In march of this year lens with named it when you first CEO for North America. The move. An overhaul by president Akio Toyoda to regional executives more local control. Once and his team didn't waste any time in taking action. Action and that underscores Toyota's push for North American production. Amid tougher competition. He split his bonds had to stay. The first this year and eight index down one month. Is that bring production of them accessible to go through the United States. A designed to come the fluctuating Yang and build cars tailored to US case. What you currently produces about 70%. Of the vehicles sell things that you went in North America. One says that number will grow to that 5%. With help from the Lexus ES went production begins in Kentucky 2015. The only high volume name played the companies felt stateside that it's not built in the region. Free it. Right now there's equilibrium between overall. Supply and overall from. So it really doesn't make any sense today to relocate Prius production here to North America. But once demand exceeds applying. We will be one of the first to raise our hands to have to bring Prius here to the US but we're nowhere close to that at this point time. In Mexico Toyota plans to build a Dallas the small car it's not made in Japan. Toyota is teaming with mom's done in a to be competitive in that key segment. When you had a very very strong that became problematic for a spring vehicles in from Japan. And we don't produce CB platform cars North America. So we've made the most sense to find a partner to be able to do that. Must thought that the time was planning a fairly large operation in Mexico. So it was a win win for both manufacturers to get more. More volume to help offset the will cost position. For us to be able to get a great product here in North America what would be a lower costs and bring it from Japan. Production of the car based on a Mazda two we'll start in the summer of 2015. At an annual pace a 50000 units. This just another example of growing list of the global partnerships. Moving up to them midsize category. And at a course that can't sitting hunt. Its US sales fell for the second straight month in April finishing second to the Honda Accord. What will it take for the Camry to extend its eleven year reign as the nation's best selling car. We think that 4000 ranges probably the right volume. We still think that's gonna keep us is number one of in this segment. Lens however the well clear of the Camry stiffening competition. I think that the court has always been a strong competitor for years and years for us I think fusion has a much better product that has been passed. So to me it's really a three horse race for who's number one on the site. Sonata has has done a good job in the market I think Sonata has really pushed styling into the midsize car. That is forever changed that segment. Another big sales does want change is for the US luxury crown now held by BMW. Mercedes a close second. Lexus wants the title and won eleven after eleven years. One says retailers don't under estimate the value of that top spot. If you look at it from a battle cry. At a dealer meeting. You know we're all competitive so being number one is is is an important consideration. However believes that being the champ isn't such a big deal with buyers. And about the fine on youth oriented becoming a near luxury brand that's what Rihanna is studying. Land says he personally think that pretty small car market is going to be a viable means but there are still some question. Is it really. Intrigue or near luxury. War or these luxury nameplate it's coming down well below what the luxury market traditionally it's. It was going to be interesting to see that's right in my mind I kind of caught just a premium small car. Because I think it's really outside of the realm of traditional luxury. And that's why frankly I don't want to play in game. Now extremely competitive segment land is yielding in. Pick up trucks. I'm never going to sell the kind of volume of pickup trucks especially full size trucks that the Big Three car. But but that's OK don't need to know pick up trucks are just one part of my offering in terms of full line manufacturer. The Detroit three automakers heavy tight grip on the full finds that US pick up market. One says the ideal target fort radio in the compact and full sized segment by and large. I think that 250 to 300000. Total pick ups is probably the sweet spot for going forward. That's not too much higher than last year. Overall in 2013. The automaker is to sell more than 2.2 million vehicles in the states. It the industry hitting fifteen point three million units up from 1214. Point five million. When asked to look further into the future. Sees a slowdown in overall growth toward the end of the decade. That's due in part to consumers demand for quote butter quality product. When you layer on better emissions that are cafe. Better safety. How much is that gonna add to the price of the vehicle to transaction price. And in time. Will that have a negative impact on the overall industry I think it probably will you be interesting to see it's. That's that's the big crystal ball everybody's trying to deal. sitting down with Ottoman at West Coast editor mark Wright did. Then at their time for now in her final installment of this series. We'll hear from General Motors North America Abbas mark Royce thanks so much for watching take care.
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Ford’s Hinrichs: ‘We’ve Learned Lessons From the Last Few Years’Welcome to our first talk from the top video series of 2013. I'm Tom back this month we'll hear from three North American chiefs. And will begin with Ford's new president of the Americans. here and Rex. He's only been on the job about five months replacing mark fields who named the blue Mobil's chief operating officer. Early in his career worked for General Motors. And later spent time at a manufacturing. Investment group. Henrikson joins Ford in 2000. To manage the van dyke transmission plant in Sterling Heights, Michigan. He would go on to lead Ford of Canada. And then North American manufacturing. In 2009. Hendrix was asked to head Ford's Asia Pacific Africa region. At the time Ford was at best a marginal player in China trailing far behind Volkswagen and GM. But he quickly put a plan in place to produce up to one point two million vehicles a year there by 2015. Doubling its current capacity. The 46 year old Hendricks is now back in Dearborn. recently sat down with us to discuss a number of items including Ford is modifying its vehicle launch procedures. To catch problems early year. What's been the biggest challenge for you. Well I think clearly getting through launch issues on the Lincoln and Khazei and and and brain that great product to life. A car many believe is Lincoln's one last shot survival. But quality glitches in parts shortages at Ford's factory in Hermosillo Mexico. Forced the company to ship hundreds of To a suburban Detroit plant for quality inspections and repairs this year. As a result many early and customers had to wait months for their cars. So Ford implemented process improvements. Betting in the first quarter. The list includes monthly launch reviews. That's were manufacturing. Product development. Quality in purchasing managers examine both internal. And external products. And the most important thing we do is bring everybody together. And we look at the physical vehicle the hardware the actual vehicle prototypes the vehicle designs themselves. The competitive vehicles are they look on margin fit finish sixth here here. We bring together online and on expectations also what the work plan is Hendricks also brings up one key question at each reading. And importantly most important. Ascertain where they need help. So that we can resolve issues quickly get resources needed if required. To make sure that we're ready on time with releases parts in the supply base and her own selves have successful launch. That's working on for the future. Rick says the onslaught of new and redesigned models in recent years strained forward at the end it's supply base. It because the pace is in slowing down anytime soon. Where adding resources to our supplier technical assistance group which the engineers to go out and help suppliers. Validate the process capability make sure they have the capacity and work through issues us on the engineering side for example. We're adding new people as we speak we're hiring and McGraw the resources because we anticipate industry growth and our part of growth in the future. Edwards believes expanding the Ford and Lincoln lineups presents a quote great opportunity to make changes to the vehicles. One area in particular. The my Ford touch infotainment system which is hurt the auto makers ratings in quality survey. Hedrick says Ford continues to upgrade software to make the system simpler and faster but keep an eye out for hardware to. of the team look at our strategy that we use for knobs and the senators back and sliders. Negate a lot of feedback consumers want from now to keep aren't to introduce those back into the vehicles. Through April Ford motor's US market share is increasing nine tenths of a percentage point in sales are up 13%. To keep up with the man. In the third quarter. Ford will begin hiring 2000 workers at its Kansas City, Missouri assembly plants. To build more F 150 pick ups and transit commercial vehicles. In the fall the auto maker will craft fusion at a second plant in flat rock Michigan. We are looking to build a few more explorers for example explorers been great lately. We'll make sure we have enough capacity firm like our trucks and all of our products. We are running pretty full the moment which is great helps our margins business overall most of those vehicles and up at dealerships. And Hendricks has a message for retailers. We will work continue to improve our quality you know want capability of our business as we know how important is to them. learn the lessons from the last few years and will improve as we go for me that commitment to them. That is our time for now in our next talk from the top segment will hear from Jim CEO of Toyota's North American region. Thanks for watching we'll see of that.
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Infiniti Store Transformed by Hybrid Employees and 12-Minute Oil ChangesWelcome back to our series best practices. I'm Tom Moore back. This is a chance for us to share some innovative and actionable tips from auto dealers across the country. Jeff knows a thing or two about having to take action and quickly. After thirteen years in the auto retail business from lot runner to sales manager. PN's big break came in April of 2007. At the age of 28. That's when he was asked to save his Infiniti dealership near Minneapolis. The GM there had just quit. The facility was bleeding cash the store like many of the other import brands in the General Motors have you loopy and chain. Was largely ignored. It was a red headed step child that's what it was at the time so loopy and quickly assess the state of the store. It on the bar area. I really came into a dealership that was was very bloated at the time and an story this is is a vote You know and it really needs to be run like a boutique. In the coming months loopy and would cut about 100000. Dollars of fixed and semi fixed costs. We had 45 people. Working here and I trimmed it down to about thirty at the time so we we cut about fifteen people. Out of the top of the over and we did that through several means some employees were let go others retired. It's staffers like Angela Anderson. Were cross straits. Our receptionist. Is also the back up office manager and our cashier. There's also a warranty administrator but that can also write tickets. So we we moved from three service traders down to two. And and still didn't miss a beat. That's also the case in service. Where you'll see Mitch rose changing loyal one minutes. And donning a certain time writing orders in the late in the next. it also became a hybrid employee. At two full time at an people I had to let when India and people an idea that and I along with sales manager. I let go the used car manager can manager. So it really forced me to you know to take a deep look at. You know to get people that you know we're willing to take and take on other job loopy and says that in the auto business role Or you're all out there's no middle ground. He looks for employees. With similar DNA. A long time ago an office manager said you know she she kept returning to visit me on the bus for on on the bus. You know if you're on jets bus everything runs. You're not on Jeff's boss. That's the bus out of town and mean and that and that's really the way you have to run. Run your business with employees on board. Loopy and who was just finishing and they dealer academy classes was looking to breathe life into the service department. You were cold one teacher's lesson. You don't know anything about the service department what you do that you caught in the service department at the end of the day yes standard things coming hours that they do. And how many text that you have on board loopy and says. His store was falling well short. Of the standard ten hours of work per per day which you followed his lead to 140%. Technician for efficiency. And any defense bar. After some digging looping and realized he was losing customers to aftermarket oil change shops. At first he thought the dealerships forty dollar price tag was hurting people law. So looping and in his service manager popped in the demo and drove to a local people who. I told myself I'm gonna let this guy sell me whatever. He asked for a minute give it you know and I went through and didn't oil changes to about a half hour did you feel that they got in and out. In at the end my bill was 220 dollars. And I said both obviously not price so what is it its convenience. Soon after loopy and became one have been Kennedy's first express service dealers it consists of a two win team. One above the one below. A crew can now turn a basic oil change in as little as twelve minutes. And that includes. Having a car and writing it bringing it in. and all the fluids and inspection and bring it back to the customer. As a result the source of service retention rate soared from 15%. To 75%. Currently you know we've run anywhere from top ten top twenty. Infiniti dealers in the country for service retention. A good day consists of 35 oil changes in that business has trickled into other servicemen. We were running some some some weeks anywhere between twenty and 30% of our oil change tickets went over the wall meaning. We brought somebody and we found out that they had an. Open. Warranty. Issue with their vehicle or recall that we could put them into the main shop in. April 2008. A year after taking over the store was in the black. Loopy and says at requests he was clean the stores permanent executive manager at age 29. The youngest infinity store boss at the time. This heinous hate it will be and is now 34. In 2012. Became CEO and president of looping in automotive group. His father Jim. Who opened its first store in 1969. And at one point had 25 dealerships. Passed away in 111. Jeff encourages communication. He created the little and wanting group. Every ninety days his GM's me to share best practices. It's modeled after the and they VH one group velocity which focuses on driving profitability. In 2012. Loopy and voluntarily. Spent a million bucks to upgrade his infinity store before the brand to. People see walking in to a dealership sometimes looks like walking into it office. We really want to remove that stigma. We'll be an infinity has a new facility and news service and he also hired a chief marketing officer for his six store growth across Minnesota. And for good reason. I'm really good at doing one thing that selling cars parts and service when I'm not good at is advertising and and are in realize that and sometimes it's an ego thing with some general managers and owners that they want to be involved in all the advertising. But what ends up happy is it's not effective and you end up paying too much. As for future growth we'll wants to keep the dealer groups small soon can state Agile. The lessons I've learned my dad is bigger is not always better. Back in the day he was one of the first people that they called make it dealer. I don't wanna be make dealer you know I wanna run a small operation. Profitably second take care of my. Clients during our visit loopy and we're called the dark days of a way to know nine. When he watched a third of any idea academy classmates go a lot of business. He made it important at the time. A promise that still motivates him today. And I had to tell myself. You know I'm not gonna be one of those stores. You really got to get in there and to be honest I mean it's it's hand to hand combat every day. Jeff's mom Barbara is the company each year it is Jeff says the buck stops with her. Thanks so much for watching we'll see you soon.
