Volume 7 Issue 3

On The Move 2010

Volume 7 Issue 3

In This Issue:On The MOve STaff:

Dave Tribble, Editor-in-Chiefdtribble@maada.com

Dawn Palzewicz, Art Directordpalz@earthlink.net

DiSTribuTiOn:Pam Schrodel

COnTribuTing WriTerS:Carlos Alvarez, Brian P. Bentz, Scott Dreisbach, Bob Elbrader, Tom Tortorici, and Tom Webb

PhOTOgraPhy:David Pano

COnTaCT:MAADA400 Interstate North ParkwayAtlanta, GA 30339

770-916-1741www.maada.com

On The Move is published four times annually by the Metro Atlanta Automobile Dealers Association.

Any reproduction in whole or in part of the contents of this publication is prohibited without prior consent of the Metro Atlanta Automobile Dealers Association.

The appearance of advertisers does not constitute an endorsement of the products or services by the Metro Atlanta Automobile Dealers Association.

2 Mission Statement Board of Directors

4 Drive On Shayne Wilson, President

5 Advertiser’s Guide

6 Sports “Big Wheels” Talk About Their Favorite Cars!

10 Difference Makers By Carlos Alvarez, American Financial & Automotive Services, Inc.

12 As Inventories Shrink in One Market, Vehicle Values Rise in Another By Tom Webb, Manheim Consulting

14 AutoTrader.com Trade-In Marketplace

18 Fraud in the Dealership Part III - Hitting the Brakes By Brian P. Bentz, CPA, CIA, Dixon Hughes

1

20 Using Video to Improve F&I Performance By Bob Elbrader, Intravision

22 Think You Know A Lot About Cars? By Tom Tortorici

24 Wishing, Hoping and Praying? By Scott Dreisbach, Valuinsight, Inc.

26 Automotive Industry On The Move

30 New Payment Processing Agreement Can Mean Better Rates, Growth Opportunities

32 Academy Schedule

MIssIon sTaTeMenT:The Metro atlanta automobile Dealers association is made up of over 160 franchised new car and truck dealers from the 18 county Metro atlanta area. The association and its members strive to uphold the highest standards of honesty and integrity and continuously work together to improve the car buying experience for Metro atlanta consumers.

Board of Directors

Bo Scott, Chairman

Jim Ellis Don Jackson

Richard Pugmire Steve Rayman

Ernest Hodge

Allan Vigil Bill Voyles

Walter Bridges

www.maada.com2

Well, look no further than the Metro Atlanta Automobile Dealers Association’s 40,000 square foot office and training facility.

MAADA offers complimentary meeting space to Ad Groups.

Our three large classrooms and one board room can accommodate meetings from 12 to 50 people. Each has high-speed internet connection, ceiling-mounted equipment with DVD, video and surround sound capability.

Call us at 770-916-1741 about availability, or send an email to dtribble@maada.com.

Clay NalleyVice-Chairman

On The Move 2010

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www.manheimatlanta.com

WeeklyNewsletter

President’s Message

Welcome to the third edition of ON THE MOVE magazine for 2010. Here is some of the latest news from the Metro Atlanta Automobile Dealers Association.

NADA’S EDUCATION & TRAINING MEETING TO BE HOSTED BY THE MAADAMAADA will be the official host of the NADA’s Education & Training Focus Group Meeting for Automotive Trade Association Execu-tives (ATAE) on August 4-6, 2010. This is an annual event to evaluate and schedule education programs for both state and metro associations across the U.S. Progressive associations with education and training departments attend these meetings to evalu-ate products and services that they want to recommend to their dealer members.

The MAADA is recognized nationally as one of the top associations for training. That’s why Atlanta was chosen as the host city for this meeting.

We’re expecting over 25 dealer associations to make the trip here. At press time, the following have committed: Alabama, Alba-ny (NY), Central Florida, Colorado, Georgia, Los Angeles, Maryland, Minnesota, New England, Pennsylvania, Philadelphia,

South Carolina and Washington D.C.

We are very fortunate to have so many friends of this Association who have come forth as sponsors for this important industry event. The following companies have currently signed up: American Financial & Automotive Services, Au-

toTrader.com, Black Book and BlackBook.com, Bulldog Marketing, DealerTrack, First Data, M5 Management Services, Inc., Manheim, and Tommy Gibbs & Associates.

29th ANNUAL ATLANTA INTERNATIONAL AUTO SHOWThe official dates for the next Atlanta International Auto Show are Wednesday, March 23 through Sunday, March 27, 2011.

Due to scheduling conflicts at the Georgia World Congress Center, the show will return to five days in 2011 and 2012. We’re planning a strong media blitz that will attract large crowds during all five days of the event.

For the first time ever, MAADA will be producing the annual Auto Show Guide. It will be packed with plenty of exciting features on the different manufacturers, vehicles and show attractions. MAADA dealer mem-

bers will also be able to advertise in this guide at a more reasonable price than in the past. Our association representatives will be making contact with you during

the coming weeks about this great opportunity.

GOOD LUCK, JANET!We all miss Janet Brown, our former Administrative Assistant, who departed the com-

pany in late May after over 16 years of service.

Janet plans to take a year long break from full time employment so that she can spend time with her parents, both in their nineties. She will also escape that long daily com-

mute to and from Lawrenceville, which, as we all know, can mean over three hours behind the wheel on bad traffic days.

Thanks for your loyalty and for doing a great job for this Association, Janet. We wish you the best in all of your future endeavors.

Shayne Wilson,

President

www.maada.com4

Janet Brown

On The Moveadvertiser’s Guide

advertiser Page # Telephone URL American Financial 11 800.967.3633 www.afasinc.com Auto Show Guide 21 770.916.1741 www.goautoshow.com AutoTrader Inside Front Cover www.AutoTrader.com CBRE 13 404.923.1212 www.cbre.com/dealershipsATL Comcast 29 www.cableadvertisingworks.com First Data 15 770-916-1741 www.firstdata.com GADA 31 770.432.1658 www.gada.com Guardian Products 5 800.727.7222 www.gpcorp.com Manheim Auctions 3 800.856.6107 www.atlantaautoauction.com WSB-TV Back Cover 404.897.7000 www.wsbtv.com The Virtual Academy Inside Back Cover 1.877.4.Academy www.maada.com

On The Move 2010

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www.maada.com6

With football season right

around the corner, ON

THE MOVE takes time out

for some “Car Talk” with

Georgia’s “BIG 3” College

Football Coaches.

We thank the following for their valuable assistance: WSB-TV’s Chuck Dowdle; Allison George, Associate AD for Communications, Georgia State University; and Dean Buchan, Assistant Athletic Director/Media Relations, Georgia Tech.

On The Move 2010

7

W hen compiling a list of native

Georgians who are all-time

football greats, Bill Curry has

to be recognized as one of the most success-

ful. How many individuals have lettered for

Georgia Tech, played in three Super Bowls

(winning two), played in two NFL Pro Bowls,

coached at four different universities, won an

SEC Championship, and has been honored as a

member of the State of Georgia Sports Hall of

Fame? And that’s just scratching the surface

of an illustrious career.

Coach Curry may have his greatest challenge ahead as the first head football coach of the Georgia State University Panthers. The Panthers will play their first game against Shorter University on September 2nd at the Georgia Dome.

Coach Curry recently gave us some of his valuable time to talk about something other than football. The topic was cars.

“The first car I ever owned was a ’51 Ford, dark green,” said Curry. “It already had lots of miles on it when I got it. It had overdrive, which meant if I got a running start on the freeway I could go 100 miles an hour, which I’m ashamed of now. I really enjoyed that car.”

Bill purchased his first new car in 1965 after he was drafted by the Green Bay Packers. He used his signing bonus of $12,500.00 to buy a gun metal blue Oldsmobile 98 that cost $5,000.00. It was a happy event for Bill and his wife. Curry said, “Carolyn and I thought that we had died and gone to heaven. We loved that car!”

“I just thought that the Oldsmobiles were beautiful, and at that time, I thought that anybody who could buy anything other than a Ford or a Chevy was really moving in high cot-ton. It was a very big deal to us,” added Curry.

While with Green Bay, Curry had the chance to play for legendary Coach Vince Lombardi. He was a member of the Packer squad that won Super Bowl I in 1967 against the Kansas City Chiefs. He returned to the Super Bowl two more times during the next four years with the Baltimore

Colts, winning again in 1971 in a nail biter against the Dal-las Cowboys.

Curry drove the 1966 Oldsmobile for five years. Dodge then began supplying him loaners every year, and his vehicle of choice was the Charger.

After 10 years of playing in the NFL, Curry moved into coaching as a career. His first job was as an assistant at his alma mater Georgia Tech in 1976. He returned to Green Bay as an assistant in 1977-79.

Curry returned to the college ranks in 1980 when he was named head coach of Georgia Tech. He left the Jackets after seven seasons to take the head coaching job at the University of Alabama in 1987, replac-ing Ray Perkins. Bill’s team won the SEC Championship during his final season with the Tide in 1989. The following season, he became the head coach at the University of Kentucky, where he remained for seven years.

Bill remained active in the college foot-ball spotlight after leaving coaching at Kentucky. He was a television analyst and contributing writer for ESPN from 1997 – 2007.

The Georgia State University coach currently drives a 2005 Lexus 430 SEL, purchased from Chattanooga Lexus.

Georgia State Coach Bill Curry Bought an OLDSMOBILE 98 with His NFL Signing Bonus

Georgia State Coach Bill Curry Bought an OLDSMOBILE 98 with His NFL Signing Bonus

1951 Ford

1966 Oldsmobile 98

The number one should be Paul Johnson’s lucky number, since the Georgia Tech head football

coach has experienced so many firsts during his successful career.

Coach Johnson also experienced an impor-tant first in 1980, one year before he started his college coaching career as an assistant at Lees-McRae Junior College in Banner Elk, North Carolina. That’s when he purchased his first new car – a Chevrolet Monte Carlo. When asked why he decided upon this vehicle, Johnson said, “I liked the style.”

Prior to making this first new car purchase, the Western Carolina University graduate was driv-ing a 1969 Ford Mustang.

Coach Johnson won two I-AA National Titles while head coach at Georgia Southern Univer-sity from 1997 - 2001 . He also received 12 dif-ferent Coach of the Year awards during these five seasons in Statesboro.

In 2002, Johnson took command of the football program at the U.S. Naval Academy, where his team bested Army for six straight seasons, and the Midshipmen led the nation in rushing for three consecutive seasons. One of the great-est memories in Navy football history is their 46-44 triple overtime victory over Notre Dame in 2004. This marked the Middies first victory over the Irish since 1963. This epic victory dur-ing a 10-2 season helped Johnson win the 2004 Bobby Dodd National Coach of the Year award.

Paul returned to the state of Georgia in Decem-ber 2007 as the 12th Head Coach of the Geor-gia Tech Yellow Jackets. Little was expected of his squad during his first season in 2008, but the Jackets responded with a 9-4 record and a share of the Coastal Division title in the Atlan-tic Coast Conference (ACC). Their final regular season game was a thrilling come from behind victory over state rival Georgia. It was their first win over the Bulldogs in seven seasons. Shortly afterwards, Coach Johnson was named ACC Coach of the Year.

The Yellow Jacket proved to be even better in

2009, finishing first in the ACC after a victory over Clemson. This sent the Jackets to their first ever BCS berth in the Orange Bowl. With a final record of 11-3, Johnson was again named ACC Coach of the Year.

Coach Johnson now has two favorite vehicles here in Atlanta. His 2010 Tahoe from Jim Ellis Chevrolet is his favorite when it comes to daily travel, while on seven Saturdays each year it’s the legendary “Ramblin’ Wreck” that leads the Jackets into battle at Bobby Dodd Stadium at Grant Field.

www.maada.com8

1980 Chevrolet Monte Carlo1969 Ford Mustang

2010 Chevrolet Tahoe

1988 Honda Civic

On The Move 2010

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You could say that the University of Georgia’s Mark Richt started his own “Cash for a Clunker”

program in South Florida over 30 years ago.

The Nebraska born Richt purchased his first ve-hicle in 1980 while attending the University of Miami on a football scholarship. He pooled his money with a football teammate to purchase a used Dodge Dart Swinger for the incredible low price of $150.00. Richt said that buying this car, affectionately known as “The Scamp.” proved to be a smart investment for the co-owners. That’s because they quickly made their investment back by leasing it to fellow Hurricane teammates for $5.00 per day.

The Coach laughed when he recalled how the Dart Swinger was damaged by a mischievous teammate. This player was a bit too overzeal-ous about team spirit when he dumped an en-tire can of orange paint on the car (the Hurri-cane team colors are green and orange). Mark said that it was also quite a task sanding the car afterwards and repainting it white with a paint brush. Even an Earl Scheib paint job was too costly for these college kids.

The legend of “The Scamp” continued to live on after Mark graduated from Miami in 1982. That’s because it was his farewell gift to the re-maining Hurricane players.

In 1985, Richt joined the football coaching staff of Bobby Bowden at Florida State University (FSU) in Tallahassee. It was at FSU that he met the former Katharyn Francis, who he married in 1987.

Finding a vehicle with good gas mileage was the goal when the newly weds purchased their first new car in 1988. They selected a four-door Honda Civic from Proctor Honda in Tallahassee. This charcoal colored vehicle fit the bill for the Richts, with over 10 years and 100,000 miles of service.

Mark left FSU in 1989 to become the offen-sive coordinator of East Carolina University in Greenville, N.C. He returned to Tallahassee the following year to take the same position with Bobby Bowden’s staff. While at FSU, Richt coached two Heisman Trophy winners (Quar-terbacks Charlie Ward and Chris Weinke) and was part to two national championships (1993 and 1999).

The Univer-sity of Georgia knocked at Mark’s door in 2001, offering him the head coaching job. He accepted and has since responded with 90 victories. He has also won two Southeastern Conference Champi-onships, four Eastern Division Titles, two SEC Coach of the Year Awards and finished in the top 10 five times during his nine seasons with the Dawgs. Above all of these accomplish-ments, Coach Richt is recognized as a great humanitarian.

Mark and Katharyn live in Athens and are the proud par-ents of four children. The Coach currently drives a Ford F-150 Lari-at truck from Akins Ford.

1980 Chevrolet Monte Carlo

2010 Ford F-150

Dodge Dart Swinger

1988 Honda Civic

The big question is, “How?” Without being able to give one simple answer, there are sev-eral great solutions that can make a difference. To begin, business managers need to focus on growing the income level in the business of-fice. Aside from the traditional methods, now more than ever, a business manager has to think outside the box. One thing that comes to mind is finding more customers to buy the products and services offered. But where do you find these customers?

Have you considered your own customers? That’s right, your own customers! Even the top producers in the business do not run 100% penetration on the sale of any product, unless it is a complete give-away product. Even then, it may be a give-away to the customer, but not the dealership. Someone must incur the cost. Think about it. There is not a better opportu-nity than contacting current customers. These customers have a good relationship with the dealership and are more likely to be receptive to receiving product information.

Next comes the phase where preparation and organization are key. In many dealerships, busi-ness managers attempt to send out letters to customers whose manufacturers limited war-ranties are about to expire in an attempt to try to sell them a service contract. Very rarely will a customer walk into the dealership and ask to purchase a service contract. Most often, there is the customer in the service department that

has a large repair bill. The ser-vice advisor tells the customer that he/she should look into purchasing a service contract to protect against future or fur-ther unexpected repair costs. At this point, the customer is

then turned over to the business manager.

The problem lies from within the follow-up process itself. There is little to no consistency with the effort being placed on capitalizing these opportunities. It is a one-shot deal, just as if the customer was sitting in the business office during the delivery of the vehicle. Here is where preparation and organization will pay off in the end. To make a difference, consider these options:

1. Obtain a report that lists all of the deal-ership’s unsold customers. This list should include customers that did not buy all the products that were presented to him/her dur-ing the delivery of the vehicle. It also includes customers that have purchased a vehicle from the dealership within the last 24 months. It is surprising how many opportunities are avail-able.

2. Upon reviewing the list, consult with the service manager and find out when the last time the customer brought his/her vehicle into the service department for any type of repair or maintenance. Remember, the business manager is controlling how this part of the business will succeed. A good place to start is with customers who are still utilizing the deal-ership’s service department.

3. Put together a written game plan that lists

which customers to contact first. It is impor-tant to do this in order to be consistent with the follow-up process.

4. Write a variety of follow-up letters that cover specific products such as service con-tracts, scheduled maintenance programs, and one that focuses on ancillary products. The best way is to have enough letters prepared to cover most situations. Be creative and create need in the letters.

5. Determine the most effective way to deliv-er the message to the customer. In today’s so-ciety, most customers communicate via e-mail. As a cost-cutting measure and time-saving op-portunity, send an e-mail to the customer. Be sure to include the message in the body of the e-mail rather than as an attachment. Make it a point to enter the customer’s e-mail address into the DMS system so that this information can be accessed in an easy-to-read report. If the customer does not have an e-mail address, mail him/her a copy of the letter.

The key to this entire follow-up process is for the business manager not to sell himself/her-self short by only focusing on service contracts or one particular product. Include everything. You do not know what may have changed since the customer took delivery of his/her ve-hicle. The customer may have shown no inter-est at the time of delivery because it may not have been in the budget. The customer may not have been sold because he/she did not see the need or value in the products offered. The business manager has the opportunity to change that now. Make a difference with your customers today!

Difference Makers

www.maada.com10

Every day, there are new challenges faced in the business office. Some of these challenges are controllable and some

of them are not. As dealerships throughout the automotive industry continue to move in a posi-tive direction, the need for the business office to recover becomes greater. It is time to make a difference.

By Carlos Alvarez

Carlos Alvarez is a Deal-ership Development Manager with American Financial & Automo-tive Services, Inc. Car-los can be reached at 800.967.3633 or by e-mail at CAlvarez@AFAS-inc.com.

On The Move 2010

11Trusted Partners. Proven Results.

F&I Development Programs

Panoptic® Insurance

Automotive Training Academy

Revenue - Generating F&I Products

800.967.3633 | www.AFAS in c . com

www.maada.com12

For every action, there is an equal and opposite reaction.

In the case of the current car markets, it translates like this: Historically low new vehicle inventories equal historically high used vehicle values.

As recently as May 1, the new vehicle inventory unit count slipped to 2.1 million units, or a 56-day supply. On a 12-month rolling basis, the inventory count fell below 2 million units – the lowest level in more than 35 years of record-keeping.

Clearly, a historic change has occurred now that manufacturer restruc-turings have allowed a movement away from pushing inventory onto dealers.

As members of the Metro Atlanta Automobile Dealers Association no doubt can attest, the positive impact on used vehicle values is hard to overstate, as dealers are able to:

• securehighernewvehicletransactionprices,• keeptheirfocusonsellingusedaswellasnewvehicles,and• freeupworkingcapitalthatotherwisewouldhavebeenallocatedto new vehicle inventory.

Wholesale used vehicle prices (on a mix-, mileage- and seasonally adjusted basis) rose again in May, with the Manheim Used Vehicle Value Index reaching an all-time high of 121.0 (January 1995 = 100), representing a 10.9 percent increase from a year ago.

May’s strength was driven, in large part, by vehicles in the lower and middle price tiers; but prices for late-model vehicles also remained strong, thanks to low new vehicle inventory. It’s a situation that should remain fairly consistent for the foreseeable future -- continued restricted levels of wholesale inventory will provide support to future wholesale values.

Not surprisingly, earnings reports from the seven publicly traded dealership groups showed strong used vehicle operations in the first quarter of 2010. On a sales-weighted basis, same-store used unit retail volumes rose more than 12 percent, the biggest percentage gain ever recorded.

For all the challenges and industry turmoil dealers have endured in recent years, this is all welcome news: There’s no time like the present to be in the used car business.

I’m reminded of Newton’s Third Law of Motion when I look at what’s happening in the new and used vehicle markets these days.

By Tom Webb

Tom Webb is the chief economist for Manheim Consulting. Contact him at Thomas.webb@manheim.com, follow him via Twitter at www.twitter.com/TomWebb_Manheim, and read his blog at www.manheimconsulting.type-pad.com.

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M any car buyers go into the trade-in process with a lot of questions. How much will I get for my trade in?

How does the dealer determine the value of my trade in? Why are the values I see online frequently different than what the car dealer has offered me?

Dealers also have questions. How can I source quality used-car inventory? How can I prove to customers the realistic value of their trade in? How can I help my customers afford the cars I’m trying to sell?

AutoTrader.com’s Trade-In Marketplace (TIM) aims to take the mystery out of the trade-in process by giving consumers a guaranteed price for their vehicle redeemable at auto dealerships participating in the program. It also works to help dealers solve some of the challenges they face every day in car buying and selling.

For consumers, the program offers a no-haggle way to get a value on their car, which they can turn into guaranteed cash or toward down payment on a newer car at a participat-ing TIM dealer. For dealers, the marketplace offers another avenue for attracting potential customers to their lots, a new way of getting quality used-car inventory and it positions the dealership as a customer advocate offering one more solution with which a buyer can dispose of their current vehicle.

Here’s how it works:l An auto seller accesses TIM at http://tradein.autotrader.com or directly in the par-ticipating dealership via a stand-alone kiosk or desktop icon. The seller or the salesperson working with the seller inputs information about the vehicle, including the make and model, the model year, major factory-installed

options, other upgrades and maintenance information and details about the condition, including any major repairs or accident dam-age.l The tool will calculate a price based on historical transaction data for hundreds-of-thousands of vehicles and up-to-the-minute supply and demand information and produce a printable purchase offer. The system will also provide consumers accessing the system at home a list of participating dealerships. l The seller can take that purchase offer to a participating dealer in the area or, if the seller is using TIM at a dealership, to a dealer representative right there.l The dealer will inspect the car to confirm that it matches the description provided by the seller and then write the seller a check for that amount.l The seller can use the funds towards the purchase of their next vehicle or simply walk away with a check.

For the car dealer, participating in the TIM program is no risk. On the sales end, once the TIM transaction is completed, a dealer has a customer on the lot who has a check and needs a car. Now there’s a hot pros-pect! Then the dealer has the option of keeping the just-traded-in car and selling it. If the dealer doesn’t want to keep the car in inventory for sale, AutoTrader.com will buy the car for the exact amount the dealer paid for it.

“AutoTrader.com is always looking

for new ways to connect car buyers and car sellers,” said Brian Skutta, the TIM General Manager. “The Trade-In Marketplace does just that by taking the mystery out of the trade-in process. For car shoppers coming to our site, it provides a convenient way of disposing of a vehicle. For our dealers working with the program, it helps attract customers by provid-ing a transparent and hassle free trade-in or selling experience and provides a no-risk way of sourcing used-car inventory.”

More than 700 dealers are currently signed on to the TIM program in the markets AutoTrad-er.com has already opened. By the end of the year, AutoTrader.com will have rolled TIM out to most areas in the United States.

Auto dealers seeking more information on the TIM program can visit http://tradein.autotrader.com for more information or speak with their AutoTrader.com representative.

Launching a New Way for Consumers to Dispose of Vehiclesand for Auto Dealers to Attract Customers and Used-Car Inventory.

Pictured in the photo: (L) Mark Welch, GM Hiley Mazda Volkswagen of Arlington; (R) Richard Padd-ack, AutoTrader.com Advertising Consultant.

On The Move 2010

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surfing on the internet for the right online automotive training service can be a bit confusing. In surfing terms, it’s easy to “Wipe Out” if you make the wrong decision.

The Virtual Academy of Automotive Professionals is, unquestionably, your best choice to ride the “Big Wave” of online training services. That’s because its curriculum is the only online training avail-

able that has been developed by dealers for dealers. It will also give your crew the opportunity to learn from over 300 different workshops in Sales, Management, F&I, Collision, Service, Legal

and Remarketing. These presentations include on-demand streaming videos, downloadable programs, PowerPoint slides, interactive email contact and testing.

Many dealers and associations have signed up for The Virtual Academy since it was launched over three years ago. They have found its broad curriculum to be invaluable.

“It has always been our goal to offer a multitude of training programs for employees in all areas of the dealership,” states Randy Nelson, Director of The Virtual Academy.

“In fact we have also produced a number of different Sales Meetings that can be used during those regular rituals within the dealership.”

Andy Jones, Dealer Principal of the Gerald Jones Dealer Group in Augusta, finds this online service perfect for his sales staff, adding. “It’s very convenient and timely. All four of our dealerships make The Virtual Academy an important part of our daily sales meetings.”

Subscribers to The Virtual Academy are also amazed that a service of this qual-ity is available at such an incredibly low price.

Shayne Wilson, President of the Metro Atlanta Automobile Dealers Associa-tion, remarks, “The Virtual Academy has given dealerships a much welcomed alternative to overpriced online training. It’s commonplace for some online training companies to ask for as much as $12,000.00 a year for their services. We have responded with a service for $2,400.00 annually. We only require that dealerships agree to a one year contract for this special pricing.”

Dealers have also found many additional savings beyond the low subscrip-tion price of The Virtual Academy.

“Times have certainly changed since a dealership had to spend thousands of dollars for just one day of onsite training,” says Nelson. “The dealership also had to cover the trainer’s travel, per diem and lunch for the whole class. It’s quite ironic that just one day of onsite training could cost as much as one year of The Virtual Academy for the entire dealership.”

David Bourne, Owner of Clay County Chrysler, Dodge and Jeep in Lin-eville, Alabama, feels that there is a big advantage using online training. He said, “This is a much better way to train than live classes because the employees can learn at their own pace. Also, we can work in small groups to review the class info and exchange ideas we have learned.”

There will soon be many new employees added to the dealership work force and these new hires will have an advantage over those of the past thanks to the broad curriculum of online training workshops available.

Start developing your team today. Please call 1-877-422-2236, or contact us via email at sales@8774academy.com to set up your personal demon-stration.

RIDE THE “BIG WAVE” OF ONLINE TRAINING!

On The Move 2010

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SALES Professional Selling Skills: Salesperson’s Job Description Understanding the Customer: - Buying Motives Need Buyer Status Buyer Excitement Buyer Secondary Buyer - Behavioral Profiles Dominant Profile Amiable Profile Expressive Profile Analytical Profile - Activating Events - Hot Buttons Today’s Market Overview of the Sales Process Reception Procedure Reception Overview Reception Tips Reception Handling Resistance Consultation Procedure Consultation Key Information Consultation Tips Product Selection Product Presentation Procedure Product Presentation Techniques Product Walk Around 1. Window Sticker 2. Engine Compartment 3. Front of the Vehicle 4. Trunk of the Vehicle 5. Passenger Side Exterior 6. Passenger Side Interior Product Demonstration Procedure Trial Close Product Demonstration Tips Write up Terminology Completing a Buyers Order/Worksheet Preparing For The Write-up Walking The Trade Evidence Manual Review With Management Write-up Responsibilities Presenting The Numbers Listening to the Customers Response Processing Objections Negotiating Guidelines WITSTU Saw One In The Paper Price Justification Negotiating Role-Play I Want to Think it Over Close Not Enough For My Trade Justification I’ve Got Your Deal Beat Justification You’ll Have to do Better Than That Justification Proper Management Referral (T/O) Introduction to F&I The Delivery Owner Follow-up Selling Used Vehicles: Selling New vs Used Keys to Selling Used Product Presentation For Used Vehicles Used Vehicle Presentation Used Vehicle Demo & Trial Close Negotiating For Gross 4 Part Series Handling Incoming Sales Calls 3 Part Series Today’s Market Buying Motives Behavioral Profiles Activating Events Hot Buttons Reception Consultation 3 Part Series Product Selection Presentation Demonstration Return On Effort Salespersons Job Description

SALES MEETINGS Talking Risk and Maintaining Focus Love Your Job Achieving Greatness Handling Anger Positively Building Self Image Visualization Can You Predict Your Future Self Confidence High Energy Negative Thinking Fear of Success Focus on the Positives Failing Successfully Rumination The Managers Role When You Talk to Yourself Personal Success Effective vs Efficient Selling Yourself Making Choices Buying Motives Behavioral Profiles Daily Plan Orphan Owners Salespersons Daily Checklist Salesperson Delivery Checklist Working The Service Drive Vehicle Condition Report Walking The Trade Closes For Every Day Objections: “Saw One In The Paper” “Not Enough For My Trade” “I Want To Think It Over” “Monthly Repairs” “Gas Savings and Payment Justification” “Asking For Cash Down”

MANAGEMENT Sales Management Development Characteristics of Successful Managers Coaching For Peak Performance Key Characteristics Making Sales Meetings Work Managing The Sales Team Common Mistakes Managers Make 2 Part Series Why Salespeople Fail 2 Part Series Used Vehicle Management Maximizing Profit in the Used Car Department 2 Part Series Mastering Inventory Turn Inventory Turn & Profitability 2 Part Series Merchandising & Marketing Recruiting & Hiring The Best Negotiating For Gross 4 Part Series Managing The Deal 5 Part Series Conversion Optimization Search Engine Optimization Search Engine Marketing

F & I: Presented by American Financial & Automotive Services The 3 C’s of Financing Identifying The True Objection Service Contract Objections Service Contract Cost Too Much Disability Coverage Objection Credit Life Insurance Coverage Objection Red Flags Rule Reduce it to the Ridiculous How to Overcome Trade Allowance Objections How to Work Out The Money

SERVICE Service Advisor “Selling Service” Fundamentals of the Sales Process Understanding The Customer Customer Retention Appointments & Appointment Systems Handling Incoming Phone Calls 3 Part Series The Selling Process Selling Service on the Drive Listening Skills & The Walk Around The Service Walk Around Responding to Resistance The Close Finish The Job The Domino Effect The Service Menu Features & Presentation Building Value in OE Parts, There is a Difference Preventing Common Brake Problems Diagnostics, A Logical Approach 4 Part Series Selling Service in Difficult Times 3M Non Lead Weights Tire Wear, Common Cause And Corrections Selling Tires Alignment Tips & Tricks COLLISION Damage Analysis & Estimating Types of Vehicle Construction Types of Damage Collision Energy Management Gathering Vehicle Information Labor Operation Automotive Part Types Taking Proper Photo’s Procedures For Writing An Estimate Supplemental Procedures Respirator Fit Test and Maintenance REMARKETINGAutoTrader.com: Presented by AutoTrader.com Online Advertising in the 21st Century Creating An Internet Savvy Culture at Your Dealership Online Merchandising Best Practices Merchandising Certified Programs Making Video Part of Your Online Presents Certified Pre-Owned Messaging & Merchandising The Truth About E-Mail Leads Effectively Advertising New Vehicles Online

OVE.com: Presented by OVE.com Shift Happens Online Remarketing Basics Applying InLane Best Practices Little Know Online Wholesale Tips

Manheim: Presented by Manheim Vehicle Remarking 101 Selling Vehicles at Wholesale Auction Wholesale Vehicle Buying

Legal: Presented by Schulten Ward & Turner Fair Labor Standards Act 8300 Form IRS Cash Reporting Rule Red Flags Rule Address Discrepancy Rule Interviewing Prospective Employees

Automotive News Automotive News “First Shift” Automotive News “Daily Updates”

THE VIRTUAL ACADEMY PROGRAMS & WORKSHOPS

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So where do you start? This final part will address ways to identify where you have the greatest risk in your dealership by ranking the fol-lowing three statements in the order of which you would be most likely to say (1=most likely, 2=second most likely, 3=third most likely):

Statement Ranking (choose each number only once)

“Everyone makes mistakes.” 1 2 3

“My controller and auditors look at that.” 1 2 3

“I trust my people.” 1 2 3

After you have ranked the statements, look for your corresponding risk areas below. Included in each section are some examples of some poli-cies and procedures to implement, or in some cases, enforce, in your dealership. The statement you ranked number one (most likely) is typi-cally the highest risk area for you, but all may be applicable.

TONE AT THE TOP“Everyone makes mistakes.”As you may have been able to discern, controlling fraud begins “at home.” Take a hard look at the individuals responsible for running your dealership (including yourself ) with the understanding that everyone else in the dealership is looking at that those people too. Would you be comfortable if anyone in the dealership did the same things you did, even if you are the owner? You may have heard the saying, “As long as he makes me more than he steals, I’m OK with it” or something similar. This practice will only end one way: with fraud in your dealership.

Defining what the dealership determines to be unacceptable is the beginning of proper governance. Without specific, documented, and enforced guidelines for employees to work and live by, lines will be tested, especially the gray areas.

Here are some great examples of policies to implement to help with your Tone at the Top:

1. Code of Conduct – These are the rules for conducting business for individuals and the dealership as a whole and may include the values and expected behaviors the dealership follows. Without these guide-lines, it is much more difficult to enforce noncompliance and build a strong anti-fraud culture.2. No Tolerance – Successful dealerships simply do not allow em-ployees to commit fraud and still stay employed, even if it is the top salesperson or an owner. Making one exception will forever make your “Tone” tarnished and essentially continue to invite fraud.

In parts I and II of the series, we discussed

what a typical fraud perpetrator profile

included and gave some strong fraud

indicators in specific departments. An em-

ployee usually steals when there is an oppor-

tunity to steal and usually is someone that

has been with company for at least five years

and is in a position of trust. Many times ad-

ditional duties and responsibilities were giv-

en to that person because of that trust that

had built up over the years. Pressures such as

money or addictions can drive someone to

perpetrate a fraud especially when it is easy

to justify the action. It is clear that even the

most trusted employees will steal.

By Brian P. Bentz, CPA, CIA

Brian Bentz is the lead member for the Dealer Services Risk Services Group and is located in our Dallas, Texas office. Since joining Dixon Hughes over twenty years ago, Brian has fo-cused exclusively on dealerships in providing them industry thought leadership consulting services related to internal audit, regulatory and compliance services, due diligence and buy / sells and agreed upon procedures.

FRAUD IN THE DEALERSHIP A Three Part Series – Part I I I – Hitting The Brakes

3. Good Hiring Practices – Consistently using background, drug, and reference checks let all of your employees know that you are only going to hire the best people. Performing these checks every time is the key to success. Good employees also can help recruit other good employees so start with your existing staff and determine if you would hire them today.

RISK ASSESSMENT“My controller and auditors look at that.”Some frauds are masterful deceits that require years of planning. Most frauds include routine transactions that have break-downs in estab-lished controls and procedures. In other words, most frauds happen because:

• Someone stopped doing what was supposed to be done• Someone started doing something that someone else should do

Dealerships, unlike certain manufacturers, do not have what seems like limitless funding to be able to have each single transaction type per-formed by a single employee. As a result, multiple transactions are per-formed by individuals every day. Fraud increases tremendously whenopportunity arises because an employee is performing duties that would allow for fraud to go undetected. By separating duties properly, fraud risk can be reduced assuming those functions are actually be-ing performed as developed. Just because someone is supposed to do something does not mean they are actually doing it.

There may be times when certain duties cannot be fully segregated due to lack of personnel, expertise or experience levels, logistics or other circumstances. In these situations many dealerships assign these duties to the most trusted employee. Of course, these are the same employees that fit the typical profile for committing fraud!

To help determine where you may have “holes” in your dealership that can lead to fraud, you need to perform an assessment of where your risks may be. Use these steps as a starting point for your Risk Assess-ment:

1. “Role” Call – Interview and document what each of your employees do for the dealership, both as a normal job duty and as a back-up (when someone is on vacation, sick, etc.) Begin first with employees that can record transactions, handle money, or purchase items for the dealer-ship.2. Risk Ranking – Determine the greatest risk to your organization. Are you more concerned with the loss of income or reputation? Is the loss of cash more important than the loss of assets? Is it more important for your dealership to comply with new regulations or save the expense

and effort and hope you don’t get caught?3. Results and Reality – Honestly assess your risks and where there may be risks you don’t know about or even understand. Is your CFO strong enough to notice financial fraud committed by one of your controllers? Are your personnel actually doing what they say they are (reviewing, approving, etc.)?

INSPECT AND MONITOR“I trust my people.”There is no doubt about it: some people will not steal even if you give them a chance. It is also true that some will try to steal even if there is no way to do it. Opportunity is the only thing you can control (that is, if you know about it) and if you choose to just “trust” that employees willdo the right thing, it doesn’t matter if there is opportunity or not.

You put a lot of trust in employees today. You trust that they protect the assets of the company, take care of customers, clock in on time, and in general, do the thousands of other things they are supposed to do each day. This should not be a problem as long as all of your employees know what they are supposed to do, are properly trained and educated, and are motivated to perform at their highest level for the company.

The only sure way to make sure you can trust your employees is by checking them. “Expect what you inspect”, “check the checkers” are all very true. Over time, for many reasons, employees will stop doing what they are supposed to do unless they are reminded.

Here are some examples of both inspect and monitor procedures you can perform for accounts payable and the related disbursements:

Inspect MonitorGet back-up for A/P check Sign A/P checks with clerk

Check invoices for signatures Ask managers what they approved

Compare invoices to G/L posting Observe clerk posting invoices

Simple inspection tests for any process include comparing the support-ing documentation to the actual posting. Monitoring can include in-quiry or observation of the process performer.

Trust your employees enough to check them.

For more information on how to detect fraud in your dealership, contact Brian Bentz, CPA, CIA directly at (817) 276-4106 or via email at bbentz@dixon-hughes.com.

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FRAUD IN THE DEALERSHIP A Three Part Series – Part I I I – Hitting The Brakes

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New video based offerings have changed the way dealers feel about this type of technol-ogy by incorporating new state of the art DMS integrated technology. Instead of focusing on compliance, these new video offerings focus on helping dealers increase F&I performance and production through training. Increased performance translates into increased produc-tion; increased production leads to higher income per retail for dealerships.

VIDEO TOOLS IN ACTIONOne dealer group using video solutions is the Greg Orr Automotive Group. Pat Barrows, Director of Finance for Greg Orr Automotive, who operates 17 dealerships throughout Texas and Louisiana, says, “Using a video system in F&I is a tremendous training offering – the best you can get. To be able to see a custom-er’s reaction to what our managers are saying, then train our staff to be better prepared in the future, is a really valuable tool.”

Barrows notes that the video based training translates into a more productive, profitable F&I staff. “We review the videos with our employees, helping them understand what they’re not doing, and how to get better. For us, it’s not a matter of catching someone doing something wrong—it’s about helping our staff get better at their jobs.” Thanks to the impact of these offerings on training, the Orr Auto-motive dealerships have seen improvements in profitability since its implementation. “It’s helping our staff get better, which has turned

into a 15% improvement in product penetra-tions across the board.” According to Barrows, the dealerships have also seen an increase in Income per Retail. “We’ve increased our dollar per copy by $300,” he says.

THE SUBURBAN COLLECTIONAnother group having success with Video tools is The Suburban Collection, who operates 26 dealerships representing 45 franchises across Michigan and South Florida. The Suburban Collection has also witnessed marked im-provement in their F&I profits since installing video offerings.

Gary Allgeier, Director of Finance for the group says, “We immediately saw a tremendous impact on our sales training. We are in a much better position to train our F&I Mangers with video solutions. We review the presentation videos and then specifically target training based upon what we see. Since we installed video solutions, our production has dramati-cally improved.”

In the stores that have Video solutions in-stalled, Allgeier notes that The Suburban Col-lection has seen a $200 increase in Income per Retail. “Individual producer’s numbers have increased as much as $300 per vehicle” he says. Product penetrations are also on the rise according to Allgeier, by approximately 25% in the stores where video solutions are installed.

With the overall benefits video solutions have

provided The Suburban Collection, Allgeier ad-mits that there was some nervousness among the F&I staff when video solutions were first implemented. “We initially focused on positive presentation reviews, to demonstrate that we weren’t out ‘to catch’ people doing something wrong and that this is a valuable training tool for our department. After a few weeks, we found that managers were asking for more reviews, more feedback so they could make better and more profitable customer presenta-tions.”

Allgeier comments that video solutions have eliminated any uncertainty about what hap-pens during the presentations, and has even helped the dealerships from a compliance standpoint. “I’ve been in the business for 20 years, and this is a revolutionary tool that puts the facts right on the table.” he says. “Video has driven production and compliance and has yielded an impressive ROI.”

For these two groups, and many more that utilize video offerings, the increased F&I revenue has helped the bottom line. In today’s competitive landscape, dealers across the country are always looking for the proverbial ‘goose that lays the golden egg’. F&I is one of those departments that can have a dramatic impact on the bottom line. Because of the expense structure in F&I, a high percentage of these additional ‘found’ dollar’s fall directly to the bottom line.

By incorporating video solutions training into your operating plan, dealers now have the ability train F&I Managers using real life examples instead of textbook theory. By incorporating this new technology into your dealership, maybe, just maybe you will finally find that golden goose you have always been looking for.

By Bob Elbrader

Bob Elbrader is Director of Operations for Intravision, an

F&I Solutions company He can be reached at:

belbrader@intravisiontech.com(913) 707-7377

Using Video to Improve

F&I Performance

If you have ever considered recording F&I transactions and decided not to make this move, you may want to recon-sider. In recent years, when dealers have thought about

recording F&I transactions, many have believed this type of technology was used solely for compliance purposes and many dealers believed recording F&I transactions could pose as a potential liability threat to their organization.

On The Move 2010

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The MAADA will be publishing the 2011 Atlanta International Auto Show Guide, and we are offering the most reasonable rates ever to our Dealer Members.

There’s no question that your insertion in the guide will reach a very strong market of affluent consumers and prospective car buyers. Sur-veys show that over 60% of attendees plan to buy new vehicles within

12 months, with the majority stating that the show helped them make buying decisions.

The Atlanta International Auto Show Guide will publish features on new introductions, concept vehicles, auto industry trends and special show events and attractions. It will also include a large floor plan, plus a list-ing of all dealer members of the MAADA.

For more information, please call 770-916-1741, or contact us by email at autoshow@maada.com.

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DRIVE BACK WHERE YOU CAME FROM.

A horse-drawn world in 1900 surely must have welcomed the zippy new age of the automobile, right? Apparently not everyone was quite so enthusiastic. Well-to-do families in the early years would set out on weekend car trips into the countryside, only to find rocks and bricks hurled at them by the locals! Cars in those days were loud, oily-smelling beasts that kicked up clouds of dust from the dry dirt roads. Apparently these intrusions of progress jarred the traditional sen-sibilities of rural folk. Worst of all, the odd, jerking machines scared the horses, who would sometimes careen off the road, carrying their carts and riders on an unexpectedly wild ride.

LOOK AT ME WHILE YOU’RE DRIVING.

The front seat/back seat arrangement seems to make perfect sense for cars, but in the early days, it appears to have taken a while to arrive at that configuration. The French 1890 Panhard-Levassor had a back seat all right, but it faced backward. In a presumable response to the difficulties of group conversation, cars like the 1896 Peugeot had its back passenger seat placed in front of the driver’s seat, in a ‘vis-

a-vis’ or face-to-face arrangement. Finally realizing that the driver’s ability to see the road trumped conversational courtesy, passengers soon got moved back to the back, but at least now they could see where they were going instead of where they’d been.

TRAVELING TO ExCITING NEW COUNTIES.

Once back-country Americans got past their early, somewhat violent resentment, and as they noticed car prices dropping, they started to pick up on the possibilities. Now, with one of these newfangled con-traptions, carrying their crops to market every week took half an hour instead of half a day. They could visit relatives in other towns who they otherwise might never see again. And, significantly, they had access for the first time to big-town medical care, education, libraries, media, sports and culture, as well as retailers hawking the latest con-sumer conveniences. In this way, the automobile probably had more overall impact on the lives of farm people than anyone else. Plus Henry Ford made sure that his Model T’s engine could be disengaged from the drive mechanism and used to run farm machinery. Not a big selling point today, but it certainly was at the time.

Here are some highlights (and lowlights) of early automobile history that may surprise you.

By Tom Tortorici

Tom Tortorici develops strategic marketing communications for today’s world. For a free copy of “Selling to Stingy Buyers in a Stinky Economy” email him at tom@tortoriciinc.com.

On The Move 2010

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Here are some highlights (and lowlights) of early automobile history that may surprise you.

BUT WHERE’S THE ENGINE?

In the earliest cars, the motor was generally mounted under and be-hind the driver’s seat, near the real wheels that it powered. During the first decade of the 1900s, some car makers experimented with engines in the front, under a metal hood, a stylish modification that soon won popularity. Problem was, other manufacturers still hadn’t figured out how to drive the rear wheels from a front-mounted engine. For exam-ple, the 1905 Yale Model E still kept its engine hidden low in the back, but to attract fashion-conscious buyers, it featured a fake hood in the front that held...nothing (except for maybe the water and oil tanks). Eventually, all automobile companies employed the engine-forward configuration, which allowed the entire car to sit lower to the ground. After all, unlike the carriages they had evolved from, cars no longer had to be built to allow the driver to see over the tops of horses.

TWO DOLLARS REGULAR, PLEASE.

The first gasoline providers for early cars were existing establishments like hardware stores. However since the pumps were simply placed in front of the store at the curb, cars that were gassing up tended to block the road. In busy areas, that lead to continual traffic back-ups, driver rage, and more than a few accidents. When pumps were finally set back as part of proper ‘service stations,’ the accompanying struc-tures initially tended to be cheap wood or corrugated metal sheds, creating dilapidated eyesores all along the road. This soon became a serious social, political and aesthetic issue. Then things swung the other way, with stations trying to outdo each other to gain architec-tural respectability. One gasoline company built their service stations to look like quaint English cottages, and another offered buildings that looked like Greek monuments, complete with classical columns.

NOW I KNOW WHY THEY CALL IT A TRUNK.

Park a modern car next to a hundred-year-old antique, and it’s hard to see how one evolved into the other. But if you look at the process step by step, you’ll see how exterior body features were gradually absorbed into a unified whole. Before about 1910, the seats were perched on top of the body; after that point, they were eventually lowered and encased inside the body. Sometime during the twenties, the hood area was widened to match the passenger compartment, resulting in smooth front-to-back lines then known as the ‘torpedo’ look. In the early thirties, many cars had an ordinary traveling trunk mounted on the back for cargo; by the end of the decade, the ‘trunk’ was thorough-ly integrated in to the body itself. Finally, fenders gradually merged with the hood between the ’30s and the ’50s, at which point an inter-esting thing happened. Other than further streamlining and variations

in styling, car bodies stopped evolving. Sedans of the mid-fifties have the same essential structure and proportions as sedans today.

WOMEN’S RIGHT OF WAY.

In the earliest days of the twentieth century, motoring was a man’s world. Throughout the late teens and the twenties, though, the lady of the house increasingly found that ‘a woman’s place’ was behind a steering wheel. Three developments helped move this trend along. First, the option of an electric ignition freed the fairer sex from hav-ing to crank up the car from the handle in the front, a difficult and often dangerous procedure even for men. Second, cars became more reliable, which made it less likely for a young wife to be stranded on the road. And third, hardtop models began to outsell convertibles, protecting ladies and their children from questionable neighborhoods and unpredictable weather. The sense of freedom and empowerment that females gained by their new mobility surely was a factor in the growing women’s rights movement at the time.

AND WE HAVE A WINNER.

At the turn of the twentieth century, electric cars, steam-driven cars, and gasoline-powered cars all competed for market share, and it was far from certain at that point which would prevail. Electric cars, like even today’s models, were limited in range, and apparently that was a deal-killer for new owners who might want to jump in and drive to the horizon. Steam cars were powerful enough to cover longer distances, but waiting up to a half hour to get enough steam up was ultimately too tiresome for on-the-go drivers. Early internal combustion engines may have made for a smoky, noisy, vibrating ride, but ultimately they won the newly-mobile hearts of car buyers by default. The fact that they start right up and ride forever made gasoline-fueled cars the driver’s exclusive choice for the next hundred years.

OBSTACLES TO PROGRESS.

Beginning in the 1880s, France and Germany made great, rapid strides in developing and popularizing the self-propelled vehicle. England? Not so much. Steam carriages were actually quite successful as public buses in the later part of the nineteenth century. But their competitors, the railroad and horse-carriage industries, had better lobbyists; Parlia-ment was persuaded to levy a tax on the steamers so burdensome it put them out of business. A few years later, British officials were so fearful of the response to personal gas-driven vehicles on public streets, they ruled that every automobile must be preceded by a man on foot, waving a red flag to warn villagers of the 4-wheeled monster coming down the road.

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Wishing,HopingandPraying?

The question then becomes, how do we increase vehicle retail turn-over? We can spend more money advertising. We can pay extra com-missions. We can price our inventory on the internet to be the most attractive in terms of a price search. We can lower our grosses. We can try to reach out to a broader base of prospects. We can also wish, hope and pray. These are not the solutions I advocate.

Have you ever wondered how one of your competitors always seems to be able to deliver more vehicles than you? Or how someone in your “20 group” was continuously selling 1 to 1 (or more) used to new? Or how they grossed more per unit than you? Or how they were able to experience little or no “wholesale pain?” It’s all about the turn. We all

know that the “quicker turners” gross more. That goes for both the new vehicle department as well as the used. This is no secret.

I recently completed an exhaustive study of all of the ramifications inventory decisions can, and do, have to the dealership’s bottom line. Many things were clearly revealed and confirmed by the data as a result of the study and the following list is not intended to be a revela-tion, nor is it, all inclusive. • Quickerturningvehiclesgrossmoreperunitonboththefront end and back end• Thereisadirectcorrelationbetweenageandgross

Having been directly involved in the retail automobile business for nearly 40 years, I have come across a myr-iad of “better mousetraps” and so called “magic pills.” If

I had a dollar for every time a vendor told me that “all you have to do is sell one more car to pay for it,” well, let’s just say that we have all heard that before. The truth is, that as it relates to the new and used vehicle sales game, it’s all about retail turnover. It always has been and it always will be.

Wishing,HopingandPraying?

By Scott Dreisbach,Vice President, Valuinsight, Inc.

561 404 8540sdrize@valuinsight.comwww.valuinsight.com

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25

• Grossalmostalwaysgoesupasavailabilitygoesdownandthe opposite is also true• Salescompensationinrealdollarsandasa%ofgross,goesupin direct proportion to vehicle age• ManySpecificYears,MakesandModels,sellfasterthanothers• Moreinventorydoesnotmeanmoredeliveries• Salespeopletendtoleadprospectstothe“freshest”inventory• Dealersadvertisingdollarsarelargelyspentontheslowest moving inventory• Seasonality,specialeventsandincentiveprogramsareheretostay• Forecastingsalesisveryunpredictableandisusuallyoptimistic and inaccurate

Back to the original question then, How do we in-crease retail vehicle turnover?

One of the best (and this one is free) methods to increase retail vehicle turnover is by installing and following a stocking guide. One of the many functions of this stocking guide is simply measuring the cost of sales of the units we are delivering versus the remaining inventory by sales segment and individual model years within each segment. I like to use the fol-lowing eleven sales categories and the 8 most recent model years within each category. The categories are: Small Car, Sporty Car, Mid Size Car, Full Size Car, Small Truck, Small Sport Utility, Large Truck, Large Sport Utility, Mini van and Van. When you clearly know how many and what the cost of sales of the vehicles are that are “burning gas” is and then compare that to your “ground stock,” you will have an exact idea of whether you are long or short in that model year and seg-ment in either units, ready money or both. Your sales pace earns you a stocking guide number in both unit count and average cost of sales. It then is simply looking at your actual inventory versus your guide. The action required to “get into balance” is clearly apparent.

As an example, if your number one gross revenue producing sales seg-ment is mid size cars and your best performing model year and quick-est turner is 2006 within that segment and the average cost of sales is $8,200, then it stands to reason that your inventory of vehicles in that segment and model year needs to be as close to $8,200 (lot ready) per unit as possible. The sales pace and number of units sold in that seg-ment determines your “stocking guide.” The closer your inventory is to the cost of sales of the vehicles that you are selling, the more active that inventory becomes. Conversely, the further away from the $8,200 target your inventory is, the less active it becomes. Another use of the stocking guide is when it come to appraisal time. If, for example, you happen to be offered a trade that is a 2006 mid size car but is worth around $14,000, get a buy figure on the unit that is good for at least 10 days, trade for the vehicle, try it out on the lot for those 10 days and if it isn’t gone in those 10 days, cash it. This will allow you the opportunity to try other vehicles without the risk of wholesale pain. Ultimately, you will find the ideal inventory in both the number of units you need, as well as the cost, for each sales category and model year. I strongly suggest aiming for a target of a 37 days supply of units and a 37 days supply of dollars in each sales category and model year. (The unit days and dollar days calculations were covered in a prior article and I will be happy to send it to you upon request.).

It will soon become evident that there are some sales categories and model years that just do not make sense to participate in with an inventory investment. You will also find that by maintaining 37 days worth of units and dollars, there will be categories and model years that sales grow rapidly in. And finally, you will also be able to find the point of diminishing returns in each sales category where more, does not necessarily mean better. (the point of diminishing returns)

I have developed a simple Excel spreadsheet “stocking guide” tool that you can use to accomplish this (no charge or obligation) and I will be happy to send it to you upon request. Simply send me an e mail asking for the used vehicle stocking guide. The “feedback” that this type of simplified inventory management system will provide you will become invaluable.

Part of the reason Wal-Mart has become the retailing Giant that it is, is due to strict adherence to the basic principles of inventory manage-

ment. Monitor demand, measure movement. Make decisions. You will rarely find any of their shelves empty or overstocked. If it is a good producing, quick turner, they gradually increase their stock until they find that point of diminish-ing return. (where more does not equal better) If they have tried it and it doesn’t work, they forget it and move on and try something else.

If you will take the time to implement this type of system, (or any of the available vehicle inventory management systems, mine included) you will in-crease your total Used Vehicle Department’s gross profit more than you might imagine. The bottom line is that when customers leave our individual Used Vehicle car lots without purchasing, it is almost always because they did not see what they

truly were looking for. (Sometimes they will not even get out of their vehicle and just do a “drive by.”) Remember, you cannot be all things to all people and it is impossible to stock everything. When your Used Car lot has more on the ground, of what your customers are looking for, what do you think will happen?

Today’s technology gives us all the opportunity to make more intel-ligent decisions, more accurately and faster than ever before. Literally, with a few clicks of your mouse in the right program, you can get all of the information you would need to make a better inventory decision. While it is impossible to predict economic swings, natural disasters, ter-rorist activities or wild fuel price fluctuations, you can phase in a “more active” inventory. Ask yourself this question. Am I confident that my managers are using all of the tools and data available to them to make the very best possible inventory decisions?

It has been said by many different professionals that the first step to recovery is to admit you have a problem. This step is often the most difficult one to take as it involves an admission to oneself that some-how, someway, we have failed. As car people, we always want to do better and being of the optimistic breed, we all believe we will do better, even when repeated results keep staring us directly in the face, month after month. Is your inventory the problem or the solution? Do your managers really use an inventory management system? If not, why not?

“Part of the reason Wal-Mart has become the retailing Giant that it is, is due to strict adherence to the basic principles of inventory management.

Monitor demand, measure movement. Make deci-sions. You will rarely find

any of their shelves empty or overstocked.”

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The stunning red Ford Start pulled ahead of 65 concept vehicles to be named Best Concept by the AutoWeek editorial staff at the Beijing auto show this year. Small, green, smart and fun, the Ford Start won admirers for its decidedly playful take on kinetic design. More than a design exploration into the feasibility of a future small car, it previews the smallest engine yet in the growing Ford EcoBoost engine family. Ford has confirmed that the 1.0-litre turbocharged I3 EcoBoost engine powering the Start is going into production, destined for use in future Ford small cars, where it is expected to deliver the same power as a larger petrol I4. Describing the Ford Start as “the kind of concept we can wholeheartedly embrace”, AutoWeek journalists gave the nifty package a ready thumbs up. (Source: Ford News)

How popular is the all-new 2010 Chevrolet Camaro? More than 500 of them—including some special models brought along by Chevy’s Team Camaro—descended on Valdosta, Ga., recently for Camaro5Fest 2010. Attracting more than 1,000 Camaro-craving enthusiasts, the celebration was believed to be the largest yet for the fifth generation of Chevy’s hallmark muscle car.

Sponsored by fan site Camaro5.com, the event was a clear indication of how passionate people are about the new car, a trait obviously shared by the men and women at GM. Not about to let customers

have all the fun, the Camaro’s chief engineer, Al Oppenheiser, traveled to the event, as did team members including Peter Kosak, the car’s ve-hicle line director; John Fitzpatrick, Camaro’s marketing manager; and Cheryl Pilcher, its product manager. And you can be sure they didn’t fly to the event; well, you can be sure they didn’t take an airplane anyway.

Said Fitzpatrick: “It was an incredible opportunity to see the passion and enthusiasm owners have for the new Camaro. This was such an exciting event that I wouldn’t be surprised to see more than 1,000 cars at next year’s Camaro5Fest.” (Source: Chevrolet in the News)

Muscle-car Meet-up: Camaro5Fest 2010

Nissan Vietnam Co. Ltd. (NVL) recently an-nounced the launch of the Nissan Grand Livina MPV, which will lead the Nissan brand expansion in Vietnam. The first locally assem-bled Nissan vehicle offered in the country, the stylish MPV that seats seven will be sold at one newly opened Nissan flagship dealer in Ho Chi Minh City and one in Hanoi.

“The opening of two flagship dealers in Vietnam with a locally assembled product

represents the company’s continuing priority focus on business expansion into emerging markets,” said Toshiyuki Shiga, chief operat-ing officer of Nissan Motor Co., Ltd. (NML), who attended the launch ceremony today at Thao Dien Village in Ho Chi Minh City. “Vietnam is one of the key global automotive markets, and we are glad to mark the impor-tant milestone in the market today.” (Source: Nissan News)

Nissan Launches Grand Livina in Vietnam

FORD START WINS AUTOWEEK’S BEST CONCEPT

On The Move 2010

27THE AUDI A9 CONCEPT THAT CAN CHANGE COLORS AND REPAIR ITSELF!

This is Audi A9 concept from the reputed Spanish designer Daniel Garcia who has Ducati 6098 R concept and may other to his credit. The awesome A9 concept will be lighter than Audi’s current

flagship model, A8. Inspiration for the styling of A9 comes from the stunning architectural style of Santiago Calatrava’s buildings in “La Ciudad de las Artes y de las Ciencias in Valencia. Daniel’s A9 concept is a low emission hybrid vehicle for the future. A9 concept features a single-piece windscreen and its roof is formed from nanotechnology material (which is yet to be discovered) that has a unique automatic-system that repairs damage and can also be adjusted for colors and opacity. Also, the vehicle flaunts the unique ‘electronic painting’ system that allows the owner to change the color with the touch of a button. The concept is proposed to be powered by an advanced hybrid setup which uses an internal combustion engine working in conjunction with four in-wheel electric motors. (Source: Audi News)

Scion recently unveiled a Five Axis customized edition of the all-new 2011 Scion tC. The special Five Axis Scion demonstrates one of the many ways in which the all-new tC can be customized with internal and aftermarket accessories.

The Five Axis tC carries a high–performance, racing theme with the installation of a four-inch wide-body conversion and a unique House of Color custom formulated exterior paint that is appropriately named, Bloodshot. Performance was enhanced with the installation of a Tein adjustable coil-over suspen-sion, a TRD custom Big Brake kit, and 20-inch Yokahama Advan Sport tires mounted onto five AD R5:F wheels.

The interior complements the exterior performance and look with unique Five Axis trim and color ap-pointments and material specifi-cations by Zing Design. Comfort is provided with custom leather-trimmed seats with Ultrasuede® EcoDesign™ inserts. Additional interior enhancements include Chil-ewich floor mats, and upholstery by Little John’s Interior Concepts.

Founded in 1995 by Troy Sumitomo, Five Axis is most noted for their con-cept cars and high-end showcars often seen at major international auto shows and trade shows like SEMA. (Source: Pressroom Toyota)

All-New 2011 Scion tC Receives Five Axis Makeover

Operation “Diaper Drop-off” Completed in Rural MinnesotaEbro, Minn. – When Chevrolet heard the amazing tale of Amanda McBride, the mother who gave birth while driving her 2005 Cobalt to the hospital, the company made Amanda an offer any mother would love – a year’s supply of free diapers and other baby supplies.

Chevrolet delivered on its promise, arriving in rural Minnesota in a Chevrolet Tahoe packed with baby supplies.

Joining Chevrolet for operation “Diaper Drop-off” was Safe Kids USA, Chevrolet’s partner in child safety. Because Amanda has three children, includ-

ing her newborn, who all require child seats, Safe Kids technicians spent an hour with the family, showing them the proper way to install new car seats (donated by Graco) in the Cobalt.

After all three kids were safely buckled in; Chevro-let presented the family with a host of other gifts, including a year’s supply of diapers.

“I never thought a big company like Chevrolet would ever pay attention to small town folks like us,” Joseph Phillips, the baby’s father. “Thank you so much!” (Source: Chevrolet in the News)

www.maada.com28

A six-month trial involving four smart fortwo vehicles in the United Kingdom has been deemed a major success, with many individu-als keen to use electric models in the future.

The iconic two-seater vehicles were test driven by 264 different people after being given to ten vehicle fleets and being present at three public events.

In total, 72 per cent of drivers said that they

would be happy to use an electric vehicle as a regular car after sampling the smart fortwo, with the model exceeding expectations in all performance areas.

Furthermore, charging the vehicle was deemed to be safe, easy and reliable.

The vehicles were handed out by Cenex, the UK’s Centre of Excellence for low carbon and fuel cell technologies, in conjunction with Re-

gional Development Agency One North East.

Robert Evans, CEO at Cenex, said: “The Smart Move trial has done a great deal to change perceptions of electric vehicles among the fleet managers and drivers who took part.

The smart fortwo electric drive can reach a limited top speed of 62 miles per hour.(Source: Mercedes-Benz News UK)

“Get in, buckle up and start talking.” Lexus customers will be calling the shots in a high-definition interactive film entitled “Dark Ride.” The film features Lexus’ newest hybrid, the CT 200h premium compact car, piloted by actor Norman Reedus (Boondock Saints franchise). Reedus is behind the wheel in this 12:30 ac-tion film, but he is following the directions of the person riding shotgun…the consumer.

“With ‘Dark Ride’ we are creating a unique vir-tual test drive opportunity so consumers can experience this hybrid, that is like no other, months before it is available at dealerships in early 2011,” said Dave Nordstrom, Lexus vice president of marketing. “In it, consumers play a co-starring role as the fun-to-drive Lexus CT 200h is put through its paces. By guiding

the driver and the CT through a series of ad-ventures, customers will be exposed to ‘The Darker Side of Green,’ which is completely different than the way hybrids are usually portrayed.”

The film is available online at www.lexusdark-ride.com along with the trailer for the film, which will appear in select movie theaters across the country. Visitors to the www.lexus-darkride.com site will get to insert themselves into the film, sitting beside “Tony” (Reedus), and navigating while he drives the CT 200h from the Nevada desert to a Los Angeles safehouse and protects it from a variety of enemies who wish to get their hands on the new prototype.

Consumers will use an array of interactive features in the film—allowing them to insert their own likeness (via a Webcam or profile pic), record their own dialogue lines, control the camera movement and POV, and make decisions that alter the path of the film so new situations arise each time. (Source: Toyota Pressroom)

Lexus Invites Consumers to Co-star in New ‘Dark Ride’ Interactive Film to Launch New CT 200h Hybrid

The awesome Kia Soul TV commercial was recently named “Automo-tive TV Ad of the Year” at the Nielsen Automotive Advertising Awards.

The cute and creative Kia Soul commercial shows a city that is in-habited by hamsters in suburban streets who go about doing what hamsters do best – mindlessly running on their exercise wheels but never moving to another spot.

They are not getting anywhere. But their world suddenly changes as a flashing red Kia Soul crossover pulls up to a stoplight. The windows roll down and inside are tree hamsters tapping their paws to cool music. These cool hamsters running on the 2010 Kia Soul discovered “A New Way to Roll.”

The creative commercial creator, David&Goliath, depicts the Soul as a lounge on wheels as the hamsters bob their head to four different music tracks coming from the Kia’s audio system with speaker lights pulsing to the beat of the music.

As viewers look closely, on the cool hamsters’ iPod are information on the song tracks and artists. This was an intentional placement because each track is downloadable from kiasoul.com website.

The Nielsen Automotive Advertising Awards chooses the best adver-tisements based on the votes of an online panel of TV viewers who watch TV programs not as a clinical research but an actual natural TV viewing experience. (Source: www.kia-world.net)

Kia Soul’s “Hamster” commercial wins the “Automotive

TV Ad of the Year” award!

MOTORISTS KEEN ON ELECTRIC VEHICLES AFTER SMART FOR TWO TEST IN THE UK

On The Move 2010

29

UNLOCK YOUR DEALERSHIP’S SELLING POTENTIAL.

Demographic Targeting-68 niche cable networks

Geographic Targeting-46 selling areas

Sports–92% of all sports are on cable television

Innovation-Online and On Demand advertising solutions

Affordability-No more advertising waste

Accountability-We deliver what we promise

It Works–Learn more by visiting us online at:CableAdvertisingWorks.com

www.maada.com30

On behalf of its franchised new car and truck dealer members, the Metro Atlanta Automo-bile Dealers Association (MAADA) has recently negotiated an excellent arrangement with First Data as a preferred supplier of payment processing services. This program offers a money-saving price structure for all credit and debit card transactions. It also allows MAADA members to accept a full range of credit and debit cards, meaning more payment conve-nience for their customers at a lower cost of doing business for the dealership.

For easier cost management, First Data pro-vides a single monthly statement, including all Visa®, MasterCard®, Discover®, American Express® and debit card transactions. Plus, with online reporting and toll-free customer support 24/7, this new relationship should be

a winner for all MAADA members.

According to First Data, the implementation for this service is easy and they will provide training for your staff.

For those who are unfamiliar with First Data, they are well known as an industry leader in electronic payment solutions. They give a competitive edge to associations, offering a complete portfolio of products and services to meet the expanding needs of their busi-ness clients.

First Data is a $7.2 billion revenue company consisting of Commercial Ser-vices, Financial Institutional Ser-vices and International Services. It enables approximately 5.4

million merchant locations to securely accept electronic payments, processing more than 34 billion transactions annually. With more than 27,000 employees worldwide, First Data serves 39 countries, more than 70 nationali-ties speaking over 75 languages.

To take advantage of this exceptional offer, please contact Randy Nelson, MAADA Vice President, at 770-916-1741 or via email at rnelson@maada.com.

For more information on First Data, contact Marcus Clark at 404-8-8-7250 or via email at marcus.clark@firstdata.com.

In today’s unpredictable economy, everybody’s looking to save money. Cut here, cut there, and cut everywhere. So, how would you like to stop the cuts and instead save money while

you’re making it? The Metro Atlanta Automobile Dealers Associa-tion (MAADA) would like to help you make this as simple as making a debit or credit card transaction.

Insurance Services for

Dealers, By Dealers.

Get comprehensive and competitively priced workers’

compensation, property & casualty or employee benefits

insurance from your own state auto dealers association.

Work with staff members who know the insurance needs

of automobile dealerships!

Contact us for more information.

Georgia AutomobileDealers AssociationGroup Self Insurance

Workers’ Compensation Fund

(866) 646-8516 (770) 432-1658 x240 (770) 432-1658 x240

On The Move 2010

27

Insurance Services for

Dealers, By Dealers.

Get comprehensive and competitively priced workers’

compensation, property & casualty or employee benefits

insurance from your own state auto dealers association.

Work with staff members who know the insurance needs

of automobile dealerships!

Contact us for more information.

Georgia AutomobileDealers AssociationGroup Self Insurance

Workers’ Compensation Fund

(866) 646-8516 (770) 432-1658 x240 (770) 432-1658 x240

sCHeDULe oF CLasses:

All Atlanta classes will take place at 440 Interstate North Parkway. Classes are subject to change. For registration or more information, please call 770-916-1741.

JULY 6-9 BODY PAINTLESS DENT REMOVALJULY 8 SALES HANDLING INCOMING SALES CALLSJULY 8 SALES PERSONAL BUSINESS DEVELOPMENTJULY 9 SALES HANDLING INCOMING SALES CALLSJULY 9 SALES PERSONAL BUSINESS DEVELOPMENTJULY 12-16 SALES PROFESSIONAL SELLING SKILLSJULY 12-23 SERVICE PROFESSIONAL LUBE/SAFETY INSPECTION & HEAT & A/C TECHNICIANAUGUST 10 SALES PROFIT BUILDING PRESENTATIONSAUGUST 11 BODY PROFESSIONAL DETAILINGAUGUST 12 SALES NEGOTIATING FOR GROSSAUGUST 16-20 SALES PROFESSIONAL SELLING SKILLSAUGUST 16-27 SERVICE PROFESSIONAL LUBE/SAFETY INSPECTION & HEAT & A/C TECHNICIANSEPTEMBER 9 SALES LEASINGSEPTEMBER 13-17 SALES PROFESSIONAL SELLING SKILLSSEPTEMBER 14-15 SERVICE SERVICE ADVISOR TRAININGSEPT. 20 – OCT. 1 SERVICE PROFESSIONAL LUBE/SAFETY INSPECTION & BRAKES TECHNICIANSEPTEMBER 20 SALES USED VEHICLE MANAGEMENTSEPTEMBER 21 SALES SELLING USED VEHICLES

Why Blow Our Own Horn

when our customers say it best?

“My managers like it because of the great selection of sales topics, and because the sessions are short and to the point. The salespeople now feel more confident having strengthened the various areas of the sale process. The bottom line is that we’re seeing improved response in sales. The pricing is certainly attractive, and we’re able to fit it into our budget when things are really tight.” ~ David M. Walters, Sr., President, Jones Ford, Inc., North Charleston, S.C.

“I am very impressed with the high quality and informative Sales and Management online workshops that are now available through The Virtual Academy. We’ve needed a great service like this for a long time.” ~ Keith Campbell, Dealer Principal, Honda Carland, Roswell

“It’s very convenient and timely.  All four of our dealerships make The Virtual Academy an important part of our daily sales meetings. It also allows us to use it during slow periods.  I appreciate that I can train sales professionals in large or small groups when it works for us. It is ready when we are.  The same goes for our service advisors. We all appreciate that you offer training on different experience levels.”  ~ Andy Jones, Dealer Principal, Gerald Jones Dealer Group, Augusta

“The Virtual Academy could not have come at a better time. With most Automotive Dealerships operating with fewer managers today, for obvious reasons, The Virtual Academy helps provide ‘Peace of Mind’ that your team members are receiving good solid training. It’s like having a Sales Trainer on staff.” ~ Ross Long, General Sales Manager, Capital Buick GMC, Atlanta

“This is a much better way to train than live classes, because the employees can learn at their own pace. It also allows us in the car business to stay sharp and keep learning with timely, focused, and specialized training for our employees. Keep up the good work.” ~ David Bourne, Owner, Clay County Chrysler-Dodge-Jeep, Lineville, AL

Toll Free: 1-877-4-Academy • email: sales@8774academy.com

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