U.S. Auto Sales Past, Present and FutureJohn Leaver

The McDavid Group

Sobre Mim

• Minha frase favorita?– Eu estou aprendendo Portugues!

• VAI SÃO PAULO!!!!• 17 anos de experiência na indústria

automotiva• Director of Field Operations and Social

Media Evangelist for The McDavid Group

2012 “The Year of Recovery"

• U.S. Housing Market still on shaky ground• Un-Employment remains at very high levels

– 7.8% (Seasonally Adjusted Dec. 2012)

• 3rd Quarter of 2012– 14.5 Million SAAR– Fastest Growth Since 1st Qtr. 2008

• Top Brands 2012– General Motors– Ford– Toyota

*Wards, Huffpost Detroit, Bloomberg

"The housing market is still on shaky ground. Unemployment remains above 8 percent. The one flank of the U.S. economy that’s marching steadily back is the sector that once seemed the weakest: Automotive.” - Article on Bloomberg

What Happened??

• 14.5 Million Units Sold– 2013 SAAR 15.4 Million

• Volkswagen increased over 35%• Ford “Focused” on other vehicles

– F150 Best Selling Truck “ever”???

• Earth Quake affected Japanese Auto Makers– Limited inventory hampered sales for Japanese Automakers– Affected Auto & Parts sales ($46 Billion in 2010)

*Detroit Free Press, Huffpost Detroit, Motor Trend

U.S. Auto Market

• The Big 3 Renamed– The “Detroit” 3– G.M. & Ford Still in the top 3

• Government Bail Out of U.S. Automakers– $62 Billion Bail out worked

• Biggest Surprises of 2012– VW 35% Increase in Sales– Gas prices remained under $4 per gallon ($1.06 Per Liter)

• R$2.10 Por Litro– December best month of the year

Top Selling Models in U.S.

2012• Ford F-Series• Toyota Camry• Chevy Silverado• Honda Civic• Toyota Corolla• Honda Accord• Chevy Malibu• Ford Fusion• Ram Pick-Up• Honda CR-V*Examiner.com

2008• Ford F-150• Chevy Silverado• Toyota Camry• Honda Accord• Toyota Corolla• Honda Civic• Nissan Altima• Chevy Impala• Dodge Ram• Honda CR-V*AOL Autos

Chinese Auto Makers in U.S.

• Have not met safety and quality standards to compete in U.S.

• Chinese Economy has slowed• Analyst estimate China is 5-10 years from selling in U.S.• Visionary Vehicles LLC.

– Named North American Distributor of Chery in 2006– Chery backed out of agreement after getting initial entry into

U.S.– Visionary and Chery are in a legal battle for $1 Billion

*Huffington Post, Forbes.com

Chinese Auto Makers in U.S.

• My Opinion– History dictates the entry of small imports

• Toyopet Crown– Economy downturn slowed potential– International Relations/Politics– Safety and Quality issues

• Do not meet US standards– Americans are picky!!– Styling/Appearance

• See Previous Bullet

U.S. Franchised Dealers

• 17,540 Franchised Dealers (NADA)– 1947 = 45,500 Franchised Dealers– 2000 = 22,250 Franchised Dealer

• Average Annual Sales 805 Units– Previous Record 784 in 2005

• 36,418 Independent Dealers (NIADA)– 2006 = 44,321 (New 21,495)– Independent Dealers dropped 18% 2006 – 2012– Franchised Dealers dropped 18.5% in same time

U.S. Auto Dealers Marketing

• Newspapers– Increased 14% in 2012*

• Television– More OEM Driven– Some dealers budget for, most use regional ads to piggy back

• Internet– The market place shrunk– All customers are internet

• Consumers spend 18-19 hours researching vehicle online**• 60 percent of the shopping time is on the internet

*Advertising Age** Polk

U.S. Auto Dealers Marketing

• Social Media– .40 of every dollar goes to digital media– Digital Media is where it is at now

• Social Media is a Hot Topic– All OEMS have a large presence

• BMW – 12.5m Facebook Likes• Mercedes Benz – 9.5m Likes• Porsche – 5m likes

– Many Companies Offer Social Media Management• Dealer.com• Digital Airstrike• Force Marketing

Internet Leads

• It could be argued that there are no more walk-ins– Not all customers make contact via web– Where should we spend our marketing $$$

• Consumers Research via internet– 18-19 hours according to Polk– 97% Use Online Media to shop*

• What percentage is a true internet lead?– 64% Automotive buyers shop via internet**– 88% will visit dealer website before going to test drive**– In 2006 5.7 Million cars sold or 32%***

*PR Newswire** JD Powers and Associates***Jupiter Media Mix (JMM)

Advertising Spending

Dealership Sales Team

• In 2010 the average dealership employed 50 sales staff– Typical ratio is 1 sales person per 10 deals– Floor Sales normally out weighs Internet Sales

• Traditional or Floor Sales– Receive phone leads– Walk-Ins– Repeat and/or Referrals

• Internet Sales– Work Internet Leads– Some would also take Walk-Ins– Some phone calls– Repeat and/or referrals

Dealership Tools

• Dealership sales team have 3-4 main systems– CRM

• Maintains customer information• Contact reminders• Some have desking tools

– Appraisal Tool• vAuto• First Look• Others

– Submission Tool• Dealertrack

– DMS• Reynolds• ADP• Dealertrack

Dealership Tools

• Desking System– ePencil– Others

• Service Scheduling System– xTime– Time Highway

• ILM– Dealer. Com– Vin Solutions– eLead– Dominion

Dealerships BDC

• BDC’s are sporadic– Dealerships have not justified the cost– Traditional Sales Persons handle some aspects

• Offsite BDC’s– Offer dealers cost effective BDC– No dealership experience hinders

• In Dealership BDC’s– Phone experts– Lead Response time monitored– Only deal with “digital” customers

Q&A

• Obrigado!!