2010 One Lap of America

Motor Trend follows The Tire Rack One Lap of America as it travels 3500 miles across the U.S. and makes stops at 8 tracks along the way. All on one set of tires. Enjoy.

Third party websites such as Motor Trend, All About Cars Online and Auto Trader are an excellent source of information about the auto related industry and a place to start your dealer search.

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Top Ten Auto Dealer Promotions

When times get tough, the tough get going. Here’s a list of the top ten unusual but creative incentives compiled by All About Cars Online.

10. It’s Raining Free Cars – Weld County Garage promised free cars if it rained on Memorial Day for all purchases during specified period. It rained allright – .59 inches.

9. The Free Car Giveaway – Fuccillo Dealership gave away nine cars in one promotion to one winner (four Hyundai Elantras and five Kia Spectras). What happened to the kitchen sink?

8. 2-For-1 Deal – Customer purchases a high end vehicle and receives a lower end vehicle for free. Does this deal come with fries?

7. Free GM Stocks – Frank Kent Motors gave 50 GM shares to the first 100 customers purchasing new vehicle to celebrate GM’s 100 year anniversary. Too bad promotion was pre bankruptcy.

6. Free Gas for a Year – Consumer purchases a vehicle and receives a debit card with a specific dollar based on the amount of gas required to drive the car 12,000 miles, based on EPA combined ratings and average  gas price per gallon.  Promo gives new meaning to the all dressed up and nowhere to go cliche.

5. Frequent Flier Miles – Dealerships purchase packages from Dealer Miles and pass on frequent flier miles to customers as sales and service incentives.  Do the auto execs at the big three know about this deal?

4. Lose Your Job, No Problem – Consumers can return their new Hyundais if employment is lost within one year of purchase.  Are there any reporting requirements with EDD?

3. Drive for Charity – Townsend Automotive Group’s Land Rover-Jaguar dealerships in Southern California gave away 50% of all proceeds from its new car sales to charity for a specified time period.  Was Sacramento on that list of charities?

2. Sex Sells – humor and sex is always a winning combination:

DRUM ROLL, PLEASE…… AND THE NUMBER ONE AUTO DEALER PROMOTION GOES TO…

1. Free Firearm – Buy a truck and receive an AK-47 at Max Motors.

Listen up President Obama – the Gun for Clunker program might have legs!

Cash for Clunkers Comes to a Crashing Halt?

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Update:

With the one billion running out before the program has even really got off ground, it is clear that this is the most successful recession bailout probably ever! The program was estimated to end in November. As of August 1st, Congress has agreed to keep program going for the next few days. The House of Representatives has voted to pump another $2 billion into the cash-for -clunkers piggy bank but this has yet to be supported by the Senate.

Stay tuned… and now would be a good time to run..not walk.. to your nearest car dealer…

All About Cars Online can help you find a car dealer in your local area quickly.

http://www.foxbusiness.com/story/markets/cash-clunkers-program-suspended-cash-runs/

http://www.cars.gov/

Auto Dealership Closures Continue

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In May, bankruptcy court allowed Chrysler to close approximately 789 or 25% of its authorized dealers. Prior to bankruptcy, there were about 3,181 authorized Chrysler dealerships.  List of Chrysler auto dealer closures

Visteon and Metaldyne, both auto parts manufacturing corporations also  filed for bankruptcy in May.

In June, bankruptcy court approved General Motors plans for the eventual closure of about 42% or 2,600 of its total 6,200 authorized dealers. It is unclear what will happen to approximately 470 Saturn, Hummer, Pontiac and Saab dealers after GM sells off these brands. The company further expects to lose another 10% due to attrition.  List of GM auto dealer closures

Bankruptcy court has made the closure of dealers a much easier process however Ford has also been closing dealerships over the last two years. It is estimated that a total of 600 authorized Ford dealers will close by the end of the decade. Currently, Ford has approximately 3,430 authorized dealers.

American auto manufacturers continue to claim that the closure of auto dealerships will help them become more competitive against foreign brands in the U.S. With an overabundance of dealerships; competition forces dealers to lower prices. Furthermore, dwindling profits have resulted in the inability for many dealerships to make upgrades to facilities and attract quality personnel. For example, Toyota (1,235 dealers), Nissan (1,067 dealers) and Honda (1,030 dealers) have substantially less authorized dealers in the United States.  Auto Manufacturer Information (Source: Associated Press)

It is clear that online marketing will become even more crucial as consumers unable to visit multiple dealer locations within a comfortable driving distance will become even more dependent on third party auto websites for research and dealer specials.

National Automobile Dealers Association and All About Cars Online among others support the bill opposing closure of dealerships (H.R. 2743/ S. 1304). The House of Representatives has inserted language into its annual spending appropriations bill that would “restore the economic rights of the dealers before the bankruptcies, ensure they have the right to recourse under state law and require the two automakers to reinstate franchise agreements before the bankruptcies” (Reuters). The Obama administration has made it clear that it does not support provision and support in the Senate is weak.

The public is encouraged to call their representatives and urge them to support House of Representatives bill 2743 and Senate bill 1304 at (202) 225-3121. The President’s office contact information is (202) 456-1111.   

Internet Behavior of Auto Buyers: Analyzing influential studies

The relationship between internet usage and vehicle purchases have consistently increased over the last decade and have now become part of the car buying experience. Auto manufacturers, dealerships and the auto industry in general have accepted this reality and incorporated the internet and related technology as part of their marketing and advertising efforts. Some of these business entities have embraced the power of the world wide web, while others are struggling to keep up with the constant upgrades, developments and latest trends. Becoming aware of internet behavior of auto buyers is important in developing and maintaining cost effective and money making marketing strategies.

Billions of dollars are spent on website development and maintenance, software, tools, gadgets, widgets, search engine optimization, social networking, on and on. This does not take into account time spent trying to figure out what works and more importantly, what does not work. Spend only a couple of hours online reading blogs and forums about online marketing and one quickly figures out that even the so called “experts” disagree and sometimes just can’t keep up themselves with the warp speed of technological developments, whims and algorithms of online corporate giants.

There is one way to tame the wild west of the online world and that is to become familiar with research findings regarding internet behavior of auto buyers. Being armed with this valuable knowledge will enable car related businesses such as auto dealers, insurance agents, lenders, and after market retailers to tailor not only their advertising budgets but time spent on understanding the multitude of marketing services. Here are some key findings and discussion about the data.

Research Findings

JD Power and Associates conducts annual surveys to measure online usage of auto buyers. In 2008, JD Power and Associates found that 75% of the public spend on the average close to seven hours on the internet when making a new vehicle purchase. They also found that consumers focused on three types of websites for information.

1. Third party auto websites were used for referrals and recommendations.

2. Auto manufacturing websites were used for product information.

3. Auto dealer websites were used to search for inventory. (source: theautochannelnews)

This same trend is also seen when it comes to used car purchases and other auto related servies such as insurance and loans.

Web Rides TV in 2008 conducted a survey of their users titled  “User Attitudes Toward Cars and Automotive Content” which found that consumers were most likely to turn to third party reviews over other information sources when it came to auto products. The findings showed that there was a decrease in using auto manufacturer websites as a primary source in one’s decision making (source: emdiawire).

Another interesting statistic is the amount of time the average consumer takes to make a vehicle purchase. According to a study by Kelly Blue Book, these figures range anywhere from six months or longer to less than a month. Embedded within this time frame are the different stages of decision making. In the same study, Kelly Blue Book found three groups of car buyers:

1. “Just looking” group consisted of consumers planning to make a purchase within a two to six month range

2. “Ready but undecided” group consisted of consumers planning to make a purchase within one month and

3. “Ready and decided” group consisted of consumers planning to make a purchase within one week

Kelly Blue Book concluded that “vehicle shoppers look to the third-party sites as a relevant and necessary source of objective information that spans across all makes and models. While consumers seek information and opinions, what they really come to the third-party sites for is confidence– that they are making a good choice, that they won’t have ‘buyers’ remorse’ after their purchase, that they won’t pay too much, that they are buying a safe vehicle, that they have weighed all their options” (source:imediaconnection).

Keynote Systems, a company that studies attitudes and behaviors on the internet, found that auto buyers prefered to conduct research about vehicle capabilities over price comparisons. In fact they found that price comparison ranked the lowest in online satisfaction. In addition, only 20% of participants in this particular study reported a willingness to request an online quote. Frustration over uncertainty about the end user of submitted information was a main concern of the 80% of respondents who declined an auto quote request (source: Keynote Systems).

Comscore, another company that measures consumer behavior and attitudes conducted the first study of blog readers back in 2005. While this study is now dated, we can assume that blog usage is even more influential today due to their growing popularity. One of their key findings were demographics of the average blog reader. Blog readers tended to have above average incomes, shopped online, and spend almost twice as much time online over regular internet users. “The fact that we found 30 percent of the online population to have visited blogs clearly underscores the commercial importance of consumer generated and driven media” (source: comscore.com).

Looking toward the future in trying to predict trends on the horizon, KRC Research and Microsoft conducted a study that focused on the “millennial generation.” The eldest of the millennials are now becoming established in their professions making them a sought after consumer. Who are these millennials? Consider these statistics:

“Millennials are born from 1982 to 2003. They are the largest generation in U.S. history; they are also the most ethnically diverse generation. Forty percent are African-American, Asian, Latino or mixed race. One in five has an immigrant parent. There’s a million more Millennials than boomers. Though no more Millennials are being born, some are immigrating, so the generation keeps getting bigger. Boomers are leaving us and Millennials are still gaining in size” (source: Mercury News).

This generation has already transformed our society. If you doubt their awesome power just ponder the immense popularity of social networking websites such as Facebook and Twitter. The millennials do not know life without the cell phone, internet or MP3s. We can predict that their social behaviors will carry over to consumer behaviors. Microsoft found that this group of consumers want an interactive online shopping experience. This includes interaction through blogs, instant messaging, and social networks. While over 90% still want to visit a showroom in person, once there they expect an automated rather then in-person experience. Additionally, “large percentages of millennials were open to seek advice from third-party consumer website (65 percent), third-party consumer blogs (45 percent), friends or colleagues via social networking sites (61 percent), and friends and family (87 percent).” (source: CXO Today).

Discussion

In examining the above findings, we can see a few patterns emerge.  Whether due to the overwhelming presence of the internet in our daily lives or current economic conditions, the traditional print media is fading and may even become extinct in the not so distant future. An overwhelming percentage of consumers rely on a combination of online resources for information. This means that auto dealers who network with a variety of websites can expect positive returns since the data shows a trend toward third party websites.

The data also suggests that instead of spending resources on third party sales leads, dealerships might focus on developing technology that captures sales leads from their own websites since consumers find third party quotes less then trustworthy and actually visit dealer websites to find inventory.

Another significant trend is the emergence of social networking through a variety of online tools. As more millennials come of age, this trend will quickly become a norm in the world of business and sales. One of the greatest advantages of social networking websites and business blogs is that they are free and easy to start. However, this is also the downside for companies. Trying to keep up with maintaining blogs, Facebook, Twitter, Squidoo, Digg, Youtube, wikis, and one’s own website is overwhelming to say the least.

Marketing Strategies

With all of this in mind, it is clear that auto dealers must have an online strategy that takes into account internet behaviors of auto buyers. Through the analysis of the above influential studies, one can use the data to develop effective marketing strategies. Using Kelly Blue Book’s stages of decision making can also be helpful in targeting specific groups of consumers:

1. Just Looking – since this consumer has no immediate plans to make a purchase, this group will most likely not be interested in viewing the dealer’s website. They are however most likely seeking information and conducting research on makes, models, and options. Older consumers are more likely to want to read (blogs) and younger consumers are more like want to view (videos).

2. Ready But Not Decided – This consumer is actively seeking referrals and recommendations. They have their antenna up for reviews on makes and models and are asking questions. Older consumers are more likely to interact in forums (blogs) and younger consumers are more likely to twit (twitter, facebook). Both age groups are also seeking information from third party websites.

3. Ready and Decided – This consumer is ready to make a purchase. They are actively searching for dealerships that offer their chosen make and model. This group will go back to third party websites, online directories and search engines. Once they find a number of dealerships, consumers in this stage will then visit these dealers’ websites to view inventories. Car dealers should have a reliable system in capturing visitors and use live chat software to satisfy the need for instant messaging behaviors of the millennial generation.

Car dealers and other auto related businesses measure the effectiveness of advertising strategies through sales and leads. However one thing to keep in mind is that leads and sales only come once the consumer is in the third stage of decision making. By not investing in websites that capture the “Just Looking” and “Undecided” groups, one ends up with a shortsighted strategy. According to a study conducted by cars.com and Synovate in 2008, “”tracking email and phone leads alone gives dealers an incomplete picture of how their internet initiatives perform” and “one-third of car buyers cited independent websites as a significant influencer affecting their decision to visit a dealership.” The study also found that a third of these consumers do not contact dealers prior to visiting showrooms (source: cars.com).

Furthermore, investing and networking with third party websites also has a hidden advantage. Investing in a multitude of third party websites that publish links to dealer’s website will increase that dealer’s search engine rank. This becomes immensely valuable when the consumer is ready to make the purchase in stage three. The rule is to get as many different websites to link to dealer’s website. Even if the third party website may not necessarily be the perfect fit for targeted audience, links play an important role in search engine ranking.

Blogs definitely are also valuable because they serve as an important source for education and information. Posts are usually set up with forums allowing visitors to comment and ask questions. An ideal situation would be to create multi-blogs with different URL’s (different website locations and names) all linked to the dealer’s main website. This increases one’s presence on the internet, improving one’s ranking with search engines such as Google, Yahoo and Bing as well as increasing the odds that a consumer will find the dealership. Creating multiple blogs is a much more cost effective method compared to microsites. Microsites are generally used for the same purpose, come with contracts and have significantly higher fees that when compared to blogs seem unrealistic. Automotive consultants advise that “every dealership should have one or more business blog focusing on current dealership happenings, service specials, seasonal car care tips, car buying tips, customer testimonals and highlighted inventory” (Paul Rushing).

Blogs and multi-blogs are a cost effective marketing strategy although very time consuming. Many entities start blogs but quickly abandon efforts because one has to make regular updates. Anywhere between 60% to 80% of blogs are abonded within one month of creation (source: Caslon Analytics). Software exists that automatically generates multiple blogs, but search engines recognize this as “splogs” which are frowned upon like spamming is in the world of e-mail. Multi-blogs have to be maintained by humans.

Analyzing internet behavior of auto buyers is imperative in today’s economy because this knowledge goes a long way in saving valuable advertising and marketing monies and increasing sales.

All About Cars Online includes detailed information, links and articles for consumers who are in the research stages of purchase. The website includes links to all auto manufacturers, nonbiased reviews, consumer rating reports, government data, purchasing tips and much more. Dealer contacts and recommended referrals to dealerships are useful to consumers who are in the final stage of vehicle purchase. The website does does not generate sales leads to protect the privacy of its users but rather directs consumers to selected reputable dealer websites.

Average Joe Takes On Detroit

What would happen if Average Joe took on Detroit? Here’s a list of the top ten Average Joe solutions to get the American auto industry out of the red and into the green. Listen up Detroit, Average Joe is in the house.

10. The United States Treasury was not there to bailout Average Joe when he took his Fantasy Football picks to Vegas. Average Joe’s only legal solace was to file for bankruptcy. If bankruptcy is good enough for Average Joe, it is good enough for Detroit.

9. President Obama earns $400,000 with approximately $170,000 in additional perks. If the President of the United States who governs 305 million people of one of the most powerful countries in the world can get by on a salary of $560,000, then a salary and bonus reduction for executive directors is good enough for Detroit. Last time Average Joe voted he saw no shortage of presidential candidates. They can all keep their private jets.

8. Average Joe earns about $16 dollars per hour. If approximately $33,000 a year is good enough for Average Joe, then it is good enough for the average unionized auto industry worker.

7. Average Joe earns extra money on the side with an occasional garage sale. If Average Joe can part with his classic rock 8-tracks, then Detroit can surely downsize some of their makes and models. McDonalds the giant of efficiency as much as they tried to repackage the McRib; BicMac is still the king of burgers. Detroit, can you say “two beef patties, iceberg lettuce, American cheese, pickles, onion and special sauce served on a sesame seed bun?” Market branding does have its advantages.

6. Average Joe may not understand the intricacies of government regulation but one thing’s for certain; he knows the rules of the game and sometimes the rules suck. But one can only kick Detroit dirt at Uncle Sam so long before getting yanked out of the game. As much as Average Joe loves the ballgame sometimes even he wonders; does LA really deserve and need a football team? Average Joes says: reorganization. How about some of that tasty Canadian… uhhh… that’s Detroitian maple syrup for our executive saps?

5. When Average Joe got laid off he was told to go to community college to get retrained. (He now knows how to say “Can I help you?” and “Would you like fries with that?” in Spanish and Chinese, but that’s another story for another time). If government subsidized education is good enough for Average Joe, then let’s keep those research and development grants and that corporate welfare coming, Washington! Average Joe wants to know, did Detroit ever get its 25 billion for R&D as promised by Bush?

4. But seriously, folks. While Average Joe loves his Chevy Tahoe, he asks what came first the chicken or the egg? Put bluntly, does life imitate art or does art imitate life? Philosophical Average Joe is also a realist. A phone call from Detroit to Hollywood is what’s needed here. Put Jolie, Clooney and Hanks to work with Spielberg, mix in a soundtrack by Springsteen and we’ll soon have Detroit selling refrigerators to Eskimos… or is that hybrids to the Saudis? If Spielberg is busy… ear to the ground has it that Obama Girl is looking for a gig.

3. While Detroit was busy on Wall Street with corporate mergers, acquisitions, globalization, market shares, and golden parachutes, a funny thing happened on the way to Main Street. Social networking. Average Joe is bullish on Facebook, Twitter, LinkedIn, and diggit. Detroit meet Silicon Valley. Now go play and share your toys. Detroit meet aerospace. Detroit did you ever have drinks with T. Boone Pickens? Profit sharing anyone?

2. Now you can say what you will about Average Joe but no matter what you may think, you’ll probably agree that Average Joe is a patriot. True blue, meat and potatoes, NASCAR loving, American pride, all the way. That’s just how Average Joe rolls. Now the other Joe might think that paying taxes is patriotic, except that Average Joe is more likely to get a tax refund from Uncle Sam rather than a patriotic grand ole’ American tax increase. Tea anyone?

But that’s beside the point. Average Joe enjoys watching those WWWII reruns on the History Channel every now and then. If U.S. government bonds funded WWWII, then by gone it, let’s sell some of those red, white, and blue patriot stocks in GM, Ford and Chrysler. Are Americans going to sit by and watch the American Chevelle, Mustang, and Barracuda muscle shrivel to Minis, Smarts and calorie counting Tatas? NO! Average Joe says take your average $13 dollar a week stimulus and buy yourself some American auto stocks. If it worked to get us out of the depression era then it will work to get us out of the consumption era.

1.And finally if none of the above work, there’s always Plan Z, which in this CASE means “copy and steal everything.” This method works best for the Chinese who in a few years just might own Detroit. (See #5)

This of course is a satirical look at the American auto industry in no way meant to undercut the seriousness of the current economic issue. No offense was meant to you Average Joe, whoever you might be and wherever you may roll.

To find great information about the car related industry, businesses and services that is updated regularly, go to All About Cars Online – you car connection made easy!