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Why is Your Showroom Sales Team Goofing Off...? Not being productive? Not Selling Cars? & Where is Management?

This is truly becoming an epidemic! It is almost the halfway mark at the dealership for the month of July and we have 4... 4!! Sales Consultants hanging out on the showroom floor just waiting for something Magical to happen. While they wait, they are joking around, running around, jumping up and down... high fiving each other. For what I do not know.

I watched with my own eyes this dealership that has a TOTAL of 9 sales consultants literally have 1/2 their showroom floor goofing off and nobody says one word. Not one word from the management team...

Last month they sold 67 units BETWEEN 9 people! And what is worse is that this dealership is HUGE and BEAUTIFUL. But it is filled with Mediocrity!

What is sad to me is that these 9 consultants come to work... work "Bell To Bell" some days for NOTHING! They have no idea how much money they are not making...


Is this happening at your store?

What are you doing about it...?

 

 

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Honda fights TrueCar's prices

Below-invoice online discounts frustrate some dealers and automakers

 

Honda, leery of brand-eroding discounts, has warned its dealers to stop offering prices below invoice on TrueCar.com and other Internet shopping sites.

The discounts jeopardize payments that Honda sends to dealers for local marketing, the automaker told dealers in October. Industrywide, the payments range from $300 to $600 for a $30,000 vehicle, one dealer said.

TrueCar is a leading player in the growing online retail industry that channels Internet leads to dealers. TrueCar CEO Scott Painter last week criticized Honda's position.

"They're trying to say Hondas are worth more than invoice, but if everybody's paying less than invoice, that's not true," Painter said.

The dispute highlights frustration among some dealers and automakers who say third-party Web sites such as TrueCar are eroding their power to set transaction prices.

TrueCar publishes recent transaction prices on its Web site and offers what it calls guaranteed low prices to shoppers. Dealers who sign up with TrueCar agree to pay the company $299 for each new vehicle sold from a TrueCar lead and $399 for each used vehicle sold.

Honda spokesman Chris Martin said that the automaker considers TrueCar an advertising medium. And Honda does not permit dealers to advertise prices below invoice, in part because it erodes Honda's brand equity. Dealers who do so jeopardize per-car payments from the factory under Honda's dealer marketing allowance.

But Painter said Honda is ignoring the realities of the marketplace, in which dealers compete aggressively on price.

In response to Honda's actions, TrueCar last week began warning Honda shoppers with a banner on its Web site that they might not get TrueCar's low price.

Upfront price guarantees are a key part of TrueCar's pitch to shoppers. And the prices listed for vehicles on TrueCar's Web site often are below invoice.

For example, a TrueCar search near Ann Arbor, Mich., for a 2012 Toyota Camry SE with automatic transmission and four-cylinder engine returned three guaranteed prices from local dealers, two of which were for less than the car's $22,075 invoice price. One dealer was offering the car for $21,875, another for $21,025 and a third dealer listed a car at the invoice price.

In TrueCar's terminology, the invoice is several hundred dollars above the cost of the vehicle to the dealer because the price does not include such factory payments to dealers as the holdback allowance.

Painter said Honda sales via TrueCar have declined since October because of Honda's warning.

He said the 278 Honda dealers under contract with TrueCar sold 2,389 vehicles in November. TrueCar's Honda dealers sell an average 8.6 new Hondas per store per month, and leads from the Web site generate 12.2 percent of the total sales volume of TrueCar's Honda dealers, he said.

"They could be doing twice as many sales through our platform than they are right now," if Honda revoked this policy, Painter said.

Painter was careful to add, though, that he was not picking a fight with Honda.

More clout

Painter: The stats don't lie.
 

On Jan. 1, TrueCar's role in auto retailing will grow. That's when TrueCar becomes the exclusive online vehicle shopping partner for Yahoo.com. Traffic to TrueCar's Web site is expected to jump from a couple of million unique visitors per month to 20 million per month as a result of the deal, Painter said.

Now, though, TrueCar leads account for a small slice of U.S. auto sales. TrueCar-participating dealers are expected to sell about 250,000 vehicles from TrueCar leads in 2011 either from shoppers on the TrueCar Web site or through agreements with more than 100 large associations, such as USAA and AAA.

Painter said he wants to almost double the number of dealership franchises that participate with TrueCar to 10,000 next year and facilitate the sale of about 500,000 vehicles.

USAA, a financial services association for military families, has asked Honda to reconsider its TrueCar action on behalf of its 8 million members who did 500,000 searches for Honda and Acura vehicles this year, according to a recent letter from David Bohne, president of USAA federal Savings Bank, to John Mendel, executive vice president of American Honda Motor Co.

Protecting profit

The Toyota Camry SE: In Michigan offers of $1050 below the invoice price.

Mike Warwick, director of digital marketing for the seven-store Kelly Automotive Group in suburban Boston, agrees with Honda's policy toward TrueCar.

"Honda's trying to protect the gross profit in selling a car and trying to protect the salespeople who are the backbone of the industry," Warwick said.

Kelly, with a Honda store and two Nissan stores among its holdings, dropped out of its TrueCar contract this month after just three months as a participating dealer, Warwick said.

In November alone, the group was inundated with 700 leads from TrueCar customers who took a guaranteed vehicle price that Kelly offered, he said. But the stores closed on just 20 of those deals and only three were profitable given the discounts negotiated, Warwick said.

The vast majority of customers went elsewhere, using the deals negotiated on TrueCar to get lower prices for vehicles at other non-TrueCar dealers, he said. Meanwhile, Kelly had to follow up with all 700 customers, Warwick said.

Few Honda dealers, he said, would be willing to risk their dealer marketing allowance for the additional volume that TrueCar can bring.

Industrywide, that type of quarterly allowance is 1 to 2 percent of the sticker price for every vehicle sold, Warwick said. On a $30,000 vehicle, that would be $300 to $600.

Other dealers, though, like TrueCar. Taylor Chevrolet in suburban Detroit is eager for TrueCar's tie-up with Yahoo to begin, said Jeff Kotlarek, Taylor Chevrolet's Internet sales manager. He gets about 15 new-car sales per month from TrueCar.

He said Taylor Chevrolet offers vehicles to TrueCar shoppers at $100 below invoice and still makes money on the vehicles by upselling on warranties, accessories or additional options. The store sells about 175 new vehicles total per month.

In a recent speech, AutoNation CEO Mike Jackson said of TrueCar: "The good deal that they're pitching to the consumer is lower than average. So to the extent that everyone goes with the TrueCar price, it moves the average down.

"It's a death spiral, and the question is whether they are powerful enough to unleash that dynamic in the U.S. marketplace."

AutoNation's COO, Mike Maroone, sits on TrueCar's board of directors, but neither he nor AutoNation has financial ties to TrueCar.

Amy Wilson contributed to this report

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