Wednesday, July 11, 2012 | Edited by Daniel Moores
||Automakers Gear Up for Strong Second Half
June Sales End with Fireworks
After the fireworks of early July 4 promotions, U.S. light-vehicle sales heated up in late June. Now automakers are preparing for a second half as strong as the first six months of a surprisingly robust 2012.
A big final week of sales and model-closeout specials pushed June volume up 22 percent to 1.3 million units. The seasonally adjusted annual selling rate rebounded to 14.1 million, beating analysts' expectations and May's disappointing 13.8 million.
"We expect the industry to maintain that pace through the end of the year," declared Bob Carter, boss of the Toyota brand, whose sales were among the biggest contributors to the strong month. "As a result, we are adjusting our 2012 projection to 14.3 million, quite a jump from our 13.5 million forecast of just six months ago."
The Detroit 3 and top international automakers such as Toyota, Honda, Hyundai, Nissan and Volkswagen are adding shifts and hiking production to meet demand.
Consumers keep replacing vehicles from the oldest U.S. fleet on record. Credit is readily available, and interest rates are low.
Buyers are snapping up new models with cool infotainment and powertrain technology and much-improved fuel economy. And large pickup trucks are soaring as gasoline prices fall and home construction creeps upward.
In June, nobody took more advantage than Toyota and Honda. Fully restocked from the post-quake shortages that slammed them a year ago, Toyota Motor Sales' volume jumped 60 percent and American Honda's volume 49 percent. Nissan North America jumped 28 percent.
Every automaker except Mitsubishi boosted June sales.
It wasn't easy in a sluggish economy, and it took some high-profile promotions, such as Chevrolet's Independence Day Cash and the Ford Summer Sales Event. The Chevy event, which was launched June 20, put more cash on the big-selling Cruze and Traverse.
Most analysts had expected June sales to be as soft as May, but July 4 promotions started in the final week.
"Quite a bit of merchandizing going on last weekend," Ford's U.S. sales boss Ken Czubay observed as sales were reported July 3.
First-half volume is 15 percent ahead of 2011, which finished at 12.8 million.
Absent a big downturn, this year's sales will race past the 13.2 million mark of 2008, the first year of the Great Recession.
That's still well short of 2007, that last year of nine straight years over 16 million, a period marked by overproduction, bloated inventories and out-of-control incentives.
But the 2012 market is far sounder. Even after three years of growth, the U.S. auto industry has unusually lean stocks. Incentives are modest and highly targeted, and production is closely linked to actual demand. Thus, transaction prices continue to rise.
Deutsche Bank analyst Rod Lache said the SAAR could slip this month before returning to 14 million in August. "We believe July 4th holiday sales were pulled into June," he wrote.
Kurt McNeil, GM's vice president of sales operations, said despite conflicting economic data, "we are seeing some decent results in housing, fuel prices are down and the availability of consumer credit is a positive."
As gasoline spiked to an April high of $3.93 a gallon, consumers flocked to fuel-efficient small and mid-sized vehicles, pushing April's selling rate to 14.4 million.
By July 2, gasoline had fallen to $3.36, according to the U.S. Energy Information Administration. June buyers generally stayed focused on efficiency, but pickup buyers started to return to the market.
And cheaper fill-ups put a bit more in all drivers' pockets. "This is acting like a tax cut for consumers," said Ellen Hughes, Ford's chief economist.
GM's McNeil said: "We knew there were going to be headwinds this year. We still see headwinds. But we're calling for moderate, gradual economic growth."
(Source: Automotive News, 07/09/12)
||A Fast-Changing Segment is the Industry's Hottest
Lower fuel prices, attractive incentives and a batch of eye-catching, redesigned models here and just around the corner are lighting a fire under mid-sized car sales.
Combined U.S. sales of the top six mid-sized cars shot up 37 percent in June, compared with gains of 25 percent for all cars, 19 percent for light trucks and 22 percent for the industry as a whole.
Those six nameplates alone accounted for nearly a quarter of all car sales in June.
Deal-conscious customers are taking advantage of incentives on outgoing 2012 models. And those looking for the latest technology and improved fuel economy are lining up to buy 2013 models that are starting to arrive in showrooms, many of which will feature big increases in fuel economy compared with previous models. That should ensure the segment's newfound strength will be more than a one-month blip.
Recent arrivals in the market include redesigned versions of the Toyota Camry, Chevrolet Malibu and Nissan Altima. A redesigned Ford Fusion and Honda Accord will arrive in the fall. The Hyundai Sonata has continued to sell well since its early-2010 redesign.
"We expect mid-sized growth to continue, as four of the five top-selling mid-sized sedans, including the Ford Fusion, will feature major revisions," said Erich Merkle, a sales analyst at Ford Motor Co. "Fuel efficiency continues to be top of mind."
Customers who might have downsized reluctantly to a compact car if gasoline had stayed at $4 a gallon now are able to stay with a roomier mid-sized car.
Aaron Bragman, senior analyst for IHS Automotive, said: "We're seeing mid-sized sedans doing so well because you're still able to get the kind of room people like, and now with increased fuel economy."
In June, Chevy Malibu sales shot up 32 percent from a year earlier, to 31,402, as cash incentives lured buyers of 2012 models. That made the Malibu the surprise No. 2 seller among all cars, behind the Toyota Camry.
Only about 2,000 of those sales were of the 2013 redesigned Malibu, which was launched in the spring with only one engine choice: a 2.4-liter inline four-cylinder teamed with General Motors' eAssist mild hybrid system.
In August, GM will put a new 2.5-liter engine in the redesigned Malibu and by fall will add a 2.0-liter turbo to the lineup. In August, 2013 models should account for most Malibu sales, said Kurt McNeil, GM's vice president of sales operations.
"The last two months have been exceptionally strong for Malibu," McNeil told analysts and reporters last week during a conference call. "We are in great shape for the next phase of our 2013 model year rollout."
Ditto at Nissan Motor Co.
The 2013 Altima, arriving now in dealerships, has an EPA rating of 27 mpg city/38 highway, a dramatic improvement over the 23 mpg city/32 highway for the outgoing 2012 model. And the sticker price has changed little.
So Nissan was blowing out the 2012s in June to make room for the 2013s. Altima sales rose 12 percent to 21,812, with all but a few of those being 2012s. July will be the first month to see significant sales of the 2013s.
Toyota and Honda have roared back from their post-earthquake slumps. Sales of the Toyota Camry shot up 50 percent to 32,107 in June compared with June 2011, making it once again the best-selling car. Sales of the Honda Accord surged 84 percent to 28,924.
The 2013 Ford Fusion doesn't arrive until fall. But that didn't stop the 2012 model from setting a record in June, spurred by incentives such as a $179 a month payment on a 24-month lease.
Ivan Drury, senior analyst for Edmunds.com, said that among shoppers who looked at more than one vehicle segment, mid-sized sedans were more likely to be included in the search than any other category. For example, 41 percent of compact-car shoppers using the Edmunds Web site looked at mid-sized cars, too.
Drury said: "If you look at it from an all-around perspective, at what car would fit most people's day-to-day scenarios, mid-sized cars fill the bill like no other."
(Source: Automotive News, 07/09/12)
||Mercedes-Benz Tops in Dealership Experience
Mercedes-Benz is still leading the pack in the U.S. when it comes to how its dealers treat shoppers. The automaker, which was in the top five of the J.D. Power & Associates dealership experience survey last year behind Lexus and Cadillac, ranks first in the latest Pied Piper Prospect Satisfaction Index (PSI).
The PSI is a mystery shopper-based study that the firm conducted between July last year and June this year, using 4,419 hired anonymous people to shop at dealerships.
Mercedes has been number one in the study for the past four years, based on a process that ties mystery shopping measurement and scoring to industry sales success. Acura, Infiniti and Lexus dealerships tied for second.
Also finishing above the industry average were Jaguar, Cadillac, Fiat, Honda, Ram, Toyota, Volvo, BMW, Buick, GMC, Lincoln, Mazda, Nissan, Subaru and Volkswagen.
Below the industry average in the study were Chevrolet, Chrysler, Ford, Land Rover, Mini, Smart, Dodge, Hyundai, Scion, Audi, Jeep, Kia, Porsche, Suzuki, and Mitsubishi. But Mitz, Suzuki, Scion, Dodge, Smart, Ford and Chrysler all improved.
Mercedes-Benz dealerships led all brands in 10 of the 60 different sales activities measured by PSI, such as the salesperson introducing himself or herself, providing a thorough test drive and focusing attention on three to five memorable features or benefits.
Twenty-two different brands led at least one sales process category. Cadillac salespeople were, for example, the most likely to mention the availability of different financing options. Nissan salespeople were most likely to ask for the sale, and Toyota dealerships were most likely to give compelling reasons to buy from their specific dealership.
The study finds that overall auto industry performance improvement was widespread, with 24 of 34 auto brands improving PSI performance from 2011 to 2012. The firm said that 78% of the individual sales process factors improved. Auto salespeople were 11% more likely than in last year's study to address specific features or benefits relevant to the shopper, 8% more likely to mention the availability of different financing options, and 7% more likely to provide a walk-around demonstration.
Particular differences abound: Pied Piper says that salespeople at Subaru, Buick and Volkswagen dealerships were 50% more likely to offer a brochure to a shopper than were salespeople at Hyundai, Jeep or BMW dealerships; and Jaguar, Volvo and Infiniti salespeople were almost twice as likely to point out features that were unique from competitive vehicles when compared to Chrysler, Mitsubishi and Jeep salespeople.
"This year's record high PSI results show that today's dealership employees work harder than ever to be helpful to car shoppers," said Fran O’Hagan, President and CEO of Pied Piper Management Company LLC. "A dealership's success depends upon many factors that are very difficult for dealerships to change. In contrast, dealership sales effectiveness is simple to measure and simple to change."
On average -- and not that surprising -- the top-performing auto brands as measured by PSI tend to be brands with higher average sales per dealership. Similarly, individual dealership improvement of sales effectiveness on average also accompanies gains in market share.
(Source: Marketing Daily, 07/06/12)
Daily Sales Tip: Voicemail Tips
If your customer or prospect can't understand your phone number, why would you expect them to return the phone call?
Make it easy for people. Leave your phone number twice on every voicemail, and when you say it, say it slowly to allow people to remember it.
This sounds simple, but it still seems to trip up far too many salespeople.
Salespeople are quick to assume that just because they have in their phone on speed dial the number of their key account contacts, that the contacts have done the same.
Sorry, it just doesn't work that way.
Here are a few more quick voicemail tips:
When leaving a voicemail message, don't use a Bluetooth or other audio enabled device. A call rarely comes through as clear on these as it does when you are speaking directly into a phone.
Make sure your voicemail message contains a benefit statement for the customer. Again, very important in a sales prospecting voicemail. It's about the prospect; it's not about you.
Keep messages tight and short: 11–14 seconds. You're right, that's short, and it means you have to know what you're going to say before you dial. The only exception is if you're calling a key account or some other type of customer you interact with a lot and you use voicemail to convey information, etc.
If it's an important message you're leaving, stand up to make it. Your voice will come across a lot stronger and more confident.
Don't think for a moment your title is important. Unless you're the CEO of a company, it's pretty doubtful the person you're leaving a voicemail message for cares about what you do. Don't waste precious time stating what you do.
Never leave enough message on a voicemail to allow the other person to make a decision without talking to you first. The exception, of course, would be if you're calling a key account or customer you interact with on a regular basis.
Tips like these will help you refine your skills and find more success when prospecting with the phone. You owe it to yourself and your career to learn all you can!
Source: Sales trainer/consultant Mark Hunter