Automakers act to simplify incentives

When a dealership lot has two identical vehicles — down to the trim level, color and even sticker price — they can still end up with a significant price difference that leaves customers perplexed.

Why is one vehicle $1,000 less than the one next to it? It may have been on the lot 100 days longer, for example, but such details aren't apparent to customers, said Brad Korner, general manager of Cox Automotive Rates & Incentives.

Some dealers and automakers are on a mission to eliminate this situation.

Automaker incentives can create a wall between the customer and the dealership. Incentives going directly to consumers can create confusion and mistrust, dealers say, and need to be dramatically simplified.

"Overly complex incentives, incentives that aren't available to every customer, every dealer or even every vehicle in the vehicle line — they destroy customer confidence in dealers and destroy our profitability," sai…

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Winner’s circle

Natasha del Barrio, CEO of Bert Ogden Auto Group, second from left, celebrates being named one of Automotive News' 40 Under 40 honorees with dealership employees at the Retail Forum: NADA. Del Barrio began working for Bert Ogden, in McAllen, Texas, as a teenager and was appointed CEO in 2017 at age 35.

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Quick question

What do you consider the main focus of the auto finance industry in 2020?

Laurie Foster, founder, Foster Growth Strategies: "This length-of-the-loan thing is going to be something that they have to answer because everybody's underwater on their cars. And so that's going to slow down the pace of people buying their next car."

Shawn Allgood, head of Chrysler Capital and auto relationships, Santander Consumer USA Holdings: "This is the year where e-contracting will likely become more and more common for dealers. I think dealers are going to force lenders to get involved in that, and technology that includes early fraud detection."

Alex Yurchenko, vice president of data science and analytics, Black Book: "Managing risk. Their own risk. The amount of loans is increasing, the length of the loan is increasing. Lease rates are at a record height. So they have a lot of exposure."

Kyle Birch, president of North American operati…

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Colorado bill would allow direct EV sales

LAS VEGAS — A bipartisan group of Colorado lawmakers, in a move that sparked swift pushback from the state's new-car dealers, has introduced a bill that would allow automakers to sell electric vehicles directly to consumers.

The measure, introduced Thursday in the state assembly, would create an exception to Colorado law that would allow automakers to directly own, operate or control dealerships that sell their own electric vehicles. A Senate hearing on the issue is scheduled for Tuesday.

"We believe the franchise [model is] better for the industry, better for the factory and better for the consumer," Tim Jackson, president of the Colorado Automobile Dealers Association, told Automotive News, adding that he anticipates franchised dealers will oppose the measure. "The dealer is in the middle of that process to take care of the customer locally."

State Sens. Chris Hansen, a Democrat, and Kevin Priola, a Republican, along with Democratic state House Speake…

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Cars.com debuts digital video marketing strategy

Cars.com is unveiling a digital video marketing strategy to help dealerships more efficiently target would-be car buyers.

The Chicago dealership technology company unveiled Fuel In-Market Video this week and will introduce it to dealers during the NADA Show.

Cars.com envisions Fuel as a smarter marketing option than TV advertising, which it says casts too wide a net. Fuel will draw on Cars.com's audience data to target shoppers it senses are in the market.

"The dealer's ad will appear where we think is most appropriate," Dean Evans told Automotive News. The former Hyundai and Subaru marketing chief was hired last fall to lead Cars.com's digital marketing initiative. He added that the multichannel approach could include such modes as cellphone or the Hulu streaming service.

Dealerships will be able to access advertising that can be customized to fit their brand and offers, Cars.com said.

Fuel has been pilo…

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VW dealers to hear about EV aid

Volkswagen dealers will learn Sunday what assistance the brand will offer to help convert their facilities to begin selling at least three new battery-electric vehicles starting this year.

Volkswagen of America CEO Scott Keogh and sales head Duncan Movassaghi will lay out the assistance plan at the VW make meeting.

Full details weren't available before press time, but John Luciano, chairman of the Volkswagen National Dealer Advisory Council, said plans he's seen should mean the vast majority of Volkswagen's 650 U.S. dealers will participate.

"It's got heavy, heavy support with co-op, so dealers will be able to use those funds for what they need to do," said Luciano, who is also general manager of Street Volkswagen of Amarillo in Texas.

Volkswagen Group, which is spending about $66 billion globally in an effort to become the world's largest manufacturer of BEVs across its brands, will bring a Tiguan-sized electric cros…

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Regulators, 2020 election lead hot topics at AFSA

State and federal regulatory activity and concerns over what the results of the 2020 presidential election might mean for the auto industry were hot topics at the American Financial Services Association conference this week in Las Vegas.

Auto lender and dealer eyes are on Washington regarding topics such as stagnation on changes to the Military Lending Act, the rise of state-level consumer financial protection bureaus and who will occupy the White House next year.

Danielle Fagre Arlowe, senior vice president at AFSA, said concern about the Military Lending Act dominates dealer discussions, while state-level consumer protection bureaus could also cause trouble for auto retailers.

California's so-called "mini-CFPB" plans to partially fund its actions through enforcement activities, Arlowe said, which AFSA finds troubling.

"There's a built-in incentive to have enforcement actions regardless of what's going on in the ind…

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AutoNation, SiriusXM to expand service notification program, app

AutoNation Inc. and Automatic Labs Inc., a unit of SiriusXM Holdings Inc., are expanding the AutoNation Connected Car Program to new markets.

The Connected Car Program, powered by Automatic Labs' in-vehicle adapter and app, was launched at five AutoNation stores in the U.S. in April 2019, the automotive retailer said in a statement Thursday.

The program is expanding in AutoNation's Houston, Phoenix and New York markets, Marc Cannon, AutoNation's chief marketing officer, wrote in an email to Automotive News.

The Automatic app gives customers and AutoNation access to vehicle health notifications, active recalls and engine light-check alerts. AutoNation said 97 percent of customers who activated the Connected Car Program at point of sale remain engaged with the program, and it has seen a higher retention of customers' vehicle maintenance and service business.

"This service establishes a strong and lasting connection betw…

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Nissan to boost U.S. dealer incentives, ad spending

Nissan will boost its marketing outlays by nearly 60 percent from last year and more than double the dealer sales-volume bonuses to help drive foot traffic at stores and lift dealer profitability.

The financially embattled automaker is facing rebellion from dealers, some of whom are walking away from the sales incentive program after Nissan decoupled some bonus money from hitting volume-based targets.

The incentive program changes, announced to Nissan's U.S. dealers Thursday, came on the same day Nissan Motor Co. cut its full-year operating profit forecast by 43 percent. Nissan posted a net loss of ¥26.1 billion ($238 million) for the October-December quarter — a performance that contrasts sharply with upbeat forecasts from rivals Toyota Motor Corp. and Honda Motor Co.

"We have been on a tough road, and we appreciate you sticking with us," David Kershaw, Nissan division vice president of sales and regional operations, said in a letter to dealers. "Our go…

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Wanxiang Group’s Karma Auto plans more layoffs in U.S.

Karma Automotive, the U.S. electric-vehicle maker owned by Chinese auto parts conglomerate Wanxiang Group, is cutting jobs for the second time in several months.

The company said the latest round of layoffs will affect 60 people at its U.S. headquarter in Irvine, Calif., and an unspecified number of workers at a manufacturing plant in Moreno Valley, Calif., where the Revero is assembled.

In November, the company said it would cut 200 workers in Irvine under a broad restructuring that would see the company license and market technology to outsiders.

Karma has been pitching excess manufacturing capacity as well as its product development and vehicle integration expertise to other automakers under a new business plan called 4+1.

The latest layoffs -- mostly supervisory and engineering posts -- were disclosed in a notice to the California Employment Development Department under the state's Worker Adjustment and Retraining Notification Act.

The …

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Dana says Q4 net income dropped 15%

Dana Inc. saw a decrease in its fourth-quarter net income, largely due to elevated costs that reduced profit and pressured company margins.

The axles and transmissions supplier said said Thursday that net income for the quarter dropped 15 percent to $85 million.

The supplier said sales in the fourth quarter gained 1 percent to $1.99 billion. The company said the slight increase is attributable to recent acquisitions and backlog conversions.

Last year, the supplier completed its acquisition of Canadian company Nordresa Motors Inc. in a move to grow its electrified drivetrain capabilities. Dana also completed its acquisition of drive systems business Oerlikon, the largest deal in company history, last year.

Adjusted earnings before interest, taxes, depreciation and amortization for the fourth quarter also increased 1 percent to $226 million.

Adjusted free cash flow fell more than 9 percent to $218 million, the company said, largely due to hig…

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Is it the end of the road for hybrid technology?

Internal combustion engines may not be the only casualty of the sweeping shift toward electric vehicles that's allegedly coming in the years ahead.

It could be time to say goodbye to hybrids as well.

Production costs and a changing regulatory environment are combining to make hybrids and plug-in hybrids an increasingly unattractive proposition for automakers, according to a report from Morgan Stanley.

The investment firm issued a research note Tuesday that highlights divergent paths for automakers, some of which have committed to hybrid development while others are bypassing them in the fast lane toward an all-electric future.

Morgan Stanley published a report called "The Case Against Hybrids" in October 2019. Only four months later, the company says it's "even more bearish on hybrids today."

Growing concerns include the regulatory front, where the United Kingdom said last week that it plans to prohibit the sale of new gasoline and…

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