Deal makers — those things that get car consumers to sign on the bottom line — are changing, especially as product quality evens out and model choices proliferate.
Of course, price and incentives sway buyers, but often it's more than money. Whether it's styling, fuel economy, peer pressure or high-tech features that seal the deal depends on the region and the customer, dealers say.
Here's a sampling of what's going on around the country.
In Van Nuys, CA, an image and emissions-conscious region of the country, cross/utility vehicles are “politically correct” for buyers who want an SUV, says Brian Allan, general manager at the Galpin Premier Collection that operates 10 franchises and is on target to sell 20,000 units this year, about 80% new.
So when Ford Motor Co. began marketing the Ford Escape and Mercury Mariner as CUVs this year, sales took off.
“Changing the designation to crossover — that became the deal maker,” Allan says. “Ford would do well to call their larger vehicles crossovers, whenever possible.”
More than fuel economy, driving an SUV has become an image problem, at least in parts of California.
It's peer pressure and it affects sales, Allan says.
It's also a matter of which vehicles will maneuver best along California's congested freeways.
“I hear more people asking, ‘If I get the hybrid, can I use the car-pool lane?’” says Allan. (The answer is a qualified “yes.”)
He adds: “Here, if you go out with friends in a Ford Expedition you may get a leery look. The negative perception about how SUVs impact the environment is unfounded because many SUVs today can be as fuel efficient and environmentally friendly as mid-size sedans.”
It's not only the vehicle that can make or break the deal. It's what is in the vehicle.
Popular features that can cause customers to walk if not available include rear-seat entertainment systems, flat-fold seats to expand cargo room and iPod-MP3 factory-dealer installed connectivity kits.
“When we couldn't get the connectivity kits for the Jag X6 and Mazda CX-9, we lost sales,” Allan says. Bottom-line: “Our buyers want a luxury car and utility vehicle. That's why crossover appeal is very strong.”
Michael Bardaxis, general manager at Fred Anderson Toyota in Raleigh, NC, says styling and tech features sell cars in his high-technology area.
Raleigh is part of a high-tech research triangle (Raleigh-Durham-Chapel Hill) with an educated, affluent consumer base to whom style, advanced technology and options are important.
Then again, so is fuel economy.
“In our market, when it comes to the vehicle purchase, the hot topic is fuel economy, and Prius, Corolla and Camry deliver on that,” Bardaxis says. “We sell more Priuses than Corollas here.”
Lifestyle and image factors are more important to consumers today than ever, he says. “How a vehicle looks and what status you portray driving it is as important as its functionality to a lot of buyers,” he says.
Must-have features such as Bluetooth telecommunication, navigation systems, iPod adaptability, satellite radio and multiple airbags figure into the buying decision due to technology advances on those fronts, says Bardaxis.
Still, every customer is different.
“For some people it still comes down to the monthly payment on a particular model,” he says. “And color continues to be a strong factor when choosing between vehicles in the same model line.”
Despite the claim that nine or more cupholders will swing the deal, the deal itself is still king in Southgate, MI, says dealer Richard Genthe who runs Genthe Chevrolet, a 90-year-old family dealership there.
The Detroit suburb has a median household income that hovers around $46,000 in a county besieged by high unemployment — running 8% to-9 % in the last year, nearly twice the national average, according to U.S. Census data.
“Buyers first look for the deal that meets their budget needs,” Genthe says. “Just behind that is a vehicle's fuel-efficiency rating, and then it has to be a vehicle that fits their family recreational needs.
“It's not the number of cupholders or iPods here. It really comes down to the deal,” he says.
It is the “cool” things in and on a vehicle that matter in the Atlanta, GA, market. And some of those things are missing from GM products.
So laments Mike Stout, general manager at Lou Sobh Pontiac-Buick-GMC, in Lithia Springs, an Atlanta suburb. His buyers want the latest and greatest technology, from iPod connections to hands-free cell phone capability.
“I don't understand with 50 gigabyte memory and hard drive costs being so miniscule, why GM can't be the first car company to produce cars with the built-in technology,” he says.
Most dismaying to this long-term GM dealer-manager? His 16-year old daughter and friends don't know or care about American cars.
“The cool factor is not there for them,” he says. “They don't even know the brands. My daughter recently asked, ‘What's a Pontiac G6?’”
Popular Deal Makers
Here are features that can help make a vehicle deal these days:
- Rear seat entertainment systems
- iPod/MP3 connectivity (factory installed)
- Hands-free mobile connectivity
- Bluetooth capability
- Flat-fold cargo seating
- Cupholders and storage space
- Satellite radio
- Free navigation systems
- Crossover designation
- Modern color choices
Mountain-Town North Carolina Dealer Is King of the Hill
Call it the Midas touch of gold. Fred Anderson, president of Anderson Automotive Inc. based in Raleigh, N.C., seems to have it.
He started as a small mountain-town General Motors dealer who acquired a Toyota franchise in 1987.
Anderson now runs seven dealerships, representing 12 franchises in North and South Carolina. Franchises include Toyota (3), Scion (2), Nissan (1), Chevrolet (2), Chrysler-Dodge-Jeep (1), Buick (2) and Pontiac (1).
They sell a combined 14,000 total units a year.
Fred Anderson Toyota in Raleigh is the largest-volume Toyota dealership in the Carolinas. He is one of 12 dealers to receive the Toyota President's Cabinet Award for 2006 for high customer satisfaction and sales.
In his latest venture, he plans to open a Kia dealership next to his Toyota facility in Raleigh. He expects Kia to be “a volume franchise for us.”
Anderson is building the Kia store from scratch and will own the property rights.
“We have never bought a dealership unless we bought the land and building,” he says. “We understand the financial implications of putting equity in real estate vs. using it as operating capital. We just prefer to control our destiny with regard to the facility.”
Total Anderson group revenue grew 63% from 2002 to 2006, he says. He projects revenue growth of 85% for 2007 vs. five years ago at a time of profit decline, especially for domestic makers and dealers.
Dealerships seem to flourish once Anderson puts his management imprint on them.
For instance, since he bought the Toyota Center, Columbia, SC in 2006, it has posted big sales increases.
“This was about a $42 million revenue store doing 1,200 new units a year,” says Anderson. “It now is tracking $60 million in revenue and about 1,600 new and 800 used a year in this store.”
He knows when to cut his losses. In February, he shed his Lincoln-Mercury operation in Asheville, saying, “It did not fit in our business portfolio model.”
His formula for success is basic. “Relationships matter,” he says. “It's people, processes, culture and commitment that count in sales or service.”
— By Lillie Guyer