Accelerate Mpls

It is no secret most people do not like car shopping.  This stems from multiple things.  Sure everyone wants a new/newer car but it is the act of acquiring one that people dislike.  While the cost does set some people off, the nature of how it all comes together is more off putting.  The old “snake oil” sales person is the main reason that people are put off by car shopping.  It is without question intimidating to walk into a dealership to buy a vehicle.  How do you know you are getting the best deal?  How do you know what you really need?  These and a myriad of other questions run across your mind as the sales person approaches like you are a fresh piece of meat.

This is the problem with car sales.  The above fears and many others.  Not to mention the part about you being viewed usually as a piece of meat.  I want to discuss an experience I had in December 2008.  I was bored one day and started looking at cars online.  I stumbled upon a really nice condition 2006 Mazdaspeed6.  It had RX8 wheels on it and the body looked great in pictures.  It was near by at a local dealership.  After deciding I will not buy this car, the thought crossed my mind that a test drive might be needed.  That evening I went to the dealership and it was cold.  I mean frigid.  I located the car outside without even entering the building and within less then two minutes a sales person had spotted me and was on his way.  He approached me and introduced himself asking if I was interested in the car.  I quickly responded with asking if we could go for a test drive.  As he went to grab the keys I did a walk around finding really little to complain about.  The body and paint were in nice condition though it was dark and I was in no way going to purchase this car that night.  The sales person came back and we went for a test drive.  He obviously had no of idea the actual features of this car (engine size, that it was all wheel drive, etc) because this was at a Chevrolet dealership.  I am not saying that is an excuse it is more of a fact in the situation.  Nevertheless, the sales person and I had a great conversation about what I did for a living and whatever small talk questions he wanted to ask me.

We returned to the dealership and I asked if I could see the Carfax.  He ran and grabbed it.  Till this point it had been a pleasant experience.  No pressure, he was nice, it had been light and airy conversation.  As I am looking at the Carfax he sits back down at his desk and says “Joel, what do we need to do to put you in that car today”.  I almost threw up a little in my mouth.  They still say that!?  Is that still allowed?  I calmly explained in one word “nothing.”  I went on to say I was not purchasing the car tonight and would think about it, possibly calling him tomorrow.  Not liking this answer he said he would run and talk to his manager for me about the pricing.  Before he could get up I explained that was not necessary it was not happening tonight.  He then went on to inform me that there was a lot of interest in this car and I should move quick.  I was a little perplexed by this statement as in the beginning he informed me he forgot this car was on the lot it had been here almost two months.  So now he is out right possibly lying to my face to try and scrape a sale.  The more this guy talked, the less I liked him.  I left the dealership that night without the car (against his wishes).

While I did not like his style I knew if I wanted that exact car I would buy it from that dealership.  It had low miles, good paint, and really it was at the exact moment what I was looking for.  I thought about it for a few days and decided the price was not right, the time was not right, I would pass.  Looking back on the situation a little over a year later, I am happy I did not purchase the car.

The beginning of that experience was great.  The sales person was nice, he talked about nothing sales related and overall I enjoyed the conversation.  He then became pushy and the old sales tactics kicked in.  There is a reason people do not like car shopping and it is because of the second half of that experience.  Pushy sales tactics, lies and overall pressure are not an enjoyable way to buy something that is expensive and important.

Dealers need to realize this is not the same sales environment it used to be.  Things are now drastically different.  When someone walks into the dealership you need to genuinely care.  Do not treat them as if they are fresh red meat.  Do not look at them with a hungry eye.  Ask what they are looking for.  What is important to them in a vehicle.  Everything from characteristics to features.  What is their price range.  Offer solutions to what they are asking for.  Know your audience and make sure you are connecting with them with the right verbiage.  There is a reason some dealerships are successful and some are not.  The ones that are getting with the times and realize it is a new day, they are going to be successful.  If you want to see a successful dealership look no further than Classic Chevrolet.  I refer to them a lot and there is a reason.  They are the largest volume Chevrolet dealership in the U.S. and there is a reason for that too.  I encourage dealerships like the one in my experience to look to Classic Chevrolet and learn.  Look forward to more on this topic in the future.

Americans in general have never associated small cars with high price tags.  They are seen as regular transportation and not premium vehicles.  In Europe this is simply not the case rather small cars are very popular and the price tags are not cheap.  They are fully featured cars with options many small cars do not have in the U.S.  With the new CAFE standards coming soon automakers in the U.S. are starting to realize that maybe we need to be a little more like Europe.  Smaller cars with higher fuel efficiency and more options.

The Detroit Auto Show was all about downsizing.  Engines were being downsized using lower displacement and it is all about getting more from less.  Utilizing forced induction both in the way of turbo charging and super charging the automakers are doing what they can with the latest technologies.  It is going farther then that.

Americans are realizing they need less.  Not everyone technically needs a Suburban to haul the kids to soccer practice.  The reality of it is when you are taking two kids to soccer practice you are not towing a 25 foot boat.  In fact most people that have large vehicles do not need them at all.  It is a perception and comfort thing.  While I know some of you are readying your pitch forks, just hear me out.  Yes, some people do need their large vehicles.  Some people actually do need SUV’s.  I drive an SUV and do use it to tow boats up north.  If we weigh out how much I need an SUV it is probably more then some but still less then others.

Interior of the 2012 Ford Focus

The automotive manufacturers are starting to bet on the little guys.  Ford’s new small car line up will begin with the new Fiesta.  The Fiesta has a base price just above $13,000 but that price can get very close to $25,000 after customizing it with a myriad of options.  Next Ford debuted the next generation Focus as a 2012 model at NAIAS last month.  The new Focus will be more refined while offering more options and features.  While they have not talked pricing you can naturally assume it will cost more.  The current Focus pricing starts a little over $16,000 topping out around $22,000.  It is estimated by some that while the base price of the the new Focus will increase slightly, a fully optioned Focus might approach $30,000.  That is a lot of coin for a small car.  The question is, are Americans willing to pay a premium on these new small cars?  Some are probably scratching their heads saying how could they charge so much.  We as Americans have been asking for the same product that Europe has been getting for years.  Ford has finally listened and decided it would be cheaper to amortize costs, thus the “ONE Ford” strategy comes to play.  Cars will be developed by Ford to be sold globally with minor changes for safety regulations and such.

2011 Chevy Cruze

Chevrolet is betting on the new Cruze to carry its sales in the compact car market.  This new model will replace the lackluster Cobalt which itself replaced the Cavalier.  The new Cruze is said to be rated at 40 mpg on the highway which is an impressive number to be sure.  The car is said to be dynamic to drive and offer the premium feel of a larger car.  That is exactly what these smaller cars with larger price tags will have to do.

So will we Americans embrace these smaller cars with larger price tags?  I think it all depends on where the starting price tag is.  This all goes back to my post about why strippers are important.  The base price on a model is what seems to drive traffic to show rooms.  Maybe that will change with time and it will be features that drive customers to the showroom.  One thing is for sure, the pricing and options work in Europe where people are paying more for less.  Are you really getting less?  In the end it is all about how you look at it.  You are getting more miles per gallon, you are getting more technology and amenities all in a slightly smaller package.  So the question is, will people buy these small cars that all the auto manufactures are betting on?

I do not even know where to start. The Toyota situation is getting so far out of hand it is not even funny. This started months ago when a family was killed when driving a loaner Lexus ES350. That situation has since come into the limelight of both the media and the government. Currently, the total recall count is a little over 6 million vehicles. This is due to the “sticky accelerator.”

The decision came down Tuesday that all sales would come to a halt on the vehicles affected. This sales freeze will be in affect until a fix can be implemented. Toyota has said they expect a fix in the next two weeks rather than months. With that said, they failed to mention what that fix might be. I would call this a “we are scrambling as quickly as possible” tactic. Many are convinced Toyota does not have a fix yet. Others are reporting Toyota already has the fix and new parts are starting to ship. It is hard to know what to believe at this point. The freeze affects eight models which makes up about sixty percent of all North American sales for Toyota. The list of affected vehicles is as follows-

• 2009-10 RAV4

• 2009-10 Corolla

• 2009-10 Matrix

• 2005-10 Avalon

• Certain 2007-10 Camry

• 2010 Highlander

• 2007-10 Tundra

• 2008-10 Sequoia

Avis/Budget car rental announced they will be removing nearly 20,000 Toyota’s from its fleet immediately. Enterprise Rent-A-Car, who now also owns Alamo and National Car Rental, will be pulling all Toyota’s and Pontiac Vibe’s included in the recall. While numbers were not provided by Enterprise it is estimated to be about 4% of their fleet.

It is coming out now that Toyota has known there was problem since mid 2008. In June of 2008, Toyota announced “sticky pedals” are a drivability issue not a safety issue. Well we all know how that turned out now that people have died. Toyota has ignored this problem. They continued to sell cars when they knew something was wrong! This is just ridiculous. Even further, Toyota was contacted last Friday by NHSTA after they heard the models were still being sold. It took four days for Toyota to make the announcement of the sales freeze on the affected models. It almost seems as if they had no intentions of stopping sales until it started hitting the public and governmental eyes.

I have spoken with many people who are shocked at this whole situation. In a conversation with a gentleman in the baby boomer generation the words, “Never in my life have I seen an auto manufacturer halt sales of over half their line up. This is history in the making.” He continued to compare this situation to 9/11, the difference is that this is going on inside Toyota. Another friend compared Toyota to big tobacco.

Many see this whole situation as getting out of control. I have heard some say it is snowballing. I personally think this is far from over and it will get much worse. Toyota’s reputation has now been thrown into question in front of the public view and in a terrible way. It will be interesting to see how current Toyota owners react when it is time for them to purchase a new car. This could benefit Ford, Hyundai, and General Motors. Time will tell if that happens. In recap, Toyota knew what was going on before people were killed, they continued to sell vehicles, more people died, did not fully think through the recall, things are going to get worse. I think I’m going to get sick.

It is widely known that General Motors paid for my travel and accommodations for the Detroit Auto Show.  In fact they even asked me in writing to disclose it on anything I write about the show.  This was part of the new full disclosure rules the FTC has imposed on all bloggers beginning at the end of last year.  General Motors was quick to mention that by them paying for my travel and accommodations I was in no way obligated to write about them or anything for that matter.

I was one of over 10 bloggers brought to NAIAS as press by General Motors.  Most manufactures bring certain people but General Motors put a specific emphasis on bringing social media people.  Both General Motors and Ford have been the “poster child” automotive companies in the social media industry.  Sure Honda made a “splash” when they did the striptease of the Crosstour on Facebook.  Most would have called that a colossal failure when the burn it with fire comments started pouring in.  As I mentioned Ford and General Motors in general are really using social media though they are taking vastly different stances with it.  General Motors does have it’s social media team on Twitter but really it is the brands and products that have accounts.

It was very interesting to witness how the “traditional media” reacted to all the social media people being around.  I am fairly certain the game is changing and they are not exactly happy about it.  Traditional media people have yet to figure out how to play nicely with social media types.  The funniest part is many of the traditional media will write their information once back at work yet the article and or pictures will not be published for days/weeks/possibly a month.  Yet they must get that picture before me or anyone else there for social media.  Social media buffs are publishing this stuff live on the spot using our phones and laptops.  We are connected (when we have signal) and are reporting live and on site.

That leads to another issue that has cropped up with the use of social media at an event such as NAIAS.  Live and on sight I was reporting the information as it was literally being spoken.  People on Twitter following me were getting the information as I received it including pictures.  The challenge was that the ten other people sitting around me are tweeting the information out at the same time.  How do I differentiate myself from these other people.  Sure we all took different pictures and different angles, but the information, specifications, general information, is all the same.  Social media types run in similar circles, many people that follow me also follow the people I was with.  Realizing this early on I had to differentiate myself on Twitter while I was there.  I could report what others were sure, but I had to have something else.   I realized how lucky I was to have been afforded this opportunity.  I decided I would try and make it so others that were not there could get whatever they would want.  I tweeted numerous times asking what people wanted to see.  When requests came in I obliged and took the corresponding photos.  Some other blogs actually asked me privately to take photos for them and I did.  Many people asked me to take a look at certain things and report back which of course I did.  Then something else happened.  General Motors set us all up with small round table sessions with some of the executives.  I instantly saw an opportunity and tweeted out who I would be meeting with and when.  I told my followers that if they had any questions for these people to let me know, and I would be happy to ask.  I took video of all the round table sessions and have already up loaded this.  Of course I asked the questions that came in off Twitter.

Fiat Twins

On Monday evening I realized that many pictures I had taken included the models posing with the cars.  I decided to tweet out a bunch of the photos and hash tag them with the keyword #EyeCandy.  This quickly turned into a “series” and people loved it.  The last thing I decided to do was simple.  There were plenty of models posing with cars and at the Fiat stand they had two girls to go along with the two 500’s.  On the second day the two girls in the morning appeared to be twins.  When I over heard someone saying they were I tweeted this.  Soon I heard Jalopnik saying they were not in fact twins.  Seeing that my eye candy series had been such a hit I decided to go and put an end to this debate.  I walked up to the “twins” and simply said there was talk about whether they were in fact twins and asked if they were.  They immediately said they were and I tweeted “BREAKING- The Fiat twins are in fact twins!”  Of course this tweet started a whole new discussion.  I also happened to learn that the twins live in Minneapolis about 15 minutes from where I live.  After having a conversation I left them to continue modeling and went back to the business of walking the show.  All of this gave me personality.  It was something different then just reporting the specifications/information about the cars.  When I got into the Lotus Evora I tweeted about how it felt like a glove when sitting in it.

The Ford area was one of the best consumer booths of the show.  They have everything from interactive computer simulations to transmissions torn apart, just about anything.  The booth itself is utterly huge.  Ford also had some customized Fiesta’s strewn about so people could get an idea about the level of customization these cars will have.

It is clear to me that social media is making an impact both in how manufactures are advertising and how they are handling themselves at autoshows.  It says something to me that the two auto manufactures most involved in social media are Ford and General Motors.  The point of all this is embracing new ways to communicate is something that forward thinking companies are doing and we should all take note.

Phil Colley, Nicole Carriere, Me, Chris Barger (from left to right)

Full Disclosure- My NAIAS travel and accommodations were provided by General Motors

Why do strippers exist?  What is the point of them?  Many people say they would never touch a stripper but I am willing to bet otherwise.  Some have even touched one without even knowing it.  Hey get your head out of the gutter!  We are talking about basic cars here.

All cars come in base or entry level trim in some form or another.  This means the vehicle is lacking certain options.  Options are all relative.  For example a base Audi A4 will include leather, power windows, power locks, power driver seat, automatic climate control, and the list could go on.  That car also has a base price starting at $31,450, with which you are paying for those standard features in that base price.  Now take for example a Toyota Camry, which has a base price $19,395.  You lose the power seats, leather, automatic climate control, prestige branding, and many more options that are standard on the Audi.  Take this one step farther and you could buy a Nissan Versa for $9,990.  What does that $9,990 get you?  A car, four wheels, an engine, and air bags, along with all the things that make the car run.  No air conditioning, no power anything, steel wheels with hub caps, though you do get six air bags and a tire pressure monitoring system.  This is the essence of basic transportation at its finest.

So why do these “stripper” models exist.  I imagine you are saying to yourself, “who buys these?”  In reality these models sell in higher volumes then you think.  Two directions are taken when it comes to sales of these models.  One is fleet sales, there are a ton of stripped down or modestly equipped Toyota Camry’s and Chevrolet Impalas in rental car fleets.  The second route is simply people that want basic transportation.  Believe it or not, there are people out there that simply care about getting from point A to point B.  Sure most say they want a stereo with a CD player, and air conditioning is usually a requirement for them as well.  The fact is a base stripped down Toyota Camry or Chevrolet Impala meets those needs.  They are also relatively inexpensive to maintain.  Most even get respectable gas mileage.

Few cars come without CD players and radios.  Almost none (save for a handful) come without air conditioning.  Modern conveniences are in tow.  Safety is always there, air bags are standard on all cars (though more are sometimes optional).  Shockingly some cars do not have ABS (Anti-Lock Brakes) standard.  I personally know a handful of people that are car guys, and they feel power seats and other newer technologies are just extra weight in a car.

The point is simple, “stripper” or base cars play a vital role in sales on different levels.  Advertising the lowest price on a base vehicle is what gets people in the door.  Once they realize how many things are missing they start to think about upgrading, but that stripper got them in the door.

This week, episode 4 discusses the week in review on both of our respective blogs, AutoBird Blog and AccelerateMpls.  We first briefly discuss the Ford Fiesta technical debriefing that I attended last week.  Our conversation moved on to the all new 2011 BMW 5 Series and the new 2011 Cadillac CTS Coupe.  We use the introduction of the new 2010 Lexus GX460 to transition into our last topic, a report card on the current Toyota/Lexus situation.

Download this episode (right click and save)

Download this episode (right click and save)

2011 Buick Regal

Last week General Motors announced they would officially be bringing back the Buick Regal.  The car is set to arrive in spring of next year as a 2011 model.  The car will launch with a base 2.4 liter four cylinder that puts out 182 hp while returning 30 mpg on the highway.  Later in the summer, a 2.0 liter turbo four cylinder that puts out 220 hp will launch.  The more powerful engine will still manage 29 mpg on the highway.  The list of specifications reads like a list of what Buick needs to get customers to both show up in the showrooms and buy their cars.  The car may look familiar to some of you, and that is because the car is a rebadged Opel Insignia.  The car that instantly won Car of the Year in Europe and is already selling well as a Buick Regal in China.  The turbo model will come with “Interactive Drive Control System.”  This will have four different driver selectable suspension settings.  GM has not gone into detail about the system yet though it sounds promising.

2011 Buick Regal Interior

The main question is simple, will this car sell?  Buick already has the new LaCrosse and the Enclave, both of which are being viewed as successes so far and selling quite well.  GM knows they need more home runs and more foot traffic in the showroom.  The Regal should bring a lower entry price point into the Buick showrooms.  GM is hoping that, in itself, will lower the age of the customers.  While we do not know pricing yet, we can naturally assume the Regal will be priced both aggressively and will undercut the new LaCrosse somewhat significantly.  I personally think, from the specifications we know so far, this car will definitely help both Buick and General Motors.  My only hope is that the rumors of a GS (GS stands for Grand Sport) model come true.  That would not only be an epic move on GM’s part, but also drive huge foot traffic that might otherwise not come near the Buick showroom.  Bob Lutz actually recently told Car and Driver that they are considering a version for the new Buick Regal to be Regal GS.  It would essentially be a rebadged Insignia OPC.  It would push somewhere along the lines of 335 hp and all wheel drive and possibly have the trick torque vectoring rear end.  Finish all this off with a six speed manual transmission and a reasonable price point that would obviously going to undercut the Germans, and everyone else that would compete, and you have a recipe for huge success.  I truly believe that GM needs a model like the Regal with a GS trim level.  It will show how serious they really are about growing their market share and changing the image of Buick once and for all.  Hey GM, I want a Regal GS, I want it now, and a wagon variant would not hurt.

Note- Hakim Givens created a mock up of what a Regal GS wagon variant might look like.

Concept of what a Regal GS wagon might look like- Image by Hakim Givens

2011 Buick Regal

Opel Insignia OPC

Opel Insignia OPC