BUSINESS: BUG STUFF, RV SALES, WEB SHOPPING, ETC
by Bob Hagin
November 13, 1998
The retail end of the car business is something that gets lost in the automotive media feeding frenzy. Lots of coverage is given to the glitzy side - the corporate mergers and such - but not much is said about the ultimate end of the business where a salesperson sells or leases to a retail customer. To remedy this oversight, we've come up with some interesting tidbits about the business side of the business:
STERLING SILVER BEETLEMANIA - If Volkswagen's New Beetle was an instant success in the U.S., it's bound to have the same results in Germany, the fatherland of the original, right? Volkswagen headquarters in Wolfsburg isn't so sure and although it was popular as a form of basic transportation in Europe, in America it was a cultural image of the '60s. Peace, Love, Flower Power and the rest were major components of the mystique of the Bug and it wasn't prevalent on The Continent. As a result of this thinking, the company is creating an aura around the car before it goes on sale there. You'll be able to buy sterling silver lapel pins, watches, expensive jackets, mountain bikes and 80 other items that bear the New Beetle logo. The car itself as sold in Germany will cost around $6000 more than its U.S. price, which makes it a trendy weekend "cruiser" rather that serious transportation. Ironically, all New Beetles are produced in Mexico and the delivery time in Germany is a little over a year. Since European New Beetle memorabilia is only sold at VW dealerships, the stuff will give dealers there an emotional "hook" into a possibly fickle buyer.
NET SALES TURN CLOUDY - Since approximately half of the families in this country have at least one computer and most of them are linked to the internet, it will come as no surprise that the sale of new (and even used) cars via cyberspace is booming. But not everybody involved in the business end of the business is happy about the system as it's now evolving. The "biggies" like Autobytel, AutoVantage and Carsmart provide manufacturer's suggest retail pricing to those clicking on as well as what a vehicle costs a selling dealer. Another service offered by some on-liners is a referral to a potential selling dealer at a predetermined fee, usually in the neighborhood of $25, if the deal is made. But this is considered being a broker in some states and that's a no-no. The automakers themselves are dismayed at netshopping through cybershowrooms since it's very simple for a shopper to forgo brand loyalty and electronically switch over from Brand "C" to Brand "F." But the local (to me) dealers I've talked to aren't worried. "People still like to come in to kick the tires and spar with our salesmen," one said.
SATURN TURNS FOLKSY - And to give tire-kickers and additional reason for stopping in at its showrooms, Saturn Corp. has initiated a program to make its dealerships more "homey", to quote a Saturn spokesman. The gentrification project is in response to customer's comments that the dealerships look too "cold and commercial". The 370-some-odd dealerships will be expected to spend up to $100,000 each to provide working fireplaces, large fish-filled aquariums, leather armchairs, and study areas. Refreshment centers with coffee, soft drinks, etc., will be included in the updating program. Internet-linked computers will be available to the browsers as well, and hopefully they won't be used to "surf" for other brands and/or cheaper prices.
RV SALES BOOM - If the current crop of Saturns is too small for you (and it's upsizing into bigger vehicles next year) you may want to look in on a couple of your local recreational vehicle dealers. You'll no doubt find him or her smiling and the reason is easy to understand. The economy is robust and the so-called Baby Boomers are just entering into their peak RV buying years. Most RV builders report that their sales have exploded in recent months. In fact, the RV business is so good that the industry is presenting TV ads that promote RVing as a family endeavor and the ultimate get-away-from-it-all for Dad, Mom and the kids. This helps dispel the myth that RVing is just for us oldsters who want to escape the snows of winter and caravan to Arizona for the season.
HERTZ SELL-A-CAR STORES COME BACK - The used car market seems to be in pretty good shape, too, judging by the reemergence of Hertz as a retail outlet for its off-rental vehicles. Hertz elected to get back into the retail end of things a couple of years ago when it increased its purchases of "risk" vehicles, cars and trucks that the various manufacturers sold to rental companies without the assurance that those manufacturers would buy them back after those machines had done their tours of duty. Hertz is so enthused about the retailing of its ex-rentals that it's recently built a couple of "supershowrooms" to market them. These big facilities can keep up to 400 "creampuffs" in stock while the rest are sent off to auctions. Too bad Hertz doesn't take a lead from Budget Car Rentals of Beverly Hills (Cal.) and return to renting out hot-rod Mustangs like it did in the '60s. Those cars were great buys back then when Hertz turned them out to pasture.
Although I tried it a couple of times, I was never much of a car salesman, but then it may be that I was employed in places that were less than prime. At some of the lots I worked at, a special "back door" was necessary to flee from angry customers.