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WATCH: Remarks from Penske Corporation Chairman Roger Penske

WATCH: Remarks from GM President of North America Mark Reuss

WATCH: Remarks from GAZ Group President & CEO Bo Andersson

WATCH: Presentation of the 17th Annual Polk Automotive Loyalty Awards

 

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2013 North American International Auto Show

 

 

Automakers spending millions on upgrading U.S. dealer showrooms to entice new customers

 

PHOTOS BY JASON RZUCIDLO / ©AMERICAJR.com

Roger Penske discusses his new Scottsdale 101 Auto Collection at the Automotive News World Congress on Jan. 15, 2013.

 

by Jason Rzucidlo
americajr@americajr.com

 

DETROIT -- Automobile companies are opening their checkbooks to make their U.S. dealerships more luxurious to attract new customers and retain their current ones. This includes adding coffee bars, free wireless internet, more comfortable waiting areas and museums--yes, museums. It was one of the topics discussed on the first day of the Automotive News World Congress, which was held on Tuesday, Jan. 15 inside the Detroit Marriott at the Renaissance Center.

“The auto retail landscape has changed,” said Roger Penske, chairman of Penske Automotive Group (PAG). “The dealership model rightfully needed to step up its game. Although the requirements are getting tougher and tougher, dealers need to make investments to drive higher levels of customer satisfaction with each brand. Dealers are building bigger stores to cater to the new retail environment. Free loaner cars are lined up ready to go. We also have what we call Rapid Repair Centers. Five of our U.S.-based dealerships were named best to work for by Automotive News.”

PAG has invested $2 billion in upgrading its dealerships since 1999. Penske said he faced several challenges when opening his first dealership in the United Kingdom.

“We began with a market concept with three dealerships back in the U.K. that allowed us to start and more understand the U.K. market," he explained. “Ultimately, that investment connected us with the Sytner Group, a publicly-traded company on the London stock exchange. In the spring of 2002, we purchased Sytner for $135 million. At that time, Sytner had revenues of about $900 [million]. It was on the cusp of explosive growth. But it lacked the facilities, it lacked the capital and the vision to move the company forward to the next level. Most recently, we entered the northern Ireland market. Our flagship dealership is a 200,000-square-feet Audi dealership. We’ve accomplished a lot over the last 13 years."

Over 90 percent of carbuyers use the internet to research their next purchase, Penske said.

“Perhaps our biggest challenge going forward is social media,” their chairman added. “We need to be fluent in YouTube, Facebook, Twitter. Customers are not afraid to use social media sites such as Yelp, Google Reviews to let us know how we did. Once these comments are posted on the information superhighway, our information is up there for everyone to see. Building loyalty through customer satisfaction is one of the key attributes of our retail business here and around the world.”

Penske Automotive operates 175 dealerships and 23 accounting offices within the United States. It offers over 40 automotive brands and employs 16,000 people worldwide.

GM Vice President Mark Reuss said the Detroit-based automaker is also spending money on upgrading it U.S. showrooms as well.

“By the middle of next year we’ll have the freshest showrooms in the business,“ Reuss explained. “And we’re continuing to invest about $8 billion a year in product development to keep those showrooms filled with still more new cars, trucks and crossovers. Our recent track record proves that this kind of continuous investment in the product pays off. Today, we have the highest average transaction prices (ATPs) among full-line automakers. Our ATPs have increased at an annual rate of 4.1 percent since 2008, versus 2.85 percent for the industry. For the most part, people are buying our vehicles because they want great vehicles, not because there’s a gift basket full of cash on the hood.“

Bo Andersson is the president and CEO of Russia’s GAZ Group. He began his career with General Motors as the manager of the Saab brand in 1987. Later, he worked his way up the corporate ladder to GM’s group vice president of worldwide purchasing. Currently, GAZ maintains a 50 percent market share of Russia’s light commercial vehicles sales and a 65 percent market share in the bus segment.

“My new passion is dealerships,” Andersson said. “Two reasons: I admire these people and secondly, I love price increases. It is a very good feeling to raise prices five percent in all your products and see the impact on your bottom line. We have 220 dealers in Russia. They used to have a lot of inventory. Our dealers are not allowed to have a three weeks inventory on their ground. They report to us daily and we check it. This year, we give customers a three-year warranty.”

The 17th Annual Polk Automotive Loyalty Awards were also presented on the first day of the World Congress:

  • Overall Loyalty to Manufacturer: Ford Motor Company
  • Overall Loyalty to Make: Ford
  • Most Improved Loyalty to Make: Volkswagen
  • Hispanic Market Loyalty to Make: Honda
  • African American Market Loyalty to Make: Ford
  • Asian Market Loyalty to Make: Toyota
  • Compact Car: Honda Civic
  • Mid-/Full-size Car: Subaru Outback
  • Luxury Car: Lincoln MKZ
  • Sports Car: Ford Mustang
  • Luxury Sports Car: Mercedes-Benz SL-Class
  • Minivan: Chrysler Town & Country
  • Mid-/Full-size Pickup: Ford F-Series
  • Compact SUV: Honda CR-V
  • Mid-/Full-size SUV: Lexus RX
  • Luxury SUV: Land Rover Range Rover

The awards are based on consumer surveys, state registrations and lease transactions. Winners are based on consumers who had a positive overall experience and returned to buy another vehicle of the same model, make or manufacturer.

For more information about the 2013 Automotive News World Congress, visit www.autonews.com.

Related Stories: Pickup trucks to make a resurgence in 2013, analysts say; Chinese automakers facing hurdles in entering U.S. market; What to Look For at the 2013 North American International Auto Show; Honda introduces the Urban SUV Concept at 2013 NAIAS; Ford EcoBoost Technology: Transitioning to Gasoline Fuel Efficiency; Comparing two multi-purpose vehicles: Scion xB vs. Fiat 500L; Lincoln debuts the MKC Concept crossover vehicle at 2013 NAIAS; Chevrolet shows off its redesigned 2014 Silverado pickup truck at 2013 NAIAS; Hyundai reveals the HCD-14 Genesis Concept at 2013 NAIAS; Volkswagen introduces its Cross Blue Concept plug-in hybrid at 2013 NAIAS; Jaguar debuts 2014 F-Type S two-door roadster at 2013 NAIAS; Hyundai at the 2013 North American International Auto Show; Chevrolet Corvette Stingray, Maserati Quattroporte discussed at 2013 Autoweek Design Forum; Automotive News World Congress: 'The electric car is not dead!' says GM's Mark Reuss; Audi shows off its 2014 R8 sports car at 2013 NAIAS; Tesla CEO Elon Musk honored at 2013 Motorcity Automotive Industry (MAIN) event; Cadillac introduces the 2014 ELR electric luxury sedan at 2013 NAIAS

 

 

PHOTO BY JASON RZUCIDLO / ©AMERICAJR.com

The 17th Annual Polk Automotive Loyalty Awards were also presented on the first day of the World Congress.

 

PHOTO BY JASON RZUCIDLO / ©AMERICAJR.com

Bo Andersson is the President and CEO of Russia's GAZ Group.

 

PHOTO BY JASON RZUCIDLO / ©AMERICAJR.com

Automotive News Editor-in-Chief Keith Crain

 

PHOTO BY JASON RZUCIDLO / ©AMERICAJR.com

Mark Reuss serves as GM's President of North America.

 

PHOTO BY JASON RZUCIDLO / ©AMERICAJR.com

Automotive News Publisher Peter Brown welcomed everyone.

 

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This page was last updated on Fri, February 8, 2013 6:09 PM

 

 

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