| |
Feature: July 2008
 
The New Sales Puzzle
Hybrids are an easy sell. Here’s how to move the rest.
By Mary Anne Shreve
New or used, fuel-efficient cars are hot. The clamor for hybrids is rising as fast as gas prices, and even some older-model hybrids are gaining new interest—the MY isn’t nearly as important as the mpg.
Patrick Davalos, sales manager, Cowboy Toyota, Dallas, says high-mpg cars sell themselves. He has 24 Priuses on order and says customers are more than willing to wait. “Prius has become a status symbol—once they’ve made up their mind they’re through with an SUV and want a hybrid, that usually means a Prius.”
But, of course, not all dealers have hybrids—at least not yet—or else don’t have sufficient supply. Instead, they can point customers to small, high-mpg models.
Sales manager Rex Todhunter can’t keep four-cylinder Fusions on the lot at Park Ford, Akron. In fact, he sold out over one weekend. He phones other dealerships to find cars. He also looks for used Focuses—“it could have 10,000 miles on it or 70,000, and I could sell a whole lot full.” Even used Escorts and Neons are hot commodities now. “Because of gas prices, anything that gets good mileage is bringing top dollar.”
If a requested model is out of stock, he’ll show customers other high-mpg models they might not have considered. Some are surprised at how many other options there are.
Don’t carry high-mpg vehicles? Don’t worry—there are still buyers for your products. “We’re into boating season—you can’t pull a boat with a Yaris,” says NADA Dealer Academy instructor Randy Brenckman.
Some advice on moving metal in gas-price hell:
• Focus on customers who need larger models. “Concentrate on the soccer moms—they have no choice,” says Brenckman. “If they have two kids, a car with only five seat belts may not work for them. They have to carpool, and you can’t take everyone to soccer in a subcompact, because there aren’t any with seven seat belts.” Get the customer thinking in terms of seat belts, and they’ll realize they still need that SUV, says Brenckman. And tout the current bonanza of rebates on larger vehicles. Other customers may have unique needs requiring, say, pickups or convertibles.
• Give away gas discount cards. “Tell customers, ‘Any vehicle you buy from us, the first $1,000 of gas is on us,’ ” says Brenckman. “ ‘All the trucks I sell get 35 mpg’ ” because of the gas card.
• Compare new models to their predecessors. Most new cars on your lot get higher mileage than the older vehicles customers are driving now.
• Explain how hybrids may not work for everyone. For one thing, the total silence when a vehicle starts up or comes to a stop is unnerving to some people. And Todhunter reminds customers that “you’ve got to have a lot of city driving and stop-and-go traffic for that hybrid to work for you.” Also, the premium they’d pay for a hybrid would take years to recoup. “I tell them, ‘You’re better off getting a four-cylinder.’ A lot of customers end up agreeing.”
• Mention your models’ green elements. Example: Ford’s 2008 Mustang, F-150, Expedition, and Lincoln Navigator feature the market’s first soy-based seat foam. The maker says its new product will reduce carbon dioxide by more than 600,000 lb. annually. Ford also uses seat fabric made from recycled plastics and polyester, saving water, electricity, and carbon dioxide emissions. Remind customers that even nonhybrids are making environmental contributions.
Mary Anne Shreve is a senior editor of AutoExec.
Troublesome Trade-ins |
Spiraling gas prices have drastically reduced the value of low-mpg trade-ins. Sales manager Rex Todhunter, Park Ford, Akron, recently had to tell a customer that his 2004 Supercab F-250 diesel—“normally prime merchandise with an average trade-in value of around $19,000”—was worth only $15,000 now. “It was hard, but I’ve got three other diesel [pickups] that have been sitting on my lot for three months and gotten no interest,” he says. “Big trucks and SUVs—I really don’t even want them.”
 |
| Tons of trade-ins: Shrinking value for large SUVs |
To ease the shock, Todhunter tells these owners up front that “everyone else is also trading these vehicles in, and they’re not going to get what they would have six months ago.”
At Cowboy Toyota, Dallas, some 70 percent of trade-ins are SUVs, many of them domestics, says sales manager Patrick Davalos. Customers “don’t take it very well” when they discover that the Escalade they paid $50,000 or $60,000 for a year and a half ago has lost half its trade-in value. “We explain that we have to protect ourselves against rising fuel costs, too. I tell them, ‘It stinks, and I understand it stinks.’”
Davalos sends low-mpg trade-ins straight to auction or prices them “very aggressively.” |
Eco-Focused Automakers |
To boost fuel economy, automakers are using lightweight plastics and aluminum on current vehicles, and producing alternative-fuel vehicles. (Check www.nada.org/green for updates.)
 |
| BMW X5 xDrive 35d |
BMW: Will have two 50-state diesel models this fall: the 335d and X5 xDrive 35d. Coming midyear 2009: the X6 Active Hybrid, a two-mode from a consortium with GM and Mercedes. BMW also has 25 Hydrogen 7 demos, with hydrogen internal combustion engines, in the United States.
 |
| Dodge Durango Hemi |
Chrysler: Has 10 flex-fuel vehicles (FFVs) that can run on 85 percent ethanol. Jeep Grand Cherokee is available as a diesel in 45 states; a 50-state Dodge Ram 1500 will be offered with diesel in 2010. Chrysler’s first hybrids—Chrysler Aspen and Dodge Durango Hemi—are out this summer, with Ram 1500 in 2010.
 |
| Ford F-150 50-state diesel |
Ford: Will produce within five years more than 500,000 EcoBoost vehicles, with direct injection turbocharge and lightweight transmission. Ford now has five light-duty flex-fuel models, plus two hybrids, adding the Ford Fusion and Mer-cury Milan models later this year. The F-150 gets a 50-state diesel engine in 2009. Ford also has a test fleet of 30 hydrogen-powered Focus fuel cell vehicles.
GM: Currently has 11 light-duty FFVs; they will be 50 percent of production by 2012. GM’s hybrid strategy: focus on large vehicles, such as the Tahoe and Yukon, for large fuel savings, with eight hybrid models out by year-end. Electric strategy: Chevy Volt plug-in is set for late 2010. Long term: GM likes hydrogen fuel cell vehicles and has a test fleet of 100 fuel cell Equinoxes, but needs to slash costs. |
|
 |
| Honda FCX Clarity |
Honda/Acura: Honda now has a hybrid Civic, will debut a dedicated hybrid five-door hatchback in early 2009. Later it will intro a small hybrid sports car based on the CR-Z concept. Acura will offer a 50-state diesel within a year, then Honda will. Honda plans to lease 200 FCX Clarity fuel cell vehicles by 2011.
Mercedes-Benz: First 50-state BlueTec diesels—
ML 320, GL 320, and R 320—out in October, and the E320 in 2010. Late in 2009, Mercedes will offer two gas/electric hybrids: S 400 single mode and ML 450 dual mode.
Nissan: Plans to produce mass-market electric vehicles by 2012. Also coming: a clean-diesel Maxima in 2010 and a fuel cell vehicle in the early 2010s.
 |
| Toyota Camry Hybrid |
Toyota/Lexus: Each automaker has three hybrids, and each will intro another one next year. Toyota’s goals: sell one million hybrids annually, and offer a demo fleet of plug-in hybrids by the early 2010s, and have a hybrid option for all models by the 2020s. Tundra and Sequoia will have flex-fuel and clean diesel versions. Toyota also has several fuel cell vehicle prototypes at two college campuses.
 |
| VW Jetta TDI |
Volkswagen: Will have a clean-diesel Jetta by September—from the BlueTec partnership with Audi and Mercedes—and a clean-diesel Touareg next spring.
—JOAN MOONEY |
|
|
