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N.A.D.A. 2003 - a Report from Key Industry Conferences
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| Industry leaders meet at the J.D. Power and Associates International Roundtable |
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| Updated |
Jun 10, 2004 22:19:47 |
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 115 ( 20 +17.39% ) | | Author | staff |
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Description:
One of the most important N.A.D.A. conferences was the J.D. Power and Associates International Roundtable, where super-star execs and analysts spent a full day discussing the state of the industry. Opinions were generally upbeat -- with most presenters predicting another strong sales year. Another area of agreement was that the negative pricing market is here to stay -- with a major debate being whether, and how long, OEMs can continue to thrive in a negative pricing environment. Notably, most manufacturer heads, including those from GM, Ford and DaimlerChrysler, also spoke at length of the re-flourishing of dealer/OEM relations, following some well-publicized bumps in the road a few years ago.
Ford CEO Bill Ford described aggressive incentives as "a fact of life." He vowed that Ford would stay very competitive in the incentive fray, but also looked to improve product and quality as long term differentiators. Ford also stated his thesis that new fuel technology is the next big battleground -- and that, on this front, the industry's future is up for grabs, more so than in the past 50 years. He stressed Ford's commitment to this new frontier.
GM CEO Rick Wagoner's outlook for sales in the year ahead was spectacularly bullish. He described the recent spate of hot sales years as the new norm, and predicted 1.8 million-unit growth industry-wide in the next decade. Wagoner also refused to be bowed by the negative pricing trend, pointing out that this is the 6th consecutive year of declining net prices and announcing that GM is going to continue with VERY aggressive incentives. Wagoner echoed a theme present throughout N.A.D.A. -- that by growing the industry overall, we can all survive with market share.
COO of DaimlerChrysler, Wolfgang Bernard, gave J.D. Power attendees a treat by bringing the new Tomahawk concept motorcycle to the conference stage. Like Ford and Wagner, Bernard addressed surviving the incentive war, and agreed that negative pricing was a given for the foreseeable future. Hyundai Motors CEO D.J. Kim discussed the company's new design center in Irvine and their new manufacturing plant in Alabama. He predicted 500,000 sales in the U.S. by 2006 -- and 1,000,000 by 2010. Hyundai is up 8% in the U.S. in 2002, with their clear brand position: competitive products at low prices.
Internet sales and processes were a hot topic with the heads of AutoNation, Herb Chambers, Asbury, Lithia, Hitchcock, Planet and other major dealer groups who also presented at the J.D. Power Roundtable. . Speakers across the board reported that the Internet was completely adapted in their business -- with Internet sales now representing between 15 and 25% of total sales. Herb Chambers, which has deployed 25 dedicated Internet staffers, reported that profits on Net customers were as good as -- if not better -- than walk-ins and described CSI's as "awesome" for Net customers. AutoNation, meanwhile, reported that they now have 900 Net salespeople, with at least some dedicated at each store. AutoNation also commented on the explosion of used Internet sales in 2002, noting that used sales grew at a clip two-times faster than new sales. Looking to the future, many large dealer CEOs identified adapting Internet processes and technology to their service business, and/or implementing CRM solutions, as their next Internet goals.
The highly anticipated N.A.D.A. Economic Forecast, presented by N.A.D.A. Chief Economist, Dr. Paul Taylor, sounded a familiar chord, predicting strong new vehicle sales for 2003. Dr. Taylor cited numerous contributing factors, including the rising number of vehicles per household, relatively low unemployment, and a relatively high N.A.D.A. Optimism Index. If 2002 saw 16.8 million new units -- 4th best year in history -- his prediction for 2003 was 16.5 million, with a caveat that 200,000 sales will be trimmed if there is an incursion into Iraq. In his 2002 sales analysis, he reported that cross-over vehicles saw a 25% sales gain -- by far the largest of any vehicle category. |
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