CATA News

Online dealership vehicle sales and their associated home deliveries have become a relatively popular purchase alternative in the age of COVID-19. But the auto-retailing industry is still working on best practices, which, among other things, include safeguards against getting ripped off by Internet scammers.
 
But less-risky issues need sorting out, too, such as establishing a delivery process, executing it without burning up excessive time and miles and designating who makes the runs.
 
Two Michigan dealership employees traveled miles to home deliver a vehicle that someone had ordered online. But they didn’t like what they saw when they got there.  
 
"The house was shady-looking, and the guy they were delivering the vehicle to didn’t look like the photo on the photo ID he showed them," Tom Carney, a National Auto Dealers Association management consultant, said in relating the account he heard through a dealership connection.
 
"The dealership people," he said, "packed up and went back to the dealership."
 
More and more consumers — especially virus-conscious people who are loath to visit a dealership yet want or need a new car — are opting for doing much of the transaction online and taking possession of the purchased vehicle at their home.
 
"People want home deliveries, but some dealers wonder if it is cost effective," said Jennifer Suzuki, president of e-DealerSolutions, a sales training company. "Are we selling more vehicles because of it? Will (customer satisfaction scores) go up? How do we pay for this?"
 
She raised those questions during an industry webinar on digital retailing. Joining her was the NADA’s Carney and Lynn Short, the CEO of LotLinx, an automotive-inventory marketing technology company.
 
Short said dealership delivery costs are more palatable with high-margin transactions. For example, delivering a $97,400 Porsche 911 sports car is less of a cost-of-business issue than delivering a $15,300 Kia Rio subcompact.
 
He’s confident dealers ultimately will perfect remote selling and home delivering.
 
"Dealers will figure it out as they move to this more efficient structure," Short said. "There will be some trial and error with these new processes and new costs."            
 
A home delivery a few miles away is no big deal, but long-distance deliveries are, Carney said.
 
"How do you pay your people if they are driving two hours to the home and two hours back to the dealership?" he asked, noting that can gobble up half of a workday.
 
In lieu of salespeople delivering cars (which cuts into their selling duties), Carney said one dealer pays a retired finance and insurance manager to do the transporting.    
Dealer culture is changing because of the sudden popularity of digital auto retailing in the COVID-19 age, Suzuki said.
 
But for dealers new at it, "it’s not easy to get down," she said. "Some are struggling. We’re encouraging our clients to continue the battle because you’ve got to give customers what they want. They’ve been saying all along, ‘We want this process easier.’ "
 
Many F&I managers are becoming adept at using online videoconferencing to present products to customers, Carney said. "At first, there was some pushback, because you are not doing it in the F&I office. But now a lot of F&I managers are excited about it.
 
He added: "It’s more subtle selling. The days of the F&I ‘box’ could go away."
 
The swelling of remote sales also raises speculation as to the potential transformation of dealership personnel duties, said Suzuki, who foresees more "combined responsibilities and lower costs."
 
Along those lines, Carney tells of a dealer who assigned his top service adviser to stints in the showroom selling cars.
 
"While he is doing that, an apprentice service adviser covers for him at the service department," he said. "The apprentice is being trained as this hybrid salesperson. It connects service to sales. It’s a unique process. A lot of dealers don’t have the appetite for it. But it’s a new way of doing things."

 

A new media campaign by the CATA touts the ability to visit Illinois dealership showrooms without an appointment and to receive free service for open safety recalls, no matter where a vehicle was purchased.

 

Illinois on May 29 moved to Phase 3 of Gov. J.B. Pritzker’s five-phase Restore Illinois Plan, lifting the restriction that car-shoppers in Illinois had to arrange for an appointment to visit a showroom.

 

Under Phase 3, businesses must limit customers in their showrooms at one time to five customers per 1,000 square feet, excluding employees. If the square footage of the facility is less than 1,000, the number of people is also less than five, based on percentage.

 

The ads also remind the public that due to excess service capacity, now is a good time to have safety recalls addressed at local dealerships. All safety recall work is performed free of charge, with many new-car dealers offering drop-off and pick-up service and loaner vehicles.

 

"Making sure their vehicle is safe should be an owner’s No. 1 priority," said CATA Chairman Bill Haggerty. "Many people are unaware of open safety recalls, a problem that is compounded when you purchase from a private party or used-car dealer. Getting recall repairs completed is always free and, in some cases, loaner vehicles are provided."

 

For consumers more accustomed to private-party transactions, a visit to a new-car dealership also could result in a conquest sale.

 

Norman Edward Zimmerman, 84, a longtime Chicago and Winnetka resident and principal of Schaumburg Lincoln-Mercury, died April 21, 2020.
 
Born in Chicago, Mr. Zimmerman graduated from Theodore Roosevelt High School in Chicago, then attended the University of Illinois and, later, Northwestern Law School. He practiced law for many years before entering the family business, the Lincoln-Mercury dealership, which operated 1976-2012.
 
Survivors include his wife, Barbara; sons Michael and Alan; and step-children Melissa and Stephen.

 

Area winners of FCA’s 2019 Customer First Award for Excellence include Bettenhausen Motor Sales (Tinely Park), Bosak Motors of Merrillville, Fields CJDR (Glenview), Grieger’s Motor Sales (Valparaiso, Ind.), Heller Motors (Pontiac), Liberty CDJR (Libertyville), Marino CJDR (Chicago), Pearl CJDR (Peotone), Prescott Brothers (Mendota), River Front CJDR (North Aurora), South Oak DCJR (Matteson), St. Charles CDJR, Taylor CJDR (Bourbonnais), Tyson Motor Corporation (Shorewood), and Wickstrom CJDR (Barrington).
 
Winners of Honda’s 2019 President’s Award include Continental Honda in Countryside and Valley Honda in Aurora.

 

Bill Jacobs BMW in Naperville and Laurel BMW of Westmont were among 35 U.S. dealerships named BMW 2020 Center of Excellence award winners.

 

John C. Crane (Hawk Volkswagen of Joliet), John Jennings (Jennings Volkswagen, Glenview), John Martino (Bill Jacobs Volkswagen, Naperville), and Mark Muller (Muller Volkswagen, Highland Park) were named members of Volkswagen’s 2019 Wolfsburg Crest Club, for extraordinary sales and customer experience efforts.

 

Charlie Watson, of Advantage Chevrolet of Bolingbrook, is part of the March 2020 graduating class of the NADA Academy.
 
Mercedes-Benz bestowed its 2019 Gold Laurel to Autohaus on Edens (Northbrook), Mercedes-Benz of Chicago, and Mercedes-Benz of Naperville. Winners of the 2019 Silver Laurel include Loeber Motors (Lincolnwood) and Mercedes-Benz of Orland Park.

 

Hanley Dawson IV (Patrick Cadillac, Schaumburg) and Tony Rizza (Rizza Cadillac, Tinley Park) are among 20 winners of the 2019 Cadillac Dealer of the Year Award.

 

Terry D’Arcy (D’Arcy Buick-GMC, Joliet) is one of 22 winners of the 2019 GMC Dealer of the Year Award.

 

Ernest D. Semersky (The Porsche Exchange, Highland Park) is one of 29 U.S. dealers named a 2020 Porsche Premier Dealer.
 
The 2019 Honda Masters Circle honor, given to the top 50 dealerships nationwide in sales volume, was given to Valley Honda, in Aurora.

 

McGrath Acura of Westmont was named a 21-year recipient of Acura’s Precision Team, for exceptional client relations and a focus on a driver-centric buying experience. Arlington Acura in Palatine won the award for a ninth year.
 
Honda Financial Services named the honorees of its 2019 Council of Excellence award. Bill Kay Honda (Bourbonnais) is a 12-year award winner; Honda of Downtown Chicago and Pauly Honda (Libertyville) are one- to nine-year winners of the award.
 
Acura’s 2019 Council of Excellence award winners include Joe Rizza Acura (Orland Park), a 12-year winner; and Pauly Acura (Highland Park), which has won the award one to 11 years.

 

Dominic Pugliani (Pugi Mazda, Downers Grove) is among the winners of the 2019 Mazda President’s Club award.

 

Napleton’s Valley Hyundai, in Aurora, is among the winners of the 2019 Hyundai Board of Excellence award.

 

More than three weeks after they disappeared, the bodies of a North Carolina couple were discovered inside a wrecked car "deep in the woods," according to local police who estimated their vehicle had reached 103 mph at the time of the crash.
 
The incident that claimed the lives of Stephanie Mayorga and Paige Escalera was brutal but far from unique, according to authorities. With traffic down as much as 80% in some parts of the country due to coronavirus lockdowns, there has been an epidemic of speeding, often at triple-digit rates.
 
And while preliminary figures suggest there have been far fewer fender benders and conventional accidents during the past two months, the number of extreme, high-speed crashes appears to have skyrocketed.
 
The National Safety Council reports that, despite the sharp drop in traffic due to pandemic lockdowns, motor vehicle fatality rates jumped 14% in March, with speeding, racing and other behaviors apparently behind the increase.
 
"People (still) on the road have been getting the itch to drive faster," said Susanna Gotsch, director of industry analysis for CCC Information Services, a firm that consults with insurance companies on auto crashes and repairs. As a result, she said, "There has been a pretty significant jump" in crashes resulting in "non-drivable" or "total loss" of vehicles.
 
The data is not yet available to confirm that this jump specifically is the result of motorists driving much faster during the pandemic, but "It points to higher speeds before impact," Gotsch said, noting that "total loss frequency is going up."
  
The numbers might not seem like much, at least at first blush. By mid-April, CCC saw a 2% increase in crashes involving vehicles that couldn’t be driven from the scene, often the case when high speeds are involved. In a normal year, even a 0.2% jump would raise eyebrows, said Gotsch. But the increase was all the more alarming when one considers that, on the whole, "there’s been a pretty significant drop in auto claims" since March, when most of the U.S. was ordered into lockdown.
 
It could take some time before experts have enough data to fully understand what has occurred. Among other things, they will be watching to see if there has been a jump in crashes involving pedestrians and bicyclists, both particularly vulnerable when motorists are speeding.

 

In the wake of the COVID-19 pandemic, car dealerships must consider major changes to adapt to our ever changing society. Many customers no longer feel safe or comfortable entering or exiting businesses, including showrooms and service departments, without the option of not having to grab a frequently touched surface such as a door handle. Dealers can overcome that trepidation with the Record 8100 Automated Touchless Entry System.

 

The Record 8100 swing operator is the ideal solution and the most inexpensive way to retrofit any manually operated pedestrian door and any ADA-compliant push-button door without having to replace it. The technology incorporates motion sensors which signal the door to open once an individual gives a waving motion with their hand. Each unit comes with a 2-year warranty, is rated for more than 1 million cycles, and is installed by technicians certified by the American Association of Automatic Door Manufacturers. 

 

To obtain an estimate or for further consultation, contact Toby Holtz at American Door and Dock at (847) 815-5916 or tholtz@americandooranddock.com.
 

Dealers across the country have been supporting their communities during this time with a myriad of philanthropic giving — ranging from charitable grants to the donations of medical supplies to providing complimentary auto maintenance to first responders, NADA Chairman Rhett Ricart said in a recent video message to dealers, employees and customers.
 
In his message, Ricart underscored the importance of safety. "Safety is our first concern — both for our staff and for the customers who rely on us," Ricart said. "To keep everyone safe, we’re maintaining safe social distancing; we’re wearing personal protective equipment while we service cars and help folks who might need a new or used car during this difficult time."

 

Golf courses in Illinois have reopened, but not to the degree that they can accommodate the CATA’s annual golf outing, which had been planned for June 18 at Cog Hill & Country Club, in Lemont.

 

Upwards of 500 golfers often are drawn to the annual CATA event.

 

Part of the outing traditionally includes the association’s annual meeting during dinner, at which the results of the board of directors election are announced. Those results this year will be announced separately.

Littler Mendelson, the CATA’s labor relations counsel, continues to produce helpful information for dealers and other businesses navigate the current climate. Among them:

 

Updated COVID Response Kit
The kit’s third edition, sent free via email to all dealers on May 27, incorporates recent guidance by the Centers for Disease Control and Prevention on quarantining and returning to work after an employee tests positive or has symptoms, and also incorporates further guidance issued by OSHA in late May on determining whether a COVID incident is "work-related." Previous editions of the kit were sent to dealers March 27 and May 1.

 

COBRA: New notice and election forms released by DOL; Modified COBRA deadlines
Since many businesses either already have implemented layoffs or are about to, they need to know about the new COBRA forms that were released by Department of Labor in May, and also about the modified COBRA deadlines during the COVID outbreak which were established by IRS guidance issued in late May. This notice, sent via email to all dealers May 29, is Littler’s first bulletin to dealers regarding COBRA issues.

 

FFRCA Paid Sick Leave and Paid FMLA Leave policies and forms
Littler sent notice to dealers about these new laws on April 3 and again on April 9 and offered the materials for $250 ($400 for multiple rooftops), but few dealers responded. Dealers at the time likely were focused on Paycheck Protection Program loans and the fact that PPP loans have largely covered continuing pay for all employees during recent weeks. Now that PPP is coming to an end, Littler’s notice will be sent again about June 3.

 

What’s a dealer to do when the OEM is not offering any relief on floorplan expenses, one participant asked during a recent NADA webinar that considered best ideas from 20 Groups. Based on his sales rate, the questioner said he had a 12-month inventory supply.
 
"There is tremendous strength in numbers in the dealer body," said Tom Carney, a 20 Group management consultant who led the presentation. "The best way I see to leverage that is, you get together your fellow dealers that are within your OEM and you basically trade.
 
"If they’re not trading, you need to contact your regional vice president. They are influenced by some of the key dealers, especially if you have worked together with some of your 20 Group dealers, and put together a letter saying, ‘We need to talk about some floorplan assistance, or some sort of bonus or something that is going to help us as dealers to get through this, almost like a Paycheck Protection Program for dealers.' "
 
The OEMs will listen to such an appeal, Carney said, because they only make money when vehicles are sold.