If I were asked to describe the soundtrack playing in the background of my life, it would have to be “Party Rock Anthem” by LMFAO. You might recognize it from Kia’s “Hamsters” commercials a couple years back, or the oft-repeated chorus: “Party rock is in the house tonight/Everybody just have a good time.”
The Kia spots sold a lot of cars and the original music video is fast approaching 750 million hits on YouTube. Some people love the music. Some people love the video. Some people might even love the hamsters. Anything is possible. I love the part of the song when the music stops and the singer says, “Every day I’m shufflin’.”
Well, I have adopted that as my personal theme. I used to say I spent every day hustling. “Shufflin’” is more high-energy, more focused and even more intense.
In the last three months I have traveled and performed more than I ever have in the 28 years since I left retail to become a trainer. The list includes 10 cities, two dealerships, two Ford Direct regional meetings, two 20 Groups and a CRM convention. I just returned from two days onstage at Industry Summit in Las Vegas, and a trip to Boston and two trips to Florida are soon to follow.
The end of 2014 and first few months of the new year will bring more conferences, more dealer association meetings and, of course, I will continue to write three columns a month for the industry’s premier national magazines. Every day in between, I am in my home office, every day, I’m making 100 sales calls, every day, I’m shufflin’. Do you get it now?
I just poured myself a healthy snifter of vintage Remy-Martin Louis XIII Cognac. I have a lot of things to cover in this issue.
A 700-horsepower edition of the Dodge Challenger will compete with a similarly suped-up Dodge Charger as well as 600-plus-hp Corvettes and Mustangs in the 2015-MY.
Zero to 60 in Less Than Three Seconds
It’s insane! Chrysler will soon begin production on 700-horsepower editions of the Dodge Charger and Challenger, both due in the 2015-MY. Considering my 1968 Dodge Super Bee was rated at 335 hp and was one of the fastest production cars of the day, I have to ask, where’s it all going?
Trumping the 650-hp 2015 Corvette Z06 and the 662-hp Mustang Shelby GT500 — and a host of European exotics — Chrysler’s SRT Hellcat line should be the ultimate “Need for Speed” machine, assuming buyers can find a public highway suitably equipped and unguarded to exercise its capability.
Well, hang on, speed freaks. In Monterey, Calif., Brandon Boeckmann is preparing to put his private-label, 1,058 hp Galpin GTR1 supercar in production. He and his team have been showing off the prototype at car shows. Prices will begin at a cool $1 million. I wonder if that includes floor mats.
Boeckmann is the grandson of a friend, Bert Boeckmann of the Galpin dynasty in the San Fernando Valley. The group includes the nation’s No. 1 Ford dealership and a myriad of other super-performing franchises. They stated they only intend to sell six units the first year. I am trying to picture a group of salesmen out in front of the GTR1 showroom, smoking cigarettes and waiting for an up. Will they put an inflatable gorilla on the roof? Only time will tell.
Volvo has shifted production of the long-wheelbase S60 from Stockholm, Sweden, to the Chengdu, China, plant operated by its parent company, Zhejiang Geely Holding Group.
The Chinese Are (Finally) Coming
Let’s climb into our DeLorean time machines and set the dial to 2004. That’s the year Malcolm Bricklin announced he was partnering with China’s state-owned Chery Automobile Co. to export cars to the United States. Bricklin was the visionary entrepreneur who was responsible for bringing Subaru to America, where they earned a great reputation with dealer franchisees. Riding high on that success, he introduced the Bricklin SV-1, a sharp-looking, Canadian-built sports car that was designed to be extremely safe and fuel-efficient. The enterprise was a dismal flop.
Next, Bricklin set his sights on the import market, starting with Fiat and Yugo, and began signing dealers. If you are too young to remember the Yugo, look it up. It was supposed to be cheap and efficient. It turned out to be perhaps the worst mechanical disaster in automotive history.
Several false starts followed, but by 2004, after traveling the world, Bricklin thought he had found the ideal partner in Chery. Official announcements were followed by rumors, presumably started by Bricklin himself, claiming that Chery’s high-quality, highly efficient imports would be priced at less than $4,000.
The industry was abuzz. At the time, many of our industry’s finest talking heads stated with some certainty that the Bricklin/Chery partnership would portend a future wave of cars coming ashore from China.
I wasn’t fooled. In speeches, articles and private conversations, I reminded dealers that China was still run by a corrupt, communist government with the largest standing army on the planet. Chinese companies are notorious for double-crossing their partners by producing counterfeit versions of their products. Just ask the Germans.
Frankly, I wouldn’t blame Chery for copying vehicle designs. Russia is Chery’s biggest foreign market. In 2007, a group there conducted independent crash tests on the Amulet sedan. The Russian magazine that paid for the tests said engineers had to remove the dummies piece by piece after a 40-mile-per-hour frontal impact test. They hadn’t broken apart. They were intertwined with the metal.
All those concerns aside, the main reason I knew it wouldn’t work had nothing to do with China. It was Bricklin himself. At the time, I wrote, “When the Chinese found out that P.T. Barnum was dead, they decided to go with Malcolm Bricklin.” Not long after that, I was the keynote speaker for the New Jersey Coalition of Automotive Retailers’ 2007 convention. Bricklin was also speaking, and he brought along the only dealer who had actually given him the $250,000 franchise fee. I leaned across the table and said to the dealer, “You must be the head of the dealer council, huh?” He didn’t sock me, but it was clear my sarcasm was not appreciated.
In the end, the deal fell apart and Bricklin sued Chery, along with some of its affiliates and officials, for corruption, stealing ideas and reneging on a contract to make him the exclusive North American distributor of the China-built Chery cars. (He settled for $2 million.)
I spoke and wrote at that time that Chinese cars were not going to come ashore until they met U.S. standards. I predicted that an established manufacturer would have to build the cars with their technology and brand them accordingly. You wouldn’t believe how many supposed industry experts called me a crackpot for saying that.
Well, here we are back in 2014, and the first mainstream car built entirely in China will soon hit the U.S. market. Is it a Ford, you ask? GM? Volkswagen? Mercedes? Nope! It’s a Volvo.
Yup, Volvo, which was sold to China’s Zhejiang Geely Holding Group by Ford in 2010, has begun building the long-wheelbase S60 in Geely’s new plant in Chengdu. They are planning to build 120,000 units per year. Until very recently, Geely had continued to build Volvos in Stockholm.
Will this change the landscape? Yes. In fact, it will change everything. As I have predicted over the last decade, the Chinese have formed partnerships with U.S. manufacturers, as well as German, Japanese and Korean manufacturers. We gave them the technology, much like we shared our best technology with Japan after Word War II.
Look for a wave of cheap, poor-quality Chinese cars to hit U.S. shores — including some badged as U.S. domestic and popular import brands. I predicted that Buick and other GM brands were going to build in China and export back to the U.S. as early as 2012. In the late stages of that year’s presidential campaign, Barack Obama’s Republican challenger, Mitt Romney, approved a campaign ad that claimed Chrysler planned to move Jeep production to China. Fiat Chrysler chief Sergio Marchionne denied it, Obama made hay of the gaffe and Romney was embarrassed. Months later, Marchionne pulled an about-face and announced that some Jeep models would indeed be built in China. This story received considerably less coverage.
Now we stand at the precipice of a market dominated by domestic imports. The same manufacturers who took your government’s bailout money are preparing to ship untold numbers of U.S. jobs overseas. And for what? They will soon learn that the Chinese government cannot be trusted, and any short-term savings will be wiped out by long-term costs and a seriously damaged public image. We will all be screwed in the end.
In 2009, Malcolm Bricklin’s attempt to bring China-built cars to the U.S. ended with a lawsuit against his overseas partners. Today, manufacturers are poised to produce vehicles in China and brand them with familiar marques.
The Wolf of Walmart
I have been to Atlantic City many times. I have conducted seminars there, spoken at conferences and consulted nearby dealers. It isn’t the nicest part of New Jersey, and it sure ain’t Las Vegas. Unlike Vegas, where the airport is a stone’s throw from the Strip, the closest major airport is in Philadelphia. The streets and sidewalks around the casinos are nice enough, but you wouldn’t want to stray too far from the bright lights. The surrounding blocks are seedy, dirty and crime-ridden. It’s the kind of place that makes you feel like taking a long, hot shower after each visit.
The Borgata and the Revel were the only hotel-casinos where the Alpha Dawg would rest his head, and the Revel closed its doors over the summer. So did the Trump Plaza and the Showboat, and half of A.C.’s big gaming venues could be shuttered this time next year.
As anyone who has visited Atlantic City knows, with a few notable exceptions, customer service is notoriously poor. They don’t care and it shows. Aside from generating tax dollars, the casino owners appear to have done little to reinvest in their city. They allowed their properties to deteriorate and their neighborhoods to decline.
When Indian casinos started popping up all over the Northeast, gamblers left Atlantic City in droves. Now it’s on its way to becoming America’s largest ghost town.
Dealers, take heed. This applies to you. Competition is increasing, and some of you don’t seem to be paying attention.
I have visited thousands of dealerships over the previous 28 years. Frankly, I am ashamed to set foot in some stores. Even with all the latest factory-mandated renovations, some of your showrooms look like pig pens. Yes, I am a dealer advocate, but some dealerships are a disgrace to the rest of us.
Don’t get me wrong. I despise the manufacturer programs that make every dealer adhere to identical, cookie-cutter models. Those factory stiffs who think uniformity sells cars and trucks are idiots. No manufacturer should dictate the sights and smells that greet your customers. It should be up to the dealer. But many of your dealerships need a serious housecleaning, and some much more than that.
Clean up your showrooms and properties. Take a serious look at your conference and training rooms. Repave your lots and fix the lighting.
How many outdated materials are thrown in corners and stacked against the wall? Display and take pride in your inventory. Make your staff dress and look presentable. Some of your older employees look like bums. Some of your younger ones are displaying too many piercings and too much body art. And they’re all constantly texting. Enough!
This is a people business. Put that damn phone down and pay attention. True professionals come to work well-groomed and dressed for success with a winning attitude.
During the 2012 presidential election, Republican nominee Mitt Romney took Chrysler to task for reports the company planned to move Jeep production overseas. The OEM denied the story at the time but announced plans to build at least one Jeep model in China less than two years later.
Ram and Jaguar Make Noise
If you had told me this 10 years ago, I would’ve said you were nuts: The latest rankings from Consumer Reports say the Ram 1500 EcoDiesel beat out every competitor in its category to earn the No. 1 ranking for quality, performance and fit and finish. At 27 miles per gallon, the Ram turbodiesel dramatically outperformed trucks from Ford, GM, Nissan and Toyota in a category in which 20 mpg is average.
Consumer Reports remains a popular source for impartial, unbiased quality tests on which Americans base their buying decisions. This summer, USA Today reported that the EcoDiesel was turning on dealers’ lots every 13 days. The gasoline-powered 1500 lagged way behind with a 78-day average turn.
In other news, Jaguar is about to come roaring back.
Everything I am reading, seeing or hearing on the streets tells me to watch this manufacturer. They are going to have a huge impact on the luxury car market, stateside and worldwide.
Now, for as long as I can remember, Jaguar has been plagued with quality issues and uncompetitive pricing. When then-Ford CEO Jacques Nasser was buying up international brands back in the late ’90s, Jaguar turned into a $2.5 billion loss for the company. When I heard that India-based Tata had acquired the brand, I wrote it off as a laughably bad move.
Well, my apologies to my friends at Tata. They chose to keep manufacturing in Great Britain, which was brilliant. They are well-financed and innovative with completely outside-the-box designs. They offer a true alternative to BMW and Mercedes-Benz, which, in my opinion, have become boring and complacent in design.
The introduction of the Jaguar XE is aimed directly at the BMW 3 Series, Mercedes C-Class and Audi A4. The lineup will include gasoline, diesel and hybrid options, all with an aluminum body.
I have seen the advance photos and performance results. My prediction is that this is only the first shot and it’s aimed directly at the Germans. Look for this manufacturer to come on strong in every luxury and performance category formerly dominated by German manufacturers.
Before you chalk this prediction up to the Cognac, think about this: Tata is well-financed and willing to throw money at the race. How do you beat the Germans at their own game? Why, you hire Germans, of course, and that’s exactly what they’re doing. Look for Tata to continue to drain management, designers and engineers away from the Old Guard back in the Fatherland.
In my opinion, BMW and Mercedes have become too self-absorbed. They believe their own hype. They have become so focused on each other that they didn’t notice Lexus and Audi sneaking back into the game. Even Cadillac is making some serious new product. The ATS coupe was an unqualified success, and have you seen the Elmiraj concept?
All of Caddy’s new product will be coming at us in rapid fire under the supervision and innovation of their director of exterior design, Bob Boniface. I like this guy and his work is going to shake things up across the industry. If only Lincoln could get its mojo back.
Well, the snifter only has one sip left and the dog needs to use the backyard. I have a lot to do before I hit the road again next week, but keep those calls and emails coming and please find me on Facebook and Twitter. I’ll be here with a fresh column next month. Until then, every day I’m shufflin’.
Jim Ziegler is president of Ziegler SuperSystems Inc. and one of the industry’s most recognizable experts, trainers and speakers. JZiegler@AutoDealerMonthly.com