Ford Opens Pop-Up Stores in California to Fight Honda, Toyota

http://blogs.wsj.com/drivers-seat/2012/11/15/ford-opens-pop-up-stores-in-california-to-fight-honda-toyota/

On Thursday night, Ford will open its fourth pop-up store on Market Street in downtown San Francisco, throwing a party intended to draw in curious and perhaps skeptical West Coasters.

In each quarter this year, Ford has used a vacant space for a “Go Further” shop for 30 days. People who come in can’t buy anything, but they can take a look at a few Ford cars and participate in uniquely themed activities. Ford says they are trying to make a positive impression on locals, improving the image of the brand and getting people to look at their cars.

In California, Ford is well behind Japanese rivals Toyota Motor Corp. and Honda Motor Co.

Indeed, Ford doesn’t have a dealership in the city limits of San Francisco.

The store that opens Thursday will be film-themed. People who drift into the store can do a casting call for chance for a role in an independent movie Ford is sponsoring. Other shops offered fitness classes, cooking classes and competitions and art galleries, said Travis Calhoun, who handles Ford marketing in the Western U.S.

“We have increased purchase consideration and brand favorability in the region around the stores,” Calhoun said. Each store has gotten progressively more visitors and the final store is expected to build on that trend because of its location in a prime foot traffic area. Ford said it has generated about 10,000 dealer leads from the events.

Each month, Ford executives talk about how its products are starting to sell well in the Sunshine State. It’s important because one in 10 new cars in the U.S. are sold there and it’s also been a challenging location for domestic auto makers. Calhoun said the San Francisco region, which is one of 22 regions Ford differentiates in the U.S., has had the second-largest sales increase this year and has grown 17% year-to-date.

According to Polk, a firm that provides research based on registration data, Ford’s sales at dealerships in California made up about 8.75% of all sales compared with Toyota’s 23% and Honda’s 15%. This number doesn’t include fleet sales. Hyundai Motor Co.’s market share, which has one third the volume of Ford nationally, has even higher retail sales than Ford in California. Ford’s national market share is about 15%, a figure that includes sales to commercial fleets and retail sales to consumers.

Marketing chief Jim Farley said Ford is a challenger brand in California, meaning it has to conquest sales from people who normally would only consider Toyota or Honda.

Indeed, Farley has said even taken steps to hide the Ford name in commercials and on certain vehicles so that people don’t just shut down and immediately disregard the vehicle.

Digital Drives Auto Shopping

THE RUNDOWN

In-market auto shoppers are doing their digital homework. Auto video research is on the rise and mobile usage has increased 35% year over year. The good news for auto brands? These shoppers are open to influence, with nearly three in four shopping across brands.

Access here: http://ssl.gstatic.com/think/docs/digital-drives-auto-shopping_research-studies.pdf

General Motors Trying Online Car Sales
Wall Street Journal
General Motors plans to expand a new online shopping tool that allows customers to bypass showrooms when buying new cars. The Detroit automaker will give the web-based application, called Shop-Click-Drive, to its entire dealer network. Acting a bit like third-party sites, letting new-car buyers use their computer screen to lock in the price of a new car, get an estimate of the trade-in value of their old car, apply for financing and even arrange a test drive or delivery of their new vehicle.

 

Business

GM Prods Dealers to Sell Cars Online
Software Lets Shoppers Bypass the Showroom

By

Christina Rogers

Oct. 6, 2013 8:01 p.m. ET

General Motors Co. plans to expand a new online shopping tool that allows customers to bypass showrooms when buying new cars.

Debbie Mahaffy bought her Camaro online, helped by email. Neil Blake for The Wall Street Journal

The software, which keeps GM's 4,300 dealers central to the sale of its vehicles, will provide a high-profile test of whether the auto maker can better cater to online-savvy consumers without running afoul of state franchise laws that give dealers exclusive rights to sell most new cars.

By the end of this year, GM plans to extend a Web-based application, called Shop-Click-Drive, to its entire dealer network. The app would let new-car buyers use their computer screen to lock in the price of a new car, get an estimate of the trade-in value of their old car, apply for financing and even arrange a test drive or delivery of their new vehicle.

GM's app acts as an electronic door to its independent brick-and-mortar dealers, and so represents a cautious step toward adapting to consumers whose experience with online shopping for appliances and other goods has made them less willing to visit showrooms.

"This is just another way to close" the customer deal, said Lenny George, general manager at Berger Chevrolet in Grand Rapids, Mich. Neil Blake for The Wall Street Journal

State franchise laws that protect car dealers mean their pivotal role in auto sales will remain intact. The dealers prefer doing business face to face because it also lets them sell auto buyers more-profitable service work, add-ons or finance and insurance products as well as new cars. New-car sales is one area that has been largely insulated from the online retailing revolution that already has pummeled booksellers and appliance stores.

Tesla Motors Inc. has tried to push the boundaries of franchise laws by selling its luxury electric cars exclusively through its website and a small number of company-owned stores. Tesla argues that franchise laws don't apply to its operations because it has never had franchised dealers.

GM dealers aren't required to participate in the project, and GM officials say they have had some dealers turn it down. One potential sticking point is that the auto maker for several years has pressured dealers to undertake costly makeovers of their stores—investments that could be undermined if more shoppers buy online. About 100 other dealers have signed up so far through a pilot launched in January in Michigan, Minnesota, Wisconsin and Arizona.

"My initial reaction was we have investment in brick and mortar, and they're trying to come up with an idea contrary to that," said Todd DeNooyer , general manager at DeNooyer Chevrolet in Kalamazoo, Mich., which was among the first batch of dealers to test GM's shopping app.

But Mr. DeNooyer said he was intrigued by the idea because he is an Amazon.comcustomer and was curious to see if a similar business model would work for autos. "We're trying to gear it to millennials who want to take it as far as they can online," he said.

GM also is aiming to win over shoppers like Debbie Mahaffy , of Gladwin, Mich., who said she didn't want to take time off work to go to a dealership to buy a car.

She knew exactly what she wanted—a 2013 Chevrolet Camaro—so she completed the entire process online and over email, ultimately buying the car from a dealership about 125 miles away and having it delivered to her workplace.

"I never even walked into the dealership or met my salesperson," said Ms. Mahaffy, a 46-year-old office administrator. "I never even test-drove it. I wanted to do everything strictly by email."

Only after hearing some feedback from friends about her experience did it strike her as unusual. "I just thought that's how people do things now," she added.

It certainly isn't how most new car sales are sold. "Other auto makers have looked into this, but GM is the first to bring it to prime time," said John Giamalvo , director of dealer strategy for car-shopping website Edmunds.com. "There has been a slow creep to this model for the last five years now."

GM says the program isn't intended to replace dealers or their showrooms, but rather to give its dealers a way to reach a growing group of customers, many of them young and tech-savvy, who prefer to complete transactions online and skip the showroom ritual.

"There are a lot of people who do things online, and those customers are asking the question: 'why can't I buy a car online?'" said Jim Bement , manager of the online-retailing project for GM. "This more or less satisfies that urge."

Of the 900 cars sold so far through the Shop-Click-Drive program, only five have been delivered directly to customers. The vast majority of buyers chose to pick up their new purchases at a showroom.

"When this was first introduced, there was a lot of talk: 'Well, GM is eliminating the dealerships. They want to be Tesla,'" said Lenny George , general manager at Berger Chevrolet in Grand Rapids, Mich., whose store was selected to test the program. "To me, this is just another way to close the customer [deal]," Mr. George said. "It's a selling tool."

Reverse car auction business targets women

Kate Jones
Published: March 25, 2013 - 5:21PM

Shoshi Vorchheimer saw a business opportunity when a female friend recounted her discomfort car shopping. It was a familiar tale – woman goes to car dealership, woman feels inferior.

“Here we are, working women contributing to the household income, our money’s as good as anybody else’s and you still hear of this happening,” Vorchheimer says, adding, "the whole notion seemed ridiculous.” So like many businesses, Vorchheimer’s was born out of frustration that fuelled inspiration.

Dutch Auction Auto aims to help women, and some men for that matter, navigate the male-dominated world of car buying. It operates solely online and while dealers list cars on the site, there is no face time between salespeople and buyers, except when it comes time to pick up the car.

Vorchheimer says this made many clients breath easier. “The dealer and buyer remain anonymous until the end of the auction,” she says.

Vorchheimer isn’t the only one trying to make the automotive industry more female-friendly. In 2000, Juliet Potter launched Autochic, a car site that advises women on how to buy a vehicle.

Last year car dealer AP Eagers, which employs about 3000 people in dealerships across the country, ran job ads calling for female workers in an effort to redress its 80 per cent male and 20 per cent female ratio.

Both Potter, AP Eagers and now Vorchheimer have established their businesses on the notion that women are just as involved as men when it comes to making a decision to purchase a car. According to Autochic’s research women now buy more than 60 per cent of all new cars and make the final decisions in 85 per cent of all decisions about buying a new car. Nevertheless, Autochic’s data shows 89 per cent of women still report a negative experience in their dealings with the car industry.

“I remember going into a dealership with my kids and the salesmen would look with horror at the children,” Vorchheimer says. “It was just such an awkward situation. There had to be an easier way. I wanted to take gender out of the equation.”

Vorchheimer runs her website on the side while juggling her full-time job as a secondary school English teacher and role as a mum to four children aged under 13.

It was while she was on maternity leave last year she began developing the Dutch Auction Auto business. “I thought, ‘Now’s my chance – it’s now or never’.”

Vorchheimer began by getting car dealers across Australia on board with her ‘Dutch’ or reverse auction concept. In such an auction buyers nominate their starting price and sellers bid against each other to beat that price. The seller with the lowest price wins the auction.

“We have an advantage in that people who come to our site already know what they want,” Vorchheimer says.“The reverse auction is a new concept, but already we’ve had a fantastic result.”

But how do you sell a new sales technique to car dealers, some of the best salespeople in the business?

Vorchheimer says getting the car dealers on board was a lengthy process, but once the first dealer signed up others were keen to be involved. At last count, Vorchheimer had 320 dealerships listed on Dutch Auction Auto.

Securing funding was even more difficult than convincing the car dealerships to come on board. “The hardest thing was going to the banks. When you get turned away it’s easy to feel despondent but you’ve just got to keep going,” she says.

The site launched in December last year and much to Vorchheimer’s surprise, a BMW was the first car to go under the hammer. She had expected her target demographic to buy mid-priced cars, not luxury labels.

The web site has needed some minor tweaks since going live. For instance, the site now advises buyers to kick off with a price 10 per cent below the recommended retail price to start the bidding war. This had to happen, says Vorchheimer, to prevent buyers listing ridiculous prices.

The site also demands a deposit from buyers to ensure they are committed to a sale. This protects the dealers from time wasters and also guarantees Vorchheimer’s site deals with genuine buyers.

With the help of a silent investor, five staff and some notable female backers including former newsreader Tracey Spicer and ABC broadcaster Lynne Haultain, Vorchheimer expects Dutch Auction Auto to continue changing as it garners more buyers and more feedback.

This story was found at: http://www.smh.com.au/small-business/reverse-car-auction-business-targets-women-20130321-2ghfc.html