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Friday
Sep122014

Vroom Room

Good Morning!

Its Friday, its the Vroom Room, the cappuccino and biscotti are served, join the conversation, leave a comment.

Its always been part of the Ferrari history that if they do well on the track, they do not so well in the showroom, and vice versa. Its interesting to see Luca de Montezemolo leave Ferrari after over 2 decades, and replaced by Sergio Marchionne. 

From our perspective de Montezemolo was part of the "old guard" under Gianni Agnelli, and Sergio is part of the "new guard" under John Elkann. Obvious the new guard is increasingly exerting its muscles and influence within the FCA empire.

Should we be worried about Luca de Montezemolo losing his job at Ferrari? What do you think?

Within the bowels of Daimler, AMG has become a jumping point for the career vector of individuals. A couple of days ago the AMG GT halo car was presented to the world. The car looks like it was done by someone on a career vector that lacks the passion, understanding, perspective of what they were trying to do. "Lets take the roof line and quarter window of a 300SL coupe, the back end of a 911, and graft it to the front of an SLS"...."As an encore we will come up with a black edition with a carbon fiber spoiler".

Fascinating to see Mercedes win on the track with a superb F1 power unit, while Ferrari philosophically never got their heads around the F1 power unit concept. 

If you are of the opinion that a Corvette Z06 is an abosolute steal for the level of performance, we agree with you.

A cool video on the new Jaguar XE...Click.

We call it the Pontiac Saga, the ongoing court case of GM Dealers vs GM that is developing in Toronto. Its always fascinating when folks start washing their laundry in public.

Tomorrow is the start of the Cobble Beach Concours d'Elegance.

Our usual old race cars from the US Vintage Grand Prix at Watkins Glenn.

 

 

 

Thursday
Sep112014

Land Rover

Cool truck and photography...enjoy!

 

 

Wednesday
Sep102014

The Pontiac Saga

Some issues seem to have a life of their own. The Pontiac saga in Canada continues to endure.

We have always been of the opinion that losing Pontiac deeply affected GM sales in Canada. In addition to greatly assisting Korean manufacturers in quickly establishing additional sales points.

Not only did GM close Pontiac sales points, created internal turmoil; it quickly assisted its Korean competitors. 

Some Pontiac dealers in desirable "open points" for the Koreans did well, and very quickly. Other dealers did not do so well. In addition to the various buy and sell side agreements to ideally consolidate the GM dealers into the ideal "full line" representation.

It begs the question "How much sales momentum did GM lose in Canada?"

A few years ago we were reading about various legal positions regarding the closings, and the various players and stakeholders that were involved. Back then it seemd a little complicated, and convoluted.

Yesterday the trial started, this article in the Globe and Mail provides a glimpse of the proceedings, stakeholders, conflicts.

It will be interesting to see how these legal proceedings develop, and who will come out ahead.

 

 

Tuesday
Sep092014

Free Flowing Money

In the auto business we all know that the product is 50% of the equation to create a customer. We should mention that in 2014 the product must not only be good (they are all inherently good) it must also be inspiring

We have often wondered through the years what would happen if all manufacturers, or most of them fired on all cylinders in Canada.

What would happen to sales?

So far this year we have the answer...sales are through the roof.

Decades ago we discovered that a compelling financial package is a valuable asset to the product. Again this year we are seeing the dramatic impact of a strong financial package/incentive. In making a solid contribution to sales.

Most pundits are wondering how long can this keep up, we believe that it can keep on forever, its the new rule of auto retailing. 

When money flows freely, and at low rates, the financial institutions making the credit decisions, be it humans, or sophisticated software. These folks always take into consideration the "risk factor" of their decisions.

We also constantly read that CMS (Citizen Main Street) in Canada is enduring a lofty credit limit, if not overextended, certainly close to the red line, perilously close.

Here is the deal:

The money is flowing freely, at low rates, but increasingly it has less places to go while remaining within acceptable risk parameters. 

What do we mean:

CSM walks into a showroom, with a $10,000 trade in, with a balance of $13,500. owing on the trade, considering a $25,000 new vehicle, with a monthly payment close to the current payment (extending the loan term). 

The credit rating of CSM is good, the current vehicle outstanding balance is $13,500. the monthly is the same or close, but now the outstanding balance jumps to $27,000. (this is a simple example, dealing with a deficiency and down payment)) which doubles the "risk factor".

The result:

Its the canary in the coal mine, its happening now; loans for a CSM with a good credit rating are not being approved due to the heightened risk factor.

What are your thoughts? Leave a comment.

 

 

Monday
Sep082014

The New Rules of Selling

We all know, we all heard about it, hopefully most of us practice it. A refreshing summary on the rules of selling...

We urge you to share with your freinds and collegues.