WHERE’S THE BRIEF …

Your quick guide and links to our latest dealer blog posts

 

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One word captures SC’s dealer and customer focus for 2018

SC wants to help dealerships provide a better experience for customers

Survey reveals vehicle brands and models that boast most-loyal customers

Direct Mail Delivers Targeted Dealer Program

Santander is all about giving dealers a funding option in 2018

How to squeeze more revenue, profit out of your new-car sales

Adding up the reasons Santander Consumer is good for your business in 2018

Customer’s ‘Road Ahead’ on redesigned SC website – and what’s in it for dealers

 

The Next Page

Auto industry’s 2017 sales decline a glimpse of the future?

Used- and new-car margins continue under pressure but dealers optimistic

 Hiring for keeps: A four-part survival guide for 2018 and beyond

How to steer your dealership through traffic in 2018 and beyond

Where is your dealership headed in 2018?

With the industry anticipating slackening demand for new vehicles, and only slightly higher demand for used-car sales in the coming year – and for the foreseeable future – it means one thing.

Dealers must look for other sources of revenue and profit to steer their businesses into the future.

“It’s time to … identify ways your dealership can continue to generate profit amid this post-peak environment and growing demand for a streamlined car-buying experience,” wrote Paul Whitworth in Look Back in the Rearview to Illuminate What’s Ahead for CBT Automotive Network.

110717 IL Personal touch important, even though car shoppers want digital options

So, here’s what he’s talking about to offset slower sales and margin compression.

A close look at last year’s results, when the automotive retail industry as a whole realized just 0.4 percent profit, “suggests that not enough retailers are taking advantage of other, perhaps more profitable, sources of income [than vehicle sales],” wrote Whitworth, an executive at Dealertrack.

Those areas are:

  • Fixed operations
  • F&I sales
  • Process improvements

Fixed operations

Citing Cox Automotive, Whitworth writes that “less than one in three service visits are being conducted at a dealership. This is a huge missed opportunity for renewable, reliable sources of income, not to mention customer retention and loyalty. And the failure starts at the point of sale.”

“Why not leverage the opportunity and make fixed operations an integrated part of the sales process. Sales-to-service turnover shouldn’t be an afterthought,” writes Whitworth. “It should be an imperative part of the sale of every new and used vehicle.”

F&I sales

“F&I sales have huge profit potential,” writes Whitworth, suggesting that for “every dollar a dealership generates through F&I, it retains about 70 to 80 cents.”

But that probably means you must streamline your F&I sales process.

“Offering optional add-ons, including extended service plans … by a separate department, in a separate office, after the close of a sale” creates a costly disconnect, Whitworth writes. “But some dealerships have started to implement a sales-F&I hybrid approach” guiding the whole deal.

Process improvements

This includes better employee training, better technology and better internal processes.

“In the car business, time is money, so find ways to reduce holding costs, make your employees happier, and your technology more accessible, integrated and user friendly,” he writes.

“You’ll find that a few changes and improvements … will go a long way toward increasing profits and making your business more appealing to customers and employees, alike,” writes Whitworth, making it “the starting point” for a stronger business in 2018 and beyond.

One word captures SC’s dealer and customer focus for 2018

We are “maniacally” customer driven.

That was the essence of keynote comments by Scott Powell, CEO of Santander U.S. and Santander Consumer USA, at the SC national sales meeting recently in Fort Worth.

And it represents a powerful message for more than 14,000 dealers with which SC works.

A key priority for the SC sales team is to “improve the dealer experience … being maniacally focused on customers, and building long-term relationships with dealers,” according to Powell, who addressed an audience of more than 200, including about 170 sales team members.

021518 IL One word captures SC’s dealer and customer focus for 2018“Success depends on our ability to differentiate ourselves,” the CEO said, acknowledging a “challenging” 2017 but with “changes in place to fuel growth” with dealers this year.

Powell wasn’t the only executive to address SC’s renewed focus on dealers’ success for 2018.

RELATED

Adding up the reasons Santander Consumer will be good for your business in 2018

Santander is all about giving dealers a funding option in 2018

“What we do every day matters a lot to our dealers,” said Rich Morrin, president of Chrysler Capital & Dealer Relationships at SC. “[And] what the dealer thinks drives what we can accomplish.”

That means SC is doing everything possible to boost dealer results, which includes refreshing, even revamping, our programs to ensure that dealers who work with us see the difference. SC wants your store’s business and will work harder than ever, “maniacally,” to earn it this year.

That includes better pricing across the credit spectrum with our new scorecard, and being “proactive to market conditions and the ever-growing needs of our dealer partners.”

Other program highlights are:

  • Fewer stips making it easier to submit more packages to SC.
  • Greater flexibility on financing terms.
  • More-efficient funding.
  • Increased participation.
  • Higher LTV/PTI allowances with higher FICOs.
  • The opportunity for more backend in some tiers.
  • Decreasing fees on better-quality packages in most cases.

Our team of area sales managers (and regional sales managers) are knowledgeable auto-lending professionals who can help dealers navigate the process of securing more deals with SC.

If you’re not getting the results you want, just ask your ASM how we can help accelerate your business.

Why the DFW Auto Show is worth the drive for industry insiders

It’s like your dealership’s showroom, but bigger.

A lot bigger, unless you have a showroom of more than a half-million square feet like the floor of the Kay Bailey Hutchison Convention Center in Dallas, TX.

But a giant showroom floor filled with gleaming cars, trucks, SUVs, crossovers, minivans and exotics – and crowded with shoppers, company representatives, auto enthusiasts and the just plain curious – is what you will find at the DFW Auto Show running tomorrow through the weekend.

It’s a good place to get a look at where the industry is – and where it’s headed – as the show will feature about 700 models from nearly 40 manufacturers, including a few 2019 models, and providing the “ideal opportunity” to compare design, styling and pricing of every major line.

Photo credit: Ford Motor Company via newspressusa The 2019 Ford Ranger pickup will be one of the featured vehicles at the DFW Auto Show.

Photo credit: Ford Motor Company via newspressusa
The 2019 Ford Ranger pickup will be one of the featured vehicles at the DFW Auto Show.

Show organizers didn’t miss the opportunity to link the event to Valentine’s Day on Wednesday.

“The DFW Auto Show is taking the love affair with the automobile to a whole other level,” said a press release about the event, which runs through Feb. 18.

“As someone who grew up in the automotive industry, I love cars,” said Don Herring, Jr., chairman of the auto show, which is produced by the Dallas-Fort Worth Metropolitan New Car Dealers Association. “And if the annual attendance at our shows is a proper gauge, consumers in the Metroplex love cars too.”

The trade association comprises about 200 franchised dealerships in 11 North Texas counties that represent more than $10 billion in new- and used-car sales annually.

The DFW show falls between larger North American (Detroit) and New York international auto shows.

Besides a lineup of all-new or redesigned 2018 models, the show will feature 2019s including:

  • Ford Ranger, Edge and Mustang Bullitt Specialty Vehicle
  • Hyundai Veloster
  • Jeep Cherokee
  • Lincoln Nautilus and MKC
  • Porsche Cayenne
  • RAM 1500
Photo credit: General Motors via newspressusa The 2018 Buick Enclave will be one of the current year’s models in the spotlight.

Photo credit: General Motors via newspressusa
The 2018 Buick Enclave will be one of the current year’s models in the spotlight.

This year’s models in the spotlight include:

  • Alfa Romeo Stelvio
  • Buick Enclave
  • Chevrolet Equinox and Traverse
  • Ford Expedition and F-150
  • GMC Terrain
  • Honda Accord and Clarity Plug In
  • Hyundai Sonata
  • Infiniti Q50
  • Jeep Wrangler
  • Kia Stinger and Rio
  • Lexus LS 500 and RX 350L
  • Mercedes-Benz E400 Coupe
  • MINI Countryman Plug-In Hybrid
  • Mitsubishi Eclipse Cross CUV and Outlander PHEV
  • Nissan LEAF
  • Porsche Panamera
  • Rolls-Royce Phantom
  • Subaru Crosstrek
  • Volkswagen Atlas and Tiguan

In addition, The High End area includes vehicles from Aston Martin, Bentley, Maserati, McLaren and Rolls-Royce, the return of Lamborghini and Ferrari, and first-time exhibitor Karma.

Don’t miss this show, because there’s a good chance your competitors won’t.

Photo credit: Aston Martin via newspressusa The Aston Martin DB 11 also will visit the DFW Auto Show.

Photo credit: Aston Martin via newspressusa
The Aston Martin DB 11 also will visit the DFW Auto Show.

SC wants to help dealerships provide a better experience for customers

A win for car dealers.

That means providing three things shoppers crave from dealerships and lenders: convenience, efficiency and transparency in researching, financing and purchasing a vehicle.

And these are what Santander Consumer USA (SC) seeks to provide through its new relationship with AutoFi mobile platform, which will allow the national auto lender to “streamline and simplify the vehicle-buying process for consumers, while giving dealers a robust digital sales channel.”

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“Working with AutoFi is a win for consumers and a win for dealers,” said Rich Morrin, SC’s president of Chrysler Capital and Auto Relationships. “Our customers get a faster, easier and more personal car-buying experience, and the technology facilitates a more streamlined process for our dealers.”

The AutoFi platform connects dealers, shoppers and finance companies to allow the lease or purchase of a new or used car through a dealership’s website whether shopping online, in the dealership or both. The company is different than some existing digital platforms, SC said, because it doesn’t just prequalify shoppers for a loan on a specific vehicle and it enables them to pick a lending offer themselves.

The aim, according to AutoFi, is to enable shoppers to “purchase vehicles online in minutes, not hours.” It will be available in the second quarter of the year.

AutoFi’s network of finance companies provides consumers with a range of real-time financing options, the ability to customize their financing terms and to evaluate optional products for their vehicles.

“Santander Consumer USA has a clear focus on using technology to enhance the customer experience,” said Keven Singerman of San Francisco-based AutoFi. “Together we look forward to delivering a convenient and transparent vehicle purchase journey.”

Santander Consumer USA is a full-service consumer finance company focused on vehicle finance, third-party servicing and delivering superior service to more than 2.6 million customers.

“Customers demand the same digital and e-commerce-like experience when buying a car as they do in other areas of their lives,” said Manuel Silva Martinez of Santander InnoVentures, a financial technology venture capital fund of Banco Santander, SC’s parent company. “AutoFi is enabling car manufacturers, dealers and car-selling platforms to adapt to the changing customer needs.”

Survey reveals vehicle brands and models that boast most-loyal customers

Brand loyalty.

It’s a pillar of the automotive business.

Obviously, you want to keep the customers you have – and get more if you can. Some models, makes and manufacturers are just better at it than their competitors.

And some are the best of the best.

The latter receive Automotive Loyalty Awards from IHS Markit, a London, England-based, global research company with an automotive practice in product planning, marketing, sales and aftermarket.

013018 IL Survey reveals vehicle brands and models that boast most-loyal customers

And the top manufacturer for model year 2017, announced at the Automotive News World Congress: General Motors – for the third year in a row.

Besides General Motors, brand winners in the 22nd annual awards, are Ford, overall make; Jeep, conquest percentage; Lincoln, dealer loyalty; Buick, most-improved loyalty to make, and Jaguar, most-improved conquest percent. Jeep’s win also was a three-peat, while Ford’s streak goes back seven years.

“Three years as the industry leader in loyalty shows that the customer-focused investments our brands and our dealers are making in new products, new facilities and the ownership experience continue to pay off,” said Alan Batey, president of GM North American and Global Chevrolet. “Industry-leading loyalty and strong conquest sales are leading to the most robust growth we have seen in decades.”

Most-loyal customers

About two-thirds of customers of GM (69.1 percent) and Ford (63.4 percent) remained loyal to their brands when buying or leasing in 2017, according to IHS Markit. Overall, a record 53.6 percent – more than nine million – of new-car customers returned to the market to purchase or lease another vehicle from the same make they already owned, IHS Markit said.

“Lincoln was found to be the brand with the highest loyalty to dealer, with 48.5 percent of all Lincoln owners returning to a Lincoln dealer for another vehicle in the 2017 model year,” IHS Markit said.

Also notable in brand results is Toyota’s strength in ethnic markets, leading that category overall, as well as Hispanic, Asian and African American markets individually.

Segment awards went to 24 mainstream and luxury vehicles with high customer loyalty.

Mainstream winners

Repeat winners for mainstream model segments are the Honda Accord, traditional midsize car; Nissan Maxima, traditional full-size car; Chevrolet Volt, traditional compact; Dodge Challenger, mid-size sports car; Volkswagen GTI, sports car; Jeep Grand Cherokee, midsize SUV; Subaru Outback, midsize CUV; GMC Yukon Denali XL, full-size SUV; Ram 1500, half-ton pickup; Ford F-Series, three-quarter to one-ton pickup, and Jeep Wrangler, compact SUV. The Outback and Yukon Denali XL scored three-peats, while the Jeep Wrangler’s segment dominance goes back at least five years.

The Mini Countryman; Honda Odyssey, midsize van; Honda Ridgeline, midsize pickup and Chevrolet Equinox compact CUV replaced 2016 model-year mainstream segment winners.

Top luxury models

Repeat luxury winners are Lexus ES, traditional midsize car; Mercedes-Benz S-Class, traditional full-size car; Lincoln MKZ, traditional compact car; Porsche 911, luxury sports car, and Lincoln MKX, luxury mid-size CUV. New segment winners are the BMW X1, luxury traditional subcompact; Lexus GX, luxury midsize SUV; Land Rover Range Rover, luxury full-size SUV, and Lincoln MKC, luxury compact CUV.

“Our Automotive Loyalty Awards program continues to demonstrate the focus automakers, brands and their dealer networks place on winning back and conquesting customers … industry leaders that are working to improve their loyalty efforts year over year,” said Joe LaFeir of IHS Markit.

IHS Markit loyalty award winners by model year are available here: 2017, 2016, 2015, 2014 and 2013.

When you want to boost results …

Santander is all about giving dealers a funding option in 2018

Our sales team has set ambitious goals for 2018.

And that means more opportunity this year for our dealer partners to get deals funded for both new- and used-vehicle customers.

But the reason goes beyond refreshing or revamping programs, which we also have done.

More than 150 Santander Consumer USA (SC) area sales managers (ASMs), inside sales managers (ISMs) and regional sales managers (RSMs) – your main connections to SC – are prepared to tell you clearly and simply why you should work with us in 2018.

012318 IL Santander is all about giving dealers a funding option in 2018The message they will deliver?

“We simply offer an option to our dealers that they may be missing out on if they didn’t submit their apps to us,” said one presenter at SC’s national sales meeting earlier this month in Fort Worth, TX. “We’re providing another opportunity to make more deals happen.”

RELATED

Adding up the reasons Santander Consumer will be good for your business in 2018

Of course, we know that, ultimately, the job is about making sales numbers – yours and ours – monthly, quarterly, annually, whatever market conditions are in 2018.

That’s why we want to provide your dealership with another funding option.

Even if you don’t choose Santander Consumer USA for a particular deal, at least you have that choice.

And we’re confident that you will choose to work with us often because you’ll decide that we have the best deal overall for you and your customer because of our revamped program.

“SC offers a program that covers about 80 percent of the population who wish to purchase a vehicle,” the presenter said. “We give our dealers access to our program without interference to make the best decision about where their business should go based on the best call they receive.”

Santander Consumer USA believes your dealership should have as many options as possible to find the best deal for your customers, and that our full-spectrum program will enable you to fund enough deals to make it worth your while to submit most of your applications to us.

Sure, our sales team also will tell you how our programs have become more competitive – including better pricing, fewer stips, greater flexibility on terms, more-efficient funding, increased participation – which you can see for yourself in a previous blog post.

But it’s the why that will make the difference – the option, your option. It’s why thousands of dealers nationally already see the opportunity of including SC among their lenders.

How to squeeze more revenue, profit out of your new-car sales

Are you leaving money on the table when you sell a new car?

With greater competition for fewer sales opportunities expected through 2018, sales of accessories becomes an even more important revenue – and customer experience – opportunity.

“Nearly half of all new-vehicle buyers plan to accessorize … [with] sales of accessories a nearly $40 billion market annually,” according to the Auto Accessories Trend Report from Reynolds & Reynolds. “Consumers who accessorize spend more than $200 [and] nearly a quarter spend $1,000 or more.”

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“Today’s consumers desire personalization to transform the vehicle from “a car” to “my car,” reported R&R. “That means customizing the vehicle with everything from floor mats and window tint to custom paint and remote starter systems to trim kits and interior illumination.”

But here’s the rub … “While consumers say they prefer to purchase accessories at the dealership, fewer than 5 percent do. The reason: Dealerships aren’t actively offering accessories to their buyers.”

Yet 150 dealers from 23 brands surveyed by R&R that are using process and technology to improve their results captured $59 million in accessories sales, with more than $33 million in profits, breaking down to about $350 per customer in sales and nearly $200 in profit.

Top 10 accessories by volume:

Floor mats; window tint; protection products; factory exterior; alarms, remote starts and recovery; body side moldings; step bars; factory interior; wheel accessories, and hitch and accessories.

Top 10 accessories by revenue:

Protection products; alarms, remote starts and recovery; step bars; floor mats; window tint; upholstery; body side moldings; tonneau covers and bed caps; dealer packages, and bed liners.

Top 10 accessories by profit:

Protection products; alarms, remote starts and recovery; window tint; step bars; body side moldings; upholstery; floor mats; factory exterior; dealer packages, and radar detectors.

“The personalization trend is where automotive retailers will find new opportunities,” said R&R. “Dealers who invest in the right processes and the right technology will capture the sales potential of accessories, increase dealership’s gross profit, and improve the customer experience.”

The Trend Report suggests the following accessories strategies and best practices:

  • Assigning a department champion to help monitor all aspects of the accessories business.
  • Establishing an accessories sales process and compliance standards to help ensure presentation to all customers, whether buying or servicing a vehicle.
  • Using digital tools to provide customers with an engaging accessories presentation, and manage the accessories sales process effectively and efficiently across dealership departments.
  • Offering genuine OEM and aftermarket accessories, using aftermarket items to fill in the gaps on fast-moving accessories not offered by the OEM (e.g., window tint, upholstery, etc.).
  • Taking advantage of any “wait time” after the purchase has been negotiated and financing is being arranged to allow buyers to digitally configure their vehicles with accessories.
  • Easing the financial pain for buyers by providing the upfront price of accessories and calculating their vehicle enhancements into the overall financing and monthly payment.
  • Coordinating the efforts of everyone involved in the transaction – from the salesperson to the vehicle buyer, F&I office, service and parts departments, and local restylers and distributors – to help ensure a seamless financing and accessories installation process and a consistently positive experience for each person involved in the accessories process.

“In short, the most successful dealers are rethinking their approach to selling accessories, creating a new profit center and separating themselves from the competition,” said R&R.

The only remaining question then is whether your dealership is among them.

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When you want to drive business …