The US Automotive Market Is In Trouble


(And bailouts, the economy, the fiscal cliff all have nothing to do with it.)

UPDATE: You can’t make this stuff up folks. Jeep responded to me on Twitter asking which model I was interested in. Even  though my Tweet/post clearly said Trailhawk….they didn’t get it. Then they Tweeted that I could use their dealer search tool and assured me that two different dealers in my area had product in stock. The below screen cap is a result of the search based on the link they provided.

Screen Shot 2012-12-27 at 9.22.18 AM


So again – I called both dealerships. The guy at Chapman Jeep (probably having read my post) simply hung up on me. I said “Do you have any Jeep Trailhawks on the lot.” That’s it. Nothing more – nothing less. He hung up. I called the other Jeep dealer (at 9:30 am PST) and got voice mail. Like I said, these guys need lots of help. If I ran my business this poorly – I’d be out of business. Never had to work so hard to give someone money in my whole life.

RANT TIME. If you don’t want to read a rant come back tomorrow. Today I’m ranting about one of my favorite topics. The US dealer network for American autos.

I’m in the market for a 2013 Jeep Trailhawk. I go to the Jeep website. Spec out a model, fill out the forms, spend 30 minutes or so, wading through a clunky interface that keeps splashing “CLOSEOUT ON 2012 MODELS” at me despite the fact I’m a 2013 buyer. I go to the trouble of filling everything out and I ask for a quote. I get an auto-response that says my “Jeep Patriot quote is on the way.” WTF? Patriot? I asked about a Trailhawk. They can’t even get this part right!

12 hours later I get a voicemail from a guy who assures me he won’t be undersold on a Patriot. “Good for you dude,” I thought. Too bad I am not buying a Patriot. In the mean time I call dealers in three cities and basically realize that none of them has a clue what a Trailhawk is. But they all assure me I can get zero percent financing on a Jeep Patriot! (AGAIN with the Patriot! And I’m not interested in financing!)

This is typical of what I experience when I go to most US auto dealerships. But Chrysler is without question the worst. Four times in the last two years I have walked into Fiat, Dodge, Jeep or Chrysler dealerships with a pocket full of money, and the full intent to buy and drive a car home. And four times I ended up somewhere either not buying anything or  buying the competition’s cars. This news should certainly upset these companies. But it probably doesn’t based on the form letter they sent me. It went something like this. “Our dealers are independent and we’re not responsible for the fact that may be idiots.”

Where’s the problem? The US dealer network was conceived about the same time as the Model T and hasn’t improved or advanced much since. Especially on the Chrysler side. My father was an investor in several car lots when I was young, including a three-point GM dealership. I used to work at the dealership when I was a kid and trust me when I say, I know this business from the inside out. What’s shocking is I hear the same stuff repeated today that I heard 40 years ago on my dad’s lot!

What you can expect when trying to buy a car from a US automaker? Poor product knowledge, zero customer focus, a complete lack of understanding of social and new media, the inability to answer a simple email, hucksterism, no transparency, high-turnover, I could go on but you get the picture.

“We want to earn your business Mr. Bourne.” (That line is 45 years old. Got anything newer?)

“Whatever it takes to make a deal.” (Yeah right.)

“We’ll even show you the invoice.” (You mean the one you generated after dealer pack, advertising money, holdback, etc.?)

The US automakers aren’t in trouble because of the economy. They’re in trouble because they suck. They’re in trouble because they are stuck in a time warp. They can and need to do better. Despite my disdain for the current state of affairs, I am rooting for them and hoping they’ll get it right. But I don’t think that will change any time soon.

After spending days looking for the Trailhawk I want, (or ANY Trailhawk for that matter!) after missed phone calls, downright wrong information (one dealer told me the Teailhawk was a concept car that Jeep never built) unanswered emails, Tweets or emails trying to sell me a Patriot, I’ve just about decided that a Range Rover might be the way to go.

We buy and sell books, music, movies, games, cameras, cellphones, clothing, jewelry, toys, educational materials, furniture, luggage, sporting goods, etc. online. But we are stuck with an arcane dealer network that forces us to deal with poorly-trained hucksters who really couldn’t care less what we want. They force us to come to a dealership. They “T” “O” us (which stands for turn over) to the sales manager after asking for more information than we’d have to give the bank to get a loan or adopt a child. Everything they do they do because they THINK it will end up in a car deal. But at the end of the day, the way to get a car deal is to take care of the customer. Instead, they just want to take some money from us, charge a BS $500 dealer “doc fee,” and move us on our way. They add second stickers to cars, hide unnecessary fees in the deal flow, mark up the financing and treat us like we’re simple marks at a carnival.

This problem exists because our politicians allow the dealerships to be excluded from our anti-trust laws. It’s time to start lobbying Congress to make a change. We need to be able to exclude the sleazy salespeople (and their managers) and buy online with a simple ordering and pricing policy that makes sense, is fair, is transparent and that works.

I am not saying I’m completely giving up on the Trailhawk. I’ve purchased six Jeeps in my lifetime. I tend to like them as utility vehicles. But if I can’t find someone who has the IQ of at least a tree-frog to help me test-drive and buy one of these things soon, I’m going to probably become a Range Rover owner. At least the British know how to sell a car, as is evidenced by my garage full of Jaguars.

So listen up US car companies. Turn the page on 1908. It’s a new day. Stop mouthing the words. Replace them with action. The days of a fat, greasy, uneducated, uninformed, salesman, who’s been on the job three weeks and doesn’t even have business cards; who’s rolling around on the ground at the dealership blocking the customer’s exit while the he screams “What will it take to get you to make a deal today?” are over. That isn’t going to work anymore. You need to train your staffs to actually understand the product. You need to know that the first words out of your mouths shouldn’t be “let me sell you one of these because we have a spiff on them this week.” You need to actually talk to your customers, know your products, help them find the right car and THEN worry about the price. And your pricing should be far more transparent than showing a fake invoice at a sales desk that’s only concerned about “grossing the old fat guy.”

One of these days Congress will drop the anti-trust exemption and you’ll all be screwed. So get it fixed beforehand or you’ll realize you are indeed fungible.

Now that my rant is over I’m going to waste more time trying to give someone $50k for a Jeep. Or, I may end up giving the Range Rover dealer $75k just to save time.

The Thing You Should Know About the Fiat Abarth

Fiat has already allegedly allocated the first 1000 Abarth models it plans to sell in the USA. Since according to several dealers I spoke with, there will only be 1000, here’s what you need to know – if you want to buy one – you should plan to be gouged on the dealer side of the transaction.

Around the country – dealers are adding between $1000 and $10,000 to the MSRP of the Abarth. Chrysler spokespeople give the usual non-answer about things like this saying “We are represented by an independent dealer network and are not responsible for their actions.”

I cry BS. The car makers can spend millions on engineering and safety, come up with all the fancy car designs and technology, brilliant (or not) marketing plans and commercials, but at the end of the day, the dealer network for most brands is horrible and is the weakest link in the chain. It can undo all the good work done up until that point. I find all the car makers have a problem here to some degree, but Dodge/Chrysler dealerships are amongst the worst. In 2011 alone I tried to buy three different Dodge/Chrysler models only to walk away and add competitor’s cars to my garage because the Dodge/Chrysler dealers were either so sleazy or so greedy (by way of unbelievable second stickers) that I took a pass.

In one case, I tried to buy the new Dodge Charger SRT8. The dealer in Vegas had an ad for the car on the Internet. I printed it out. I called the dealer. I asked if the price in the ad was valid and if the car was on the lot for sale. I was told yes. I asked the salesman to double check. He said yes. The car was available. I went to the dealership, said I wanted the car, out came the sleazy manager who said – “you know I can’t sell you that car for that price – it’s special.” The oldest trick in the book. Hey sales manage, 1970 called and wants its sleazy back. I won’t be buying a Charger SRT8 any time soon.

I’ve had the same experience with the Abarth. Two different dealers told me they’d sell me the car for MSRP but then added things like “dealer fees” of between $1000 and $5000. So I walked. And so should you.

If consumers simply refuse to pay the second sticker prices added to these cars, that practice will stop. And when an Abarth starts to cost more than a fully-loaded Mini due to these tactics – well, this could explain why Fiat failed miserably when it comes to meeting their projected sales numbers. It could also explain why people are buying Camaros and even Corvettes rather than Dodge Charger SRT8s. With a $70,000 price (after the second sticker) why buy a Charger when that will get you a ZL1 or a Grand Sport Vette????

ALL the car makers need to clean up the dealer network. It’s still infested with guys who bring back the notion of the 70s and a car salesman named Fairly-reliable Bob. This problem will eventually solve itself because the car makers’ lobby will eventually run into an honest politician who won’t take their money and the Internet will become the open marketplace for these cars. When that happens, prices will become more realistic and car makers will have been forced into making the right decision – whether they like it or not.