Jim Ziegler

PresidentZiegler Supersystems

Alpha Dawg MentalityZiegler Speaks to Dealers and General Managers

Pg. 22

Let’s Take a Look at the Future

Manufacturers do not know how to sell cars, and they’re never going to learn

The Hard Facts are…

In 2013 we will sell approximately:

o 15.5 million new units

o 43 million pre-owned units

There are approximately:

208,000,000 licensed drivers in the USA for 88% of adults within eligible age guidelines

That is up from 193,000,000 a decade ago

In 1983, more than a third of all licensed drivers were under 30 years of age

Today, that number has decreased to less than 22%

Qualified adults in 1983 under the age of 40 accounted for more than 50% of all drivers

Today that number has diminished to less than 40%

There are 234,467,679 cars and light trucks registered to US Citizens

In other words, we own 1.27 cars or light trucks per licensed driver already

If we are going to continue to sell 58.5 million units annually, and that number is expected to grow, we will have to sell a new or newer car to every licensed driver every 3.5 years

This is in direct conflict with the fact that the average car today is 10.8 years old. (Compare that with 6.9 years in 1973)

Collectively, all of manufacturers selling product in the US Market:

• Have forecast their production in excess of 35 million units

• Around mid-year will make dramatic revisions scaling their production plans back

• The year-end incentive wars are on

The numbers don’t lie! At some point, we’re going to reach market saturation…again.

In 2007:

We sold 17 million new units

We sold 43 million pre-owned units

This is the all-time record U.S. automobile sales

If it is to happen again, it won’t be until perhaps 2015

Remember:

We’re cramming nearly 61 million units a year into a potential customer base (licensed drivers) of 200 million

The Internet is the worst thing that ever happened to Car Dealers

This is a predicted cycle

The internet has not created the sales of one additional unit that we wouldn’t have sold anyway

The internet has inserted vendors between us and the retail customers who are taking profits while reducing our profits AutoTrader.com has annual revenues of more than $1,037,000,000 That is One Billion, Thirty Seven Million Dollars annually The majority of that billion dollars was paid by dealers out of what

was otherwise your profits

Add up all money paid to all of the vendors who are grabbing some piece of your pie to deliver sales to us that would have happened anyway

No vendor has ever said credibly they created additional customers or brought new buyers into the marketplace

“All the Internet has accomplished is redistributing which dealers get the business.”

It doesn’t matter if we like it, love it, or hate it. It’s here and it’s not going away. You have two choices, “Grow or Die”

If your dealership is underperforming while a competitor across town is over-performing, there’s a strong possibility they are taking that business from you with superior technology-enabled sales and marketing

If it’s passive messaging and not interactive advertising, it’s not effective

Contrary to popular belief, balloons are not state-of-the-art marketing

The survivors, and ultimately the winners, are going to be those dealerships that made the commitment to the personnel, tools, and processes that will put your company on top

Commitments Required:

Resistance to Measurement

Customer Relationship Management

Daily Save-a-Deal Meetings

The Bottom Line is The Bottom Line

The Bottom Line is The Bottom Line

The areas of concern:

Facility

Processes and Training

Staffing

Inventory

CRM

Advertising

Internet and Customer Communications Department

Community Involvement

Reputation Management

The Final Factor

…is dealer commitment

You want the numbers? You want to survive and prosper in this increasingly competitive environment? The only way to increase your business…or even stay where you are now…is to take that business from a competitor that already has it. The Internet is the combination to the vault and you need to get serious or get out of the game.