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    • By William Maley
      Cadillac is offering 400 of its smallest dealers a buyout if they don't want to be part of the ambitious and contentious Project Pinnacle.
      Automotive News reports the offers will range from $100,000 to $180,000. The dealers eligible for the buyout sold less than 50 new Cadillac models in 2015. While the 400 dealers make up 43 percent of Cadillac's total number of dealers in the U.S. (around 925), this group only made up 9 percent of total sales last year.
      Cadillac President Johan de Nysschen said the buyouts is to give those an alternative who don't want to forward with the new program.
      “This is going to be a long, arduous and challenging journey and certainly not one for the faint-hearted. Some people may choose to make life a little easier than what lies ahead,” said de Nysschen.
      de Nysschen did say while Cadillac has too many dealers compared to their rivals, the buyout program isn't meant to be seen as a way to get rid of low-volume dealers. 
      Project Pinnacle is a new incentive program that will separate dealers into five tiers based on sales volume. Each tier offers a varying level of customer perk along with different requirements for services and facilities. For example, small stores cannot stock vehicles on site. Instead, they would offer a virtual showroom for customers to explore and order a vehicle. This program has gotten backlash from dealer groups, saying it would violate franchise laws and be unfair to the smaller dealers. 
      Those who have been offered the buyout have until November 21st to either take it or move forward with Project Pinnacle, which is expected to begin January 1st.
      Source: Automotive News (Subscription Required)
       

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    • By William Maley
      Cadillac is offering 400 of its smallest dealers a buyout if they don't want to be part of the ambitious and contentious Project Pinnacle.
      Automotive News reports the offers will range from $100,000 to $180,000. The dealers eligible for the buyout sold less than 50 new Cadillac models in 2015. While the 400 dealers make up 43 percent of Cadillac's total number of dealers in the U.S. (around 925), this group only made up 9 percent of total sales last year.
      Cadillac President Johan de Nysschen said the buyouts is to give those an alternative who don't want to forward with the new program.
      “This is going to be a long, arduous and challenging journey and certainly not one for the faint-hearted. Some people may choose to make life a little easier than what lies ahead,” said de Nysschen.
      de Nysschen did say while Cadillac has too many dealers compared to their rivals, the buyout program isn't meant to be seen as a way to get rid of low-volume dealers. 
      Project Pinnacle is a new incentive program that will separate dealers into five tiers based on sales volume. Each tier offers a varying level of customer perk along with different requirements for services and facilities. For example, small stores cannot stock vehicles on site. Instead, they would offer a virtual showroom for customers to explore and order a vehicle. This program has gotten backlash from dealer groups, saying it would violate franchise laws and be unfair to the smaller dealers. 
      Those who have been offered the buyout have until November 21st to either take it or move forward with Project Pinnacle, which is expected to begin January 1st.
      Source: Automotive News (Subscription Required)
       
    • By William Maley
      The automotive industry in the U.S. has been enjoying one of the best years in terms of sales. But one segment is seeing a drop in their sales. That segment is the midsize sedan.
      Automotive News reports that the demand for midsize sedans is at a five-year low. The numbers tell this sad story. In the first quarter of 2016, sales of midsize sedans dropped 3.4 percent. The second quarter saw sales dropped 13 percent, while the third quarter saw a whopping 21 percent drop. For the month August, all 16 midsize sedans saw an average drop of 27 percent. The Ford Fusion, Hyundai Sonata, Kia Optima, and Nissan Altima reported drops of over 30 percent.
      Automakers have been throwing money on the hoods of their midsize sedans to try and ignite sales. But this tactic isn't working.
      Why are midsize sedan sales down? It comes down to consumers wanting crossovers and SUVs.
      "It doesn't matter how deep you discount the leisure suit and bell-bottoms -- nobody's going to buy them if they're not fashionable. I don't think they're ever going to go away, but there's a lot more people who don't consider them anymore," said Eric Lyman, vice president of industry insights at TrueCar. 
      The outlook for midsize sedan sales doesn't look good as we enter fall and winter.
      "That larger sedan buyer just sees more value in the SUVs or CUVs," said Mike DeSilva, co-owner of Liberty Hyundai in Mahwah, N.J. "That's just where the activity is. And heading into the end of summer and going into winter, we're really going to get into SUV season."
      Source: Automotive News (Subscription Required)

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    • By William Maley
      The automotive industry in the U.S. has been enjoying one of the best years in terms of sales. But one segment is seeing a drop in their sales. That segment is the midsize sedan.
      Automotive News reports that the demand for midsize sedans is at a five-year low. The numbers tell this sad story. In the first quarter of 2016, sales of midsize sedans dropped 3.4 percent. The second quarter saw sales dropped 13 percent, while the third quarter saw a whopping 21 percent drop. For the month August, all 16 midsize sedans saw an average drop of 27 percent. The Ford Fusion, Hyundai Sonata, Kia Optima, and Nissan Altima reported drops of over 30 percent.
      Automakers have been throwing money on the hoods of their midsize sedans to try and ignite sales. But this tactic isn't working.
      Why are midsize sedan sales down? It comes down to consumers wanting crossovers and SUVs.
      "It doesn't matter how deep you discount the leisure suit and bell-bottoms -- nobody's going to buy them if they're not fashionable. I don't think they're ever going to go away, but there's a lot more people who don't consider them anymore," said Eric Lyman, vice president of industry insights at TrueCar. 
      The outlook for midsize sedan sales doesn't look good as we enter fall and winter.
      "That larger sedan buyer just sees more value in the SUVs or CUVs," said Mike DeSilva, co-owner of Liberty Hyundai in Mahwah, N.J. "That's just where the activity is. And heading into the end of summer and going into winter, we're really going to get into SUV season."
      Source: Automotive News (Subscription Required)
    • By William Maley
      If you think the Fiat Chrysler Automobiles' sales probe couldn't take an unexpected turn, then you would be wrong. The Wall Street Journal reports that federal investigators are asking questions about a phrase that was used by various executives to dealers and regional sales managers.
      According to sources, executives at FCA would use the phrase “unnatural acts department” during conference calls and one-on-one conversations. This phrase was to convey to dealers and regional sales managers to get more sales before the end of the month. Such solutions included selling vehicles at a loss or asking dealers to buy a number of vehicles that would be used for test-drives with customers. Investigators are trying to figure out if the phrase was used a way to rally the troops to meet sales targets or a key piece of evidence of whether or not FCA executives deceived the public by using this phrase to tell dealers to falsify sales numbers.
      As we reported back in July, FCA is currently under investigation by the U.S. Department of Justice and Securities and Exchange Commission over their sales reporting practices. The investigation stems from dealers in Florida and Illinois suing the company for falsifying sales numbers. In the same month, FCA admitted the sales streak that supposedly lasted for 75 months only lasted for 40 months. The company also changed how it reported sales numbers.
      Source: The Wall Street Journal

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