Saturday, 27 December 2014

Honda Canada Launches Airbag Safety Campaign

Honda Canada Inc. announced this week it is launching a Safety Improvement Campaign in Canada to replace the driver's front airbag inflator in certain 2001 through 2010 Honda and Acura vehicles.
The airbags in question were designed by Takata, and contain inflators that may rupture under intense pressure and have been the subject of 8 million recalls in the U.S. and an estimated 400,000 in Canada.
The new Honda campaign will cover approximately 700,000 vehicles in Canada, and owners will be notified by mail and requested to bring their cars to an authorized Honda/Acura dealer for replacement of the affected part.
Though initial concern for the airbags erupting was tied to regions of high temperature and high absolute humidity, Honda explained this latest action is to address the concerns of customers living outside these areas, "thereby supporting the ongoing investigation into this issue currently underway in the United States."
To data, Honda Canada is not aware of any reported claims of injuries or deaths in Canada relating to a ruptured airbag inflator of any Takata produced airbag in a Honda or Acura vehicle, though the Takata airbags in question have proved dangerous in other vehicles and have been linked to five deaths.
And automakers aren't the only ones reacting to the Takata airbag proceedings - the Merchant Law Group announced it is launching Canada wide class action litigation in Ontario and Saskatchewan regarding the defective airbags just this week.
The affected Canadian models are as follows (certain specific vehicles only):
  • 2001-2007 Honda Accord with 4-cylinder engines
  • 2001-2002 Honda Accord with V6 engines
  • 2001-2005 Honda Civic
  • 2002-2006 Honda CR-V
  • 2003-2010 Honda Element
  • 2002-2004 Honda Odyssey
  • 2003-2007 Honda Pilot
  • 2006 Honda Ridgeline
  • 2003-2006 Acura MDX
  • 2002-2003 Acura TL
  • 2002 Acura CL

Honda Canada Launches Airbag Safety Campaign.......................

Friday, 19 December 2014

Top 12 Websites Women Turn To For Auto Research

In an effort to decipher which auto research sites are favorites among the female population, utilized a survey technique to rank the top sites.
And it seems dealers are doing something right when it comes to their online presence, because dealership websites remain the No. 1 online research option for women, with 41.27 percent of survey respondents choosing this option on the survey. conducts ongoing research through its Women Satisfaction Index, and the site also asks women to complete an optional 25-question survey about their dealership experience after completing a dealer review, which includes questions about online research.
After dealer and manufacturer websites, third-party sites began showing up in the results with Kelley Blue Book leading the way, followed by Consumer Reports.
Listed below are the top sites women visited from's most recent 3,220 surveys.
1. Dealership (41.27 percent)
2. Manufacturer (39.75 percent)
3. KBB (39.62 percent)?
4. Consumer Reports (22.23 percent)?
5. (21.34 percent)?
6. (20.38 percent)?
7. (18.85 percent)?
8. Carfax (15.29 percent)?
9. Craigslist (7.64 percent)?
10. JD Power (6.05 percent)?
11. (4.71 percent)?
12. Autobytel (2.29 percent)
* Note: Total adds up to greater than 100 percent as reviewer can leave multiple responses.

Top 12 Websites Women Turn to for Auto Research....................

Friday, 12 December 2014

Buffett's Dealer Group Buy Still Creating Ripples

Two blockbuster dealer group acquisitions this year - Berkshire Hathaway's purchase of the Van Tuyl Group, along with Lithia Motors buying DCH Auto Group - are proving to be game-changers on the mergers and acquisitions side of the retail auto business.
As Erin Kerrigan, founder and managing director of Kerrigan Advisors, said in her firm's latest look at dealership buy/sell activity: "These two mega deals have motivated a new wave of sellers to consider entering the market, while also pushing pricing expectations to peak - and likely unsustainable - levels."
A synopsis of the Q3 Kerrigan Quarterly Blue Sky Report indicates that price expectations in dealership acquisition are at "record peaks," with the Berkshire Hathaway-Van Tuyl deal - the largest in auto history - playing a major role in that run-up.
Not long after that Berkshire deal was announced, an analysis from Sageworks, a financial information company, examined the financial conditions of privately held auto dealers, in particular, and why some of their traits would entice an investor like Warren Buffett and Berkshire Hathaway. The analysis shares an interview quote from Buffett in which he describes well-run dealerships as "a very good business."
In late October, Auto Remarketing talked with Sageworks analyst Libby Bierman about that notion and what attributes may lead someone like Buffett to have such an outlook on privately held dealers.
"Certainly, I'm sure Warren (Buffett) and other investors are looking at things outside of financial performance, whether that's who the management is, business projections, plans for that business, etc. But when you're looking at, particularly our financial information - so, the net profit margin and sales growth for these industries - they look like pretty sound industries.
"What you don't see is negative sales growth since the recession. You continue to see above-average sales growth, so they're bringing in more, as well as that stable net profit margin," she said. "It's not super high; they're not the most profitable of industries. But the fact that it's consistent, it's more of a steady-Eddie type of investment than maybe some of the higher-risk investments these guys might be considering."
Going back to the Kerrigan report, the firm - citing its own data and that of The Banks Report - said there were 148 completed dealership transactions year-to-date through Oct. 1. That's nearly double the 78 transactions done through the same period of 2014.
Berkshire Hathaway's purchase of Van Tuyl was announced on Oct. 2, and since then, "the number of dealers considering a sale has increased considerably," the Kerrigan report says.
In fact, the firm is projecting buy/sell activity to remain elevated for the rest of the year and most of next year. The report also mentions that private buyers are leading the pack by a wide margin.
 "It is not surprising that private capital is seeking financial exposure to auto retail. These investors see a profitable, fragmented industry with tremendous consolidation opportunities (the top 125 dealership groups represent only 25 percent of industry's sales)," said Ryan Kerrigan, who will be leading the new private equity and family office advisory at Kerrigan Advisors.
"They also see attractive exit opportunities in the public markets through a future IPO (auto retail's stock market capitalization relative to market size is one of the smallest in our economy)," he continued. "Private investors also see opportunity in a changing industry in which online sales, no haggle pricing, and new forms of car ownership create attractive new business models that are less reliant on expensive human capital," he concluded.

Buffet's Dealer Group Buy Still Creating Ripples.......................

Saturday, 6 December 2014

Vehicle Loan Amounts Reach Record Highs

Perhaps Experian Automotive found another part of what is the "new normal" in auto financing as analysts determined that the average dollar amount for both new- and used-vehicle loans reached all-time highs in the third quarter.
According to the latest State of the Automotive Finance Market report, the average loan amount for a new vehicle was $27,799 in Q3, up $1,080 from the previous year. Used-vehicle loans increased $676, reaching $18,576 over the same time period.
The report indicated leasing accounted for 29.1 percent of all new-vehicle financing in Q3, up 7.1 percent from a year ago. New-vehicle loans in the 73- to 84-month range grew by 23.7 percent in Q3 compared with the previous year, while used loans in the same range grew by 18 percent from a year ago.
"Car buyers tend to shop with a monthly payment in mind. As a result, we are continuing to see them turn to leasing and longer loan lengths as strategies to keep payments down and make vehicles more affordable," said Melinda Zabritski, senior director of automotive finance for Experian.
"As car values continue to reach new heights, these insights will help dealers, lenders and consumers become more aware of the options available to them to keep people buying cars, all while staying within their budgets," Zabritski continued.
Furthermore, the report found that the average monthly payment for new and used-vehicle loans increased from the previous year. The monthly payment for a new-model loan reached $470, up $12 from a year ago, while the monthly payment for a used-vehicle loan reached an all-time high of $358, an increase of $8 over the same time period.
Additional findings from the report showed that interest rates for new-vehicle loans increased slightly in the third quarter, climbing 4.7 percent from a year ago. However, despite the growth, these rates have decreased each quarter in 2014. Interest rates for used-vehicle loans decreased to 8.5 percent in the quarter.
"As consumers explore the different options available to them to keep their monthly payments low, they have to remember interest rates often can play a factor. Making timely payments and becoming a low credit risk are the easiest ways to ensure a low interest rate," Zabritski said.
"For example, the average interest rate for super-prime consumers on a new loan was 2.6 percent, compared with 12.7 percent for deep subprime consumers. Understanding how on-time payments influence credit scores, can help consumers improve their financing experience," she went on to say.
Experian also highlighted five other notable trends, including:
-The average credit score for a new-vehicle loan was 713 in Q3, down 3 points from a year ago.
-The average credit score for a used-vehicle loan rose 2 points in Q3, reaching 650.
-Captives were the only lender type to see an increase in market share year over year, up 28.9 percent.
-A record-high 54.1 percent of all used vehicle transactions were financed, up from 52.6 percent in Q3.
-For new vehicles, 84.8 of all transactions were financed in Q3 2014, which was unchanged from the previous year.

Vehicle Loan Amounts Reach Record Highs...................................