4 June 2009

Anyone not living in a cave knowsthat the automotive industry hasbeen in the news a lot lately.While the consumer media ofyour choice probably does agood job of reporting this news

as it relates to the general public, there’s often littlecoverage given to the various potential effects onfolks who make a living in the industry.

The reorganization of Chrysler and GeneralMotors has resulted in huge numbers of dealer-ships facing their demise. Chrysler’s mid-May re-lease of its list of nearly 800 dealerships slated tolose their franchises was followed a few days laterby GM’s announcement of plans to shed 1100 oftheir own. That’s going to put a lot of talentedpeople out of work and—unpleasant as it maysound—might represent a good opportunity foryou to upgrade the quality of your staff by hiringsome of them.

It will also cause vehicle owners to look else-where for maintenance and repair work if theirservicing dealer goes out of business. Results of asurvey, disclosed at the recent Global AutomotiveAftermarket Symposium, say that while abouthalf of all people who fit this description would goto another (less convenient) dealer, 25% saythey’d seek out an independent shop and another12% are undecided. That’s a golden opportunityfor you to increase your business. But keep inmind these customers won’t just walk in yourdoor; you’ll need to understand their expectationsfor “dealer-level service” and work to earn theirbusiness. They probably take things like shuttleservice, extended hours and comfortable waitingareas for granted.

Since I wrote about “Cash for Clunkers” onthis page in February, it seems more inevitablewith each passing day that we’ll soon see a federalprogram put into place, despite the protestationsof many aftermarket industry groups. AAIA, forexample, calls Cash for Clunkers a radicalpiece of legislation that “would actuallyincrease the amount of pollution generat-ed for years to come.” Additional argu-

ments against the legislation can be found atwww.fightcashforclunkers.org.

A special report published by MEMA—www.aftermarketsuppliers.org/pdf/Scrappage09.pdf—asserts that there are serious unintended con-sequences to the introduction of an indiscrimi-nate Cash for Clunkers program. The grouppoints to the fact that dramatically lower new-carsales between 2008 and 2010 will create a slumpin aftermarket activity for much of the nextdecade, and contends that the implementation ofa nationwide scrappage program at this time willdeal a second blow to the aftermarket. Neverthe-less, legislation does seem be the track we’re on,and therefore something we’ll need to deal with.

And on May 19, President Obama proposedfuel-economy standards that will require the av-erage new passenger car to achieve 39 miles pergallon by 2016. For such an aggressive number tobe attained, a large percentage of the new carssold in the not-so-distant future will be driven bytechnologies that you had better become familiarwith. Among those the EPA and the DOT expectautomakers to consider using to meet the pro-posed standards are: hybrid, plug-in hybrid andall-electric vehicles; gasoline direct injection en-gines; smaller engines with turbochargers; ad-vanced transmissions; and start-stop technology.Probably because diesel is a dirty word to mostenvironmentally focused people, there’s scant talkin Washington about that form of powerplant.However, since it’s something that would con-tribute greatly to achieving these new goals, itcan’t be ignored.

One fuel-saving technology we can safely ig-nore—at least for the time being—is the hydro-gen fuel cell, since the president recently killedhis predecessor’s $1.2 billion development planfor them (details on page 45 of this issue).

While it seems increasingly likely that our fed-eral government will have a greater say in whatAmericans drive, the good news is that there willnever be an automotive technology that doesn’trequire maintenance and repair, and that’s whereyou come in.

JohnLypen

These days you practically need a scorecard to keep up with

all the programs being discussed in Washington with the potential

to affect your business. Let’s try to sort some of them out.

jlypen@motor.com

Editor’s Report