To a successful 2008

Emich VW finished as the 20th largest Certified Pre-Owned VW dealer in the nation. We also completed the year as one of Generation VW's Best. Actually finishing 7th in the nation as a Dealership. We are also sending three employees to the VW Guild event in Las Vegas. Congratulations Dave Guttenberg (Sales Manager), John Morse (Parts Manager), and Karl Riedell-Reynolds (Parts Associate). Dave Guttenberg has also won a trip for two to Cabo San Lucas for being the 4th ranked Sales Manager in the country for 2008. Congrats!

Parts #30 in USA for 2008

Congratulations to the parts team for being ranked 30th in the nation by selling just short of $2,000,000 parts in 2008. This was a huge increase from the previous year.

State of the Automobile Industry

I predict that 2009 will be even harder for the auto industry than 2008. The reason I think this is the major changes we are seeing in the credit markets. In previous years creditors loaned customers thousands of dollars more than vehicles were worth. With great credit it was possible to borrow almost twice the vehicles value or easily 140%. Now these creditors have began to realize serious loses with the contracting economy and staggering job losses. They are also having a hard time borrowing at decent rates based on their increased lose ratios. Within the last month we have seen rates jump several points and advances shrivel to below 100% of the vehicles value. This has made it difficult to finance anybody with a trade-in which they owe money on. In previous years lenders extended loan terms to 84 plus months and allowed for large advances in terms of loan to value. Therefore these customers have paid more interest and less principle during the first years of the loans. This coupled with the lowest used car values in recent history has created greater inequity for customers who have not paid off their current vehicles. Now if they want a new vehicle banks have reduced allowed terms, increased rates, and decreased the amount they will finance in terms of loan to value (LTV). Literally overnight some banks have gone from a 130% LTV advance policy to 100%. That is the difference between a customer being able to finance $6000 in inequity or $0 on a $20,000 vehicle. Some banks are now even charging up to 3% to finance up to 120% LTV which was a minimal amount a year ago. In the long term these policies are not bad because they will put customers in a better equity position than what was allowed previously. However this year many people who are used to financing vehicles with trade-ins for $0 down might have to fork over more down payment than expected. With swelling new vehicle inventories the manufactures are going to have to figure out a way to loosen credit with their captive finance sources. Just wait a week and this will probably all change....

Luckly VW has a large customer base that lease vehicles. They will be insulated from this phenomenon because the lease company assumed the risk of the future value of their vehicle. Therefore they will not have inequity at a time when used vehicle values are at their lowest and lenders are tightening up.

#1 for 2008

Hats off to the Sales Department for being the top new VW dealer in CO, NM, and UT for 2008. They also finished within the top 25% in the nation for Customer Satisfaction. I am still waiting for the final parts and service numbers, but those departments also had a tremendous 2008. Keep up the hard work!

Congratulations to the Emich Team!

November was a tough month in the auto industry, but the Emich VW team proved all the critics wrong. The sales department delivered two more new vehicles than in November of 2007 when the auto industry was down 37% as a whole. They were also the top VW dealership in UT, NM, and CO by over 20%. The parts department was the 23rd largest purchaser in the United States, and the Service Department continued their high customer satisfaction rankings holding strong in the top 25% for the year.

Fox 31 Interview

Click the link below to see text and video of the Fox 31 interview with Fred Emich IV.

http://www.myfoxcolorado.com/myfox/pages/Home/Detail;jsessionid=A7B38102E2F2CA507D48326C751972EE?contentId=7998790&version=1&locale=EN-US&layoutCode=TSTY&pageId=1.1.1&sflg=1

Support Federal Loans to US Automakers

Please support federal loans to the Big 3 US Automakers. At first I thought that Chapter 11 Bankruptcy was the way to go for the Big 3, but after seeing the possible consequences I have changed my mind. Unless it a perfectly prepackage Bankruptcy there is too much risk if even one of the Big 3 file Ch 11. The job losses would be tremendous, the suppliers would have to file Ch 11 soon after, the Federal Pension Guaranty Corporation would have to cover hundreds of billions of dollars of pensions, billions of dollars of health care benefits would be lost for hundreds of thousands of employees and retirees, and the US could fall into double digit unemployment spirally the economy into a serious depression.

The claims that the Big 3 do not make vehicles that the people want are unfounded. GM is still the most popular manufacturer in the United States. Yes, they sold more cars than Toyota in 2007. Ford has produced the first Hybrid SUV (Ford Escape Hybrid) and Chevy will be the first major manufacture to offer an electric vehicle (Chevy Volt). The problem is that the Big 3 have been handcuffed with major liabilities imposed on them by the United Auto Workers (UAW) for higher wages, pensions, health care, and other benefits. While the Big 3 have been paying out $29/hour for unionized autoworkers plus hefty benefits Toyota, Honda, Nissan, and others have been allowed to bring there production from oversees into southern states with no import taxes and instead hand outs to entice them. These companies do not have unionized workers either. This gives foreign manufactures an unfair advantage to produce vehicles in the USA. The Big 3 are not in trouble because they do not make the right products, but because the US has allowed foreign manufactures to come in and produce vehicles in the US at a much lower cost because they do not have to offer the same pensions, health benefits, or wages that domestic manufactures do.

So please tell Congress to support loans to the Big 3 or we could endure an economic depression not seen since the 1930's. Why should we give hand outs to foreign manufactures and not support the backbone of American industry the Big 3?

State of the Automobile Industry

Currently the automobile industry is experiencing some of the most dire times in decades and maybe ever. It has been a perfect storm of decreased demand, credit crunches, ballooning inventories, and decrease vehicle margins. However despite what the media might lead you to believe financing or leasing a vehicle is still possible. In fact VW has some of the strongest incentives in years and right now customers can experience some of the best deals ever as dealers struggle to liquidate heavy inventories. Although financing has tightened, financing a vehicle is virtually unchanged for people with credit scores above 600. The auto financing industry did not experience the same problems that mortgage companies did because they have always known that cars are hard to find to repossess, and that they always depreciate. Therefore their loan structure never allowed for incredible losses like the mortgages did when houses were viewed as investments that always appreciated.

Over the next months you will probably see many dealers closing their doors. I would predict that most of these dealers will have domestic franchises. The optimist in me sees these days a great chance to expand our dealerships as stuggling dealership go up for sale. Hopefully people will ingnore the gloom and doom media and purchase a vehicle during these times when the best deals can be found.

Parts #32 in the USA!

Congratulations to the parts department for a much improved YTD ranking of 32nd in the country in terms of VW parts purchases. Hopefully we can end the year in the top 25 and be in the top 10 next year.

#1 in Area 49!

Congratulations to the sales team for selling the most new VW's in the CO, UT, and NM region. It was also great to see that we sold 45% more new vehicles than October of 2007 in a market that was down over 30% year over year. Keep up the good work!