Fleet-ing Thoughts

Vol. 2 No. 18

The 2006 New York International Auto Show – Celebrities, Beautiful Women, and Dream Cars…What Could be Bad?

The regular readers of this blog know that I like car shows, and I’m fortunate that one of the best in the country happens every spring in New York City, just a short distance from my hometown of Philadelphia. Of course, when I got the invitation to attend the Morgan Stanley Automotive Conference in the Big Apple, March 10-12th, I would have been there just for that event, but when I found out that attending it could give me access to the “Press & VIP” opening days of the NY Auto Show, March 12-13th, I jumped at the opportunity. Now, being the consummate party crasher that I am, I’ve managed to wedge my way into opening press/VIP days at car shows before (some kids grew up sneaking into movie theaters, I focused on car shows). During these preview days, you hear press-related announcements (naturally), see a few extra visiting manufacturer dignitaries, a few fashion models, and you get a first look at all the cars and attractions that are open to the public a day or two later. For car nut like me, an advance look is an attraction not to be missed under any circumstances.

As you might expect, the NY Auto Show is one of the glitziest car shows on the planet. It’s celebrity-packed right through the last day -- no need to just go the first few days to see the VIPs. The very first time I went, in the late ‘80s, on a regular day open to the public, I was amazed to find myself walking right behind Anthony Quinn (who was accompanied by an infamous international arms dealer whose name I can’t remember). Now, in all honesty, I was probably drooling over the sports cars too much of the time to even notice many of the special attractions this year. For instance, I somehow missed meeting Billy F. Gibbons, the ZZ Top Frontman, who was signing copies of his book at the XM Satellite radio booth (now there’s a guy who has one cool beard – how long do you think it would take for mine to grow like that?). I also missed Charlie Hughes’ special book launch and signing of Branding Iron. Very sad to say I also missed the keynote that kicked off the first press day, presented by Carlos Ghosn, the internationally famous President and CEO of Nissan (the guy credited with executing the most dramatic turnaround for a car company since Lee Iacocca).
Okay, so what did I see you might ask? Well, I stopped in (but didn’t drive) the gigantic “Camp Jeep New York” pavilion that Daimler Chrysler set up, that was a complete, drivable test track proving ground for the product.

I also noted a cool charity silent auction that Bentley put on, and was actually front and center for the press conference/introduction of the new Audi TT, which was directly preceded by a full production runway model fashion show by the famous designer Doo. Ri Chung (not sure what that had to do with the car though). Keeping with the theme, the TT was introduced on stage by another German beauty, supermodel Tatjana Patitz (recognized as the “face of Calvin Klein” and noted for her appearance in George Michael’s legendary video for his hit, “Freedom 50”)…yes I do like car shows, a lot.
In truth, I spent most all of my time ogling sports cars and exotics, and believe me, there seemed to be more to ogle at this venue than at any car show I’ve attended for a long time. I started off by checking out, in detail the new Jaguar XK8 (have to get me one of those, mine’s over a year old now…):

“07-XK8”

I then went over to the

collection of Austin Martins:

“Austin Martin”

Took in the new Maserati two door:



“Maserati”

Stopped over to see the new Bentley GT Convertible right in the middle of a press interview filming (okay so the Bentley probably doesn’t count as sports car, but it was so good looking it fit into my “ogling” category):

“Bentley GT Convertible”

Caught up with a few specialty cars along the way:

“Specialty Cars” & “Specialty Cars II”

Fully took in an attractive Saleen creation

(I do like taking in these fresh new models):

“Saleen”

And finally settled on my personal favorite from the show, the $452,500 Mercedes SLR McLaren Coupe. I noted this was the “base price” but tell me, what options do you think it doesn’t include for a price like that? Air conditioning? A radio perhaps?

"Mercedes SLR McLaren"

There were many others, but I spent so much time comparing and contrasting all of the details that these were the only cars I had time to capture on film. However, as there are more pictures in this blog entry than all of the others combined, you probably get the idea of how much I like fast cars. And since words can never do justice to the cars themselves, I’ll stop here with the text. Suffice it to say the NY Auto show is pure fun; too bad it only happens once a year.

Technorati Tags: Driveitaway, upstream remarketing, fleet sales, fleet manager, John Possumato, New York Auto Show, Carlos Ghosn, Camp Jeep New York, Jaguar XK8

Vol. 2 No. 17

The 2006 Car Rental Show – “Car Rental Guys” and Vegas…What Could be Better?

Plus: Podcast with Sherb Brown, Vice President & Group Publisher, Bobit Media, and head of The Car Rental Show, April 3-5, 2006

From my last blog entry, it’s probably not a secret that I like rental “car guys” as much as I like retail car folks, and, from all the past blog entries, anyone who can read more than a few sentences realizes how I feel about the town of Las Vegas. So when the two were combined in Bobit Business Media’s annual Car Rental Show, April 3-5 this year, you could have wagered on my being front and center. In fact, this is the first time the Car Rental Show (CRS) came this time of year (it usually is in the fall), which was perfect timing for me, as it was a continuation of my conversations with rental car folks, that started at the National & Alamo Licensee Conference a few weeks ago.

The Bobit Media Car Rental Show was attended by licensees from all the major car rental companies, as well as a diverse group of the largest independent car rental operators from around the country. Depending on your area of the country, names like Fox Rent A Car, Ace Rent A Car, or Triangle Rent A Car, may or may not be familiar, but their principals and operators were at this year’s CRS as well. I’m glad that was the case, as I got to meet a whole new group of very entrepreneurial rental “car guys” that are a pleasure to talk business and hang out in Vegas with.

As you’d expect at any Bobit Business Media event, there was a plethora of information- packed seminars for rental car operators, offered in concurrent sessions under two broad categories: “Operational/Management/Finance” and “Customer Service/Sales.” As usual, a lot of information was packed into one and half days, with seminars like “Revealing the Customer Experience” which detailed the results of JD Power & Associates recent car rental study, a panel discussion on the “The Insider’s Guide to Fleet Financing,” and an open forum panel about the American Car Rental Association (ACRA), moderated by Sherb Brown, Vice President and Group Publisher of Bobit Business Media. While a lot of the information in some of the seminars didn’t apply to what we do directly here at Driveitaway, I’ve always believed that, in general, the more we learn about the current best practices and issues facing our clients the better we can understand and serve the industry on the remarketing front, so it was all very interesting.

The keynote on Wednesday, “Demystifying True Leadership” was presented by Kevin Catlin of Insight Strategies, a company that specializes in increasing organizational performance capabilities., which of course, was pertinent to any business management situation, as it broke down the concept of good leadership into actionable business practices. And, as you come to expect from the Car Rental Show, there was an active exhibition floor filled with a variety of vendors servicing the car rental industry. The open convention floor mingling (at lunches, receptions, etc.), is always one of my favorite parts of any conference, as I get to catch up with old friends and meet many new ones.

So Now I’m Even More Convinced…

Attending the Car Rental Show convinced me more than ever of two things: a) as the car rental industry transitions from “program” to “risk” vehicles -- that is cars provided by the manufacturers under a guaranteed “buy back” program versus cars in which the rental car operator is responsible for reselling them --,our upstream remarketing solution is the right “product” at the right time, and b) I especially enjoy working with the entrepreneurial principals and independent operators in the car rental industry. The quick response, the eagerness to try something new, the camaraderie, ....these are real car guys….


Technorati Tags: Driveitaway, upstream remarketing, fleet sales, fleet manager, John Possumato, Bobit Business Media, CAR rental show, Fox Rent A Car, American Car Rental Association, Sherb Brown

Vol. 2 No. 16

Why I like “Rental Car Guys”

Plus: Podcast with Rod Smith, President, Arelco, Inc., on the market for consumers purchasing rental cars

Once in a blue moon, I get invited to a trade association conference I’ve never been to before, like the annual National Car Rental & Alamo Rent-A-Car Licensee Business Conference, and it immediately gets on the “annual” event list. Rod Smith, the president of Arelco, Inc., one of the largest independent National& Alamo Rent-A-Car Licensees with headquarters in Indianapolis, hosted this year’s conference; and he and Jim Dedon, the Executive Director of the NCRLA (National Car Rental Licensee Association), invited me to their annual conference, this year held in St. Petersburg, from March 19-March 22.

After the conference, I was able to snag Rod for a wrap-up podcast of his observations on the event and industry developments. Not only is he a life-long “car guy” and very successful “rental car guy,” Rod is one of the sharpest “used car guys” in the business, with a unique acumen for buying and selling, retail and wholesale, that matches any of the best car dealers I know (and surpasses most).

Why I was at NCRLA, and Why I Hope To be Invited Back…

We at Driveitaway are expanding our upstream remarketing program and platform to service the specific needs of the car rental industry. This area of fleet is transitioning from “program” vehicles (those units provided by the manufacturers under a guaranteed “buy back” program, in which the rental operator can turn the vehicle back to the manufacturer within a designated time and so has no need to remarket these units) to “risk” vehicles (those rental cars purchased by operators without a buy back provision, where the rental car operator is responsible for turning over the vehicle and reselling it back into the marketplace). So it was only natural to begin to attend the annual car rental licensee meetings that happen around this time of year. I’m fortunate that Rod Smith, one of our first rental clients, invited me to this event, as I enjoyed being there and meeting National/Alamo licensees from all over the United States.

As the first car rental licensee meeting I ever attended, I have to say that it reminded me of the best “dealer 20 groups” I used to belong to, back in my dealership days. I’m not sure where the “20 group” idea began, or when it was first adapted for the retail car business, but no more effective association for the advancement of general business procedure ever existed. Essentially this is a group of dealers, or in the case of NCRLA, rental licensees, of the same franchise/licensee but not competitive in geography. They get together to present and discuss best business practices and introduce new ideas and products into the mix, for the benefit and general advancement of all operator participants. While there were far more than 20 operators here (hundreds more likely), and the “20 group” business focused meetings at this conference were closed to “non-operators” like me, I could tell from the “social” sessions that I did attend, that behind those closed door sessions lots of business was going on and valuable “new idea” discussions were occurring.

Among the new ideas discussed at the receptions I participated in was the upstream remarketing program that Driveitaway has begun to offer car rental licensees, and I was happy to see that the independent entrepreneurial spirit is alive and well in rental car licensees. When confronted with a new but promising business technique, process or product, these guys investigate and research it thoroughly, and then make the decision to try it, all in a short time frame. Timely adaptation and response, not usually found in the corporate side of the fleet business, is the mantra for rental “car guys” and I have to say it’s very refreshing. It brings me back to my car dealer days, and why I’ve always said that the retail car business is one of the last “big business” industries dominated by independent entrepreneurs, the last “cowboy” frontier, in a world that seems to be getting bigger and more bureaucratic every day. I personally think that’s why retailers and rental operators will always adapt and prosper despite Detroit’s well-known “big business” woes.

Why, just the other day I read in the Wall Street Journal…

Speaking of Detroit, an article in the Wall Street Journal April 5, entitled “Car Dealers Win Even as Detroit Sags,” by John D. Stoll, had a call-out sentence from the article that stated, “Despite strong ties to big car companies, few similarities exist between battling it out in the supply chain and making it in the car-sales business, says one analyst.” The title and phrase say it all, even though the article mostly described the success of the public dealer groups (AutoNation, United Auto Group, etc.), because those are the companies that Wall Street analysts follow.

What should be noted as well, is that most of these groups are led by “car guys” (Michael Jackson at AutoNation, and Roger Penske at United Auto Group, etc.), and, even more importantly, that many, many private dealer groups and individual dealers are doing just as well as the public groups, and have been doing so through many “boom and bust” manufacturer cycles (I’m not sure there is any other business sector in the U.S. that has as many second, third, and fourth generation owners). So I’ll go out on a limb here, and say something that this article did not. The reason the small automotive retailers always survive and are successful, while the large corporate car companies tend to have problems, is that they are run by independent entrepreneurs – the cowboys – who deliberately keep business decisions adaptive, non-bureaucratic and entrepreneurial, even when they grow into very large organizations (the five top publicly traded dealer conglomerates have a combined $49B in revenue).

The independent licensee rental folks I met at the National & Alamo Licensee Business Conference a few weeks ago, represent the best of this entrepreneurial adaptability and spirit, and I have to say it was very energizing, at least for someone like me. I can’t wait to get more involved and do more business (and socializing) with the rental “car guys;” it’s the atmosphere I enjoy the most.

As Charles Darwin said,
“It is not the Strongest of the Species to Survive,
Nor is it the Most Intelligent, but the
One Most Responsive to Change.”

Technorati Tags: Driveitaway, upstream remarketing, fleet sales, fleet manager, John Possumato, AutoNation, United Auto Group, Rod Smith, Roger Penske

Vol. 2 No.15 a

CAR Part IIIa: Wisdom at the Roundtable -- A Podcast Discussion with JD Power’s Charlie Vogelheim

Okay, so I still don’t sound much better on audio (after the 15th or so podcast I might warm up a bit) but being able to chat with Charlie Vogelheim, live, on-site, right after the CAR show was just too good an opportunity to pass up. As a reminder, as well as being emcee of the CAR show, Charlie is the Vice President of Automotive Development, J.D. Power & Associates, in charge of their International Automotive Roundtable series, their automotive publications, such as the “Power Report” and “PowerGram” and also leads marketing and business development for Power Information Network (PIN). We thank Charlie for taking a few minutes out on the Friday afternoon just after CAR adjourned to give a brief overview of the event. (Click on at the top of this entry to listen…)

Technorati Tags: Driveitaway, upstream remarketing, fleet sales, fleet manager, John Possumato, Charlie Vogelheim

Vol. 2 No. 15

CAR Part III: Wisdom at the Roundtable
Plus: Look for the Podcast Discussion with JD Power’s Charlie Vogelheim in coming days

The last day of the Conference of Automotive Remarketing (CAR) in Las Vegas included two panels of particular interest to almost any organization that consigns or remarkets vehicles. The first, “Trends and Influences of Future Values” was moderated by Charlie Vogelheim and filled with industry experts (representatives from RVI, Automotive Lease Guide, and my old friend Tom Webb, the Chief Economist at Manheim Auctions. It dealt with one of the “hottest” issues in remarketing -- where used car residual values are headed. The final panel of the program, “How Consignors Can Improve Auction Take-Home Dollars,” held everyone’s interest as well, even being the final presentation. The panel was moderated by my friend Steven Houston, National Vice President of Vehicle Remarketing at WFS, as well as the current President of the International Automotive Remarketers Alliance, along with panel guests representing some of the brightest physical auction guys in the industry.


Hearing it First Hand:
Our own “Remarketing Advisory Panel” Meeting

Although this year, the 11th annual CAR show finished up mid-day on Friday, March 10th, the excitement kept right on going for us at Driveitaway as we held our first Remarketing Advisory Panel meeting. Devoted exclusively to the issues of Remarketing, we focused on the current wants and needs of fleet managers, with the purpose of implementing future improvements. I have been very lucky over the years to know and be in regular contact with some of the best, most knowledgeable and most esteemed fleet folks in the business, and am grateful that I could get some old and new friends to take a few hours out of a pleasant Friday afternoon in the playground called Las Vegas to discuss their business with us. We had some of the industry’s best around the table, in a group that included:

(Clockwise, from left):
Suzanne Fischer, Dreyer’s Grand Ice Cream
Mike Antich, Automotive Fleet
John Possumato, Driveitaway
Gage Wagoner, Philips Medical Systems (named Upstream Remarkter of the Year the previous day)
Elsie Lucia, The Estee Lauder Companies, Inc.
Rod Smith, Arelco Inc. (Alamo/National Car Rental Licensee)
Patsy Brownson, CAFM, Cox Enterprises, Inc.
Frank Memolo, Panasonic Corporation of America

We were also privileged and grateful that my very good friend, Mike Antich, the CAR Conference Co-Chairman and the Editor and Associate Publisher of Automotive Fleet Magazine (the bible of the fleet industry), took the time, right after he finished directing the most successful remarketing conference in history, to moderate this Remarketing Advisory Panel.

#1 on the Agenda: Vehicle Pricing

Taking our cue from the “Future Values” panel at CAR, first on our agenda was a discussion of used vehicle remarketing pricing. For the commercial fleet end of the business, this topic is uniquely appropriate, as for the first time commercial fleet operators are looking to expand or migrate from using just one benchmark guidebook not widely used in the rest of the used car industry, to extracting many different guides’ prices to establish the proper resale price for end-of-term. The basic question for these fleet managers is, “how should I price my car when selling it?” What seems a simple question, is indeed, complex, and took almost half of the time slated for the panel discussion – in fact, we had to consciously move the discussion on to another topic, as it could have easily taken up all the time allotted and more.

Who sets pricing? How does a fleet leasing company derive a suggested price? How confident can we be in a pricing formula? What happens if the suggested vehicle prices received are too high or too low compared with the actual results after the remarketing sale? These questions evoked many interesting responses. The major takeaway from discussion was that fleet managers are very sensitive as to pricing issues, and not only want, but require, more guidance and comparisons in this area, and ideally, want the ability to use an understandable pricing tool themselves, rather than having to depend on leasing companies or external guidebooks. We hear you at Driveitaway, and some of the innovations we will roll out over the coming months are specifically designed to satisfy this need, as we have heard various strains of this before from different clients.

Patsy Brownson and Frank Memolo explore a point during the discussion.

A related issue of discussion was that of benchmarking and performance reports. We talked about the used vehicle sale benchmarking reports fleet managers currently receive from vendors (it’s curious that every fleet management company and remarketing organization reports back to fleet managers that their cars performed average or slightly above average against a basket group of sample vehicles, but never below the norm). We also discussed what form and content a used car sale performance report should possess; and whether benchmarking against peers or individual performance against prior cycle and sales history is most beneficial. As we are developing our own set of benchmarking performance reports for our commercial clients on the net increase in realization per vehicle directly attributed to an upstream (v. downstream) sale, this input was very useful.

The final broad topic we covered dealt with new replacement vehicle delivery/end-of-term vehicle collection issues. It’s a fact that a new replacement vehicle can be tracked all along the order/build/ship process with status reports produced by each manufacturer for the fleet client…that is, until the time the newly built vehicle leaves the plant. The time at which a new vehicle arrives and is ready for delivery at the delivering franchise dealer however, cannot be directly traced by the manufacturer or subsequently, the fleet manager, and the fleet manager is dependent upon the actual delivering dealer to report new vehicle arrival, and readiness for delivery. (Did you follow that?) Since the availability of the used vehicle (which is dropped off at the time the corporate driver picks up his replacement vehicle at the dealer), is directly contingent upon this new vehicle pick-up, this unknown factor is sometimes referred to as the “black hole” period for new vehicle delivery/end-of-term used vehicle collection. We’ve all heard the horror stories of used car drop offs being lost for months and in some cases over a year, because the new vehicle delivering dealer either didn’t alert someone to its existence or it somehow fell through the cracks. Things have definitely gotten better over the last few years, but in a lot of cases, this end-of-the-remarketing process is still highly dependent on the quality and the attentiveness of each new vehicle delivering dealer and, is still the most people-dependent part of the process as it requires phone calls and follow-up.

In conclusion, the Panel participants all presented interesting information, experiences and viewpoints; the discussion was enlightening, and we could have gone on for hours without beginning to exhaust the issues. Suffice it to say the first Driveitaway Remarketing Advisory Panel was considered by all to be a great success, and we are already planning our next one for the beginning of May, in coordination with the National Association of Fleet Administrators (NAFA) annual Conference and Exposition in Orlando.

Technorati Tags: Driveitaway, upstream remarketing, fleet sales, fleet manager, John Possumato, Charlie Vogelheim, Tom Webb, Steve Houston, International Automotive Remarketers Alliance, CAR, Mike Antich