-- May 17, 2010 - 12:01
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Carfax advertises its reports to consumers. Now it is advising consumers on car prices, and dealers aren’t happy.
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· Dealers are upset by Carfax price data <<<<<< Actual Article Link!
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Carfax Inc., known for its vehicle history data, has added vehicle value information to its reports. Dealerships that buy the service are furious. In late April, Carfax History Impact debuted in the vehicle history reports that
accompany dealers' used-vehicle listings. It reviews a used vehicle's history
and advises that, based on that history, the vehicle is worth more or less than
the vehicle's book value. Rob Fontano, digital sales and marketing
director at John Marazzi Nissan in Naples, Fla., is irritated. He says he was
caught off-guard by the addition. "When did Carfax jump into the pricing
game?" Fontano asks. "They've refused to tell us what they're basing it on or
what book values. Part of the frustration is we're paying Carfax to add an
arbitrary feature on our Web sites that can confuse a customer." Carfax
spokesman Larry Gamache defends the product, saying it has nothing to do with
dealers' asking prices. He says the adjustment to book values can help dealers
hold onto gross profits and build confidence with consumers. Thousands
of factors affecting a vehicle's history, such as service history and whether it
has been in an accident, are analyzed to calculate History Impact value, Gamache
says. The values debuted in January Carfax reports accessible to dealers
only, Gamache says. From then through April, the company sent letters and
e-mails notifying dealerships about the new values, which derive from "actual
sale prices of vehicles with those history attributes," he says.
Carfax's field staff team, which calls on dealers, also detailed the
change, Gamache says. He adds: "We didn't spring this on anybody."
Carfax doesn't plan to drop the program. But Gamache says the company
takes the complaints "to heart." A 2008 Cadillac
SRX crossover listed last week on the site of Douglas Auto Group in
Summit, N.J., was accompanied by a Carfax report that listed an odometer reading
of 34,844 miles and no reported accident or damage. The vehicle was reported to
have had two types of owners: rental and commercial. Based on the
vehicle's history, its price should be $810 less than book value, the report
says. Ken Beam, creative marketing director at Douglas Auto Group, which
sells Infiniti and Volkswagen, says his dealership pays Carfax, up to $1,300 a
month so customers have free access to its reports on his Web site. If Carfax
wants to get into vehicle pricing, it should do it on its own Web site, not his,
he says. "They don't know what I paid for a vehicle at an auction," says
Beam. "What gives them the right to say what I should sell it for?" John
Paul, used-car manager at Goodson Acura in Irving, Texas, is less upset. He uses
the reports as a negotiating tool. Paul asks customers whether they will accept
the deal if he lowers the price by the amount stated in the reports -- and most
do. But he, too, says he was caught off-guard when he saw the values in
the history reports: "We were shocked and didn't expect it."
You can reach Arlena Sawyers at email@example.com.
Read more: http://www.autonews.com/article/20100517/RETAIL04/305179998/1400#ixzz0oCrgXvcB
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s that nuclear reactors would be small enough to stow in the trunk. This particular vision, of course, never materialized. In that regard, the Nucleon is just one of many dream cars that failed to hit the road. Sometimes it seems as if that the revolutionary “car of the future” is one of those things, like small-scale nuclear fusion, that is always a decade away.
I think that is still the case. The car of the future is probably still a decade away—but not much more.
There is a real chance that the long-awaited reinvention of the car really is just around the corner. I say that because there has already been a revolution of sorts, but one so gradual and so positive that it has been relatively little noticed by the average person shopping for wheels. What I am thinking of specifically is that new cars are not really mechanical any more; they are microprocessors that move. Today’s cars, McKinsey noted last year, “have the computing power of 20 personal computers.” That is a fundamental change and one that can, and will, lead to even bigger changes.
Consider the windshield. For decades, these were killers, shattering on impact and slicing up occupants. Then came safety glass, which didn’t shatter. Or think about anti-lock brakes. These prevent the wheels from locking up, and according to some engineers, have been even more important than seatbelts in terms of saving lives. Both of these innovations were enormously important; but no one really took much notice of them. The new, improved windshields looked pretty much like the ones they replaced; drivers braked exactly the same way with the anti-lock version. The advances were seamless, and therefore easy to accept. And the same can be said of many of the emerging innovations that could redefine the car.
That matters because while people say they want cleaner, safer cars, they have proved markedly reluctant to pay for these benefits, to change their own behavior, or to lower their expectations of performance. What we are beginning to see from next-generation cars is that they are not eat-your-spinach-for-the-planet vehicles. They are fun, powerful, and cool to look at. And that is why I think that this time, the revolution really is nigh.
So what will the car of the future look and feel like? They will probably be much lighter; carmakers are investing heavily in figuring out how to adapt costly carbon fiber to manufacturing. Future cars will certainly spew fewer particulates and greenhouse-gas emissions. Many will be made (and of course sold) in China. Here are a few other points to think about:
Autonomy: The “driverless car” is getting a ton of attention, perhaps more than the idea deserves at the moment, considering how few of them are rolling. But there is really no question that cars will do more things in the future than they do now. I am confident about that because they already are; think of things like cruise control, self-parking, and stability controls, all of which are ways in which humans have ceded control to the machine. After 2050, says the energy consultancy, IHS, almost all new cars will be autonomous. I suspect people will still want to drive for the simple reason that many of us like to drive. But self-driving cars could be a boon for older people whose reactions have slowed and risk losing their licenses; they could also do a lot to reduce congestion and improve safety. Plus, “drivers” who are not driving can do other stuff; forecasters at Johnson Controls believe that by 2025, up to 90% of drive time will be automated. So things like game tables will find their way into car interiors. All the major car companies are exploring self-driving cars, and re-thinking the way the insides of such cars should look and function. Here is what the interior of a Mercedes automated concept car looks like.
Photo credits: Ford, Mercedes
Information: Already, some cars will tell you when a tire is low or a brake pad is thinning, and remind you in red letters if you don’t do anything about it. Some luxury models come with smartphone apps that enable owners to set up sound and climate controls remotely. In the future, the car itself will be its own ecosystem, interacting with drivers in new ways; for example, there could be systems to detect sleepiness or stress. This will sound a little creepy—think if Stephen King’s sinister car,Christine, could plot with Isaac Asimov’s Sally—but cars will also be able to communicate with each other, sending wireless signals to warn when they are getting too close, for example. Cars will also be able to communicate with infrastructure; embedded sensors can let vehicles know about road or traffic conditions. “Augmented reality” dashboards will be able to spot and identify objects on the road ahead; passengers might even be able to zoom in if they are curious. Want to chat on the phone? Sensors might automatically turn off connections if they think the driver needs to pay close attention.
Alternative power: This is the biggie. In 1900, steam was the most prevalent power source for the car, followed by electricity; the gas-powered internal combustion engine (ICE) was a distant third, with 22% of the market. But it was not long before gas, which delivered much more power pound for pound, thumped the rest; it has been standard ever since, and still accounts for more than 95% of all cars. That is going to change, but not overnight. One oil major has estimated that by 2040, more than half of all new cars will by hybrids, combining electric and traditional ICE components. That may be conservative; oil companies obviously have a huge investment in a gas-powered car system. But the point is that even a conservative view sees a very different future.
And the future could come much faster. For one thing, China is already the world’s biggest car market (25 million cars and trucks sold in 2014) and has begun to encourage electric vehicle (EV) ownership; permission to buy an EV comes much faster than for a traditional car. The government is investing heavily in related technology. One cannot rule out a truly disruptive innovation, in the form of hydrogen, or fuel cells, or high-performance batteries. One fascinating idea that is being explored is to store energy in the panels of the car body; these capture the energy cars create, for example when being plugged in or through regenerative breaking systems, and then can be used on demand.
All of this is cool; none of it can be assumed. What can be said is that all the major car companies are investing big time in non-gas-powered engines; heck, even Harley-Davidson has joined the EV club. While relatively few people have proved willing to pay a lot more for cleaner vehicles, costs are coming down. All the concept cars at the February Chicago Auto Show tout their green credentials; in effect, theidea of a revolution is becoming mainstream, and that is hugely important.
It is also important that new business models are emerging; car-sharing services are one obvious example. In several American states, a major utility has set up a network of charging stations; it then charges electric-car owners a flat monthly fee for access, not unlike paying for cell phones. This reduces the upfront costs of owning such cars. Again, this service is new and unproven. The larger point, though, is that such experimentation has to happen to create the stable economics without which no revolution can sustain itself.
As my McKinsey colleagues have noted, “Cars are ‘freedom machines’ that enable mobility—they're also pollution and congestion machines. Reconciling these two facts is the future imperative for the auto industry.” That gets it exactly right. And there’s reason for optimism that such reconciliation is more than possible. It is likely because on so many dimensions, the technologies exist, and the momentum—from industry, government, and consumers—is building. With more than a billion vehicles on the road, and more being added every year, even incremental changes in the car can make a noticeable difference in terms of the environment and urban quality of living. Big changes will mean big improvements.
Creating the car of the future, it turns out, does not require reinventing the wheel—and that’s a good thing.
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