BB&T Lowers Its Estimates On Monro Muffler Brake
BB&T Capital Markets has cut its fiscal third-quarter forecast for Monro Muffler Brake based on one weather event (Hurricane Sandy) and one weather non-event (snow).
Analysts Bret Jordan and David Kelley contend in a Dec. 7 report that Sandy has created headwinds for much of Monro’s Mid-Atlantic and Metro New York markets, with residual sales softness and more than 250,000 cars removed from the regional parc via storm damage.
Additionally, they point out in their report that snow has yet to spur tire demand. In fact, no material snow is forecast in Monro’s major markets through mid-December, leading Jordan and Kelley to surmise that tire volumes will remain soft in the fiscal third quarter ending in December.
“While December is one of the first ‘easy’ comps against last year’s ‘winter that wasn’t’ (December 2011 -10 percent comp), channel checks and peer commentary lead us to believe that we remain mired in weak demand,” the BB&T analysts wrote. “Assuming weather projections are correct and there is no meaningful snow before the third week of December, we think it is unlikely that tires can compete with the Holidays for consumer spending.”
Therefore, BB&T has lowered its fiscal third-quarter comparable-store sales expectation to -4 percent, which is below management’s guidance calling for comps to come in flat (at best) to -3 percent (at worst). Similarly, BB&T has lowered its earnings per share (EPS) forecast to $0.33. This also falls outside of Monro’s guidance, calling for EPS to come in between $0.35 and $0.40 for the quarter.
Nonetheless, BB&T has a longer-term favorable view of aftermarket demand and expectations of tire recovery with winter weather, leading the analysts to retain their “buy” rating on Monro’s shares.
One thing working in Monro’s favor, Jordan and Kelley point out in their report, is that costs are improving. “While demand remains in the ditch, Monro continues to benefit from lower input costs as manufacturers continue to reduce prices and Monro’s purchasing scale improves with acquisitions,” the analysts wrote. “As we remain confident that industry tire volumes will improve with the onset of winter … we expect Monro is positioned to generate improved sales and margins in Q4.”
ATD Expands Its Presence Into Canada
Charlotte, NC-based American Tire Distributors has acquired the assets of TriCan Tire Distributors based in Edmonton, AB for US$97.50 million in a cash transaction. The purchase price is subject to certain post-closing adjustments, including working capital adjustments.
This marks ATD’s entry into the Canadian market, as well as the first time the company has expanded its distribution services beyond the borders of the United States. TriCan is a leading Canadian tire distributor with 15 distribution centers stretching across the country.
“Given the similarities of Canada’s retail structure and leading tire brands, expanding ATD’s footprint and distribution services into Canada represents a natural step for the company’s growth plan,” explained Bill Berry, president and CEO of ATD. “After thoroughly evaluating the marketplace, it became clear that TriCan was going to be the best partner for us in Canada.”
The company plans to operate TriCan as a standalone business unit. TriCan will retain its name and its management team, led by Chris Fletcher, who has been president of the company since 2006.
ATD plans to begin expanding TriCan’s existing distribution centers in 2013 to support a broader product offering. Management also plans to add several new distribution centers across Canada by opening greenfield locations and potentially acquiring other Canadian distributors.
ATD is one of the largest independent suppliers of tires to the replacement tire market. The company operates 102 distribution centers servicing 45 states. It employs 3,000-plus people across its distribution center network, including more than 300 people at its Charlotte-area field support center, distribution center and regional hub.
For the third quarter ended Sept. 29, 2012, ATD’s sales rose $84.40 million, or 10.2 percent, to $915.34 million in the quarter. The increase came primarily from new distribution centers opened since the beginning of 2011, as well as the acquisition of Consolidated Tire & Oil. These growth initiatives added $41.90 million in incremental sales in the third quarter of 2012. In addition, higher net tire pricing of $37.20 million contributed to the increase.
Despite the double-digit jump in net sales, ATD reported a net loss of $10.60 million, compared to $1.48 million in net income from a year ago.
Mudlick Mail Launches Service For Oil & Lube Market
Acworth, GA-based Mudlick Mail is expanding into the oil and lube market. The company will provide targeted campaigns to oil and lube shop owners hoping to raise awareness about new and broader services. Mudlick’s campaigns rely on market research, allowing shop owners to target customers by income, geographic area and even vehicle make.
The company’s campaigns include graphic design services, printing, listing services, postage and delivery for a flat fee. In addition, Mudlick offers strategies to help shop owners maximize the effectiveness of their direct mail campaigns.
Prestolite Performance: Prestolite Performance
Senior Financial Analyst for manufacturer’s Cleveland-area office. Must have U.S. Bachelor’s degree or foreign equivalent degree in Accounting or Finance, followed by at least 2 years’ experience as a financial analyst or cost accountant in the automotive aftermarket industry. Experience must include performing cost analysis in a manufacturing environment. Job duties to include coordinating the preparation of annual budget and quarterly forecasts, providing updates against those forecasts, and analyzing monthly operating results to show variances to forecasts; leading monthly KPI reviews with the operations team; developing business plans for capital requests; and assisting in the month-end closing, including balance sheet reconciliations.
Send resumes to
Prestolite Performance LLC
Attn: Alice Bissett
10601 Memphis Ave. #12
Cleveland, Ohio 44144
Point of View: We Are Certainly Part Of A People Business
Most times, when speaking generally and affectionately about this industry, most people are quick to tell you, “This is a people business.” Usually, what that means is that our business relationships come down to the personal relationships, reflective of the quality of the people in this industry with whom we end up doing business. I certainly have little argument with that, noting that I have always been impressed with the quality of character I find in the folks I have come in contact with over the last four decades.
Yet, I think there is more to that statement than meets the eye.
Yes, in the business-to-business dealings we are all involved in, it is good to know the folks you are dealing with, making the transactions smoother and allowing the problems to be easier to resolve. It is hard to be difficult with people you know and trust, and it is hard to take advantage of anyone with which you have a relationship. But there is more to the “people buying from people” aspects of our industry than that.
When it comes to the final customer – the vehicle owner – it is a personal thing for them, and that is demonstrated in countless ways.
First of all, for most of us, our vehicles are both a matter of personal travel and business travel. We use our vehicles to get us to and from work, and often, many employment situations include the use of a vehicle. On top of that, our cars and light trucks provide the means to travel safely and securely, running errands, getting the family where they need to be, etc., etc., etc.
But, even more than that, people consider their vehicles a part of their lives, an inanimate object that we personify in any number of ways.
For example, Automotive.com, an online buyer’s guide to new and used cars, has released the results of a survey showing that 61 percent of all car owners have named their car. The survey found that the most popular name among the respondents was “Beast” with other popular names including Batmobile, Betsy, Big Red, Christine, Lucy, Penny and Silver Bullet.
Yes, car owners customize their vehicles with styling items and other bolt-ons, but, at the same time, they have a relationship with their cars and expect diagnostics, service, and repairs to have a personal aspect to them … not unlike a trip to the doctor.
The survey also found out that 16 years old is the most common age that people get their first car, with 47 percent waiting till after 16.
This should remind all of us that the maintenance and servicing of vehicles is a personal matter for the vehicle owner — a transaction wrought with both emotional and pragmatic implications, a complex set of issues that need to be taken into account at the point of sale and beyond.
People are put out when their vehicle is in the shop, and the expense alone will always have the consumer primed to be dissatisfied – even when expectations are met or exceeded. How we inject this understanding into how we go to market may not be easy, but it is a factor with which we need to be aware.
It is certainly true that we are in a “people business,” and the relationship consumers have with their vehicles is a personal one. That is why it behooves us all to remember to be less mechanical and even more professional, especially at the point of sale.
Otherwise, the consumer will come up for a name for us – and it won’t be one we will like.
Gary A. Molinaro
Motor Age Targeting Transmission Specialty Shops
The Advanstar Automotive Group has forged a partnership with the Automatic Transmission Service Group (ATSG) to deliver general automotive repair information to transmission specialty shops under a new brand called Powertrain Pro, which will begin in January and will come under the umbrella of Motor Age, an Advanstar magazine.
ATSG is a technical support service for the automatic transmission industry, offering a technical hotline, books, software, bulletins, seminars and technical courses to automatic transmission professionals.
Powertrain Pro will reach out to the transmission market with content in Motor Age’s monthly print magazine; periodically in Powertrain Pro print supplements; in weekly newsletters; and in regular, technically-focused educational webinars.
Wayne Colonna, president of ATSG, will serve as publisher of Powertrain Pro. He will contribute a monthly column and technical content in Motor Age, as well as be involved in webinar training.
Colonna stresses the need to provide general auto repair information to specialty transmission shops amidst a challenging business environment. “Not only is the repair of automatic transmissions more difficult for these shops, but, since 2006, the amount of repairs have steadily declined by 3 percent per year,” Colonna explained. “So, there’s been a need for automotive transmission shops to diversify into general automotive repair work in order to survive. So, these shops are eager to learn what’s necessary to work under the hood — beyond their specialty — into areas such as ABS, powertrain and engine management.”
The new brand will be centered at www.MotorAge.com/PowerTrainPro. Advanstar estimates Motor Age reaches more than 10,000 transmission specialty shops.
CarMD Launches New Infomercial
CarMD.com Corp. (Irvine, CA) has debuted a new infomercial on regional and national cable and network stations across the United States. The 28.5-minute production features host Mel Arthur of “As Seen on TV” and Magic Jack notoriety promoting a new 30-day trial offer on the CarMD Vehicle Health System.
The CarMD system is comprised a handheld device, Mac/PC software and USB cabling that allows consumers to diagnose “check engine” light issues at home. The CarMD Vehicle Health System launched its first infomercial in 2009.
Field Rep for UCI Fram Group
Need 2+ yrs automotive service exp, prefer ASE cert., to deliver Sales and Training support to customers in Fuel Delivery Products, Water Pumps, Filtration, and Electronics. Will work with the field sales team and help identify ways to increase customer’s sales. Position requires weekly travel (approx 75%). Can be based in Mid-West (Memphis, Little Rock, Paducah, Evansville, Louisville). Competitive package plus company car. Bilingual is A+.
To apply, please send resume and comp details to firstname.lastname@example.org
Speedemissions Buys 5 Atlanta-Area Emissions Testing Facilities
Speedemissions Inc., an Atlanta-based vehicle emissions testing and safety inspections company, has acquired five vehicle emission testing facilities in Atlanta from Auto Emissions Express. The transaction increases Speedemissions’ presence in its home market to 19 locations, making it the No.-2 vehicle emission test-only chain in the region.
President and CEO Rich Parlontieri said that purchasing these locations underscores his company’s commitment to expanding its existing business by making strategic acquisitions. It also dovetails with Speedemissions’ efforts to expanding its business by selling franchises and providing an emissions repair business segment.
Speedemissions also operates emissions testing and safety inspection shops in Houston, St. Louis and Salt Lake City.
In related news, the company has released a new version of its CARbonga technology. CARbongaBT is an application that, along with a new bluetooth device, gives drivers a “x-ray” of their vehicle’s emissions and safety codes. In addition to operating the app, the bluetooth device has driver evaluation, vehicle maintenance and fuel economy provisions.
Delivery of the product will begin in early 2013 and retail for $69.99. It will be available for purchase at CARbonga.com, Speedemissions.com and in Speedemissions testing facilities. The CARbongaBT app sells for $4.99.
PetroChoice Acquires Craft Oil
Riddlesburg, PA-based PetroChoice, which has been working to expand its distribution throughout the Mid-Atlantic region, has acquired Craft Oil Corp. of Avoca, PA. Craft Oil distributes lubricants, equipment, and a range of related services to the commercial, automotive, industrial and aviation markets. Key brands represented include ExxonMobil, Shell, Pennzoil, Quaker State, Service Pro, Clean Burn, Wynn’s and Rotary Lift.
Craft Oil was a privately held company owned by Bob Mills and Maureen Mangan Mills. Bob is assuming the role of Mid-Atlantic division president and chief strategy officer of PetroChoice.
This is the fourth acquisition by PetroChoice this year. PetroChoice is a provider of petroleum-based lubrication products and services in the Mid-Atlantic and Midwest regions. The company distributes a variety of lubricants, coolants, equipment, and auto-lube and filtration systems.
Lift Institute Elects Officers, Hires PR Agency
The Automotive Lift Institute (ALI) has elected Jerome Lentz of Challenger Lifts in Louisville, KY chairman of the board of directors. Lentz takes over from Douglas Grunnet of Stertil-KONI USA, who ALI recognized for extensive contributions to the organization over his three-year term.
Continuing in their roles on the ALI board of directors are: Gary Kennon of the Vehicle Service Group, Gary DiAngelo of Wheeltronic Ltd., Jeff Kritzer of BendPak Inc., Pete Liebetreu of the Hunter Engineering Co., and Bob O’Gorman, ALI president.
In related news, ALI has named Simpson Communications as its public relations agency of record. Simpson Communications is a full-service public relations agency based in Shaker Heights, OH. It specializes in business-to-business communications within various segments of the transportation industry. Many of its clients focus on vehicle service, maintenance and repair.
O’Gorman, the president of ALI, explained that — with the introduction of its Lift Inspector Certification Program — ALI has expanded its mission to include vehicle lift inspection in addition to traditional activities designed to help promote a stronger automotive lift safety environment. “In order for the program to succeed, lift owners, technicians and the general public need to understand the importance of having every vehicle lift inspected annually by a qualified inspector. We hope that, in time, this will translate to mean by a lift inspector certified by ALI,” he said. “Simpson Communications understands the automotive industry and has a long history of communicating with the audiences we need to reach, so it was an easy decision to bring their team onboard.”
Also in related news, ALI reports that more than 300 industry professionals attended its Lift Inspector Certification Program orientation at the SEMA Show in late October. Attendees included lift inspector candidates, ALI members, and vehicle repair business executives.
And Stertil-Koni, a lift company, has initiated a new program among its distributor network to boost enrollment and participation in the ALI Lift Inspector Certification Program. Fifteen of the company’s independent distributors are now participating.
Retired Bausch & Lomb CFO Joins Monro Board Of Directors
Steve McCluski has joined the Monro Muffler Brake board of directors. McCluski, age 60, has more than 35 years of business and financial reporting experience, most recently serving as a senior vice president and CFO of Bausch & Lomb from 1995 until his retirement in 2007. He currently serves as an operating director of DeltaPoint Capital Management, a private equity group based Rochester, NY, which is where Monro is headquartered.
Revolution Supply/Oro-Tek TPMS: Sales Positions
We are seeking two full time Business Development Managers for an Automotive Aftermarket Program Group
Job Description: We need 2 individuals with solid experience in the automotive aftermarket. These individuals will be responsible for driving sales for the quickly expanding TPMS product segment and our quality line of accessories throughout the US. In addition, the individuals will be responsible for continuous education and training of the market place.
New Directors And A New Hire For AMRA
Dave Baier of Monro Muffler Brake will serve as chairman of the Automotive Maintenance & Repair Association (AMRA) board of directors for 2012-’13. He is joined by Lynn Parker of the TBC Retail Group, who serves as vice chairman, and Len Vogt of LENCO, who serves as secretary/treasurer. It’s worth noting that Parker was selected to replace Richard Schossler as vice chairman. Parker returned to the AMRA board in 2011-’12 after previously serving as a director from 2003-’05.
No new members joined the board this time around, as all those eligible for re-election were approved.
Receiving new two-year terms, running through October 2014, are:
• Chuck Abbott of UView;
• Ricky Jackson of Jiffy Lube International;
• Jerry Lott of Bridgestone Retail Operations;
• Al Wheeler of Carquest Corp.; and
• Richard Schossler of the Goodyear Tire & Rubber Co.
Rounding out the board are:
• Denny Bowen of the Hunter Engineering Co.;
• Dennis Johndrow of the Sears Holding Co.;
• Jack McDonald of Pep Boys; and
• Dick Laimbeer, an automotive industry consultant and representative of the MAP Advisory Council.
It should be noted that former board member Joseph Henmueller resigned after being hired as director of administration for the AMRA staff. His former position on the board remains open while a replacement is determined.
In related news, AMRA has added Joellen Kwiatkowski as its manager of membership and administration. Her duties include providing membership administration services, as well as coordinating meeting sites for MAP Technical Committee meetings. As a part of her initial responsibilities, Kwiatkowski will assist AMRA with its move in early 2013 from Falls Church, VA to Arlington Heights, IL.
AMRA is made up of more than 9,200 automotive service provider locations and their vendors serving the automotive aftermarket. Through its Motorist Assurance Program (MAP), a technician participation and assessment program, AMRA provides communication standards to be used between the automotive maintenance and repair service industry and its customers.
Tint World Launches Specialized Detailing Products
Weston, FL-based Tint World is launching its own exclusive line of specialized automotive detailing products. Tint World will be manufacturing the products, which range from car wash shampoo to polish. The launch of the new Tint World-branded auto detailing products comes a year after the release of specialty window tint film under the same Tint World brand name.
In related news, the first Tint World location in New York has opened in Albany. It is a franchise shop.
9 Consecutive Quarters Of Customer-Pay Gains At AutoNation
America’s largest automotive retailer, AutoNation Inc., saw its parts and service gross profit rise 4.1 percent to $251.80 million in the third quarter of 2012 as segment revenue increased 3.3 percent to $596.80 million. Same-store parts and service sales rose 3 percent to $593.30 million, with improvement across the board in internal warranty, customer pay, collision and wholesale parts.
Same-store parts and service gross profit increased 3.8 percent to $251.20 million, primarily because of increases in gross profit associated with the preparation of vehicles for sale of $6.70 million, warranty of $1.40 million and customer-pay service of $1.30 million. Management said that customer-pay service gross profit benefited from improved market conditions and better marketing of products and services in the service department. Notable, this was the ninth consecutive quarter of year-over-year gains in customer-pay gross, as well as revenue.
AutoNation of Fort Lauderdale, FL owns and operates 261 new vehicle franchises that sell 32 brands across 15 states.
Lithia Motors’ Customer-Pay Revenue Up 6.9%
Medford, OR-based Lithia Motors saw its service, body and parts gross profit climb 6.4 percent to $43.76 million in the third quarter of 2012 as revenue grew 7.1 percent to $90.63 million. Customer-pay revenue increased 6.9 percent to $51.83 million. Warranty revenue fell 1 percent to $13.69 million. Wholesale parts revenue increased 9.9 percent to $16.40 million, while body shop revenue rose 17.8 percent to $8.71 million.
On a same-store-sales basis, Lithia’s service, body and parts business continued to experience overall growth, rising 6.1 percent.
Same-store customer-pay business grew 5.8 percent to $50.40 million, marking the company’s 13th consecutive quarter of same-store customer-pay sales improvement. Same-store wholesale parts sales increased 8.5 percent to $16.04 million, while same-store body shop sales rose 17.8 percent to $8.71 million.
Same-store warranty sales fell 1.7 percent to $13.30 million, as work continues to be impacted by declining units in operation from 2008, 2009 and 2010, as well as the increased warranty work in 2011 associated with Toyota recalls.
“We continue to anticipate lower warranty revenue for the remainder of 2012 and into 2013 due to a lower number of units in operation from lower sales over the last few years,” said Bryan DeBoer, president and CEO, on a conference call with members of the financial community. “Warranty comprises 15 percent of our service, body and parts business, and can be more than offset by concentrating on growing the other 85 percent of the non-warranty activity.”
Lithia Motors is the ninth largest automotive retailer in the United States, selling 29 brands of new vehicles and all brands of used vehicles at 87 stores in 11 states.
Sonic Automotive’s Parts Sales Rose 0.8% In Q3
Charlotte, NC-based Sonic Automotive saw revenue from its parts, service and collision repair segment (a.k.a. fixed operations) increase 1.3 percent to $290.90 million in the third quarter of 2012. Parts revenue rose 0.8 percent to $154.34 million, while service revenue increased 1.7 percent to $123.22 million. Collision repair revenue increased 4.4 percent to $13.34 million.
Overall fixed operations customer-pay revenue grew 1.6 percent during the quarter, while wholesale parts revenue was up 0.5 percent.
Total fixed operations gross profit came in at $142.14 million, which was up 1.7 percent over the previous year. Gross profit from parts decreased 0.1 percent to $49.76 million. Service gross profit increased 2.4 percent to $85.11 million. Gross profit from collision repair increased 6.9 percent $7.28 million.
Penske Reports 8.6% Rise In Same-Store Service & Parts Gross Profit
The Penske Automotive Group (Bloomfield Hills, MI) saw its service and parts revenue rise $24.60 million, or 7.1 percent, to $372.03 million in the third quarter of 2012. Management attributed the revenue growth to an $18.30 million increase from net dealership acquisitions, coupled with a $6.30 million, or 1.9 percent, increase in same-store revenue.
The increase in same-store revenue came from a $2.80 million, or 1.1 percent, increase in customer-pay revenue; a $1.80 million, or 2.8 percent, increase in warranty revenue; a $1.30 million, or 36 percent, increase in vehicle preparation revenue; and a $400,000, or 1.4 percent, increase in body shop revenue.
Penske’s service and parts gross profit rose $17.10 million, or 8.6 percent, to $215.10 million. Management attributed the growth in gross profit to a $9.50-million increase from net dealership acquisitions, along with a $7.60 million, or 4 percent, increase in same-store gross profit during the period.
The same-store gross profit increase came from the aforementioned $6.30 million, or 1.9 percent, rise in same-store revenues (which increased gross profit by $3.70 million), coupled with a 0.8-percent increase in gross margin, which increased gross profit by $3.90 million. The same-store gross profit increase is composed of a $5.50 million, or 21 percent, uptick in vehicle preparation gross profit; a $1.30 million, or 1.1 percent, increase in customer-pay gross profit; a $600,000, or 1.7 percent, rise in warranty gross profit; and a $200,000, or 1.2 percent, increase in body shop gross profit.
Penske operates 341 retail automotive franchises, representing 40 different brands, as well as 30 collision repair centers. The company has 171 franchises in 17 states and Puerto Rico, as well as 170 franchises located outside the United States, primarily in the United Kingdom.
Business Development Manager – Automotive Aftermarket
We are seeking two full time Business Development Managers for an Automotive Aftermarket Program Group
We need 2 individuals with solid experience in the automotive aftermarket. These individuals will be responsible for driving sales for the Automotive Distribution Network membership in a geographic area, by developing relationships with the membership and their customers. In addition, the individuals will be responsible for developing a partnership with the membership, assisting with growth in the areas of Marketing, IT initiatives, National Accounts, Product Compliance, and Network Products Co-Man Warehouse.
Group 1 Same-Store Wholesale Parts Sales Flat In Q3
Houston-based Group 1 Automotive reported higher parts and service revenue (up 7.1 percent to $224.90 million) and gross profit (up 8.1 percent to $118.12 million) for the third quarter of 2012. On a same-store basis, parts and service revenue increased only 0.4 percent to $210.84 million, driven primarily by a 3.6-percent rise in collision revenue. Same-store customer-pay, warranty, and wholesale parts and service revenue all were relatively flat when compared to the same period in 2011.
Same-store gross profit increased 0.9 percent to $110.18 million.
Group 1 owns and operates 121 automotive dealerships, 158 franchises, and 30 collision centers in the United States and the United Kingdom that offer 32 brands of automobiles.
Asbury Automotive Parts & Service Revenue Up 1.2%
The Asbury Automotive Group (Duluth, GA) saw its parts and service revenue increase 1.2 percent to $143.50 million in the third quarter of 2012, as a $2.60 million, or 3 percent, increase in customer-pay revenue was partially offset by a $1.20 million, or 6 percent, decrease in warranty revenue. Parts and service gross profit rose 4.1 percent to $832.20 million due, in part, to a 3-percent bump in customer-pay parts and service gross profit. Wholesale parts gross profit was unchanged at $4.80 million.
Asbury operates 77 retail auto stores, encompassing 97 franchises for the sale and servicing of 28 different brands of automobiles.
Toyota Tops CarMD Vehicle Health Index
Toyota/Lexus/Scion came out at the top of the CarMD Vehicle Health Index for the second year with an overall index rating of 0.58 — up from 0.67 in 2011, the index’s inaugural year. The reason for Toyota’s score improvement can be traced to lower repair incidents.
Hyundai held down the No. 2 spot with a rating of 0.67 — up from 0.85 a year ago. Additionally, Hyundai boasted the lowest average repair cost among the Top 10 manufacturers with an average “check engine”-related repair cost (parts plus labor) of $271.86. BMW/Mini came in with the highest average repair cost at $502.48.
Rounding out the Top 10 automakers by CarMD index rating were …
• BMW/Mini – 0.84
• Honda/Acura – 0.98
• Volkswagen/Audi – 0.99
• Nissan/Infiniti – 1.00
• Kia – 1.04
• General Motors – 1.12
• Ford/Lincoln/Mercury – 1.17
• Chrysler/Jeep/Ram/Dodge – 1.23
Most of the automakers saw their CarMD index rating improve year-over-year, reflecting an overall improvement in vehicle reliability. The only decliners were Ford (dropped from No. 4 to No. 9) and General Motors (fell from No. 5 to No. 8). Both automakers experienced a slight drop in repair incidents but an increase in average repair costs. GM’s average cost for “check engine”-related repairs rose 18 percent from $245.27 to $290.50, while Ford’s average repair costs increased 42 percent from $240.68 to $340.96.
CarMD’s Vehicle Health Index ratings are based on more than 163,000 specific repairs performed from Sept. 1, 2011 to Sept. 1, 2012, encompassing roughly 136 million model-year 2002 to 2012 vehicles.
Consumer Interest In Electric Vehicles Has Declined
According to a new consumer survey from Pike Research, fundamental interest in plug-in electric vehicles (PEVs) has declined since the first commercial launches in 2010. In 2012, only 35 percent of respondents stated that they would be “extremely” or “very interested” in purchasing a plug-in hybrid electric vehicle (PHEV) or battery electric vehicle (BEV) with a range of 40 to 100 miles and an electricity cost equivalent to $0.75 per gallon.
In 2011, 40 percent stated they were “extremely interested” or “very interested” in this type of vehicle, which was down from 44 percent in 2010.
Dave Hurst, a senior research analyst at Boulder, CO-based Pike, said that interest in PEVs remains moderate but has fallen over the last year. “While this decrease is not staggering, it might indicate that auto manufacturers need to address misconceptions among consumers and do a better job of educating consumers about the benefits of PEVs in order to attract buyers in larger numbers,” Hurst posited.
In addition to a decline in interest, the 2012 survey found that there are a number of misconceptions in the market. When asked if PEVs are cheaper to own in the long run than gasoline vehicles, 37 percent of respondents disagreed. Additionally, 37 percent believe PEV batteries are dangerous. Even those respondents who expressed interest in PEVs showed signs of concern, as more than one third believes current PEV owners are often stranded as a result of their vehicles running out of power.
The report, “Electric Vehicle Consumer Survey,” details findings from a web-based survey of 1,001 consumers in the United States. The study assesses consumer demand, preferences, opinions, and price sensitivity for PEVs and electric vehicle charging infrastructure. The survey was conducted in the fall.
AAA Urges Stop To Rollout Of E15
AAA is urging regulators to stop the sale of E15 gasoline until motorists are better protected, saying research indicates a strong likelihood of consumer confusion, as well as the potential for voided warranties and vehicle damage. AAA says that 95 percent of consumers surveyed have not heard of E15, a newly approved gasoline blend that contains as much as 15 percent ethanol.
According to AAA, its automotive engineering experts believe that sustained use of E15 in both newer and older vehicles could result in significant problems such as accelerated engine wear and failure, fuel-system damage, and false “check engine” lights for any vehicle not approved by its manufacturer to use E15.
“It is clear that millions of Americans are unfamiliar with E15, which means there is a strong possibility that many motorists may improperly fill up using this gasoline and damage their vehicle,” said AAA president and CEO Robert Darbelnet. “Bringing E15 to the market without adequate safeguards does not responsibly meet the needs of consumers.”
AAA says five manufacturers (BMW, Chrysler, Nissan, Toyota and Volkswagen) are on record saying that their warranties will not cover fuel-related claims caused by the use of E15. Eight additional automakers (General Motors, Ford, Honda, Hyundai, Kia, Mazda, Mercedes-Benz and Volvo) have stated that the use of E15 does not comply with the fuel requirements specified in their owner’s manuals and may void warranty coverage.
Less than 5 percent of cars on the road are approved by automakers to use the fuel.
The only vehicles currently approved by automakers to use E15 are flex-fuel models, 2001 model-year and newer Porsches, 2012 model-year and newer GM vehicles, and 2013 model-year Ford vehicles. These approvals extend only to cars, light-duty trucks and medium-duty passenger vehicles (SUVs). The use of E15 is prohibited in heavy-duty vehicles, boats, motorcycles, power equipment, lawn mowers and off-road vehicles.
AAA urges fuel producers and regulators to do a better job of educating consumers about potential dangers before selling E15 gasoline. This outreach, the association says, should include a consumer education campaign and more effective pump labels, among other potential safeguards to protect consumers and their vehicles. AAA also recommends additional testing to conclusively determine the impact of E15 use on vehicle engines and fuel system components.
News Briefs 12/12/12
• More than one in eight U.S. vehicles has bald tires, according to survey by the Rubber Manufacturers Association (RMA). The survey of 5,300 vehicles found that more than 13 percent had at least one bald tire. That’s an increase from 10.4 percent in 2010.
• The Automotive Management Institute (AMI) in October recognized 80 auto service and repair professionals who earned AMI’s Accredited Automotive Manager designation by successfully completing AMI courses and accumulating a minimum of 120 credits.
• AMI has now awarded more than 2.5 million credits since the program launched in 1989.
• Bosch is expanding its portfolio of training to include an advanced course on gasoline direct injection technology. This one-day class will be offered in various locations across the United States and will launch in 2013.
• Bosch says more than 200 new service centers have joined the Bosch Service network in the United States and Canada this year, bringing the total up to 1,400.
• Bosch says that more than 1,100 Bosch Service credit cards have been issued to motorists in North America since the program launched in late 2011. This year, consumers are expected to charge $2 million in parts and services to these cards at Bosch Service network shops across North America.
• TransferCasesforSale.com, a transfer case retailer, has added online quotes to its website.
• Automotive diagnostic videos created by Wells Vehicle Electronics have exceeded 3 million views on YouTube.
• Experian Automotive says more than 9 million vehicles are registered in the counties most significantly affected by Hurricane Sandy.
• The U.S. Internal Revenue Service (IRS) is raising the standard mileage rate for business miles driven during 2013 by 1 cent to 56.5 cents per mile.
• Matt Dougher has joined ASA Ohio as the group’s new membership director. He oversees membership recruitment and retention.