2007 Certified Sales Outperform, Outdistance Dismal New-Car Market.

By Richard Greene, Editor August 08, 2007

DETROIT — As menacing and ominous-looking storm clouds continue to hover over new-car sales, with July being one of the darkest on record, a silver lining just very well may be certified sales.

The foreign nameplates dominated the new-car market in July, as the Big 3's market share dipped below 50 percent for the first time. But, according to the AutoData Corp., domestic manufacturers had a great month on the certified side, reversing a major trend by gaining market share against the Asian factories in July.

And several certified executives credited the hard work of their dealers behind such a productive month, as well as pointing to the power of the Internet for helping to educate customers and drive leads to their respective dealerships.

AutoData Corp. reported Tuesday that July CPO sales hit 143,562, 4.8-percent higher than a year ago. Year-to-date sales stand at 1,004,595, up 3.4 percent from July 2006.

"These results compare to the very soft month on the new-car side, where U.S. market retail sales of 1,308,672 were 12.3 percent below those of a year ago," AutoData Corp. officials noted.

"Domestic brand CPO share was 47.8 percent, up 1.9 percent from July 2006, while Asian share was down 0.4 percent and European share fell 1.5 percent," officials went on to say.

According to AutoData Corp., Ford, Honda, Acura, Nissan, BMW, Chrysler (formerly DaimlerChrysler), Porsche and Bentley sales reached July highs.

At the same time, the daily selling rate was the "highest ever," the company said, "slightly above" the rate this past May. The month had 24 selling days, compared with 25 the previous July, AutoData Corp. added.

General Motors

Though sales for all certified GM brands did not attain a July best, sales were still up nearly 9 percent from last July, the automaker reported.

By brand, GM Certified Used Vehicles posted 37,355 sales, up 12 percent from last July. Cadillac Certified Pre-Owned Vehicles sold 3,026 units, a 4-percent decrease compared to last July. Saturn Certified Pre-Owned Vehicles posted 1,537 sales in July, down 15 percent, while Saab Certified Pre-Owned Vehicles sold 638 units, a 26-percent drop. Hummer Certified Pre-Owned Vehicles sold 85 units, up 29 percent from July 2006.

"Our dealers are doing a great job of certifying eligible vehicles and converting the leads sent from our listings partners, Cars.com and AutoTrader.com, into sales. These listing programs provide our dealers with unparalleled exposure to used-vehicle intenders," explained Paul Pejza, manager of GM Certified Used Vehicles.

"We've also grown enrollments in our GM Certified dealer network nearly 10 percent since the beginning of the year," Pejza added. "Dealers are seeing the value in the program, and they're certifying more units, helping GM Certified grow our industry-leading certified inventory."

Pejza pointed out that the Internet is a key element of the automaker's certified marketing plan. "It provides a more measurable and flexible medium," he noted.

"At our site, consumers learn about the benefits and value of purchasing a GM Certified Used Vehicle," Pejza added. "The next step is to click over to a GM Certified dealer home page to check out the available GM certified inventory."

Chrysler

According to AutoData Corp., Chrysler, Dodge and Jeep dealers achieved a July monthly record when they posted sales of 9,629 certified units, up 11 percent, or 940 units, versus last July.

By brand, dealerships sold 3,123 Chrysler certified vehicles, 3,905 Dodge units and 2,601 Jeep vehicles.

Bud Place, senior manager of vehicle sales and marketing for Chrysler Motors, praised the efforts of the manufacturer's dealerships. "The key driver to our success continues to be our dealer effectiveness in communicating the benefits featured in our CPOV program to their used-vehicle prospects," he noted.

The Internet plays a significant role regarding the marketing of certified vehicles, Place said. "A majority of hits to our new-vehicle sites are for the purchase of researching new model vehicles and/or finding a dealer," he explained.

"For those who are searching for used or new vehicles on our Chrysler, Jeep or brand Web sites, they will find the CPOV link there as well," Place said. "But AutoTrader.com, Cars.com, AutoExtra.com, AutoMart.com and others are where the majority of used-vehicle shoppers, particularly CPOV intenders, search for used vehicles today.

"That is why we, as well as our major competitors, maintain such a major presence on these Web sites," he continued. "This presence is maintained both in terms of advertising CPOV inventory listings and listing information regarding the consumer benefits of our respective CPOV programs."

Ford

There was good news emanating out of Dearborn, Mich., as well. Combined Ford and Lincoln Mercury CPO sales finished July at 16,978 units, setting a new record for the month and "the second best month since the program launched in 2001," according to Mark Stewart, of Ford's certified pre-owned programs.

Ford CPO sales in July hit 14,647 vehicles, also setting a new record, up 7.9 percent compared to July 2006, Stewart added. Lincoln Mercury dealers posted 2,331 sales, up 9.1 percent compared to the same time last year.

Tom Cornellier, manager, certified pre-owned, remarketing e-business and marketing for Ford, said the automaker sees "substantial and growing opportunity" in leveraging the Internet for Ford's certified program.

"The listing and syndication of inventory across sites popular with shoppers, rich banner advertising, paid search and search engine optimization, as well as serving more relevant content and functionality on our corporate sites, has proven very effective in reaching ‘in-market' consumers," Cornellier explained.

Identifying and understanding consumer intentions as they use the Internet is "critical," the Ford executive added.

"Continuing to refine our Internet strategy means getting the consumer to their area of interest as easily as possible, whether it's inventory, program information or consumer offers," he said. "In some cases, it means pointing or deep linking customers to areas within our corporate Web site, while in others it may mean serving inventory in their geographic areas."

Honda and Acura

July was another good month of certified sales for Honda and Acura dealers, officials said. With Honda certified sales hitting 17,861 units and Acura 3,474 units, both "exceeded our sales objectives for the month," according to Dan Crowe, Honda and Acura's manager of remarketing.

Like his counterparts, Crowe pointed to the strategic importance of the Internet.

"As shoppers do their research on vehicles of interest, our intent is to drive them to view the certified vehicle detail page on the Web sites that house all of our certified inventory, and the number of vehicle searches continues to grow every month," he said.

"We promote our Web site on some of our point-of-sale material," Crowe added. "However, the vehicle information and marketing message is the same for both our Web site and the third-party sites that we use to display our inventory on."

BMW

Sales of BMW's certified pre-owned vehicles also reached their best July ever. Sales were up 2.9 percent to 7,178 units versus 6,977 vehicles reported last July.

Bill Bates, manager of pre-owned sales at BMW of North America, stated that the Internet is more relevant for used and certified than it is for the new-car business.

"On the new-car side, there is this plethora of information that people can get. We know that when people are coming into our BMW centers, they are coming in armed with incredible product knowledge," Bates said.

"My hypothesis on the used-car side is a little different. On the used-car side, they are finding the specific car that they want to buy," he pointed out. "No mechanism exists for this as the Internet."

Bates said BMW was initially reticent to market certified vehicles via third-party sites, choosing instead to promote heavily the manufacturer's certified Web site. But then the automaker began to see the complementary value of using third-party sites because customers were relying on them to find used vehicles.

"If they are shopping at the major third-party non-OEM sites, and they sure as heck are, then we should go where the customers are shopping, rather than sitting here naively saying, 'Make the customers come to us,'" he highlighted.

"Our Web site is still the official and authoritative place where you can get all the details about the certified pre-owned BMW vehicle program," Bates added. "So, we're not demeaning or diminishing the importance of BMWUSA.com/certified, we're just saying there are these other sites where we need to put our product because that is where a lot of people are shopping."

Toyota and Lexus

Meanwhile, Toyota posted a bigger than expected decline in new-car sales in July, and the automaker also registered a decline in certified sales when compared to last year.

Toyota dealers posted 21,927 sales, falling from 23,479 units sold the previous year.

But Norm Olson, sales operations manager for Toyota Certified Used Vehicles, was quick to say that year-to-date sales are showing a 5.5-percent, or more than 8,000 units, increase ahead of last year.

The Internet is helping to fuel that overall increase, Olson said. "TCUV continues to realize a tremendous amount of consumer traffic through our manufacturer Web site and third-party provider sites," he pointed out. "Consumers are constantly looking for more and better information, a trend that will continue in the future."

As a result, Olson said that TCUV has developed a "fully integrated" marketing strategy across all media channels.

"Our advertising message builds awareness and brand consideration, inviting consumers to learn more about Toyota Certified Used Vehicles on our Toyotacertified.com Web site," he explained.

"Our third-party providers have done an excellent job promoting their sites to our lower funnel buyers who are actively interested in buying a certified Toyota. Third-party sites reach the highest amount of in-market shoppers at all states of their shopping process," he continued.

As for Lexus, its CPO sales reached 4,270 units, a 9.2-percent increase over July 2006.

Matt Kaleba, national certified pre-owned and fleet manager for Lexus, also said the Internet is an integral part of its marketing strategy.

"Affluent shoppers spend time online researching certified programs and vehicles for sale," he explained. "To reach these consumers with our message, we focus our efforts online, giving them the tools they need to learn more about our programs and search our dealers' inventories for certified vehicles.

"By reaching consumers who are utilizing our Web site, our dealers' Web sites or third-party automotive sites, we are able to educate them on the Lexus certified pre-owned program and also show available vehicles for sale," Kaleba continued. "When the consumer wants more information on the vehicle, we are able to connect them with their local dealer and begin a personal dialogue."

Additional Automakers

Moving on, Nissan dealers posted sales of 4,645 units, compared with 3,948 units last July.

Mercedes-Benz also had recorded a year-over-year increase in July. This year, certified sales were 4,417 units, whereas sales were 4,368 units a year ago.

Audi's certified sales in July were fewer this year compared to last July. Audi dealers sold 2,221 units this year, as opposed to 2,357 vehicles in 2006.

Volkswagen also saw a year-over-year decrease, selling 2,780 vehicles, down from 3,284 the previous July.

July was also not kind to Jaguar and Land Rover. Jaguar certified sales were 867 this year, compared with 999 a year ago, and Land Rover posted 462 certified sales in July 2007, compared with 759 in 2006.

Finally, Porsche dealers sold 515 Porsche Approved Certified Pre-Owned cars in July, versus 503 for the same period last year.