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On the Point

Stop That Train!

‘Da Man’ gets a little reflective about his recent surgery before regaining form and doing what he does best.

May 10, 2012

Did you ever catch that Denzel Washington flick, “Unstoppable”? Released in 2010, it’s about an out-of-control freight train that stretches a mile long and is barreling toward a city. Its cargo consists of poisonous and combustible materials that will wipe out everything within a 50-mile radius upon impact.

It’s a great flick that, unfortunately, didn’t receive the fanfare it should have. But that’s not the reason I bring up the movie. I bring it up because I’ve been living like a runaway train for way too long now. And now it’s time to fix it.

See, as I mentioned last month, my knee went under the knife for a third time on March 19. And let me tell you, I’m a new man, as the operation was an overwhelming success — at least, so far. I say “so far” because, while the leg is doing fine, something about the anesthesia I was administered awoke some cardiac issues I didn’t know I had.

So, for the last three weeks I have made multiple trips to the cardiologist for high blood pressure, skipped heartbeats, and a low pulse rate. After a few visits with the cardiologists at Emory University, all is good. But out of that experience came the realization that I need to make some serious lifestyle changes, and consuming less alcohol is among them.

Ziegler 3.0
I’ve never viewed my lifestyle as a problem, but I do live in airports, on planes and in hotels. My attendance at dealerships and industry events leads me to some of the best restaurants in the country, and, well, the scales don’t lie. In fact, I had a serious talk with myself that started out with this: “OK, Ziegler, you fat ass, we’ve got some serious changes ahead.”

So I’ve lost 15 pounds since I started being real with myself, and I’m getting ready to restart an exercise routine once the leg is fully healed.

This ordeal also reminded me how much I’ve done in my career. I mean, before I started my company, I was working 10-hour days six or seven days a week for 10 years. And as I’ve bragged in the past, I spend about 250 days of the year traveling and speaking. I’m also writing, blogging and crusading. And that’s been my schedule since 1986.

Does this lifestyle sound like a runaway train to you or what? Although I have no intentions of retiring, I have made a conscious decision to slow it down — that’s if I can find the brakes. Hey, I’m like a machine, sticking to my 100-calls-a-day schedule.

Break on Through
It’s April 9 and there’s a lot of news coming out of the New York International Auto Show. Since this is one of the last major shows of the season, manufacturers use the event to drop the bombs they’ve been holding back.

One thing about these shows is you have to be able to separate fact from fiction. Many manufacturers will showcase amazing concept vehicles that they have no intention of putting into production. That’s not the case with Nissan, however.

Every year I wonder when Nissan will finally make its move on the market. To me, it seems as if the brand has never fully lived up to its market potential, mainly because it continues to live in the shadows of Toyota and Honda. There have been flashes of brilliance, but never a sustained, aggressive product-and-marketing assault on the competition.

This year, industry watchers have noticed Nissan has quietly captured an 8.2 percent market share. I don’t think that achievement is product-driven. It’s the result of a top-quality, highly motivated dealer network. Nissan also gets credit for not interfering with its dealers’ own sales and marketing efforts.

Now Nissan is coming out with an incredible new product that’s expected to hit showrooms immediately. In fact, the new Altima, already the nation’s No. 2 best-selling car, is going to be a game-changer. Production on the 2013 model began on May 14, with delivery set for June. And what we’ve seen so far is no concept; it’s the real deal.

Totally redesigned, and, more importantly, reengineered, this new Altima is going upscale with technology, fuel efficiency and luxury enhancements that I believe will capture a lot of market share from its Japanese rivals, particularly Honda. I could write 10 paragraphs about the vehicle, but you can read that elsewhere. What I will tell you is the company is so excited about the Altima that Carlos Ghosn, the company’s CEO, is predicting that Nissan and Infiniti brands will capture 10 percent of the market this year.

Plaguing Questions
Back in the ’80s, when I was selling Toyotas in Jacksonville, Fla., the Cressida was the carmaker’s top-of-the-line luxury vehicle. At some point, the Avalon assumed that title. My take on the Avalon is that it was a totally unnecessary, tricked-out Camry for people who couldn’t afford a Lexus.

The car simply has no identity and no reason to exist. Come to think of it, the Cressida didn’t sell all that well in its day, either. And with only 29,000 Avalons sold last year (and that’s a dramatic increase), again, I ask: Why does it exist?

Personally, I would have discontinued it a long time ago. That said, Toyota has totally reimagined the Avalon with a distinct identity. Developed here in North America from the ground up, the Avalon is a huge roll of the dice given that it’s competing in the shrinking full-sized sedan segment that is already overcrowded.

But I feel for Toyota. It’s been a tough sled. I mean, not even the 10 plagues of Egypt were as bad as the last few years for the company. Yes, all Japanese manufacturers endured floods, earthquakes and tsunamis, but Toyota suffered through recalls, government fines, lawsuits and bad press to boot.

Now we see Toyota beating its chest in triumph. The company expects to deliver 400,000 Camrys this year. If that feat is achieved, it’ll be the best sales year for the Camry since 2008. Not to rain on anyone’s parade, but more than 20 percent — some estimating 30 percent — of those vehicles are headed to fleet and rental lots. So, look for the floodgates to swing open for off-rental cars and off-fleet units.

Partying Like It’s 2006
It seems like there’s a giant party happening right now in the auto retail industry. Everybody is high-fiving, with dealers and manufacturers feeling pretty optimistic about the market right now. We’re sort of back to where we were in 2006. The skies have cleared and it’s smooth sailing ahead.

Unfortunately, I see manufacturers once again lining up to overproduce to demand. Every one of them believes they’re going to gain increased market share this year with new product and newly refurbished facilities. Sorry, boys, somebody has to lose.

And last I checked, market share was a percentage of the business, and 100 percent is still all you can achieve. Yes, coaches like to demand 110 percent from their players, but there’s a difference between motivating your team and overproducing to meet unrealistic goals.

Curtain Call
As I said, the full-size, mid-priced sedan market is already flooded with new entries. Already out and selling well are the redesigned Hyundai Sonata, Kia Optima and Volkswagen Passat. The new Chevrolet Malibu is already on the floor and, as I mentioned, the Altima is expected to roll into showrooms in early summer. In the coming months, we’ll also see the redesigned Honda Accord, Ford Fusion and Mazda 6.

Product is only a piece of a much larger puzzle. Yes, I believe product is the center of the universe, but it takes sales and marketing to drive those vehicles off dealer lots. Unfortunately, some manufacturers are becoming so distracted by minutiae and trivia that they’re going to get their butts handed to them by the competition.

I predict the manufacturers that excel and surpass projections will be the ones that give dealers a lot of great product and allow them to do what they do best with minimal interference. Hyundai and Kia are two such companies.

In fact, I believe Honda’s 5 percent retreat in sales last month wasn’t about the company losing business as much as it was Hyundai and Kia taking it away. How else can you explain the sales drop, especially after Honda enjoyed strong sales in January and February?

Okay, I admit it: I am a huge John Krafcik fan. There are a handful of factory executives who I hold in high esteem and Hyundai’s U.S. CEO is one of them. As a factory guy working with dealers, I think he really gets it. That said, I have to disagree with something he said recently.

Krafcik confirmed that Hyundai will stay the course with a single brand identity to cover all of its model lines, but I just don’t see how you can. I mean, the Genesis is such a departure from the base-model Hyundai Elantra  (as is the Equus, with its $60,000 to $70,000 price tag). That’s why I’ve predicted from the beginning that there would come a time when the Genesis name would spin off to become its own upscale brand identity like Toyota did with the Lexus brand.

You have to give it to Hyundai. It has come a long way since the ’90s. I recall a time when Hyundai product quality was so bad that banks wouldn’t finance them, relegating the brand to a special finance car for credit-challenged customers.

Some people may recall the late ’90s when I wrote and said repeatedly in speeches that dealers should buy a Hyundai franchise. People thought I was crazy, but I predicted something that came to pass. Yes, the ghosts of the past still haunt the brand today, even though the quality and styling of Hyundai’s vehicles are now world-class. Unfortunately, a certain segment of the population wouldn’t be caught dead driving a Hyundai.

No offense! I love the franchise and the brand, but truth is truth. I have tried to convince  many people, including family members, that the Genesis is an incredible machine for the money. But they don’t care how good Hyundai’s vehicles are now, they just won’t drive one.

Life Isn’t Fair
As you probably heard, General Motors sold more Volt hybrids in March than in any other month so far. This car has had its share of problems, real and perceived. First of all, it’s become a symbol of President Obama’s tampering with free enterprise and inserting the government into private industry. The fire scandal was overblown, in my opinion, but it certainly didn’t help.

Personally, I believe it’s a great car with the best technology in its field. I think it has been unjustly slandered and maligned, which is why the public isn’t beating the doors down to get their hands on one. As for having its best month so far, well, 2,289 units kind of sucks if you’re projecting to deliver 60,000 for the year.

Sales of the plug-in hybrid for March were 50 percent higher than its previous best month, which was December. I believe the customer-testimonial commercials are working and GM should pour it on.

So, is it really the Volt’s fault? Or is the entire hybrid-electric thing that’s really the issue? Truth is, not even the $7,500 government tax advantage Obama laid on the hoods of these vehicles made a difference. It’s still a niche, folks. In fact, a recent report from R.L. Polk points out that more than 66 percent of people trading in a hybrid or electric car didn’t opt for another one, choosing conventionally powered vehicles instead.

I like these cars, but would I own one? Well, not unless you or the economy made me. Gasoline reaching $8 a gallon would be a nice motivator, too. I’d essentially be getting an equivalent of 183 miles per gallon behind the wheel of a Volt.

Engineering Degree Required
As most people who know me will tell you, I drive domestic cars and my wife drives the imports. What can I say? I’m addicted to my Corvettes and SUVs.

The wife currently drives a Mercedes, but she has owned a Lexus and BMW. And let me tell you, her SL550 is so complex and complicated that I don’t care to drive it. I felt the same way about her 5 Series. And I can just about guarantee that my wife doesn’t know how to operate half the features in either car. Heck, I’d be willing to bet that most owners don’t, either.

But this isn’t solely an import issue, or even a luxury problem. The problem is cars are being crammed with a lot of technology these days. I just don’t know how you can drive without being distracted. Even with Bluetooth and other hands-free technologies, you still can’t help but fiddle with all those gadgets.

And let me tell you, the government is all over it, issuing in February proposed guidelines to encourage auto manufacturers to limit the distraction risk of in-vehicle electronics. A month later, it released 2010 statistics that showed that 3 percent of the 899,000 distracted-driving-related accidents reported to law enforcement were caused by navigation or infotainment systems. Those guidelines are voluntary right now, but I expect that to change this year and for the Department of Transportation to impose limits on what automakers can add to vehicles.

My ‘Train A Comin’
Looking at the desk in front of me, there’s one thing noticeably absent as I write this article. Usually, there’d be an empty snifter of Remy-Martin Louis XIII cognac, which has been my tradition for 20 years. Not this time. That doesn’t mean never again, it just means not just yet. Hey, I still have six or seven unopened bottles here, but, like I said previously, I’m making some changes.

I am really excited about the Internet Battle Plan seminar this month (May 9-10) in Cleveland. As a matter of fact, look for F&I and Showroom magazine and me to be teaming up on some conferences in the near future. Keep those e-mails and phone calls coming.

Jim Ziegler is the president of Ziegler SuperSystems. E-mail him at jim.ziegler@bobit.com.

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Author Bio

Jim Ziegler

President & CEO of Ziegler SuperSystems

Jim 'Da Man' Ziegler joined the magazine in 2011 to deliver his On-the-Point message about the car business to dealer principals and store managers. He'll offer strategy advice on everything from sales and F&I to marketing in the digital age. Catch him every month at www.fi-magazine.com.

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