Gasoline, autos boost retail sales in August

WASHINGTON, Fri Sep 14, 2012 – Retail sales rose for a second straight month in August, boosted by automobiles and high gasoline prices, but the underlying tone pointed to modest economic growth in the third quarter.

Retail sales increased 0.9 percent, the largest increase since February, the Commerce Department said on Friday, after a downwardly revised 0.6 percent rise in July that was previously reported as a 0.8 percent advance.

While the gain last month was above economists’ expectations for a 0.7 percent rise, details of the report pointed to an only modest increase in consumer spending this quarter after sluggish demand restricted the economy to a 1.7 percent annual growth pace in the April-June period.

That suggests third-quarter economic growth would still be insufficient to cut into high unemployment, which on Thursday prompted the Federal Reserve to launch a third round of bond purchases and push its pledge to hold interest rates near zero through at least mid-2015 from late 2014.

The rise in sales last month was led by gasoline stations, reflecting a 28 cents per gallon increase in the pump price. Gasoline sales surged 5.5 percent, the largest increase since November 2009, after rising 0.4 percent in July.

Automobile sales increased 1.3 percent, the most since February, after gaining 0.1 percent in July.

Excluding gasoline and autos, retail sales edged up 0.1 percent after rising 0.8 percent the prior month.

Don’t just say ‘customers first’ — mean it!

Bernie Moreno, Owner, Collection Auto Group

This is the third part of an interview with Bernie Moreno, the owner of Collection Auto Group. For more, please see:

Collection Auto Group

Managing growth while maintaining culture

What’s the best piece of advice you’ve ever received?

Make a decision. Too many times in business we are faced with hundreds of choices and options. Given the fast pace at which business moves today, you have to trust your judgment and make a decision. Second piece of advice that goes along with this: be right at least 51 percent of the time!

When you think about putting your customers first, describe your philosophy for what that means and how you impart that to your team members?

Customer’s first is a philosophy EVERY business CLAIMS to have as part of their culture. There is no organization that would say they don’t value their clients. However, saying it and LIVING it are two entirely different issues. We live that philosophy by creating a culture in which our team members put the customer at the center of everything we do. We know our clients can “fire us” at any time and we never take for granted that we must execute every day. Of course, that culture hinges on having great people, which we are very fortunate to have an abundance of.

How do you empower your staff to go above and beyond for customers?

They are defaulted to say “yes.” If a team member is going to disappointment a client, that’s my job. I am the only one allowed to say “no.”

What is your philosophy for continuous growth — and continuous improvement?

The business world is changing at a speed that is unprecedented in history. We look at ways of reinventing ourselves, not just changing and evolving.

When you think about your business, what keeps you up at night, and what do you do to resolve it?

Nothing keeps me up at night. Business is my career and I never personalize it by letting it stress my personal life. That would not be fair to my family.

Collection Auto Group

28450 Lorain Road

North Olmsted, OH 44070

Phone: 440,716.2700

E-mail: [email protected]

Web: www.collectionautogroup.com

Facebook: www.facebook.com/pages/Collection-Auto-Group

Auto sales to drive aluminum demand – Novelis

NEW YORK, Thu May 3, 2012 – Novelis Inc.the world’s largest maker of aluminum sheet, said strong U.S. automotive sales this year would help drive U.S. demand for products using aluminum at a pace consistent with an expected 2 percent growth in U.S. gross domestic product.

“We look at the U.S. economy, all things considered, as stable and running at about a 2 percent GDP, maybe 2.5 percent. Nothing exciting, but still growing,” CEO Phil Martens told Reuters in a recent interview.

He projected global aluminum demand growth of 4 percent to 5 percent in each of the next five years, which would exceed U.S. demand growth.

In the United States, the aluminum chief was particularly upbeat about the automotive sector’s use of aluminum. He forecast that demand will grow dramatically over the next three to five years as the industry shifts to lighter materials to boost fuel efficiency and to reduce emissions.

“We’ve moved from let’s watch this, to let’s study it, we’re not sure what the scale will be but its going to exceed our expectations. Now we’re trying to figure out how to best support it long term,” he said of the movement toward more aluminum use by automakers.

Martens also assessed consumer buying patterns in the company’s two other main markets, saying beverage cans have been relatively stable for six months and consumer electronics demand continues to grow.

But he noted that U.S. consumers can be skittish.

“We still think the consumer in general has the ability to be scared. You have to be very cautious, because last year in the first half we were cruising along and then this debt ceiling debate came along and threw everyone for a loop,” the CEO said.

Managing growth while maintaining culture

Bernie Moreno, Owner, Collection Auto Group

Last year, we introduced you to Collection Auto Group and owner Bernie Moreno.

The company is still making tremendous strides in the automotive industry, so we sat down with Moreno again to see how Collection Auto Group continues to drive success.

What’s your greatest business challenge?

Managing our growth while maintaining our culture. We have grown from 25 people to almost 300 in just under seven years. We have a very unique culture that puts the customer at the core of everything we do. We don’t consider ourselves a “dealership,” but rather, we consider ourselves a customer service business. As such, recruiting, hiring, motivating and retaining the absolute top performers is critical. We also spend a lot of attention on making certain everyone understands our mission and our core values.

What makes you an innovative leader?

I don’t know if I am an “innovative leader,” but I do know we always look for creative solutions to challenges others have found difficult or impossible. We strive to keep our organization on the leading edge by being on the forefront of technology; whether by using social media, iPads for our sales people, or state of the art customer relationship management systems.

What’s the greatest lesson you’ve learned in business?

Not everyone has the skills needed to be singularly devoted to following through on the mastery of the details required to delivery excellent customer service. Knowing this, we continually reinforce the need to put in place organizational processes to help manage these details.

What has been Collection Auto Group’s impact on the economy?

We employ almost 300 people and generate over $250,000,000 in gross sales revenue. We are one of the largest collectors of sales tax in Cuyahoga County. We donate about $500,000 to local charities. We also provide human capital in the community to help improve this region.

How do you provide value and go “above and beyond”?

We take the purchase or servicing of a car from a transaction to an experience. Anyone call “sell” a luxury vehicle; we want to provide our customers one of the best, if not the best, service experiences they have ever had.

Collection Auto Group

28450 Lorain Road

North Olmsted, OH 44070

Phone: 440,716.2700

E-mail: [email protected]

Web: www.collectionautogroup.com

Facebook: www.facebook.com/pages/Collection-Auto-Group

U.S. lenders making more subprime car loans, report says

NEW YORK ― Lenders are making more subprime auto loans again, reversing the cautious approach they adopted after the credit crisis, an industry research firm said on Tuesday.

The portion of car loans made to subprime borrowers rose to 40.8 percent in the second quarter from 37.2 percent a year earlier, according to Experian Automotive, a unit of credit bureau and research firm Experian Plc.

The data shows how keen lenders are to boost their loan books amid a sluggish U.S. economy. Car loans are seen by lenders as relatively safe, because they are collateralized and repossessing cars is easier than foreclosing on homes.

Average credit scores for borrowers declined and the average term for their loans extended by one month to 63 months on new cars and 59 months on used cars.

“We are continuing to see growth in subprime, both new and used, and loans are becoming looser,” Melinda Zabritski, director of automotive credit for Experian said in an interview.

In mid 2007, loans to subprime borrowers made up 46.2 percent of the total. That easy lending led to a surge in delinquency rates before lenders turned conservative.

Tighter underwriting has resulted in fewer loans going bad. Loans delinquent by 30 days fell to 2.59 percent of those outstanding in the second quarter of this year, down from 2.89 percent a year earlier, according to Experian.

“Even though we have growth in subprime of late, our delinquency rates right now are extremely low,” said Zabritski. “We have an overall stable market because we did have a lot of conservative lending in 2009 and 2010.”

Repossessions have declined, too, with the percentage of car loans ending in repossession falling to 0.59 percent from 0.62 percent.

In a measure of market share tracked by Experian, the five most frequent lenders and their portions of the number of loans of all kinds made during the quarter were: Ally Financial, 6.93 percent; Wells Fargo & Co, 5.79 percent; Toyota, 4.84 percent; JPMorgan Chase & Co, 4.75 percent; and Honda, 3.92 percent.

Collection Auto Group

Bernie Moreno, Owner, Collection Auto Group

While their locations are in North Olmsted, Cleveland and Beachwood, Collection Auto Group and owner Bernie Moreno truly service the world.

The Collection Auto Group is a privately owned business composed of multiple automotive dealerships and an on-site performance center. Moreno started building his empire in 2005 with the purchase of the Mercedes-Benz dealership in North Olmsted. Later he added Porsche, North Olmsted Performance, Lotus, Saab, Fisker, Sprinter, Acura and Infiniti over the next five years.

Moreno and staff have made many achievements in the automotive industry since opening in 2005, including: Mercedes-Benz “Best of the Best” Award 2006, 2007, 2008, 2009 and 2010; #1 Mercedes-Benz Dealership in Ohio; #1 Mercedes-Benz Dealership in the Central USA; #1 McLaren SLR dealer in the world; #1 Porsche dealer in Ohio; #1 Porsche dealer in the Central USA; First German “Autohaus” designed Mercedes-Benz dealership in North America; #1 Saab dealership in Ohio; and #1 Lotus dealer in Ohio.

Smart Business spoke with Moreno to discuss how he’s been able to build success and drive growth.

What was one of the biggest obstacles you were able to overcome?

During the peak of the economic crisis in 2008 and 2009, we made the strategic decision to add staff and spend more in advertising to gain market share and further improve our customer service. We knew everyone would be doing the opposite and that our approach would put us in a great position to build momentum.

Why did you decide to add staff and spend more?

We define our business as a service delivery business and knew that every other dealership would be cutting critical customer-facing employees. We saw this as an opportunity to staff up and increase our service level with the aim of increasing market share.

What makes you an innovative leader?

We foster a spirit of fun throughout the dealership that customers recognize and appreciate when they come here. We also look to the newest technologies and adapt our processes accordingly to suit our customers’ needs.

Why is a spirit of fun so important? What makes a good company culture?

I love cars. I can’t imagine why someone would not find buying a new car fun. It never made sense to me. What is better than getting a new car? As a result, we try to instill that culture in our sales team. A good culture is one that everyone understands and follows … and achieves the desired result!

What new technologies have you utilized and how have they made you more efficient?

We use iPads and touch screen TVs throughout the dealership and have invested heavily in IT to improve our customer experience.

You’re a big proponent of supporting local businesses. Why is that so important?

It’s the circle of life. I live in this community. My kids live in this community and will always know Cleveland as their hometown. To really be effective as a business, you have to give back to your town more than you took. That is our goal.

We have increased employment tenfold in six years. We spent almost $15,000,000 in construction, all of it with vendors or suppliers from Northeast Ohio. We spend over $3 million in local media.

What’s the biggest lesson you’ve learned?

Set high expectations for yourself first and motivate your team to do the same for themselves.

Collection Auto Group

28450 Lorain Road

North Olmsted, OH 44070

Phone: 440,716.2700

E-mail: [email protected]

Web: www.collectionautogroup.com

Facebook: www.facebook.com/pages/Collection-Auto-Group