Ziegler Supersystems, Inc Automobile Dealership Success Plan

Jim Ziegler is called a lot of things. Bashful isn't one of them. He gets under the skins of factory executives, and relishes making pronouncements that often prompt denials before earning confirmation down the road.

In a typical week, Ziegler, a nationally recognized sales and marketing trainer, consultant and speaker, reads an average of 10 auto publications; scans hundreds of industry-related press clippings; fields 200 phone calls and sifts through as many e-mails - from Big Three auto industry executives, car dealers, sales managers, and other industry insiders - just to keep his finger on the pulse of the industry.

Scanning the horizon, he sees a major realignment as manufacturers gain and lose market share to each other and continue to fight over a dwindling pie.

Ziegler's Latest Forecasts:

Honda will lose major market share as Hyundai and Nissan gain product-driven momentum in the North American market.
Widening rifts and hostilities between manufacturers and their dealer bodies as almost all manufacturers increase their intrusion and control with programs like Blue Oval Certification and Honda Excell.
Daimler-Chrysler Corporation will continue to struggle with failed marketing concepts in spite of world-class new product introductions.

Harsh Predictions:

Ziegler warned dealers at the MSADA Annual Meeting recently that the only certainty in the retail auto market will be severe losers and extreme winners. The Reason: The sales pie is shrinking.

If dealers want their piece, Ziegler said "You're going to have to take away that business from someone else."

He instructed dealers to get their processes in shape if they hope to prosper in coming years.

Ziegler also told dealers to find their "passion for the sale," accusing them of forgetting the passion they brought to their careers originally.

For starters, he suggested that his audience listen to their kids. Children are "the world's best salespeople." They are without peer for persistence and variety of tactics when convincing parents to "make the buy."

One of Ziegler's favorite topics is to skewer the factories, and he did not disappoint the crowed. He likened auto manufacturers to the Invasion of the Body Snatchers, and cautioned dealers not to fall asleep for fear of being taken over. "The factories have not stopped their urge to micromanage your business," he warned.

Ford Under Attack

His main target was Ford, accusing the care company of trying to cost cut its way to profit instead of using its resources to sell more cars. By contrast, General Motors and Chrysler take a product-driven approach.

Ziegler said he does not relish the prospect of criticizing the troubled auto maker, but he believes it caused much of its own troubles. "They brought in every propeller-head and MBA and put them in charge of a major factory. Now they're on the ropes."

"There will be more pain," he predicted, "before they get better."

Misdirected Toyota

Surveying the import manufacturers, he predicted that Toyota has peaked - despite its dominance, $8 billion profit and a cash hoard larger than many car makers' market capitalization. "Camry, in the Japanese dictionary, translates to Buick," Ziegler quipped. "The average Camry buyer today is 41 years old and getting older."

"[Toyota USA Chief Operating Officer] Jim Press is making monumental tactical mistakes," Ziegler continued. "I accused them in my column of hiring new-age consultants...and taking sales people out of the process with technology. They assured me that I was wrong.

"Then nine months later, they announced Scion. They want to let kiosks sell their cars and keep sales people away because Generation Y does not like to be sold."

A Program of Punishment

Ziegler warned dealers that Blue Oval, Honda Excell, Chrysler Five Star and similar programs were not designed to promote customer satisfaction, despite their stated aims. "They are about controlling and manipulating dealers, and micromanaging your business...The replacement for Blue Oval will be worse. It will not be a program of rewards, but of punishments.

Setting his sites on import car makers, Ziegler predicted that Hyundai and Nissan will emerge as the biggest threat to larger factories' dominance through their new products and superior technology. As a example, he cited the new 300 horsepower Titan truck and Armada SUV from Nissan, which is helping it steal market share from Honda.

He said Nissan is building better, and more technologically advanced, product than just about anyone in the market. "They are eating Honda's lunch."

Korean Companies Will Replace Japanese Juggernauts

The largest Japanese manufacturers will encounter rough roads ahead, Ziegler predicted. "Honda is on the same precipice that Toyota is about to fall off. They're chasing Generation Y, which is never going to happen."

Predicting a bright future for Hyundai and Kia, he warned dealers not to dismiss the emerging Korean industrial powerhouse too quickly. "Remember, it took Toyota 10 years to build reliable products. Korea will be unstoppable. They are where Honda, Nissan and Toyota were in 1982. Hyundai is building a $3 billion state of the art plant in Alabama with 80% robotics."

Hyundai, Ziegler added, is building "awesome products."

Submerging China

Ziegler was less optimistic about China, calling it a major mistake fort car makers to build market share there. "It's a submerging market, not an emerging market," Ziegler said. He reminded his audience that 83% of Japanese car sales now come from the North American market.

He accused the Chinese of double crossing everyone, adding that the Koreans are not much better in the business dealings. Never-the-less, he sees a bright future for Korean car makers, stating, "Korea won't take over the world, but they will displace the Japanese."

Toyota Worries

Turning back to Japan, Ziegler praised Toyota for its "marketing machine" on the one hand, but warned Toyota dealers, "The factory is trying to manage the sales process - to tell you what you may or may not say to customers - and take away your autonomy. They're concerned that it's a maturing franchise."

Ziegler agreed with George Albrecht of Woburn Foreign Motors, who insisted that Toyota listens to its dealers and responds quickly. "They won't crash," Ziegler acknowledged. "They will fall back on market share. But they're still the No. 2 or No 4 franchise." By contrast, Ziegler predicted, Honda will take the harder fall of the two car makers.

Looking to Germany, Ziegler said of Volkswagen, "They always 'almost make it'" Ziegler compared the new BMW 7 series to Pontiac's Aztec, calling it "an ugly S.O.B. for $70,000."

Dealers had plenty of questions for Ziegler, and he had plenty of answers. Among his many opinions and insights:

On Saturn: It has lost nearly $3,200 on ever unit sold since the beginning. In the words of Groucho Max, "If we don't sell too many of these we may break even." I have a server problem diverting R&D money into a non-profit making outfit. But Saturn dealers now have the best product in the GM lineup. Let's see what they do with it.