the country. Mills Honda of Brainerd earned the Honda ... More than 1,000 Honda
dealerships nationally competed ..... Over 450 guests received oil changes at
either Dahl ... was 183,863, a 44% increase during the three year period. ... 2011.
2012. 2013. Forecast. New light vehicle registrations. TOTAL. Car ..... Honda
CRV.
Inside this issue:
Dealership Showcase
Ken Waschke Auto Plaza
Industry Spotlight Collision & Service Council
John Hawkins & Aly Quinn
Stalking Dealer-Assisted Finance Fall 2013
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Volume 10 • Issue 1
IN THIS ISSUE 10 Cover: Consumer Finance Protection
33 Dealership Showcase: Ken Waschke Auto Plaza
34 Industry Spotlight: John Hawkins & Aly Quinn
Table of Contents NADA News NADA Endorses Hiring Our Heroes Program....7 2013 Executive Committee President Steve Brimhall, Minnesota Motor Company President Elect Morrie Wagener, Morries Automotive Treasurer Greg House, House Chevrolet Secretary Mike Saxon, Inver Grove Ford Lincoln Immediate Past President Paul Walser, Walser Automotive Group Executive Vice President Scott Lambert EDITORIAL STAFF Scott Lambert, Publisher Ginger Lemke, Editor PHOTOGRAPHY Jim Mims, Mims Photography
MADA Minutes Recent Dealership Performance Awards....9 On the Cover Consumer Finance Protection..................10 Dealers Are Good Neighbors Good News...............................................16 C&S News Pheasant Hunt..........................................18 Minnesota Auto Outlook Comprehensive New & Used Vehicle Information on Minnesota’s Automotive Market.......................................................19 Dealership Showcase Ken Waschke Auto Plaza.........................33 Industry Spotlight John Hawkins & Aly Quinn.......................34
SUBSCRIPTIONS Minnesota Dealer Outlook is an official Minnesota Auto Dealer Association publication, provided Quarterly to Members of the Minnesota Automobile Dealers Association. SUBMIT ADDRESS CHANGES TO: Minnesota Automobile Dealers Association 200 Lothenbach Avenue West St. Paul, MN 55118-3505 Phone: 651.291.2400 • Fax: 651.291.2894 Toll Free: 1.800.652.9029 Email:
[email protected] ADVERTISING SALES: Ginger Lemke Phone: 651-291-2400 Email:
[email protected]
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On the Cover:
Our heroine on the cover is Cindy Wagener Robin of Morries Automotive who has turned the tables on would-be psycho Scott Lambert.
Data Source Information for Minnesota Auto Outlook on pages 19 - 33 Exclusive source for new vehicle registration data presented in Minnesota Auto Outlook is R. L. Polk and Company, a leader in providing detailed new and used vehicle sales and registration statistics. Data is available on a timely basis on the internet. For more information visit www.polk.com
Advertising Directory Blue Cross Blue Shield MN............................. 25 CVR............................................................. 9 CliftonLarsonAllen....................................... 6 MADA Business Cards.............................. 29 MADA Direct Mail........................................ 8 MADA Endorsed Services and Vendors...... 8
Protective.....................................Back Cover Reliable Plus.............................................. 25 Schmit Towing........................................... 25 Super America............................................. 5 StarTribune.......................Back Inside Cover Wings Financial................Inside Front Cover WIPFLI LLP............................................... 30
3
MINUTES
Recent Dealership Performance Awards
Minnesota dealerships fare quite well in attracting national recognition for providing the best shopping experience, service and ownership experience. These recent awards represent the top 10% of the most coveted national distinctions for dealerships. Ryan Chevrolet Cadillac, Buffalo, received GM Mark of Excellence awards for both Chevrolet and Cadillac. Of 4,500 Chevy Buick GMC dealerships nationally, only the top 7% of dealerships win this award.
Fury Motors Inc., South St. Paul, received the Walter P. Chrysler Club Award for overall sales and Mopar parts sales performance. Only 44 awards were given nationally of 2,498 dealerships.
In a surprise at the summer national meetings, NADA’s Chief Lobbyist Michael Harrington awarded Executive Vice President Scott Lambert a copy of the bill signing that repealed the need for dealerships to distribute insurance information. The bill was passed by Congress late in 2012 through the help of MADA and Senator Amy Klobuchar. The framed document comes with the signature of the Speaker of the House, the President Pro Tempore of the Senate and President Barack Obama and includes a Presidential pen. It now hangs proudly in the offices of MADA.
Maplewood Toyota received the Toyota
President’s Cabinet Award for recognizing operations, sales and outstanding customer service. The award is limited to 12 dealerships in the country.
Mills Honda of Brainerd earned the Honda
President’s Award for exceptional performance. More than 1,000 Honda dealerships nationally competed for the title, with 112 dealerships earning the award.
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David Luther is named 2014 TMQDA Nominee MADA is proud to announce David Luther as Minnesota’s 2014 TIME Magazine Quality Dealer (TMQDA) Award Nominee. The TMQDA award is one of the automobile industry’s most prestigious and highly coveted awards for new car dealers. Recipients are among the nation’s most successful auto dealers who have also demonstrated a long-standing commitment to effective and generous community service. David is the owner of Luther Automotive Group which includes 26 dealerships that are members of the Minnesota Auto Dealers Association. Congratulations and good luck, David!
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MADA NEWS
NADA Endorses Hiring Our Heroes Program The men and women of the U.S. armed forces, who bravely served and fought for our country, are facing huge hurdles when trying to find employment after leaving the military. There are 800,000 veterans without jobs, and with more than 1 million service members expected to leave the military over the next five years, we are called to help serve those who have served us. Veterans deserve a fighting chance when they return home. And that starts with finding a job. To join in this effort, the National Automobile Dealers Association has partnered with Hiring Our Heroes to raise awareness of career opportunities available at new car and truck dealerships. Hiring Our Heroes, sponsored by the U.S. Chamber of Commerce Foundation, is a nationwide effort to help veterans and their spouses find jobs in communities across America. Why hire a military veteran? Veterans possess real-world experience and skill sets that can only enhance our industry. They are team players who have proven leadership skills in the most diverse environments and demanding situations.
participated in the program to hire veterans and their spouses. To participate in a local job fair and find out dates and locations, visit www.uschamber. com/hiringourheroes/events. NADA encourages you to spread the word about the partnership. Inform your community that you’re a “Proud supporter of Hiring Our Heroes” by branding your website. For examples, visit www. nada.org/heroesbranding. Post comments on your social media platforms – with a link to NADA’s Hiring Our Heroes campaign at www.nada.org/hiringourheroes – and promote it throughout the year. We encourage you to become a supporter of Hiring Our Heroes and get involved today. Dave Westcott NADA Chairman Read more: http://bit.ly/19IHEEF
To help expand career opportunities for military personnel and their families, we’re encouraging dealers to embrace the Hiring Our Heroes program by attending job fairs, posting dealership job openings on military employment websites and engaging in other media outreach initiatives. So far, Hiring Our Heroes and its partners have hosted 600 job fairs across the country. These job fairs have provided accessible jobs to 20,200 men and women. And nearly 1,200 businesses have www.mada.org
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MADA Endorsed Services & Vendors Computerized Vehicle Registration CVR Dealership Marketing Visible Customer F&I Products Protective Group Health Insurance Blue Cross Blue Shield of MN Delta Dental ReliaStar Life Workers Compensation Ensure Agency Midwest Family Mutual Dealer Bond Program Ensure Agency Collections Springer Collections Check Guarantee/Credit Card Processing Certegy / FIS Disability Income Insurance & Section 125 Cafeteria Plans American Fidelity Assurance
Call MADA for all of your Direct Mail Needs. 651-291-2400 • 800-652-9029
OSHA, EPA & DOT Compliance/Training ComplyNet Corporation Fleet Fueling Program SuperAmerica Office Supplies S & T Office Products Uniforms and Linen Services AmeriPride Linen and Apparel Services Hole-In-One Insurance Hole-In-One-USA Pre-Paid Legal, Jim Gavin Identity Theft Shield & Pre-Paid Legal Services
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9
e
c n a n i F d e t is s s A r e l a e Stalking D
Afraid of Norman Bates? He’s
the boogeyman Alfred Hitchcock
created in the classic slasher movie, Psycho. You recall Norman – so soft-
spoken and unassuming in appearance and
manner but in reality a monster - isolated, out of
control and so fixated on something he couldn’t possess that he destroyed it.
We’re an industry still on the road to recovery seeking security and shelter after the most tumultuous economic collapse that most of us can
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Jim Schutjer Legal Counsel
remember. We’re being stalked. We should be afraid. An actor – as dangerous and out of control as Norman – is fixated on us. A knife is raised at an industry that thought it was safely outside the grasp. As you may have guessed, our boogeyman is the Consumer Finance Protection Bureau – the CFPB.
We Thought We Escaped.
Unlike the unsuspecting movie victim, Janet Leigh, the auto industry saw the danger coming. Congress was passing a sweeping Wall Street reform bill in 2010 to fix the home mortgage industry’s excesses and abuses that contributed to the collapse of the economy in 2009. Part of the reform bill was to create a brand new, independent agency with unprecedented regulatory powers. Auto dealers fought hard and won an exemption from the grasp of the newly-created Bureau of Consumer Financial Protection. In spite of stiff opposition to the exemption by the White House, Pentagon, Department of Treasury and other groups, Congress agreed that dealer-assisted financing is already wellregulated. Creating a new set Auto dealers fought hard and won an of rules and regulations would exemption from the grasp of the newly-created have undoubtedly made it Bureau of Consumer Financial Protection. harder and more expensive for consumers to access auto credit.
Isolated and Out of Control.
Most policy-making federal agencies with the power to tell people and businesses what to do are directly accountable to our elected representatives in Congress. Accountability is typically achieved in two ways: 1. Governing body The Federal Trade Commission and the National Labor Relations Board are good examples. The FTC is headed by
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Stalking Dealer-Assisted Finance five Commissioners, nominated by the President and confirmed by the Senate, each serving a seven-year term. No more than three Commissioners can be of the same political party. The NLRB has five members appointed by the President to five-year terms, again confirmed by the US Senate. 2. Power of the purse Most Federal agencies are dependent on periodic Congressional appropriations to fund their activities. Neither of these methods of Congressional control and accountability apply to the CFPB. Why? 1. Structurally, the agency “sits” as part of the US Department of Treasury’s Federal Reserve System. However, there is no governing board or political link back to Congress. There’s no commission or board of governors. There’s one strong man – the “Director.” Current Director, Richard Cordray – a former Ohio State Attorney General with solid Democratic credentials - is pretty much untouchable for five years. By law, he can be removed only by the President and then only for “inefficiency, neglect of duty, or malfeasance in office.”
Congressional oversight? No way. Federal Law specifically PROHIBITS any oversight of the funding requisitions by House and Senate Appropriations committees. 2. For funding, the CFPB unilaterally claims funds from the Federal Reserve Board. For 2013, the Director may requisition up to $597,600,000 for operating expenses. Congressional oversight? No way. Federal Law specifically PROHIBITS any oversight of the funding requisitions by House and Senate Appropriations committees.
EEOC Disparate Impact Guidance. In March of this year, the
CFPB took an indirect swipe at dealers. The Bureau can’t attack dealers directly but it can threaten our business partners, the regulated lenders. In a Guidance Document, the CFPB advised regulated lenders that they will be held legally liable if their dealer reserve and dealer compensation policies could somehow result in higher average interest rates for consumers because of race, religion, national origin, sex, age, etc. Due 12
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to the risk of discrimination, the recommended guidance to lenders was to eliminate dealers’ discretion to mark up buy rates and instead compensate dealers on a flat fee per transaction basis.
Viewing Disparate Impact through a Prism of Reality.
Freedom and Equality are two of the most cherished words in the American lexicon. People and nations throughout history have fought and died to achieve or preserve some measure of both. But do Freedom and Equality go hand in hand? They may, but not always. Sometimes my freedom comes at your expense. In fact, it is fair to say that total, unbridled freedom yields total absence of equality. The strong and privileged would exercise total dominion over the world at the expense of the weak and disenfranchised. On the other hand, imposing absolute equality would, by its nature, obliterate all freedom of action. So, how do we deal with the paradox? Society invented laws and government to try and sort things out. But the task is far from easy. Government and lawmakers often end up balancing competing goals and interests. They make quantitative and qualitative decisions about how much freedom of action should be sacrificed and how much regulatory overhead should be imposed to achieve some incremental measure of equality. Tough job, huh? The government is less likely to thrust its influence into the decisions we make in our personal lives. For example, no law governs discrimination in dating. I can exclusively ask Norwegians to dinner and tell all the Swedish girls to take a hike. However, the government is far more aggressive, insisting on equality in commercial transactions. Most of us would agree that this is a proper regulatory goal of government. Discrimination in commerce is bad. Government should act. Let’s stay with the Swede / Norwegian analogy. I’m a Norwegian. I’m a car dealer. I don’t like Swedes. I’ll sell a sell a car to one of those rutabagas, but it costs them an extra $500. Discrimination? Sure. That’s easy. It’s wrong. It’s illegal. Let’s take a little different tack. I’m a car dealer. I really don’t care about Swedes one way or another. I care about selling cars. However, some government agency starts snooping around my books, crunches a
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Stalking Dealer-Assisted Finance bunch of numbers and comes to the conclusion that Swedes, as a group, are being charged more on average at my store than the rest of my customers. This type of discrimination is called “disparate impact.” It’s based on statistical analysis. The concept is that discrimination doesn’t have to be purposeful in order to be wrong.
Proxies and Statistical Significance.
Two very interesting questions flow from the Disparate Impact discussion above. How do we differentiate Swedes from the rest of the dealer’s customers? Second, assuming we could identify Swedes as a group, how much disparity of pricing is significant? $500 on average? Sure, that’s significant. $50? Perhaps. $5 average price difference? Probably not. In a letter dated June 20, 2013, 35 members of Congress - including Michele Bachmann - expressed concern with this CFPB guidance and formally requested that the Bureau provide a full set of details about the methodology of its statistical disparate impact including: 1. “Proxies” used to determine the background of consumer credit applicants; 2. Factors held constant to isolate the applicant’s background as the sole reason for any alleged pricing disparity; 3. Metric used to measure whether pricing disparities exist (e.g., basis points, the dollar amount of the finance charge, etc.); and 4. Numerical threshold at which it was determined that a pricing disparity on a prohibited basis constitutes an ECOA violation. The Bureau’s vague response is that customers are classified by race and national origin based on surnames and geographic residence indicators. In our example, perhaps “Lundgren” might be a typically Swedish surname. However, the Bureau offered no indication of exactly which surnames were used as proxies nor how many basis points of interest rate disparity were judged as relevant.
The Assault on the Marketplace is Real
The CFPB’s suggested response shows government at its worst - stealing freedom without regard to cost.
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Instead of punishing wrongdoers and preserving the benefits of freedom for a hugely successful marketplace, the CFPB wants to severely limit the freedom dealers have - in cooperation with their lenders - to set competitive motor vehicle interest rates. It suggests instead that lenders switch to paying dealerships flat fees for arranging loans instead of allowing dealers to mark up the loan. In 2012, 15.7 million auto loans were made, and the total amount of auto loan debt was $783 billion. Despite vigorous competition by banks and credit unions for direct loans, 80 percent of car buyers choose to However, the Bureau offered no indication of finance their purchases through exactly which surnames were used as proxies the dealership. Why? Dealer financing is successful because of price, availability and service.
nor how many basis points of interest rate disparity were judged as relevant.
The National Automobile Dealers Association is vigorously defending dealer freedom and argues that switching to flat fees would turn the highly successful indirect lending model on its head. NADA’s Chairman David Westcott and President Peter Welch are taking every opportunity to sound off in opposition to the CFPB anticompetitive tampering. NADA says the CFPB’s initiative eliminates the potential for a credit customer to get a dealer to “meet or beat” a best credit offer. Instead, it incentivizes dealers to select the finance source contract with the highest flat fee – rather the best interest rate for the customer. The CFPB initiative actually weakens rate competition which must drive up the cost of credit for all consumers. According to a statement by Peter Welch to industry publication, Automotive News, “You’ve taken a market that naturally, competitively, served to lower rates, and ... we think that now that’s all upside down. Why would they want to take 17,000 price discounters out of the market?”
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Dealers Are Good Neighbors
MADA salutes Minnesota new vehicle dealerships and dealership employees who make their communities a better place to live. The Big Brothers Big Sisters program is grateful for the support received from Luther Honda of St. Cloud. The dealership has served as the lead sponsor at the “Magic Moments Ball” fundraiser for the program and regularly helps spread the word about what is needed even more than funding. That ongoing need is for mentors for the hundreds of children still waiting for someone to step up and help.
Zumbrota Ford teamed up with the Goodhue County 4-H club for a Drive 4 UR Community event. The 364 test drives by community members raised $6,000 for the 4-H club.
Tom Clusiau’s Walker Ford teamed up with the
Northern Cass County Relay for Life through the “Drive 4 UR Community” event in June. For every test drive completed, $20 is contributed to the organization.
Hawkins Chevrolet, Fairmont, raised $3,350 for the
American Cancer Society with a series of activities and promotions. A co-ed softball tournament, silent auction, donations for test drives and vehicle purchase were just some of the many ways funds were raised.
Nelson Auto Center had been working toward the goal of 485 test drives during June and July. As the goal was met, a $2,000 check was presented to the Fergus Falls community Food Shelf. Another $500 was donated to the Battle Lake Food Shelf. Walker Ford’s General Manager Josh Loney (second from right), handed the “big check” for $1,880 to Relay for Life Chair Christy Johnson (second from left) and Rachel Johnson (left), team captain for the Walker Cancer Crusaders. Also pictured are Walker Ford employees Char Moore and Kyle Cyr.
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Dahl Automotive Lube-A-Thon event contributed over $7,000 for the Family and Children’s Center of Winona. The annual event offered guests a free oil change with a minimum $10 donation to the charity. Over 450 guests received oil changes at either Dahl Toyota or Dahl Chevrolet, Buick, GMC Inc. Over 90% of the team members from Dahl Toyota and Dahl Chevrolet donated their time to this year’s Lube-A-Thon.
Send YOUR good news to Sandy at
[email protected]
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Education The Willmar High School Music Department has received $5,620 for its participation in the Ford “Drive One 4 UR School” event at Mills Ford of Willmar. Chevy Youth Baseball Program and Lewiston Auto Company, Inc. are supporting the Little League baseball organizations in the area. As part of Chevrolet’s nationwide commitment to support Youth sports, the dealerships are providing monetary and equipment donations. Dan Welle’s GM & Chrysler dealership is partnered with the Sauk Centre Youth Baseball in the same Chevrolet program. The sponsorship includes t-shirts, bags, youth clinics featuring current and former MLB/MiLB players, coaches and instructors and a cash donation.
Jeremy Sunderman of Dan Welle’s gathers with players from Sauk Centre’s Youth Baseball Association.
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C&S NEWS
C&S Pheasant Hunt After a spectacular fall afternoon packed with successful pheasant hunting, great food, and wonderful camaraderie, we can confidently say the Council’s first annual event was a huge success. From comments like, “I’ve known this guy for seven years, and I learned some really great things about him when we were on the hunt,”…..to, “This beats a golf tournament any day!” …. and, “This was a fantastic event and it was great meeting so many of these guys today,” the Council is already looking at scheduling this event again for next year. The photos show just a fraction of the story. Be sure to RSVP early for next year. Space will be limited!
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Comprehensive Information on the State New Vehicle Market Improves 16.6% thru August of 2013 Minnesota Automotive Market State New Vehicle Market Improves 16.6% thru August of 2013
FORECAST MINNESOTA AUTO OUTLOOK FORECAST
FORECAST Market predicted to increase for fifth consecutive year in 2014
Market predicted to increase for fifth consecutive year in 2014 State New Vehicle Market Improves 16.6% thru August of 2013
In 2009, when new vehicle sales tumbled to their lows, industry pundits were downbeat on the prospects for proMarket predicted to increase for fifth consecutive year many in 2014 longed And most thought that there was little that the market returnon to the peakprospects levels reached in In 2009,recovery. when new vehicle sales tumbled to their lows,chance many industry punditswould were ever downbeat for pro-
In 2009, when sales tumbled tothere theirwas lows, many industry pundits were downbeat on the for prolonged the early to new mid vehicle 2000’s. Auto Outlook At the time, our was that the incredibly low sales levels would longed recovery. And most thought thatdisagreed. little chance thatviewpoint the market would ever return to prospects peak levels reached in onlyearly add momentum to Auto the there market, pent up demand took hold. Addever in the long prognosis for sales low interest rates, the mid thought 2000’s. Outlook Atthat thethe time, our viewpoint was thattoterm the incredibly low levels recovery. Andto most that wasasdisagreed. little chance market would return peak levels reached in the earlywould to mid escalated trade in disagreed. values to the tightened supplies of used eventual improvement household and only add momentum to thedue market, as pent up demand tookcars, hold. Add in the long prognosis forbalance low interest rates, 2000’s. Auto Outlook At time, our viewpoint was that the incredibly low term salesin levels would only addsheets, momentum significant across-the-board improvement in new products, and we thought new vehicle sales were sure to head higher. escalated trade in values due to tightened supplies of used cars, eventual improvement in household balance sheets, and to the market, as pent up demand took hold. Add in the long term prognosis for low interest rates, escalated trade in values due to And indeed, thru the half wayimprovement point of 2013, exactly what transpired. significant across-the-board in that newisproducts, and has we thought new vehicle sales were sure to head higher. tightened supplies ofthe usedhalf cars, eventual household sheets, and significant across-the-board improvement And indeed, thru way point ofimprovement 2013, that isin exactly whatbalance has transpired. in new products, we thought newMinnesota vehicle sales were sure to head higher. And indeed, half way point of 2013, that is Here are the and numbers: In 2009, new retail light vehicle registrations werethru onlythe 128,088 units, while last year’s totalwhat was 183,863 a 44% increase during the three year And Auto Outlook is only predicting thatunits, for 2013, will Here are the numbers: In 2009, Minnesota new retail lightperiod. vehicle registrations were 128,088 whilethe lasttotal year’s exactly has transpired. exceed above during 2008 levels. What lies aheadAnd forAuto 2014? We think the market again total was200,000 183,863units, a 44%well increase the three year period. Outlook is predicting thatwill forincrease 2013, the total next will
year. the percentage increase is expected tolies be lower than this year. why: exceed units, well above 2008new levels. What ahead for 2014? WeHere’s think market will while increase Here are However, the200,000 numbers: In 2009, Minnesota retail light vehicle registrations were onlythe 128,088 units, last again year’snext total year. However, the percentage increase is expected to be lower than this year. Here’s why: was 183,863, a 44% increase during the three year period. And Auto Outlook is predicting that for 2013, the total will exceed Pent up demand is easing. The vehicle fleet in the U.S. is still at record-high levels, which will help keep the market mov200,000 units, well above 2008 The levels. Whatfleet lies ahead 2014? Weatthink thesubside market will increaseduring again next year. However, the ing inup a positive thevehicle boost supplied byfor pent demand will somewhat next months. Pent demanddirection, is easing.but in the U.S. isupstill record-high levels, which will helpthe keep the18market movpercentage increase is expected to be lower than this year. Here’s why: ing in a positive direction, but the boost supplied by pent up demand will subside somewhat during the next 18 months.
Change in Data Source Interest rates are likely to increase. It shouldn’t be a big jump, but the consensus view of economists is that interest rates
Pent up be demand easing. vehicleforfleet inforeseeable the U.S. at record-high levels, will help Effective with thishamperrelease, will heading gradually higher future. Higher rates wouldwhich lead to of higher monthly Interest ratesisare likelyThe to increase. Itthe shouldn’t be is a still big jump, but the consensus view economists ispayments, that interest rates ingthe consumer affordability for new keep market in ahigher positive direction, but thefuture. boost Higher supplied by pent demand will monthly will be headingmoving gradually forvehicles. the foreseeable rates woulduplead to higher payments, the data sourcehamperfor Auto ing consumer for new vehicles. subside somewhataffordability during the next 18 months. Outlook is R.L. Polk and
Used car prices have reached their peak. Most used vehicle analysts believe that used vehicle values will reach their peak Thispurchase. change during 2013. Softening used car reduces trade in values, thereby increasing the vehicle net costvalues ofCompany. a new Used car prices have their peak. Most used vehicle analysts believe that willvehicle reach their peak Interest rates are likely to reached increase. It prices shouldn’t be a big jump, but the consensus view ofused economists was made to improve the during 2013. Softening used car prices reduces trade in values, thereby increasing the net cost of a new vehicle purchase. is that interest will be gradually higher for the foreseeable future. rates Bottom linerates outlook for heading the Minnesota new vehicle market for the rest of Higher this year andwould 2014: Continued but at a accuracy growth, and reliability leadBottom to higher hampering consumer forrest newofvehicles. slower pace. linemonthly outlook payments, for the Minnesota new vehicle affordability market for the this year and 2014: Continued but at a of the growth, data presented. slower pace. Historical figures will Used car prices haveSource reached their peak. Most used vehicle analysts believe that used vehicle Change in Data change slightly from those values will reach their peak during 2013. Softening used car prices reduces trade in values, thereby Change in Data Source presented in to previous Effective data purchase. source for Auto Outlook is R.L. Polk and Company. This change was made improve increasing thewith net this costrelease, of a newthe vehicle the accuracy andrelease, reliabilitythe of data the data presented. Historicalisfigures willand change slightlyThis from those presented inhave previous Effective with this source for Auto Outlook R.L. Polk Company. change was made improve issues. If youto any issues. youand havereliability any please contact Outlook. you! the accuracy of the data presented. Historical change slightly from those presented in previous Bottom lineIf outlook for thequestions, Minnesota new vehicle Auto market forfigures theThank restwillof this year and 2014: questions, please contact issues. Ifgrowth, you have please contact Auto Outlook. Thank you! Continued but any at a questions, slower pace. Auto Outlook. Thank you! Annual Trend in Minnesota Vehicle Market Annual Trend in Minnesota NewNew Vehicle Market Annual Trend in Minnesota New Vehicle Market
New light vehicle registrations New light vehicle registrations
250,000 250,000 200,000 200,000 150,000 150,000 100,000 100,000 50,000 50,000 0 0
203,000 183,863 203,000 170,413 183,863 170,413 154,312 133,482 154,312 128,088 133,482 128,088
2008 2008
Source: Polk Source: Polk
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2009 2009
2010 2010
2011 2011
Data Source: Polk
2012 2012
2013 Forecast 2013 Forecast
Market Review Review Market Market Review
TOTAL TOTAL
YTD '12 YTD '13 % Chg. Mkt. Share YTDAug '12 thru YTDAug* '13 % Chg. Share thru '12 to '13 Mkt.YTD '13 thru Aug thru Aug* '12 to '13 YTD '13 111,613 130,190 16.6% 111,613 130,190 16.6%
Car Car Light Truck Light Truck
49,088 49,088 62,525 62,525
55,243 55,243 74,947 74,947
12.5% 12.5% 19.9% 19.9%
42.4% 42.4% 57.6% 57.6%
Detroit Three Detroit Three European European Japanese
57,330 57,330 8,072 8,072 36,697
67,579 67,579 8,908 8,908 44,359
17.9% 17.9% 10.4% 10.4% 20.9%
51.9% 51.9% 6.8% 6.8% 34.1%
Japanese Korean Korean
36,697 9,514 9,514
44,359 9,344 9,344
20.9% -1.8% -1.8%
34.1% 7.2% 7.2%
Detroit Three consists of vehicles sold by GM, Ford, and Chrysler. Detroit Three consists of vehicles sold by GM, Ford, and Chrysler. *August 2013 figures estimated Datawere Source: Polk by Auto Outloook. *August 2013 figures were estimated by Auto Outloook. Source: Polk. Source: Polk.
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Brand Registrations Report Minnesota New Retail Car and Light Truck Registrations
TOTAL
Previous Three Months (June thru August*) Year to date thru August* Registrations Market Share (%) Registrations Market Share (%) 2012 2013 Change YTD '12 YTD '13% change YTD '12 YTD '13 Change 2012 2013% change 40,294 48,463 20.3 111,613 130,190 16.6
Cars Light Trucks
17,957 22,337
20,837 27,626
16.0 23.7
44.6 55.4
43.0 57.0
-1.6 1.6
49,088 62,525
55,243 74,947
12.5 19.9
44.0 56.0
42.4 57.6
-1.6 1.6
Domestic Brands European Brands Japanese Brands Korean Brands
19,846 3,003 14,004 3,441
23,930 3,340 17,666 3,527
20.6 11.2 26.1 2.5
49.3 7.5 34.8 8.5
49.4 6.9 36.5 7.3
0.1 -0.6 1.7 -1.2
57,330 8,072 36,697 9,514
67,579 8,908 44,359 9,344
17.9 10.4 20.9 -1.8
51.4 7.2 32.9 8.5
51.9 6.8 34.1 7.2
0.5 -0.4 1.2 -1.3
Acura 327 387 Audi 315 356 BMW 447 645 Buick 794 938 Cadillac 263 388 Chevrolet 5,697 7,094 Chrysler 948 963 Dodge 1,176 1,598 FIAT 73 72 Ford 7,103 8,320 GMC 1,391 1,627 Honda 3,628 4,710 Hyundai 1,637 1,613 Infiniti 215 186 Jaguar 7 14 Jeep 1,199 1,260 Kia 1,804 1,914 Land Rover 62 82 Lexus 514 604 Lincoln 266 274 Mazda 784 1,021 Mercedes 398 463 MINI 129 163 Mitsubishi 105 221 Nissan 1,947 2,512 Other 101 63 Porsche 41 58 Ram 986 1,415 Subaru 1,238 1,859 Tesla 0 23 Toyota 5,187 6,162 Volkswagen 1,335 1,259 Volvo 177 199 *August figures were estimated.
18.3 13.0 44.3 18.1 47.5 24.5 1.6 35.9 -1.4 17.1 17.0 29.8 -1.5 -13.5 100.0 5.1 6.1 32.3 17.5 3.0 30.2 16.3 26.4 110.5 29.0 -37.6 41.5 43.5 50.2
0.8 0.7 1.3 1.9 0.8 14.6 2.0 3.3 0.1 17.2 3.4 9.7 3.3 0.4 0.0 2.6 3.9 0.2 1.2 0.6 2.1 1.0 0.3 0.5 5.2 0.1 0.1 2.9 3.8 0.0 12.7
0.0 -0.1 0.2 -0.1 0.1 0.5 -0.4 0.4 -0.1 -0.4 -0.1 0.7 -0.8 -0.1 0.0 -0.4 -0.6 0.0 -0.1 -0.1 0.2 0.0 0.0 0.2 0.4 -0.2 0.0 0.5 0.7 0.0 -0.2
18.6
0.7 0.7 1.4 2.0 0.7 15.5 2.0 3.5 0.2 18.4 3.6 8.8 3.4 0.4 0.0 2.6 3.8 0.2 1.1 0.6 2.0 0.9 0.4 0.4 4.7 0.2 0.1 2.8 3.8 0.0 12.0
0.0 -0.1 0.2 0.1 0.0 -0.3 -0.6 0.5 0.0 0.5 0.0 0.1 -0.5 -0.1 0.0 -0.3 -0.9 0.0 0.0 0.0 0.2 0.0 0.0 0.1 0.1 -0.1 0.0 0.3 0.6 0.0 0.2
0.4
0.4
0.0
968 943 1,795 2,611 963 20,231 2,657 4,577 208 24,007 4,640 11,406 4,403 532 33 3,361 4,941 239 1,419 719 2,621 1,205 509 558 6,182 219 149 3,676 4,949 59 15,638 3,248 524
0.7 0.8 1.2 1.9 0.7 15.8 2.6 3.0 0.2 17.9 3.6 8.7 3.9 0.5 0.0 2.9 4.7 0.2 1.1 0.6 1.8 0.9 0.4 0.3 4.6 0.3 0.1 2.5 3.2 0.0 11.8
12.4
798 866 1,339 2,090 732 17,591 2,888 3,299 199 19,975 4,029 9,765 4,313 503 26 3,257 5,201 182 1,183 660 2,045 1,015 410 369 5,120 300 120 2,760 3,558 0 13,189 3,315 516
21.3 8.9 34.1 24.9 31.6 15.0 -8.0 38.7 4.5 20.2 15.2 16.8 2.1 5.8 26.9 3.2 -5.0 31.3 19.9 8.9 28.2 18.7 24.1 51.2 20.7 -27.0 24.2 33.2 39.1
18.8
0.8 0.8 1.1 2.0 0.7 14.1 2.4 2.9 0.2 17.6 3.5 9.0 4.1 0.5 0.0 3.0 4.5 0.2 1.3 0.7 1.9 1.0 0.3 0.3 4.8 0.3 0.1 2.4 3.1 0.0 12.9
1.6
0.5
0.4 -0.1 Source: Polk
Top ten ranked brands in each category are shaded green.
20
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MARKET TRACKER: BRAND MARKET SHARE MARKET TRACKER: BRAND MARKET SHARE
Japanese Japanese and and Detroit DetroitThree Three Gain Gain Market Market Share Share in in 2013 2013
MARKET TRACKER: BRAND MARKET SHARE
Japanese and Detroit Three Gain Market Share in 2013
Change in State Market Share: YTD 2013 thru August* vs. YTD 2012 Change 2013thru thruAugust* August*vs.vs. YTD 2012 ChangeininState StateMarket Market Share: YTD 2013 YTD 2012
Japanese Japanese
1.2 1.2
Japanese Japanese brand share brand share increased 1.2 increased 1.2 points so far points so far this year. this year.
Detroit Three Detroit Three
0.5 0.5
European European
-0.4 -0.4
Korean Korean
-1.3 -1.3
-2.0 -2.0
-1.5 -1.5
-1.0 -1.0
-0.5 0.0 -0.5 0.0 in market share Change in market share x Change
0.5 0.5
1.0 1.0
1.5 1.5
x
Source: Polk. *August 2013 figures were estimated by Auto Outlook. Source: Polk. *August2013 2013figures figures were were estimated estimated by Source: Polk. *August byAuto AutoOutlook. Outlook.
MARKET TRACKER: HYBRID ELECTRIC VEHICLES MARKET TRACKER: HYBRID AND AND ELECTRIC VEHICLES MARKET TRACKER: HYBRID AND ELECTRIC VEHICLES
Hybrid & Electric Share HeadsHeads HigherHigher in 2013 in 2013 Hybrid & Electric Share
Hybrid & Electric Share Heads Higher in 2013 Quarterly (includes hybrid hybrid and andelectric electric vehicles) vehicles) QuarterlyAlternative AlternativePowertrain Powertrain Market Share (includes Quarterly Alternative Powertrain Market Share (includes hybrid and electric vehicles) 4.0% 4.0% 3.5% 3.5% 3.0% 3.0% 2.5% 2.5% 2.0% 2.0% 1.5% 1.5% 1.0% 1.0% 0.5% 0.5% 0.0% 0.0%
Trendline Trendline
Alternative powertrain market Alternative powertrain market share has trended higher during share has trended higher during the past three years. the past three years.
Q4 Q1 Q2 Q3 Q4 Q1 Q4 '11 Q1 '11 Q2 '11 Q3 '11 Q4 '12 Q1 '10 '10 '11 '11 '11 '11 '12 Source: Polk. *Third Quarter 2013 includes July figures only. Source: Polk. *Third Quarter 2013 includes July figures only. Source: Polk. *Third Quarter 2013 includes July figures only.
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Q2 Q2 '12 '12
Q3 Q3 '12 '12
Q4 Q4 '12 '12
Q1 Q1 '13 '13
Q2 Q2 '13 '13
Q3 Q3 '13* '13*
21
BRAND SCOREBOARD - PART ONE BRAND SCOREBOARD - PART ONE
Toyota is State Car Market Share Leader Toyota is State Car Market Share Leader
BRAND PART ONE FordSCOREBOARD leads for -light trucks; Dodge car market share moves higher
Ford leads for light trucks; Dodge car market share moves higher Toyota is State Car Market Share Leader The two graphs below show market share for the top ten car and light truck brands for the first eight months of 2012 and
Ford leads for light trucks; Dodge market share moves higher The two graphs show market share the top ten car and truckmarket brandsshare. for theNote: first eight months of 2012were and 2013. Brands arebelow shown from left tocar right onforeach graph based on light ytd 2013 August 2013 figures 2013. Brands are shown from left toPolk. right on each graph based on ytd 2013 market share. Note: August 2013 figures were estimated by Auto Outlook. Source:
The two graphs below show market share for the top ten car and light truck brands for the first eight months of 2012 and 2013. estimated by Auto Outlook. Source: Polk. Brands are shown from left to right on each graph based on ytd 2013 market share. Brand Market Share in State Car Market - YTD 2012 and YTD 2013, thru August* Note: August 2013 figures were estimated Auto Outlook. Polk.Car BrandbyMarket ShareSource: in State
- YTDonly 2012 and YTD 2013, thru August* TopMarket Ten Brands Brand Market Share in StateTop Car Ten Market YTD 2012 and YTD 2013, thru August* Brands only Top Ten Brands only
18.0% 18.0% 16.0% 16.0% 14.0% 14.0%
YTD '12 YTD '12 YTD '13 YTD '13
12.0% 12.0% 10.0% 10.0% 8.0% 8.0% 6.0% 6.0% 4.0% 4.0% 2.0% 2.0% 0.0% 0.0% YTD '12 YTD YTD '12 '13 YTD '13
25.0% 25.0%
Toyota Toyota 14.5% 14.5% 15.4% 15.4%
Ford Ford 13.2% 13.2% 14.2%
Chevrolet Chevrolet 12.7% 12.7% 11.9%
Honda Honda 9.2% 9.2% 8.9%
Hyundai Hyundai 7.1% 7.1% 6.4%
Kia Kia 6.7% 6.7% 6.1%
Subaru Subaru 5.6% 5.6% 5.9%
Nissan Nissan 5.4% 5.4% 5.4%
VW VW 5.9% 5.9% 5.2%
Dodge Dodge 2.1% 2.1% 3.8%
14.2%
11.9%
8.9%
6.4%
6.1%
5.9%
5.4%
5.2%
3.8%
Brand Market Share in State Light Truck Market - YTD 2012 and YTD 2013, thru August* Brand Market Share ininState Truck YTD andYTD YTD2013, 2013,thru thruAugust* August* Brand Market Share StateLight Light Truck Market--only YTD 2012 2012 and Top TenMarket Brands Top Ten Ten Brands only Top
20.0% 20.0%
YTD '12 YTD '12 YTD '13 YTD '13
15.0% 15.0%
10.0% 10.0%
5.0% 5.0%
0.0% 0.0% YTD '12 YTD YTD '12 '13
Ford Ford 21.7%
Chevrolet Chevrolet 18.6%
Toyota Toyota 9.3%
Honda Honda 7.9%
GMC GMC 6.5%
Ram Ram 4.5%
21.7% 21.9% 21.9%
Jeep Jeep 5.2%
Nissan Nissan 3.9%
Dodge Dodge 3.6%
18.6% 9.3% 7.9% 6.5% 4.5% 5.2% 3.9% 3.6% 18.8% 9.0% 8.0% 6.2% 5.0% 4.5% 4.3% 3.4% YTD '13 18.8% 9.0% 8.0% 6.2% 5.0% 4.5% 4.3% 3.4% *August 2013 figures were estimated by Auto Outlook. Source: Polk. *August Data 2013Source: figures Polk. were estimated by Auto Outlook.
Subaru Subaru 1.3% 1.3% 2.2% 2.2%
Source: Polk. *August 2013 figures were estimated by Auto Outlook.
22
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BRAND SCOREBOARD - PART TWO
Ford and Chevrolet Are Relatively Strong Performers in State Subaru, GMC, Buick, Ram, and Chrysler also rank high
BRAND SCOREBOARD - PART TWO
The graph provides Are an indicator of brands that are Performers popular in Minnesota (relative to the National standard), and Ford andbelow Chevrolet Relatively Strong in State
those that are Buick, not. Here’s works: For the rank top 30 selling brands in the state, each brand’s share of the U.S. market is Subaru, GMC, Ram,how anditChrysler also high
multiplied by retail registrations in the state during the first eight months of 2013. This yields a “target” for the state market.
Target registrations are subtracted from actual that registrations to derive the measurement of sales performance. Brands The graph below provides an indicator of brands are popular in Minnesota (relative to the National standard), and thoseatthat the top of the graph (i.e., Ford, Chevrolet, Subaru, GMC, Buick, and Ram) are relatively strong sellers in the state, with are not. Here’s how it works: for the top 30 selling brands in the state, each brand’s share of the U.S. market is multiplied by retail actual registrations exceeding the calculated target by a large margin. For instance, Ford registrations exceeded the tarregistrations in the state during the first eight months of 2013. This yields a “target” for the state market. Target registrations get by 6,298 units. Note: figures for August 2013 were estimated by Auto Outlook. are subtracted from actual registrations to derive the measurement of sales performance. Brands at the top of the graph (i.e., Source: Polk. Ford, Chevrolet, Subaru, GMC, Buick, and Ram) are relatively strong sellers in the state, with actual registrations exceeding the calculated target by a large margin. For instance, Ford registrations exceeded the target by 6,298 units. Note: figures for August 2013 were estimated by Auto Outlook.Source: Polk. Minnesota Retail Market Performance based on registrations for YTD 2013 thru August* Minnesota Retail Market based onregistrations registrationstimes for YTD 2013 thru August* Actual registrations minus Performance target (state industry U.S. market share) Actual registrations minus target (state industry registrations times U.S. market share)
Ford
6298
Chevrolet
5690
Subaru
916
GMC
716
Buick
707
Ram
668 591
Chrysler Dodge
156
Kia
95
Mazda
66
Lincoln
46
Mitsubishi
37
Volvo
0
MINI
-79
FIAT
-149
Land Rover
-191
Porsche
-231
Volkswagen
-276
Infiniti
-406
Audi
-440
Acura
-530
Cadillac
-570
Jeep
-779
BMW
-868
Lexus
-936
Mercedes
-1320 -1527
Hyundai Toyota
-2087
Honda Nissan
-2454 -2835
-4,000
Source: Polk.
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-2,000
0
2,000
4,000
6,000
8,000
Actual registrations minus target (area industry registrations times U.S. market share) Data Source: Polk.
23
SEGMENT WATCH
Pickup Segment Share Moves Higher in State
SEGMENT WATCH
Compact and Luxury SUVs also post gains Pickup Segment Share Moves Higher in State
Compact and Luxury SUVs also post gains Change in Segment Market Market Share Share Change in Segment YTD 2013 thru August* YTD 2013 thru August* versus versus YTD 2012 YTD 2012
Minnesota and U.S. New Vehicle Minnesota and U.S. Markets New Vehicle Markets Typical models in in segments: Typical models segments: Small Car: Hyundai Elantra Small Car: Hyundai Elantra Mid Size & Large Car: Toyota Camry Mid Size & Large Car: Toyota Camry Luxury & Sports Car: BMW 3-Series Luxury & Sports Car: BMW 3-Series Pickup: Ford F-Series F-Series Van: Pickup: HondaFord Odyssey Honda Odyssey CompactVan: SUV: Jeep Liberty Compact SUV: Jeep Mid Size SUV: Jeep Grand Liberty Cherokee SUV:Chevrolet Jeep Grand Tahoe Cherokee Full Mid SizeSize SUV: Full Size SUV: Lexus Chevrolet Tahoe Luxury SUV: RX Luxury SUV: Lexus RX
Source: Polk. * Figures for August 2013 were estimated by Auto Outlook.Source: Polk.
Pickup Compact SUV Luxury SUV Mid Size SUV Luxury and Sports Car Full Size SUV Van
MN US
Small Car Mid Size and Large Car
* Figures for August 2013 were estimated by Auto Outlook.
-1.5
-1.0
-0.5
0.0
0.5
1.0
Change in market share
MADA Dealer Outlook Switches Data Vendor For more than 10 years, MADA has published comprehensive new and used vehicle sales figures for the state of Minnesota. The numbers are published in both the MADA Newsletter and this quarterly magazine, MADA Dealer Outlook. MADA recently changed its data source. Our analyst is the same, but small differences in the way the data is processed between different providers can create differences in market share numbers. MADA reviewed the new report and believes that it fairly reflects Minnesota vehicle sales figures. However, we caution against comparing the numbers in our last magazine to these, since the sources are different. Please let us know if you have questions or concerns about our new data reporting. 24
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25
MODEL SCOREBOARD
Toyota Camry is on Top of Standard Mid Size Car Segment
MODEL SCOREBOARD
Toyota Camry is on Top2ofrow, Standard Ford Edge is best-selling Mid SizeMid SUV Size Car Segment Ford Edge is best-selling 2 row, Mid Size SUV
The table below shows the top five selling models during the first seven months of 2013 in 16 primary market segments.
The table below shows the top five selling models themarket first seven of 2013 insegment. 16 primary market segments. In addition to unit registrations, it also shows eachduring model’s sharemonths in its respective Toyota Camry was theIn addition to unit registrations, it also shows each model’s market share in its respective segment. Toyota Camry was the bestbest-selling Standard Mid Size Car, with a 15.5% share. Ford Focus was first among Sub Compact Cars, followed by selling Standard Mid Size Car, with a 15.5% share. Ford Focus was first among Sub Compact Cars, followed by Chevrolet Cruze Chevrolet Cruze and Toyota Prius. BMW 3-Series remained at the top, as the best seller among Near Luxury Cars. ChryslerToyota Town Prius. and Country and Chevrolet Equinox sellingamong Mini Van Compact respectively. Fand BMW 3-Series remained at the were top asthe the best best seller Nearand Luxury Cars.SUV, Chrysler Town andFord Country Series was at the top for Full Size Pickups. Lexus RX was the best-selling Luxury SUV. and Chevrolet Equinox were the best selling Mini Van and Compact SUV, respectively. Ford F-Series was at the top for Full Size Pickups. Source: Polk.Lexus RX was the best-selling Luxury SUV. Source: Polk.
Top Selling Models in Each Segment - Minnesota New Retail Registrations - YTD 2013 thru July Cars Entry Model
Sub Compact Regs. Share
Kia Soul
Model
Sporty Compact
Regs. Share
Model
Standard Mid Size
Regs. Share
Model
Regs. Share
1257
33.8
Ford Focus
2550
14.0
Chevrolet Camaro
387
36.4
Toyota Camry
2890
15.5
Ford Fiesta
584
15.7
Chevrolet Cruze
2279
12.5
Ford Mustang
333
31.3
Ford Fusion
2482
13.3
Chevrolet Sonic
451
12.1
Toyota Prius
1923
10.5
Dodge Challenger
178
16.7
Honda Accord
2148
11.5
Honda Fit
417
11.2
Honda Civic
1825
10.0
Hyundai Veloster
100
9.4
Subaru Outback
1743
9.4
Kia Rio
252
6.8
Toyota Corolla
1670
9.1
45
4.2
Chevrolet Malibu
1708
9.2
Large Mid Size Model
Subaru BRZ
Entry Luxury
Regs. Share
Model
Near Luxury
Regs. Share
Model
Luxury and Sports Regs. Share
Model
Regs. Share
Ford Taurus
863
24.4
Lexus Ct200H
75
28.3
BMW 3-Series
570
22.4
BMW 5-Series
264
16.4
Chevrolet Impala
675
19.0
Acura TSX
73
27.5
Mercedes C-Class
298
11.7
Mercedes E-Class
209
13.0
Buick Lacrosse
597
16.8
Acura ILX
71
26.8
Lexus ES
280
11.0
Cadillac XTS
163
10.1
Toyota Avalon
474
13.4
BMW 1-Series
23
8.7
Infiniti G
221
8.7
Audi A6
101
6.3
Dodge Charger
338
9.5
Volvo C30
17
6.4
Audi A4
209
8.2
Chevrolet Corvette
81
5.0
Light Trucks Compact Pickup Model
Full Size Pickup
Regs. Share
Model
Van
Regs. Share
Model
Compact SUV Regs. Share
Model
Regs. Share
Toyota Tacoma
421
51.6
Ford F Series
7748
38.4
Chrysler Town & Country
1424
23.0
Chevrolet Equinox
3662
19.4
Honda Ridgeline
163
20.0
Chevrolet Silverado
6464
32.1
Dodge Caravan
1347
21.7
Ford Escape
3236
17.2
Nissan Frontier /Xe
144
17.6
Ram
3311
16.4
Honda Odyssey
1101
17.8
Honda CRV
2968
15.7
Chevrolet Colorado
61
7.5
GMC Sierra
1887
9.4
Toyota Sienna
1100
17.8
Toyota RAV4
2245
11.9
GMC Canyon
11
1.3
Toyota Tundra
392
1.9
Chevrolet Express
321
5.2
Nissan Rogue
1180
6.3
Mid Size SUV (2 rows) Model
Mid Size SUV (3 rows)
Regs. Share
Model
Full Size SUV
Regs. Share
Model
Luxury SUV
Regs. Share
Model
Regs. Share
Ford Edge
1540
29.3
Toyota Highlander
1542
15.3
Chevrolet Tahoe
410
24.3
Lexus RX
550
12.4
Jeep Grand Cherokee
1482
28.2
Ford Explorer
1486
14.8
Chevrolet Suburban
410
24.3
Buick Encore
329
7.4
Subaru Forester
997
19.0
Honda Pilot
1169
11.6
GMC Yukon
368
21.8
Lincoln MKX
309
7.0
Hyundai Santa Fe Sport
460
8.8
Kia Sorento
1144
11.4
Ford Expedition
207
12.3
Acura RDX
298
6.7
26
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MINNESOTA MARKET VERSUS U.S. MINNESOTA MARKET VERSUS U.S.
Increase in State Market is Stronger Increase in State Market is Stronger than U.S. than U.S.
Detroit Three market share in state is 11.4 points higher than in the Nation
Detroit Three market share in state is 11.4 points higher than in the Nation The accompanying table provides a comparison of results in both the Minnesota and U.S. markets. New vehicle registrations in the state improved 16.6% during the first eight months of 2013, while the U.S. market increased 10.9%. Car market share in Minnesota was 8.2 share lower than in the Three marketand share inmarkets. Minnesota 51.9%, up slightly from The accompanying table points provides a comparison of Nation. results inDetroit both the Minnesota U.S. Newwas vehicle registrations in the state earlier, improved 16.6% eight months of 2013, while the U.S. market increased 10.9%. Car market share in Minnesota a year and well during above the the first 40.5% share in the Nation. was 8.2 share points lower than in the Nation. Detroit Three market share in Minnesota was 51.9%, up slightly from a year earlier, and DSource: Polk well above the 40.5% share in the Nation. Source: Polk.
Minnesota Market
U.S. Market *
16.6%
10.9%
Car Market Share Car share of industry retail light vehicle registrations - YTD 2013 thru August*
42.4%
50.6%
Detroit Three Brand Market Share Domestic brand share of industry retail light vehicle registrations - YTD 2013 thru August*
51.9%
40.5%
Change in registrations % change in registrations YTD 2013 thru August vs. YTD 2012*
Top selling light vehicle brands and market share - YTD 2013 thru August* First Second Third Fourth Fifth Sixth Seventh Eighth Ninth Tenth *Figures for August 2013 were estimated by Auto Outlook
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Ford Chevrolet Toyota Honda Nissan Kia Subaru GMC Dodge Hyundai
18.4% 15.5% 12.0% 8.8% 4.7% 3.8% 3.8% 3.6% 3.5% 3.4%
Toyota/Scion Ford Chevrolet Honda Nissan Hyundai Kia Dodge Jeep Subaru
13.7% 13.1% 10.8% 10.6% 7.2% 4.7% 3.8% 3.3% 3.3% 3.1% Data Source: Polk
27
RECENT RESULTS IN MINNESOTA USED VEHICLE MARKET RECENT RESULTS IN MINNESOTA USED VEHICLE MARKET
RECENT RESULTS IN MINNESOTA USED VEHICLE MARKET Minnesota Used Vehicle Market Recovers in 2013 RECENT RESULTS IN MINNESOTA USED VEHICLE MARKET Minnesota UsedVehicle Vehicle31% Market Recoversinin 2013 Minnesota Used Used vehicle registrations increased Market in firstRecovers seven months of2013 the year
Minnesota Used Vehicle Market Recovers in 2013
Usedvehicle vehicle registrations increased 31%in infirst first sevenmonths theyear year UsedUsed vehicle registrations increased 31% in31% first seven months ofmonths the year registrations increased seven ofofthe Below is a list of key trends in the Minnesota retail
Minnesota Retail Used Light Vehicle Registrations
used vehicle market: Below is a list of keyoftrends in theinMinnesota retail YTDUsed thru July Minnesota Retail Light Vehicle Registrations Below is a key trends Minnesota retail Minnesota Retail Used Light Vehicle Registrations Below is a listlist of key trends in thethe Minnesota retail % Change Market Share Registrations used vehicle market: used vehicle market: YTD thru July ‣ Retail used vehicle market: used registrations in the state increased a YTD '12July TO '13 YTD '12 YTD '13 YTD '12 YTD '13thru % Change Market Market Share Registrations • reported Retail 31% usedduring registrations in months the state the first seven of this %31.0% Change Share Registrations TOTAL 354,977 465,180 ‣ Retail used registrations state increased ‣increased TO '13 YTD YTD '12 YTD YTD YTD '12 YTD YTD '13 '12'12 Retail used registrations in in thethe state increased year versus aa year earlier 31% reported during the first a a TO '13 '12 '13'13 YTD '12 '13 reported 31% during first seven months this Cars TOTAL reported 31% during thethe first seven months of of this 354,977 465,180 28.3% 31.0%52.6% 186,616 239,337 51.5% seven months of this year versus a year TOTAL 354,977 465,180 31.0% year versus a graph year earlier ‣ As year versus a year earlier shown on the below, the new vehicle Light Trucks 168,361 225,843 34.1% 47.4% 48.5% earlier. Cars 186,616 239,337 239,337 28.3% 52.6% 52.6% 51.5% 51.5% Cars 186,616 28.3% market grew at a faster pace than the used market ‣ As shown on the graph below, the new vehicle Detroit Light Trucks256,690 168,361 225,843 28.3% 34.1%72.3% 47.4%70.8% 48.5% Three 329,400 Asshown shown on the graph below, thethe newnew vehicle 2012, while on both markets were up this year. • in‣As the graph below, Light Trucks 168,361 225,843 34.1% 47.4% 48.5% market grew at a faster pace than the used market European market grew at a faster pace than the used market 19,909 27,444 37.8% 5.6% 5.9% vehicle market grew at a faster pacethis than Detroit Three 256,690 256,690 329,400 329,400 28.3% 72.3% 72.3% 70.8% 70.8% in 2012, while both markets were year. Detroit Three 28.3% ‣ Theinsharp 2012, while both markets were upup this decline in 2012, new vehicle sales foryear. 2009 Japanese 70,208 96,508 37.5% 19.8% 20.7% the used market in while both markets European 19,909 27,444 37.8% 5.6% 5.9% European 19,909 27,444 37.8% 5.6% 5.9% has led to short supplies of four year old vehicles, Korean 8,170 11,828 44.8% 2.3% 2.5% ‣ The up this year. decline newvehicle vehicle sales for2009 2009 Japanese 70,208 96,508 96,508 37.5% 19.8% 19.8% 20.7% 20.7% ‣were The sharp in innew sales leading to sharp the decline 6.6 market share point drop inforfour Japanese 70,208 37.5% Polk has led short supplies four year vehicles, Source: Korean 8,170 11,828 11,828 44.8% 2.3% 2.5% has led to to short supplies of of four year oldold vehicles, old vehicle registrations. Korean 8,170 44.8% 2.3% 2.5% • year The sharp decline in new vehicle sales leading to the 6.6 market share point drop in four leading to the 6.6 market share point drop in four Source: Polk for year 2009oldhas led to short supplies of four Source: vehicle registrations. %Polk Change in Retail New and Used Vehicle Markets ‣ Used yearlight old vehicle registrations. truck registrations were up 34.1%, year old vehicles, leading to the 6.6 market while cars increased 28.3%. 2009 thru and YTD ’13 vs. Vehicle YTD ’12Markets Change in Retail New and Used Vehicle Markets ‣ Used lightdrop truck registrations were 34.1%, in four year were old vehicle %% Change in 2012, Retail New and Used ‣share Usedpoint light truck registrations upup34.1%, 40.0% % Change in Retail New and Used Vehicle Markets while cars increased 28.3%. 2009 thru 2012, and YTD YTD registrations. ‣ Chevrolet while cars increased 28.3%. Impala was the best-selling model in the 2009 thru 2012, and YTD ’13’13 vs.vs. YTD ’12’12 2009 thru 2012, and YTD ’13 vs. YTD ’12 for light vehicles six years old or newer.were up 30.0%40.0% • state truck registrations 40.0% ‣ Chevrolet Impala was best-selling model ‣Used Chevrolet Impala was thethe best-selling model in in thethe 20.0%30.0% 34.1%, while cars increased 28.3%. state for vehicles six years old or newer. state for vehicles six years old or newer. 30.0% 10.0%20.0% • Chevrolet Impala was the best-selling 20.0% model in the state for vehicles six years old 0.0%10.0% 10.0% or newer. -10.0% 0.0%
0.0% -20.0% -10.0% -10.0% YTD '12 to '08 to '09 '09 to '10 '10 to '11 '11 to '12 YTD '13 -20.0% -20.0% YTD YTD '12'12 to to '08 to '09 '09 to '10 '10 to '11 '11 to '12 New -17.0% 4.2% 27.7% 7.9% 16.6% '08 to '09 '09 to '10 '10 to '11 '11 to '12 YTD YTD '13'13 Used New -7.8%-17.0% 5.0% 4.2% 4.3% 27.7% 0.0% 7.9% 31.0%16.6% New -17.0% 4.2% 27.7% 7.9% 16.6% Used period -7.8% 5.0% registrations 4.3% is thru0.0% 0.0% New vehicle 31.0% Year-to-date for used5.0% vehicle July. Used -7.8% 4.3% 31.0%
registrations are thru August. August 2013 figures were estimated. Year-to-dateperiod periodforforused usedvehicle vehicleregistrations registrationsis isthru thruJuly. July.New Newvehicle vehicle Year-to-date registrations are thru August. August 2013 figures were estimated. registrations thru August. August 2013 figures were estimated. Source: Polk are Source: Polk Source: Polk
Minnesota Retail Used Vehicle Registrations - Percent Change ininThree thruJuly July‘13) ‘13) Minnesota Retail Used Vehicle Registrations - Percent Change ThreeMonth MonthMoving MovingAverage Average(Aug (Aug‘11 ‘11 thru Minnesota Retail Used Vehicle Registrations - Percent Change Three Month Moving Average (Aug thru July ‘13) Minnesota Retail Used Vehicle Registrations - Percent Change in in Three Month Moving Average (Aug ‘11‘11 thru July ‘13)
May-13 Jun-13 May-13 Jun-13 Jul-13 Jun-13 Jul-13 Jul-13
Apr-13 May-13 Apr-13
Mar-13 Apr-13 Mar-13
Feb-13 Mar-13 Feb-13
Oct-12 Nov-12 Oct-12 Nov-12 Dec-12 Nov-12 Dec-12 Jan-13 Dec-12 Jan-13 Feb-13 Jan-13
Sep-12 Oct-12 Sep-12
Aug-12 Sep-12 Aug-12
Jul-12 Aug-12 Jul-12
Mar-12 Apr-12 Mar-12 Apr-12 May-12 Apr-12 May-12 Jun-12 May-12 Jun-12 Jul-12 Jun-12
Feb-12 Mar-12 Feb-12
Source: Polk.
Jan-12 Feb-12 Jan-12
-20.0% -20.0%
Dec-11 Jan-12 Dec-11
Aug-11
50.0% 60.0% 60.0% 40.0% 50.0% 50.0% 30.0% 40.0% 40.0% 20.0% 30.0% 30.0% 10.0% 20.0% 20.0% 0.0% 10.0% 10.0% -10.0% 0.0% 0.0% -20.0% -10.0% -10.0%
Aug-11 Sep-11 Aug-11 Sep-11 Oct-11 Sep-11 Oct-11 Nov-11 Oct-11 Nov-11 Dec-11 Nov-11
60.0%
Source: Polk. Source: Polk.
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Nearly New Vehicle Sales Move Higher Four year old market shares heads lower Tight supplies USED VEHICLE SALES of BY 2009 AGE model year vehicles led to the 6.6 market share point decline for four year old cars and trucks during the first seven months of this year (see graph below). Three year old or newer share increased. The recovery in new vehicle sales during the past three years will lead to increased supplies of nearly new used vehicles in 2013, which has been contributing factor toheads the increased Four yeara old market shares lower in used vehicle registrations.
Nearly New Vehicle Sales Move Higher
Tight supplies Source: Polk.of 2009 model year vehicles led to the 6.6 market share point decline for four year old cars and trucks during the first seven months of this year (see graph below). Three year old or newer share increased. The recovery in new vehicle sales during the past three years will lead to increased supplies of nearly new used vehicles in 2013, which has been a contributing factor to the increase in used vehicle registrations. Source: Polk Change in Market Share by Vehicle Age (vehicles six years old or newer) YTD 2013 thru July vs. YTD 2012 4.0
Change in market share
2.0
Change in Market Share by Vehicle Age (vehicles six years old or newer) YTD 2013 thru July vs. YTD 2012 3.0
2.8
3 years old
2 yrs old or newer
0.7
0.0 -0.7
-2.0 -4.0 -6.0 -8.0
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-6.6 6 years old
5 years old
4 years old
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TOP SELLING MODELS
Impala Tops the Used Vehicle Sales Chart
TOP SELLING MODELS
Silverado, F-Series, and Fusion also ranked high
Impala Tops the Used Vehicle Sales Chart
Silverado, and Fusion also ranked The graphF-Series, below shows top selling models in high state for vehicles six years old or newer. Source: Polk. The graph below shows top selling models in state for vehicles six years old or newer.
Source: Polk.
Top 25 Selling Models (Six years old or newer) Top 25 Selling Models (Six years old or newer) Used retail registrations, YTD 2013 thru July Used retail registrations, YTD 2013 thru July Chevrolet Impala
7295
Chevrolet Silverado
5764
Ford F Series
4810
Ford Fusion
3598
Toyota Camry
3411
Chevrolet Malibu
3394
Dodge Caravan
2773
Ford Escape
2729
Chrysler Town & Country
2600
Toyota Corolla
2370
Ford Focus
2358
Ford Edge
2270
Chevrolet Equinox
2221
Honda Accord
1859
Dodge Ram
1859
Honda Civic
1848
Nissan Altima
1834
Chevrolet Traverse
1778
Toyota RAV4
1730
GMC Sierra
1645
Hyundai Sonata
1572
Chevrolet Suburban
1451
Chevrolet Cruze
1405
GMC Acadia
1372
Volkswagen Jetta
1323 0
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1000
2000
3000
4000
5000
6000
7000
8000
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BRAND MARKET SHARE BY VEHICLE AGE
Chevrolet and Ford Stay on Top of State Used Vehicle Market
BRAND MARKET SHARE BY VEHICLE AGE
Toyota and Honda rank third and fourth for 3 and 4 year old vehicles
Chevrolet and Ford Stay on Top of State Used Vehicle Market Toyota and Honda rank third and fourth for 3 and 4 year old vehicles
The two graphs below show brand market share leaders for vehicles two years old or newer, and for 3 and 4 year old ve-
The two Chevrolet, graphs below show market share or newer, and for three and had fourayear hicles. Ford, andbrand Toyota/Scion were leaders ranked for first,vehicles second,two andyears third old in both age categories. Honda 6.9%old vehicles. Chevrolet, Ford, and Toyota/Scion were ranked first, second, and third in both age categories. Honda had a 6.9% share share for three and four year old vehicles, compared to 3.9% for vehicles two years old or newer. Source: Polk. for three and four year old vehicles, compared to 3.9% for vehicles two years old or newer. Source: Polk. Brand Market Share - Vehicle 2 years old or newer YTD 2013 thru2July Brand Market Share - Vehicle years old or newer YTD 2013 thru July
Brand Market Share - 3 and 4 Year Old Vehicles 2013 thru4July Brand MarketYTD Share - 3 and Year Old Vehicles YTD 2013 thru July 27.7%
Chevrolet 16.6%
Ford
6.9%
Honda
4.6%
Nissan
11.2%
Toyota
6.2%
Dodge
15.2%
Ford
7.1%
Toyota
17.7%
Chevrolet
6.2%
Dodge
GMC
3.9%
Nissan
4.4%
Honda
3.9%
GMC
3.4%
Hyundai
3.7%
Chrysler
3.1%
Chrysler
3.3%
Volkswagen
2.5%
Kia
3.1%
Mazda
2.2%
Volkswagen
3.0%
Buick
2.2%
Buick
2.6%
Hyundai
2.0%
Jeep
2.5%
Kia
1.8%
Mazda
1.8%
BMW
1.8%
Subaru
1.6%
Subaru
1.7%
BMW
1.4%
Jeep
1.7%
Lincoln
1.0%
Lexus
1.7%
Mitsubishi
0.9%
Cadillac
1.5%
Cadillac
0.9%
Lincoln
1.4%
Mercedes
0.8%
Mercedes
1.2%
0.0%
5.0%
10.0% 15.0% 20.0% 25.0% 30.0%
0.0%
5.0%
10.0% 15.0% 20.0% 25.0% 30.0%
visit us online at www.mada.org
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DEALERSHIP SHOWCASE
KEN WASCHKE AUTO PLAZA Ken Waschke Auto Plaza recently completed the GM Facility Image project and are quite proud of their new digs. “From the time a guest drives onto the lot and in through the doors, we want them to feel our commitment to their experience,” said Ken Waschke. You would think the 20-year old building is a brand new store. Every guest touchpoint has been improved by the extensive remodel including the New Vehicle Delivery center and extremely comfortable lounge. Parents and kids alike really appreciate the special area where kids can be kids. Though it’s obvious that they’ve made a considerable investment, their guest experience is more than the brick and mortar, fancy facade and a comfy lounge--it’s the Waschke Family commitment that’s 30 years in the making. In 1983, Ken and Mary Waschke partnered in what began as Waschke Williams in Eveleth, selling and servicing Oldsmobiles and Cadillacs with eight staff members. Times were tough, interest rates were 23% and employees of the Iron Mines--the primary industry on the Iron Range--were experiencing major layoffs. It wasn’t an easy market in which to start a car dealership, but it grew rapidly. In 1989, the Waschke Family built a new facility and added the Buick, Pontiac and GMC franchises. Thirty years later, 48 people work at Ken Waschke Auto Plaza, selling and servicing Cadillacs, Buicks and GMC Trucks with 511 collective years of service. It’s no wonder the dealership can deliver consistent service to their guests. The average employee has 11 years with the Waschke Family; a handful started at the beginning. Ken states that
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“The people who work here are a very important part of the success of Ken Waschke Auto Plaza. They are working hard, day in and day out, to assure that our guests’ expectations are exceeded. We’ve been lucky that way!” Despite ups and downs in the economy, the Iron Range community has been a wonderful place to establish the dealership. “There are a lot of small cities on the Iron Range, but be certain that it offers big opportunities for everyone who works and plays here,” Ken continued. The community is an important part of where the Waschke Family chose to plant its roots and why Ken Waschke Auto Plaza gives back through support of numerous foundations, organizations and activities in the area. The Waschke Family expanded their market area by buying established stores in Cook and International Falls during the past seven years. With three stores now, the Waschke Family of Dealerships is able to offer all General Motors franchises and efficiently serve their regional markets. Ken Waschke Auto Plaza has held strong convictions and evolved with the constantly changing business. Ken and Mary’s daughter Kerry is the second generation to proudly carry on the tradition and confidently step into the future of the automotive industry. The team at Ken Waschke Auto Plaza is second to none.
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Industry Spotlight
John Hawkins & Aly Quinn The CVR program was created by statute in 2005 and set into operation in early 2008. Throughout the process of moving to easy, electronic title transfers we have had to overcome skeptical F&I Managers, Deputy Registrars, title clerks, bureaucrats and just general 20th century naysayers. We even suffered the indignity of a state shutdown in the summer of 2011. But throughout these challenges, the product has shown steady and continued growth. Now, nearly a third of the state’s new car dealers use CVR on a daily basis, and we are fast approaching the 10,000 transactions/month mark. Given this important milestone, MADA’s Executive Vice President Scott Lambert sat down recently with the two people most responsible for the program’s success: CVR’s Territory Manager John Hawkins and its Account Executive Aly Quinn. SL From a dealer’s standpoint what’s the best thing about CVR?
SL Aly, how many clients do you cover?
SL Why is that?
SL This explains why we never see you in our offices. What about the deputies?
AQ (without hesitating) It improves their CSI. AQ Because the customers love it, and they give the dealers extra marks for quick titles and plates.
SL So what’s the biggest roadblock to setting it up? JH The F&I Manager.
SL Why?
AQ That’s the funny part, they think it’s the opposite. The F&I Managers are certain that the customer will never pay for the service. But once they see the customers’ acceptance and the stronger CSI, they become converts.
AQ 180 in Minnesota and Western Wisconsin.
JH There are 53 Deputy Registrars around the state signed up to take this business.
SL Why should a Deputy Registrar be on the program?
AQ If you have a big dealer who wants to be on CVR, the deputy runs the risk of losing the dealer’s business if they don’t accommodate him.
SL Have you ever seen a dealer not get on the program because the deputy refused to work with CVR?
SL Who else has seen the light? AQ Title Clerks.
JH Occasionally. But I’ve also seen deputies lose a lot of business to other CVR-ready deputies because of their stubbornness.
SL I assume they like the push button aspect of this?
SL What are the biggest myths about the CVR program?
AQ What they really like is that the banks are happy and don’t call as often.
SL Why’s that?
JH With our process, we issue titles in less than two weeks versus 60 days through the old process. This means they are getting titles to customers and liens recorded a whole lot faster. Banks like to know where their stuff is.
34
JH Deputy Registrars will lose their fee – Not true Deputy Registrars will lose the dealer business – Not true Customers don’t want it – They do Customers won’t pay for it – They do We can’t do used cars or out of state vehicles – We can
CVR Territory Manager & Account Executive
It takes 20 minutes to process a single transaction in the F&I office – It takes 2 minutes It’s a Government Program – it’s a private program that works with the state.
SL At least they don’t think it’s a factory program. That would kill it for sure. AQ That’s what I gather.
SL What’s next for CVR?
JH We plan to release a 50-state fee calculator very soon. This should make it far easier to sell to out of state customers and help them with their title processing and tax payments.
SL How would you describe your jobs here?
JH I’m on new accounts and am installing two to three a month right now. AQ I’m here to help the dealers with the utilization of the program.
SL And you’re both Minnesota people, correct?
AQ and JH We both live here. JH This is kind of unique to CVR nationally to have two reps like us parked in one state.
SL And we’re richer for it, thanks.
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Source: Omniture May 2012.
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