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In search of new car industry answers - January 09, 2009
In today's column, I address questions from readers on a wide range of topics – many of which, not surprisingly, are focused on the state of the economy and the automobile industry.
Q: What will the Canadian economy be like in 2009?
A: The top bankers and money experts in the world couldn't predict the U.S. mortgage crisis and the collapse of the global markets.
So I'm not going to predict where the Canadian economy is going. Flip a coin.
Q: With the recent softening of the economy, how is the retail car industry holding up?
A: The Canadian retail auto industry performed fairly well in 2008 – certainly better than in the U.S. In any economy, some dealers do better than others. That's a reality of our business.
Regardless of what you may hear, this economy is really no different – some dealers will do well and some will struggle.
Q: The news in the media is mostly doom and gloom these days. Should Canadians really be worried
A: I think there is a certain self-fulfilling prophesy to the news. If people are bombarded with enough bad news, they'll eventually come to believe it.
The mainstream media does a good job reporting on economic events as they unfold, but some of the reporting is overkill. Good news stories in the auto industry are rare.
Q: Should consumers wait until the economy improves before buying a new car?
A: In any economic environment, people should focus on their own fiscal realities and needs when buying a car. Employment status, affordability, driving needs and stylistic preferences – these should be your criteria, not what you hear on the nightly news.
Q: Is it possible to buy a car from a dealership entirely online?
A: Technically it's possible, but why would you?
It would be like buying a house over the Internet. Visiting a car dealership is an essential part of the car-buying experience.
It's sensory, allowing consumers to touch, feel and drive various makes and models.
It allows consumers to view other departments and meet staff members, whose job it is to make your buying experience pleasant and satisfactory.
Why wouldn't you want to take advantage of that?
Q: Can I book a service appointment with a dealership online?
A: Yes. Most dealerships have websites that allow customers to book service appointments online.
If your dealership doesn't provide that option, contact it and suggest that it add that feature.
Q: Is there anything that the federal government could do to help car buyers afford new vehicles in the current economy?
A: In 1980, the Canadian government introduced a short-term tax rebate on cars to help dealers sell 1979 model vehicles.
That type of stimulus worked then, and I think it could work now. A short-term tax rebate would provide a welcome boost for dealers and consumers.
Q: Are all auto manufacturers in the country part of the Canadian Motor Vehicle Arbitration Plan (CAMVAP)?
A: No. A few manufacturers have elected not to belong to the CAMVAP program.
Starting in April, all new car sales and leasing agreements in Ontario must inform customers whether or not they have the option of presenting a case to CAMVAP.
Q: Any comments about social networking sites and how they're affecting new car dealerships and sales?
A: I think social networking sites are good for consumers and for our industry.
Sites like MySpace and Facebook allow friends, colleagues and people with shared interests to form online communities.
There are even sites for auto industry professionals, such as drivingsales.com, which allows industry folks to collaborate using video, blogs and discussions and communicate the latest trends and developments.
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