Auto Dealers May Soon Feel Financial Pinch
As home values fall it's harder for people to obtain home equity loans, refinance or obtain money from their homes. A decline in housing values, along with a rising inflation rate is likely to reduce the consumers overall confidence, making them less likely to spend. Kevin Tynan, an analyst for Argus Research, predicts the auto industry is most likely to suffer collateral damage from the credit crunch. In the past decade, the industry has lengthened auto loans to five and six years, up from three and four years. Although the number of repossessions doesn't appear to be going up across all franchises, Ford Credit is seeing the severity of its bad loans increase. In the third quarter, the financing arm lost up to $7,500 per bad loan, an average of $1,000 more than the year before.

New Opportunities Created Due to Changing Auto Market
“Loss of market share and higher gas prices create an opportunity for the auto industry to reinvent itself,” said NADA Chairman Dale Willey, in a speech to the Automotive Press Association in Detroit.

Effects of Rising Oil Prices
Goldman-Sachs expects that gas will rise to $4.30 a gallon by 2008, creating a huge recession in the U.S. Since most every sector of the economy relies on oil in some way, the effects on the economy will be catastrophic. Clean fuels will most certainly receive greater support and use. Companies producing equipment for wind and solar power equipment will see increased growth, and car companies will be forced to build more fuel efficient cars rather than fuel guzzling SUV's.

Automotive dealers Reduce 2008 Vehicle Orders
According to a Wachovia analyst, Andrew Casey, 34 percent of dealers recently surveyed now expect to reduce their 2008 vehicle orders, thus affecting production rates through the rest of this year and possibly the first quarter of next year. a Wachovia analyst said Thursday. The survey also revealed that 89 percent of dealers surveyed believe that despite ongoing troubles in the credit industry, there was adequate financing available for their customers.

GM and Reynolds in Court Over Dealer Software
Two years ago General Motors negotiated a deal with Reynolds and Reynolds Co. to replace the management system, Reynolds, used by all Saturn dealers, to assist with standardizing information and equipment and lowering cost. On Oct. 4, Reynolds sued GM in U.S. District Court for breach of contract, alleging that GM should pay for proposed software revisions. GM promptly counter sued. Many dealers do not want to switch from their old ADP systems to the new Reynolds system. GM negotiated an attractive price on behalf of over 440 Saturn dealers and approximately 300 non-Saturn dealerships.

SPOTLIGHT ON PMG'S Sourcing Department

PMG Sourcing Group Mission Statement
The PMG sourcing group collaborates with PMG Client Service Managers and clients to deliver innovative supply strategy options in a timely manner. We present best value solutions including bottom-line savings to our clients.

About PMG’s Sourcing Department
Our category experts combine their professional knowledge and expertise to review many products and services for our clients. With over 100 years of specific category sourcing experience, our team continuously reviews and qualifies vendors based on their ability to perform. In the process they consider the quality of the vendor’s product or service, capability of meeting or exceeding our client’s expectations, delivery ease and competitive pricing.

Saving Clients Money
Our clients are enjoying saving money on products they use everyday. We also offer a host of specialized product and/or service reviews, negotiation and solutions to be used within their organization. Partnering with PMG provides our clients with the knowledge and comfort that they have done the due diligence necessary to make an educated purchasing decision. A PMG customer should expect savings from office supplies to property and casualty insurance. The solutions we offer through strategic sourcing continue to make a huge impact on the organization’s bottom line!

January 2008 PMG Newsletter

What's New At Performance Management Group (PMG)?

PMG Client Aggregated Savings For 2007
PMG broke a new record in 2007 saving its 300+ client locations over $14,000,000 in aggregated expense savings.

Preferred Supplier Update
PMG has selected Preferred Supplier vendors in nearly every expense category. The purpose for PMG's Preferred Supplier program is to offer clients a price that leverages the organization's entire size, ensures high quality goods and services, all with a quick turn-around time for delivery. Below you will find a few brief listing of PMG's Preferred Suppliers for the corresponding category.

Customer Success Story
PMG Assists Dealer In Reducing Energy Consumption and Lowering Utility Costs Simultaneously.

Partnering with Wisconsin Focus on Energy, Wisconsin Public Service (utility provider), the lighting supplier and Performance Management Group, Broadway Automotive decided to undertake the challenge of reducing their dealership energy consumption and lower the utility costs at two dealer locations. PMG worked to source and recommend energy efficient alternatives to Broadway.

New lighting retrofit kits were installed and in some areas completely new light fixtures all with T8 lamps. Reflectors were incorporated with these fixtures and retrofits to make the most efficient use of the light. The electrical energy consumption for lighting was reduced by 52.4%! The investment in lighting improvements not only reduced the utility bills but greatly increased the efficiency of the lighting. In some cases more lighting was provided by installing even fewer fixtures.

Broadway is excited about the energy efficient lighting installed and hopes to continue being a leader in the industry by demonstrating ways to preserve the environment, reduce energy consumption and reduce operating costs. Through strategic purchasing processes, PMG has assisted Broadway Automotive with purchasing recommendations in numerous operating expense categories, saving the dealership even more as noted below.

Additional Operating Expense Savings