Words of advice on dealer demos
We received an inordinate number of inquiries about the treatment of qualified demonstrators as a result of Tec Advice 98/01/002 and the articles that appeared in industry publications.
It is important to emphasize that the demo rules did not change.
The Tec Advice resulted from a bad case in which the dealer did not obtain a demo agreement, and there was no log or any other evidence of either business use or company policy prohibiting the personal use of the car (except for commuting) during the years under examination.
As a result, the Internal Revenue Service agent disallowed the demo income exclusion.
What is the best advice to dealers?
Keep the essentials in mind, and you will be safe if you are examined by the IRS:
Adopt a policy prohibiting the use of demos for personal purposes.
Insist that personal items are not left or stored in demos.
Make sure you obtain a demo agreement from every salesperson.
Make sure that a permanent or adequate personal log is maintained to document the business use of demos.
Many dealers have phased out the use of demos in favor of paying a monthly allowance to dealership employees.
CPA - Managing Director
American Express Tax
and Business Services
Marketing errors doomed the SHO
If the Taurus SHO was available with a little less equipment, it would be a whole lot easier to sell the wives of America on the idea of a four-door performance alternative.
After all, weren't the deep dealer discounts and weak resale values just the voice of the consumer, speaking to establish the natural market value of the SHO?
By contrast, the average asking price of a two-year-old Impala SS might suggest that Chevy did a little better by targeting the mainstream vs. the near-luxury price point.
Recalling the original muscle-car concept, the 1960s enthusiasts were asked to pay extra only for the fast engine. The SHO experiment didn't establish whether the 1990s enthusiasts would be willing to pay extra just for all the performance-enhancing bolt-ons.
Instead, we watched as the high-tech, luxury-option content was, basically, given away, since all we really wanted was the hot engine, anyway.
No doubt history will blame the demise of the SHO on the apparent lack of an enthusiast market.
THOMAS M. LINSLEY
The writer sells material-handling systems.
Getting straight with the emu
Regarding your Feb. 16 article about Texas emu farmers suing Honda: Your ignorance has aligned you with Oprah Winfrey.
The emu is not carnivorous; it is a ratite that eats insects, grubs and vegetation.
The birds are 5 to 6 feet tall, not 4 feet. And $4 a day would feed 10 or 12 birds, not one, as you wrongly stated.
You have done a great injustice to the emu industry, and I would like a correction.
Gads Hill, Ontario
The writer is technical leader of the machine and tool department at FAG Bearings Canada and is a part-time emu farmer.
An auto blueprint for Southeast Asia
The financial crisis in Asia indicates that the countries must cooperate and integrate their automotive industries.
Each country should focus on certain aspects of production, based on their strengths of technology, natural resources, labor skills and infrastructure.
In Vietnam, the industry is very young and cannot compete with the rest of Asia.
One way for Vietnam to attract more investment and to integrate its industry into the Asiawide production system would be to accept the low-tech and less-desirable auto parts business, such as foundry.
Thailand, however, is in a better position to provide more-sophisticated components, such as engines, because it has advanced and modern automated production machinery and capacity.
Thailand's engine production can be distributed to the rest of Asia and the surplus exported to the United States.
The globalization and restructuring process must begin within the Association of Southeast Asian Nations because its members are more likely to cooperate with each other.
Since major Japanese automakers already have a strong foothold in Asia, Japan would be the leader to coordinate and help transfer automotive technology and know-how to Southeast Asia.
In short, this scenario makes an ideal case for automotive restructuring of the entire area. Like many scenarios, the solution may be obscured by long-standing regional political rivalries.
Unless Asian countries give up their national protectionism and cooperate, the automotive industry may trigger the next economic crisis in Asia.
Under the current situation, no country can conquer the others. Countries that go after their unrealistic visions and dreams may forego superb business opportunities.
President and CEO
Dangtu Inc. is a consulting firm that specializes in Southeast Asia market analysis and development.
Honda on a roll; records pile up
Both the March 9 headline and the article, 'Sales steady in Feb., but small cars are dismal,' overlooked one notable exception: the Honda Civic.
Civic sales set a record for February. That followed a record in 1997 and a good January when the Civic was second to the Honda Accord as the best-selling car in the United States.
Your article noted record truck sales for American Honda led by the CR-V, but it overlooked the fact that American Honda set a February record for total sales and that Honda Division set February records for Accord sales and for both truck and car sales.
Honda Public Relations