Name game has enormous stakes
What is the value of vehicle brands discarded by carmakers because of declining sales? Tom Kinnear, a professor at the University of Michigan, said even a brand beyond hope is an asset worth $100 million to $500 million. Kinnear, speaking at a conference on auto branding, figured Acura threw away $2.5 billion when it discarded the Legend name. Although brands don't appear on financial balance sheets, a strong vehicle brand is worth $1 billion to $4 billion, and salvageable brands are worth $500 million to $2 billion, he said. Regarding DaimlerChrysler's decision to pull the plug on Plymouth, Kinnear quipped that he offered to buy the brand name.
HAVE YOUR CHECKBOOK READY - Jim Willingham, chairman of the National Automobile Dealers Association and president of Boulevard Automotive Group in Long Beach, Calif., joked - at least he seemed to be joking - that he's ready to sell out to AutoNation's Wayne Huizenga any time. He thinks AutoNation and other consolidators have tripled the going rate for desirable dealerships. 'I'm looking for Wayne, with his checkbook,' Willingham told the International Motor Press Association in New York. 'I hope he's there when I get home.'
WHERE DOES THE MONEY GO? Wonder why Nissan wasn't spending more on exciting designs? Nissan Motor Co.'s fiscal first half results showed that on a group basis it paid out $421 million just for interest payments on its debt. So for a full year, Nissan will pay, at current exchange rates, nearly $857 million to cover the interest on its loans. That is more than Mazda Motor Corp. and Fuji Heavy Industries Ltd., maker of Subaru cars, combined will invest this fiscal year for plant and equipment. It is also equal to Nissan's entire projected operating profit this fiscal year.
VICTORY FOR THE LITTLE GUY - Kia Motors America last week tapped David & Goliath, a new two-man shop, as its new ad agency. Dick Macedo, executive vice president at Kia, said he has been working for six months to develop a new agency for Kia with shop co-founder Skip Sullivan, a former Lexus account chief at Team One Advertising. Get this: When Kia announced Nov. 17 that it was firing Goldberg Moser O'Neill, its only U.S. agency, Macedo said he needed big-agency resources. He dubbed Goldberg a 'creative boutique' that has 'not been able to develop beyond that.' Then why sign with an upstart? Macedo said last week that the new shop has formed partnerships with big firms to help with brochures, direct mail and media buys. Compensation for the new agency will be tied to performance. 'This is not a fee issue,' Macedo said of the agency switch.