LOS ANGELES - Chasing powerful Toyota, the 77 Chevrolet dealers in Los Angeles have decided to buy more regional advertising.
The dealers will double the amount they contribute to their dealer ad association, the Chevrolet Los Angeles Marketing Group.
Toyota dealers sold nearly three times as many retail vehicles as Chevrolet in California during the first six months of this year. The figures don't include fleet sales.
Southern California Honda dealers are joining in, too. After a 12-year absence, they have agreed to reinstate their dealer ad associations in September (see story at right).
Ad associations give dealers clout by pooling money from dealers for local advertising. The more vehicles the dealers sell and order, the more money that goes into the ad pot. Factories typically contribute to the associations.
John Macik, president of the Chevrolet Los Angeles Marketing Group, says the factory has given them good new products. Now it's time for the dealers to step up.
"We weren't spending enough money," says Macik, owner of Santa Paula Chevrolet in Santa Paula. "Toyota, Honda and Nissan were outspending us.
"But now I'm tired of Toyota wrapping themselves in the American flag and taking our market. Chevy is an American brand. This is our market, and we're taking it back."
Chevy, Honda step up
L.A. Chevrolet dealers had been putting 0.5 percent of the wholesale price of each vehicle ordered into the fund. They now contribute 1 percent for each vehicle ordered, the same as Chevrolet dealers in the rest of the state.
Southern California Honda dealers also will contribute 1 percent for each vehicle ordered. On a vehicle with a $20,000 invoice, that's $200 per car. Toyota's L.A. ad association caps the dealer fee at $245 per car.
Toyota's substantial dealer contributions to the ad associations, along with its high retail sales in California, give its dealer ad associations a substantial voice.
According to R.L. Polk & Co., Toyota dealers had 198,605 retail sales in the entire state through June, up 9.1 percent; Chevrolet sales totaled 70,777, down 11.6 percent. Honda's sales were up 8.8 percent, to 104,649.
In 1994, American Honda Motor Co. replaced its dealer ad associations in California with regional offices under the direction of Honda's agency, RPA, also known as Rubin Postaer and Associates.
Dave Conant, president of the Conant Auto Retail Group and owner of three Honda stores in Southern California, is happy to see the Honda dealer associations coming back.
"The beauty of it is that the dealers are more nimble and can respond more quickly to changing market conditions," he says.
"I think the Toyota dealer association is an example of something very effective," says Conant, who also owns one Toyota store. "If we (Honda) can have the same success as Toyota, that's good."
Chevrolet dealers need that same success because they are key to GM's future in this state.
Chevrolet sells more vehicles in California than all other GM brands combined. And the L.A. dealers represent 50 percent of all Chevrolet sales in the state.
Dale Sullivan, regional sales and marketing manager for Chevrolet's western region, says the factory will kick in more money as well.
"We will match whatever John (Macik) wants to put in," Sullivan says.
"If (the ad association) increases theirs, we'll increase ours."
Macik says Chevrolet's presence in the market for the third and fourth quarters will range from TV and radio to billboards and truck wraps. He says there also will be sponsorships and other promotions.
You may e-mail Kathy Jackson at [email protected]