Main Street Motors

Main Street Motors interview with Aaron Gold

MainSales@MainStreetAutos.com

Ask the Experts > Main Street Motors interview with Aaron Gold

Main Street Autos -- Interview with Aaron Gold -- cars.about.com

Shane @ Main Street Motors: Where do you see the new car market in the next six to twelve months?

That's a hard one. I think it's going to stay pretty stagnant for the next few months. Even if the economy starts to turn around, I think people are going to be wary of expensive, long-term commitments until things stabilize. Few people are willing to commit to three to five years of payments when they aren't sure if they'll still have a job next month. Things may pick up a bit in the fall, as I bet there are going to be some serious model-year-end fire sales; the economic slowdown came too fast for the automakers to put the brakes on their plans for 2010. That may give us a bump, but I think true recovery is a ways off.

Shane @ Main Street Motors: Where do you see the used car market in the next six to twelve months?

There's a lot of potential in the used car market. I think Americans generally prefer to buy new. But you can save a ton of money by buying a car that's even just a couple of years old, and several tons by buying one that's six or seven years old. Today's cars are built better than ever, so buying used is a safer bet than ever. In my household, our newest car has 111,000 miles on it, and it's still a reliable daily driver (knock on wood). (We bought it used, by the way.) In a way, that may be one of the upsides of the current economic situation -- people will buy used out of necessity, and realize what a great idea it is. I mean, it's nice to have that new-car smell and the new-car warranty and be the first person to drive a car off the lot -- but are you really willing to pay $5,000 or $10,000 or $20,000 extra for that privilege?

Shane @ Main Street Motors: Where's more future growth, the new or used car dealer market?

My money would go on new cars in the long term. Used cars in the short-term, maybe, but new in the long-term. As I said, Americans prefer to buy new, and the automakers and dealerships are good at coming up with creative financing. When the economy turns around, I think the focus will shift back towards new cars.

That said, this isn't necessarily bad news for used car dealers and buyers. When lots of people buy new, especially when they lease (allowing them to drive a car that they couldn't otherwise afford), that puts lots of good 2- to 3-year-old cars on the market, and that in turn drives the prices of older cars down even further. I'm amazed at how much car you can get for five grand these days.

Shane @ Main Street Motors: Do you believe hybrid cars are a fad or do you believe this segment of the car business will only increase in sales?

I don't think hybrid cars are a fad, but I do think they are a stop-gap until something better comes along. Hybrids are able to capture energy that would otherwise be wasted and re-use it later. They use less gasoline than conventional cars, but current hybrids can't use renewable fuels -- not yet, at least. I think flexible electric-drive cars are the future -- cars that use an electric motor only to drive the wheels, and can accept multiple sources of power, i.e. an engine-generator set, a hydrogen fuel cell, a battery, or whatever the engineers come up with next. I do think it's sad that we're ignoring several sources of alternative energy that are already available (or could be available) in abundance, like natural gas and synthetic diesel, but you didn't ask me about that!

Shane @ Main Street Motors: Do you believe repairs on cars in the coming years will become more complex?

I think they'll rely more heavily on electronics. I don't know that that necessarily makes them more complex. Years ago we had carburetors, which are amazingly complex devices. If they aren't set up just right, the car runs, but not quite as well or efficiently as it could. Adjusting them was an art. Today you plug in a computer and it says "The oxygen sensor is bad." You change it and the car passes its emissions test. Doesn't seem all that complex to me! J I own a 20 year old car 190,000 mile car with electronic fuel injection and ignition, and I'm amazed at how well the electronics have held up. I also own a 40 year old car with no electronics, and if I don't tune it up every year, its fuel economy drops by 20%. People long for the good old days of "simple" cars, but I think they've forgotten how maintenance-intensive those "simple" cars were. Aside from oil changes, today's cars are virtually maintenance free. I say, bring on the complexity!

Shane @ Main Street Motors: When do you believe the car business will get out of it's current doldrums?

Model-year-end clearance sales may help give it a boost, but I think it'll be a several months until the economy starts to turn around, and several months more before people feel confident committing to a major purchase that they'll be paying off for 3 to 5 years.

Shane @ Main Street Motors: What are some of the hottest car models coming out in the coming years? What models are you most excited about? What models are you not excited about?

Cadillac has coupe and wagon versions of the CTS coming out, which I'm dying to see. There's talk of a "V" version of the coupe (the CTS-V sedan has a 556 hp supercharged engine), and if they did a CTS-V wagon, I might turn into an incoherent puddle of drool. (I love wagons.) Ford has a four-cylinder EcoBoost engine in the works, a two-liter that will produce around 230 hp, and I think that's going to go really nicely in their small and mid-size cars. I've driven the European version of the Ford Fiesta, which is coming here in 2011, and I think that's going to give the Honda Fit a run for its money. Also, the next version of the Focus will be similar to the European model. (European cars designed for European buyers don't usually do well here, but the original Focus was a notable exception.) Fiat is talking about bringing the 500 here, which would be very cool, and I'm curious to see what Chrysler and Dodge products will come from Fiat ownership, although we won't see those for another 3 to 5 years. Oh, and I'm excited about Honda's CR-Z hybrid sports car. I own a Honda CRX, so I have a soft spot for two-seat Hondas.

Stuff I'm not excited about? I don't think I have an answer for that one -- I get excited about pretty much every new car!

Shane @ Main Street Motors: Do you think Tata Motors "Nano" will sell well in India?

I honestly can't say -- I don't know that much about the Indian market. If the car is any good, I would imagine the Indian people will embrace a home-made product... I mean, if the best the home market has to offer is the Hindustan Ambassador, well, you can only go up from there!

Shane @ Main Street Motors: How do you feel about the current new car dealership closings? Do you believe the new car manufacturers were too heavy handed?

I think they had to happen, especially for General Motors. GM's huge dealer body is an albatross around its neck. It forced them to make decisions that appeased the dealers but set their marketing plans back by years. The Pontiac G3 (a rebadged Chevy Aveo) is a great example -- there's a car that's completely wrong for what GM was trying to do with that brand, and yet they had to bring it out, because the Pontiac/Buick/GMC dealers were demanding it because they didn't have small cars when gas hit $4/gallon. (Thereby giving import buyers yet another reason to accuse American automakers of being out of touch.) I know the cutbacks were painful, but I think they were necessary.

Fifteen years ago, I worked for a car magazine in Britain, and there was an article about Ford possibly lengthening the Contour (sold in Europe as the Mondeo) to meet dealer demands for more back-seat legroom. The British press was amazed at the sway that American dealers held over the automakers. In the UK, the automaker says "Here's our car, now sell it." I don't think we should go that far; dealers know their buyers -- but it's the automakers that spend millions of dollars on market research, and they should be calling the shots on what they build. The dealerships have ample opportunity to show their preferences in the types of cars they order.

Shane @ Main Street Motors: Do you believe the internet is going to play a much larger role in the new/used car business then it already has?

Yes, definitely. The Internet is a great way to buy a car. For consumers, it removes a lot of the pressure. A buyer may go in for just a test drive, but any sales rep worth his or her salt is going to do their best not to let them leave without a signed contract. The Internet makes for easier bargaining. And for dealerships, it offers a way to reduce transaction time. I'm sure most sales reps don't want to spend half a day being haggled to death only to make, say, $100 on a deal. But if one rep can spend half a day online and close six or eight deals at $100, that's another story.

Shane @ Main Street Motors: When Fiat first entered the United States market they were laughed at and ridiculed for having inferior vehicles. They were even nicked named "Fix it again Tony". How do you feel about Fiats acquisition of Chrysler? Do you think Fiat technology will help Chrysler sell more cars or will it be a complete failure?

I have high hopes for Chrysler under Fiat ownership, but then again I had high hopes about Mercedes ownership, and look how well that went. I think Fiat is smart enough to know that they have to create products that will appeal to American buyers. American buyers are unique; what works in Europe doesn't work here. Americans say they want European cars, but cars that sell really well in Europe don't do well here -- the Volkswagen Golf and Opel (Saturn) Astra are great examples. If Fiat really listens to their Chrysler executives, the people who know the market and the buyers, and invests the money to adapt their cars as needed, they could do very, very well. The Chrysler 300 is a great example of a product truly tailored to American buyers -- and a lot of it is based on Mercedes technology. The Jeep Compass is a great example of what happens when you *don't* pay attention to buyers. As for build quality, well, that's never been Chrysler's strong suit anyway, so things can only improve.

Shane @ Main Street Motors: When Toyota and Hyundai first entered the United States market many years ago, many people laughed at their products but to only find out in the years to come they sold quality vehicles. My question is, what new car manufacturer do you believe will be the next Toyota or Hyundai?

No question: Kia. Granted, they are owned by Hyundai, but they've been left by the wayside the last couple of years. But they have two new products for 2010, the Soul and the Forte, which are phenomenal cars. Not just adequate, but truly phenomenal. In fact, I think the Forte is better than the Hyundai Elantra, even though the two are related. Kia is the rising star.

I also think Ford might see a resurgence -- they're making some smart decisions nowadays. The domestics don't always seem to be living in the real world, but I think Ford is. They're openly following the technology leaders, emulating features found on Japanese and European luxury cars, like rain-sensing wipers and active headlights, instead of dismissing them as gadgets that people don't really need. They've got the best navigation/entertainment system in the business. They're going full-throttle with turbocharging and direct injection engines, which VW/Audi have been using with great success. And they're making real strides in fuel economy.

Shane @ Main Street Motors: If you could own any car in the world, what would the car be and why?

Do I have to pick just one? Hmmm... If I was making a real-world decision, it'd probably be the Cadillac CTS-V, because it's thrilling as hell and great to live with on a day-to-day basis. Other runners-up... The Citroen Xantia diesel, because it's different as different can be, and because I have a secret love for French cars. A 1968 Dodge Charger, because it's one of the most beautiful cars designed by Detroit. And a Mitsubishi Lancer Evolution, because driving it is like having a day-long... um... how can I put this in a family-friendly way... a pleasurable occurrence that is the intended by-product of certain acts between consenting adults.

Shane @ Main Street Motors: If you could go back in time and be either Henry Ford or Kiichiro Toyoda who would you be?

If I went back in time and became either one, I'm sure the companies they (I) started would be out of business by now!

Shane @ Main Street Motors:
Thanks Aaron.

If anyone has any questions or comments please email me. I will post them on site. E-Mail @ MainSales@MainStreetAutos.com

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