Automotive News - October 11, 2010 - 22

BUY-SELL UPDATE
Mark D Johnson President MD Johnson Inc. Dealership BUY SELL Advisors

22 • OCTOBER 11, 2010

Inventory – U.S. car and light-truck, on Oct. 1
Days Days supply supply Inventory Oct. 1 Sept. 1 units 2010 2010 Days Days supply supply Inventory Oct. 1 Sept. 1 units 2010 2010

Vehicles are domestic unless noted.
Days Days supply supply Inventory Oct. 1 Sept. 1 units 2010 2010

U.S. sales per franchise, Sept.
Make Car Truck Sept. Sept. 2010 2010 Total Sept. 2010 Total Aug. 2010

Like homeowners, many auto dealers are being forced to sell for less than their dealership debt. Dealers who have lent their businesses money need to be sure they have proper documentation. To have any chance of repayment, you must have clear documentation of lending. You’ll need to ensure that you have: a) Clear security agreements; b) Filed appropriate UCC 1s; c) Maintained minutes in corporate (or LLC) minute books along with clear and executed corporate (or LLC) resolutions regarding the details of cash contributions and cash borrowed from non banking sources; and d) Read complete article at www.mdjohnsoninc.com We have seen some selling dealers who don’t have sufficient funds to pay off all the unsecured creditors, but will have some proceeds at closing. You can’t just assume that you can pay yourself before other creditors. In this situation, we often ask about corporate (or LLC) minutes properly documenting the loan, and whether payment of interest and the filing of a security agreement have occurred. In other words: Have you treated the loan arrangement as a real arm’s length deal? Too often, these housekeeping items are not being performed. Auto dealers “selling short” typically assume that they can simply write themselves a check at closing and not pay other unsecured creditors. But without a clear, documented and valid debt obligation, documented at the time of the inception of your loan, you can’t simply pay yourself the proceeds of the sale and not pay other unsecured creditors. We have seen such impermissible payments treated as preferences and unlawful distributions. But the dealer does not get to keep the proceeds he paid to himself. Secured creditors are generally required to be paid. Until they are paid they won’t release their security interests/liens that encumber dealership assets. Whether the dealer or family members are lending to the dealership, it’s critical to make sure they are secured creditors. The lesson: Document related party loans and make sure your lawyer is a part of this process up front. ALWAYS Get Legal Advice. If you want to know what your dealership is worth or are looking for a store, contact us today. For previous newsletters, articles or to be added to our newsletter, go to www.mdjohnsoninc.com. Contact Mark Johnson at 702 497 5480 to discuss in confidence.
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BMW div. car (I) .... 19,000 BMW div. trk. (D/I).. 1,900 Total BMW division (D/I) 21,000 Mini Cooper car (I) .. 2,700 BMW† .................... 23,600 300.......................... 5,500 PT Cruiser .............. 2,700 Sebring .................. 5,000 Total Chrysler Div. car 13,200 Town & Country...... 21,200 Total Chrysler Div. trk. 21,200 Total Chrysler Division 34,400 Avenger .................. 5,500 Caliber .................... 6,500 Challenger .............. 11,700 Charger .................. 9,100 Viper ...................... 300 Total Dodge car...... 33,000 Caravan .................. 16,700 Journey .................. 11,900 Nitro........................ 5,300 Total Dodge trk. .... 33,800 Total Dodge............ 66,800 Dakota .................... 1,800 Ram ........................ 68,300 Sprinter .................. – Total Ram trk. ........ 70,100 Total Dodge/Ram .... 137,000 Commander ............ 400 Compass ................ 2,000 Grand Cherokee ...... 26,700 Liberty .................... 11,900 Patriot .................... 5,500 Wrangler ................ 23,300 Total Jeep trk. ........ 69,700 Chrysler Group car.... 46,300 Chrysler Group trk. .. 194,800 CHRYSLER GROUP .... 241,100 Mercedes-Benz car (I) 24,600 Mercedes-Benz trk. (D/I) 16,700 DAIMLER AG† .......... 41,300 Crown Victoria ........ 4,500 Fiesta ...................... 14,500 Focus ...................... 41,100 Fusion .................... 38,800 Mustang.................. 20,000 Taurus .................... 14,400 Total Ford div. car .. 133,300 E-series/Club Wagon 1,500 E-series van ............ 11,900 Edge........................ 18,900 Escape .................... 36,500 Expedition .............. 9,200 Explorer .................. 8,800 F series .................. 119,400 Flex ........................ 8,700 Ranger .................... 12,300 Transit Connect (I).. 8,400 Ford div. trk. (D) .... 227,200 Ford div. trk. (I) .... 8,400 Total Ford div. trk. .. 235,600 Ford div. (D) ........ 360,500 Ford div. (I) .......... 8,400 Total Ford division.... 368,900 MKS ........................ 4,500 Town Car ................ 1,200 MKZ ........................ 5,800 Total Lincoln car .... 11,500 MKT ........................ 2,500 MKX ........................ 2,600 Navigator ................ 2,400 Total Lincoln trk. .... 7,500 Total Lincoln .......... 19,000 Grand Marquis ........ 1,800 Milan ...................... 4,400 Total Mercury car .. 6,200 Mariner .................. 5,400 Mountaineer............ 1,400 Total Mercury trk. .. 6,800 Total Mercury.......... 13,000 Total L-M car .......... 17,700 Total L-M trk........... 14,300 Total L-M .............. 32,000 Ford/Lincoln/Mercury car 151,000 Ford/Lincoln/Mercury trk. 249,900 Ford/Lincoln/Mercury 400,900 Ford Motor Co. car .. 151,000 Ford Motor Co. trk. (D) 241,500 Ford Motor Co. trk. (I) 8,400 Ford Motor Co. trk. .. 249,900 FORD MOTOR CO....... 400,900 LaCrosse ................ 13,600 Lucerne .................. 6,300 Regal (I).................. 6,200 Buick car (D) ........ 19,900 Buick car (I) .......... 6,200 Total Buick car ...... 26,100 Enclave.................... 13,200 Total Buick trk. ...... 13,200 Total Buick (D) ........ 33,100 Total Buick (I) ........ 6,200 Total Buick ............ 39,300 CTS ........................ 16,700 DTS ........................ 5,300 STS ........................ 1,400 XLR ........................ – Total Cadillac car .. 23,400

34 11 29 14 26 47 93 27 40 59 59 50 27 33 93 26 157 38 52 71 65 59 46 47 101 – 98 63 30 45 61 61 37 75 61 38 70 60 47 55 50 57 119 76 61 87 52 71 21 44 37 64 78 59 63 99 81 59 59 59 59 63 59 63 87 26 116 77 119 24 100 50 63 23 67 43 61 74 63 52 60 55 58 69 59 62 69 59 59 59 62 72 81 87 74 87 77 75 75 75 87 76 111 71 47 167 92

36 13 31 23 29 43 92 17 35 50 50 43 18 30 68 19 122 30 37 74 42 47 38 26 79 7 74 51 54 26 58 55 28 63 51 31 57 50 49 60 53 51 87 58 51 85 61 61 34 33 42 52 69 47 59 82 69 127 54 127 56 57 127 58 104 42 69 74 119 41 70 63 69 21 65 37 52 69 54 43 53 59 56 60 56 57 60 55 127 56 57 62 50 87 58 87 63 71 71 63 87 66 97 71 116 375 90

Escalade.................. 6,700 Escalade ESV .......... 3,700 Escalade EXT .......... 700 SRX ........................ 11,000 Total Cadillac trk. .. 22,100 Total Cadillac.......... 45,500 Aveo (I) .................. 6,900 Camaro .................. 15,500 Cobalt...................... 4,200 Corvette .................. 6,300 Cruze ...................... 4,700 HHR ........................ 5,100 Impala .................... 13,800 Malibu .................... 39,300 Chevrolet car (D) .... 88,900 Chevrolet car (I) .... 6,900 Total Chevrolet car.. 95,800 Avalanche................ 7,800 Colorado ................ 5,100 Equinox .................. 14,600 Express/G van ........ 16,500 Silverado ................ 109,700 Suburban ................ 7,200 Tahoe ...................... 18,100 TrailBlazer .............. – Traverse .................. 27,500 Total Chevrolet trk. 206,500 Total Chevrolet (D) .. 295,400 Total Chevrolet (I) .... 6,900 Total Chevrolet ........ 302,300 Acadia .................... 13,700 Canyon.................... 2,400 Envoy ...................... – Savana/G van .......... 4,500 Sierra ...................... 47,800 Terrain .................... 7,400 Yukon...................... 9,900 Yukon XL ................ 4,700 Total GMC trk. ........ 90,400 H3 .......................... 200 Total Hummer trk. .... 200 G5 .......................... – G6 .......................... – G8 (I) ...................... 100 Vibe ........................ – Pontiac car (D) ...... 100 Pontiac car (I)........ 100 Total Pontiac car .... 100 Torrent .................... – Total Pontiac trk. .... – Total Pontiac (D)...... 100 Total Pontiac (I) ...... 100 Total Pontiac .......... 100 Aura ........................ – Total Saturn car .... – Outlook .................. – Vue.......................... – Total Saturn trk. .... – Total Saturn............ – GM car (D)............ 132,300 GM car (I) ............ 13,200 GM car.................. 145,500 GM trk. ................ 332,500 GENERAL MOTORS† .. 477,900 RL (I)†† .................. 1,000 TL............................ 9,000 TSX (I)†† ................ 7,000 Acura car (D) ........ 9,000 Acura car (I).......... 8,000 Total Acura car ...... 17,000 MDX........................ 8,000 RDX ........................ 3,000 ZDX ........................ 1,000 Total Acura trk. ...... 12,000 Total Acura ............ 29,000 Accord .................... 69,000 Civic (D)................ 52,000 Civic (I) ................ 3,000 Total Civic .............. 55,000 CR-Z (I) .................. 2,000 Fit (I) ...................... 9,000 Insight (I)................ 7,000 Honda Div. car (D) .. 121,000 Honda Div. car (I) .. 21,000 Total Honda Div. car 142,000 CR-V (D) .............. 23,000 CR-V (I) ................ 10,000 Total CR-V .............. 33,000 Element .................. 3,000 Odyssey .................. 10,000 Pilot ........................ 13,000 Ridgeline ................ 3,000 Honda Div. trk. (D).. 52,000 Honda Div. trk. (I) .. 10,000 Total Honda Div. trk. 62,000 Total Honda Div. ...... 204,000 Am. Honda car (D) .. 130,000 Am. Honda car (I) .. 29,000 Am. Honda car ........ 159,000 Am. Honda trk. (D).. 64,000 Am. Honda trk. (I) .. 10,000 Am. Honda trk. ........ 74,000 AMERICAN HONDA .... 233,000

138 112 97 68 89 90 26 61 30 142 228 24 28 60 49 26 46 111 47 31 79 85 63 83 250 87 74 64 26 62 74 77 125 122 108 39 107 80 87 35 35 250 167 – – 250 – 429 250 250 250 – 406 69 83 21 – 21 58 55 50 55 78 69 104 89 78 89 80 85 49 54 100 53 68 71 72 112 74 40 47 104 72 63 70 43 57 46 67 33 40 54 41 57 43 59 73 67 72 43 57 44 60

139 100 93 53 74 82 49 73 34 132 – 9 19 51 37 49 38 99 74 28 92 79 50 68 156 75 70 55 49 55 70 94 50 76 95 33 105 67 79 61 61 – 208 – 250 286 – 464 – – 321 – 500 43 37 83 21 42 38 43 86 45 72 61 97 69 75 69 77 73 40 61 58 46 59 67 50 99 52 72 39 86 59 56 58 32 36 33 35 30 35 51 33 36 34 48 59 60 60 35 36 35 49

Hyundai div. car (D/I) 62,300 Hyundai div. trk. (D/I) 11,300 Total Hyundai div. (D/I)† 73,700 Kia car (I) ............ 19,200 Kia trk. (D/I).......... 16,600 Total Kia (D/I)*........ 35,800 Hyundai-Kia car (D/I) 81,600 Hyundai-Kia trk. (D/I) 27,900 HYUNDAI-KIA .......... 109,500 Jaguar car (I)* ........ 3,800 Land Rover truck (I)* 5,600 JAGUAR LAND ROVER N.A.†*9,400 Mazda2 (I) .............. 3,800 Mazda3 (I) .............. 27,700 Mazda6 .................. 7,000 MX-5 Miata (I) ........ 2,600 RX-8 (I) .................. 400 Mazda car (D)........ 7,000 Mazda car (I) ........ 34,500 Total Mazda car ...... 41,500 CX-7 (I) .................. 6,900 CX-9 (I) .................. 6,700 Mazda5 (I) .............. 4,000 Tribute .................... 1,500 Mazda trk. (D) ...... 1,500 Mazda trk. (I) ........ 17,600 Total Mazda trk. ...... 19,100 MAZDA†.................. 60,600 Eclipse .................... 1,500 Eclipse Spyder ........ 600 Galant...................... 1,800 Lancer (I) ................ 6,500 Mitsubishi car (D) .. 3,900 Mitsubishi car (I) .... 6,500 Total Mitsubishi car .. 10,400 Endeavor ................ 800 Outlander (I) .......... 2,700 Mitsubishi trk. (D) .. 800 Mitsubishi trk. (I).... 2,700 Total Mitsubishi trk... 3,500 MITSUBISHI ............ 14,000 Infiniti car (I) ........ 10,000 Infiniti trk. (D/I)...... 3,800 Total Infiniti (D/I) .... 13,800 Nissan Div. car (D/I) 85,700 Nissan Div. trk. (D/I) 48,000 Total Nissan Div. .... 133,700 Nissan N.A. car (D/I) 95,700 Nissan N.A. trk. (D/I) 51,800 NISSAN N.A.† .......... 147,400 Porsche car (I) ........ 4,200 Porsche trk. (I) ........ 1,200 PORSCHE† .............. 5,400 Saab car (I) ............ 3,500 SAAB CARS N.A.†‡ .... 3,500 Subaru car (D)** .... 14,000 Subaru car (I) ........ 13,900 Subaru car (D/I) ...... 28,000 Subaru truck (D)** .. 400 SUBARU† ................ 28,400 Suzuki car (I) .......... 6,300 Suzuki trk. (D/I) ...... 2,000 SUZUKI† ................ 8,300 Lexus car (I).......... 18,700 Lexus trk. (D/I) ...... 13,500 Total Lexus (D/I) ...... 32,100 Toyota/Scion car (D/I) 185,200 Toyota trk. (D/I)...... 93,200 Total Toyota/Scion (D/I) 278,400 TOYOTA MOTOR† ...... 310,500 Audi car (I) .......... 6,900 Audi trk. (I) .......... 1,600 Total Audi (I) .......... 8,500 VW div. car (D/I) .... 59,500 VW div. trk. (I) ...... 10,400 Total VW division (D/I) 69,900 VW GROUP OF AMERICA 78,300 30 series (I) ............ 800 40 series (I) ............ 700 50 series (I) ............ 200 60 series (I) ............ 100 70 series (I) ............ 2,900 80 series (I) ............ 1,800 Total Volvo car (I) .. 6,600 XC60 (I) .................. 2,000 XC90 (I) .................. 1,500 Total Volvo trk. (I) .. 3,500 VOLVO CARS N.A.†‡‡ 10,000 Total car .............. 1,100,000 Total truck ............ 1,103,400 TOTAL.................. 2,203,300

40 38 40 34 26 30 38 30 36 98 56 68 163 87 64 83 90 64 91 85 67 69 90 125 125 72 75 82 133 215 38 84 63 84 75 49 64 49 64 60 70 42 39 41 51 50 51 50 49 50 91 36 69 79 78 31 34 33 71 33 129 119 127 57 38 47 61 43 53 53 33 13 26 87 91 88 69 79 61 57 13 78 62 64 56 54 55 60 56 59 57

31 35 32 25 26 25 30 29 29 69 53 58 134 62 59 107 162 59 69 66 60 61 97 121 121 67 69 67 127 190 53 87 82 87 85 100 73 100 73 78 83 41 43 42 52 44 49 50 44 48 95 50 78 324 324 26 37 31 54 31 123 98 116 58 36 47 57 40 50 50 35 19 29 90 95 91 73 74 41 44 – 82 68 66 38 49 43 56 50 53 52

Toyota/Scion Honda Lexus Nissan Mercedes-Benz Hyundai Mini BMW Infiniti Kia Ford Acura Subaru Chevrolet VW Audi Mazda Dodge/Ram Land Rover GMC Volvo Jeep Mitsubishi Cadillac Porsche Chrysler Jaguar Lincoln Buick Saab Ferrari Mercury Suzuki Aston Martin Maserati Hummer Rolls-Royce

61 49 36 40 37 49 56 41 32 21 14 18 35 14 29 19 19 9 – – 8 – 8 5 6 3 6 3 3 5 4 2 3 3 3 – 1

44 35 39 22 22 9 – 13 13 24 30 21 0 19 3 11 10 13 14 13 5 12 4 5 4 4 – 3 2 0 – 2 1 – – 1 –

105 84 75 62 59 58 56 54 45 45 44 39 35 33 32 30 29 22 14 13 13 12 12 10 10 7 6 6 5 5 4 4 4 3 3 1 1

104 94 85 64 56 68 51 58 52 49 43 42 36 36 36 34 30 22 15 13 14 10 10 10 10 7 8 5 6 1 4 5 5 3 3 1 1

Source: Automotive News Data Center

Stock by brand
Days supply on Oct. 1, 2010

Smallest
1. Mini† 2. Audi 3. BMW† 4. Kia* 5. Subaru† 14 26 29 30 33 127 98 90 88 87

Largest
1. Suzuki† 2. Jaguar†*, Ram 3. Cadillac† 4. VW 5. GMC

†Dealer stock only *Estimate Source: Automotive News Data Center

Stock by maker
Days supply on Oct. 1, 2010

Smallest
1. BMW† 2. Subaru† 3. Hyundai-Kia 4. Nissan N.A.†, Daimler AG† 5. Toyota Motor† 26 33 36 50 53

Largest
1. Suzuki† 127 2. Mazda† 82 3. Saab† 78 4. Mitsubishi 70 5. VW Group, GM†, Porsche† 69
†Dealer stock only Source: Automotive News Data Center

Perspective
Total industry days supply on Oct. 1 2006 2007 2008 2009 2010 63 59 72 53 57

†Dealer stock only *Estimate ††Total car stock figure is actual, but the RL and TSX breakout is estimated. ‡The sale of Saab to Spyker Cars was final on Feb. 23, 2010. **Total domestic stock figure is actual, but domestic car and truck stock figures are estimated. ‡‡The sale of Volvo to Zhejiang Geely Holding Group was final on Aug. 2, 2010. Source: Automotive News Data Center and company sources

Source: Automotive News Data Center

Domestics vs. imports
Days supply on Oct. 1
On Oct. 1 On Sept. 1

Note: Numbers may not add due to rounding; (D) = produced in North America; (I) = imported to U.S. Days supply: Number of days needed to sell all vehicles in inventory, Inventory: Unit count of vehicles on hand at dealerships, factory lots, ports of entry and in transit on a specific date based on the previous month’s daily selling rate

Detroit 3 European Japanese Korean Total industry

65 51 55 36 57

57 55 50 29 52

Source: Automotive News Data Center
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Automotive News - October 11, 2010

Table of Contents for the Digital Edition of Automotive News - October 11, 2010
