Ciccolo’s view of the industry from the inside

By Bill Griffith

September 24, 2012

4 minutes to read

Ray Ciccolo bought the former Gene Brown Rambler/Volvo dealership in the 1960s when he was 25. Nearly 50 years later, his Village Automotive Group sells 11 brands in 9 locations in Eastern Massachusetts. Ciccolo continues to be active both in his group and with the National Automobile Dealers Association (NADA).

Q: Three years ago, you predicted the automotive industry would lead the country out of economic recession. How has it worked out?

A: The industry has come back pretty much as I expected it would. The demand for new vehicles rose to 13.5 million last year and a projected 14.1 million this year. Many manufacturers are building their cars in the United States now and will be exporting any excess production. Those are both big positives.

Q: A common complaint from readers is that vehicles, particularly in the compact SUV and midsized segments, all look the same, like cookiecutter cars. Why is this?

A: It’s a problem that isn’t going to go away. They’re all going to be as aerodynamic as possible simply to maximize gas mileage. And those are the aerodynamic shapes of choice these days.

Q: Speaking of gas mileage, will the industry be able to meet the President’s mandate for a 54.5 mpg average by 2025?

A: Probably, but the cars that reach it won’t be ones people want to buy. The average consumer doesn’t want to go without power accessories or to give up air conditioning or drive a tiny, featherweight vehicle. The automobile industry is one of the fewwhere we [the government] tell the manufacturer what to produce. It’s strange to have that in a free enterprise system where the market always shows what the consumer wants to buy.

Q: The Right to Repair Bill was passed in Massachusetts this year but it still remains as a ballot question this November. What’s your take on it?

A: The bill that passed was an acceptable compromise. It took a lot of the issues that were going to fall into local dealers’ laps and let them stay with the manufacturer, where they should be. Dealers only do 22 percent of all retail repair, so there is plenty being done by other chains, independent garages, and other operations. We [dealers] certainly don’t have a stranglehold on the industry. In fact, I’d like to see my dealerships do better than that 22 percent.

Q: When will Americans embrace smaller vehicles?

A: I don’t see it happening yet. Even with gasoline at $4 a gallon, which the industry once thought of as the tipping point to make people go small, consumers still want their SUVs and midsized cars, especially people with families. If they have to, they’ll drive less. But these vehicles will still be the heart of the marketplace as long as people are having kids and need car seats and a place to put strollers. Then, when the kids get older, they need space for their children’s friends and sporting equipment. Those are the practicality issues. And there’s a safety issue. People feel safer in an SUV with its better visibility or in a vehicle with allwheel- drive.

Q: Among new cars, which have caught your eye?

A: Here are four.

1. The new Cadillac ATS. It’s going to be a game-changer. It’s a car that must be successful for Caddy and GM. It was designed to compete with the BMW 3Series. I like the lines of it and think it’s going to be both attractive and an attraction for the dealerships.

2. Honda’s new Accord. I think they’ve made enough enhancements to get it back to its rightful place. It’s also a tad smaller than the outgoing model.

3. Nissan’s new Altima. It’s a huge shot in the arm for Nissan. I see it being very popular.

4. A surprise: Hyundai’s new Santa Fe. It hasn’t been a big player in the Hyundai lineup but the new version just came out and it looks to be a natural for New England. It will have heated front and rear seats and a heated steering wheel, plus all-wheel-drive. It looks like a practical car at an affordable price.

Q: What is your take on hybrids and electric cars?

A. No one is rushing out to buy them. For example, the Chevy Volt gets 40 miles on a charge [though it then can continue with a gas engine providing the electricity to turn the electric motors]. Why would anybody want to drive a car like that, especially one that’s heavily subsidized? And when you talk about the environment, think of where the electricity to charge these vehicles originates. This country still generates 52 percent of our electricity from coal.

What the hybrids are doing, however, is helping make the industry more competitive. I see where a Chinese automotive parts supplier has bought into local battery maker A123 Systems. That’s a positive development. Eventually, battery technology will improve and electrics will have longer ranges.

If I’m a Middle East oil producer, I’m going to adjust prices to stay competitive because I can’t drink this stuff if demand falls.

I see the gasoline-powered vehicles continuing to evolve and improve each year. Also, transmissions are getting better and leading to increased mpg numbers. And we’ll continue to see systems—some that were developed for hybrids like start/stop technology—used in all vehicles.