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At a Glance...
Top Stories
Detroit 3 Diet: Lose Dealerships
Hyundai Motor Expands US Dealer Network
Ford Ties Honda, Toyota in Initial Quality Survey
Economy, Gas Prices Drive Up New-car Incentives
Diesel Hybrid Auto Sales to Rise
Luxury Car Sales Show the Rich are Spending Less
UAW: Five GM Plants Face Strike
Opinion: Calif. Board Can't Force its Will on Auto Market
Opinion: Getting All the Carbon Out of Cars
NADA Update
IRS Issues Guidance on Dealership Cost Segregation Studies
2009 Convention Workshop Proposals Now Being Accepted
Dealer Executive Education Students Complete First Week
NHTSA Publishes 2008 Insurance Cost Information Booklet for Car Dealers
Lenovo Offers NADA Members Discount on Thinkpad Notebooks
STAR Answers Dealers' Questions About DMS Vendors
Top Stories
Detroit 3 Diet: Lose Dealerships

The Detroit 3 continued to subtract U.S. dealerships and franchises last year, largely a result of the automakers' retail consolidation plans. On Jan. 1, 2008, General Motors, Ford Motor Co. and Chrysler LLC had 14,199 dealerships in the United States — 621 fewer than at the start of 2007, according to the annual Automotive News census of dealerships. The attrition of dealerships has accelerated each year since 2003, when the Detroit 3 subtracted 256 stores. In 1980, the Detroit 3 had about 21,000 U.S. dealerships. That total has steadily declined. Overall, the Automotive News census finds, there were 239 fewer new-vehicle dealerships in the United States at the start of 2008 than on Jan. 1, 2007 — a 1.1 percent drop. The number of franchises declined by 513 last year, to 39,772. The Detroit 3 lost 484 franchises last year, while import-brand automakers subtracted 29 franchises. GM shed 248 dealerships and 227 franchises last year. But it still has 6,653 dealerships and 13,650 franchises in the United States — the most of any automaker. Joe Chrzanowski, GM's executive director of dealer network planning and investment, says the company is not forcing dealers to close or consolidate. Instead, he says, GM is identifying dealerships that have outdated facilities or are in declining or oversaturated markets. "Sometimes, just by educating dealers about their capabilities based on data in the marketplace, it helps them make the best decision for them and their families," Chrzanowski told Automotive News.
Source: Automotive News (Subscription required.)

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Hyundai Motor Expands US Dealer Network

Hyundai Motor plans to expand its dealer network in the United States to 820 from the current 787 this year, the company has said. Owners of select US Hyundai dealers were invited to Korea for a three-day trip during which they toured the company's research centers and test drove the Genesis, which will be launched in the US during the second half of the year. At the meeting Hyundai Motor vice chairman Kim Dong-jin requested the dealers' assistance in raising the company's sales in the United States, which have fallen 8.5 percent to 95,338 units in the first quarter of the year from a year ago, and meeting its annual sales target of 515,000 units. The chairman of Hyundai Motor has voiced concerns over the health of the market in the US in the wake of fuel price increases.
Source:  Just-Auto.com

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Ford Ties Honda, Toyota in Initial Quality Survey

Ford Motor Co. is in a dead heat with Japan's Toyota Motor Corp. and Honda Motor Co. in terms of initial vehicle quality, according to a study the automaker is expected to release Monday. The report is based on an annual survey of thousands of new vehicle owners conducted for Ford by the RDA Group, a market research firm based in Bloomfield Hills. The study looked at 2008 model cars and trucks from all full-line manufacturers. Drivers were asked to list any problems they had encountered during their first 90 days of ownership. RDA has been conducting the annual survey for Ford since the late 1990s. The marketing firm conducts similar studies for other automakers, and its findings have historically hewed close to those of the closely-watched annual initial quality survey independently conducted by J.D. Power and Associates. Previous year's studies have shown Ford narrowing the quality gap with Japanese automakers. This year's report found that Ford is now in a statistical dead-heat with Japan's leading carmakers, according to a source who had reviewed the numbers.
Source:  The Detroit News

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Economy, Gas Prices Drive Up New-car Incentives

With the economy slumping and gas prices spiraling, incentives that began creeping up in January gathered steam last month, increasing to an average of $2,435 per vehicle sold in February... The 8.4 percent increase from February 2007 is significant because it suggests that automakers – particularly the Detroit Three – are being forced to return to the high, profit-sapping incentives they have all renounced. Most big incentives are on full-size pickups and SUVs. But the amounts on some sedans are also growing.
Source:  The Dallas Morning News

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Diesel Hybrid Auto Sales to Rise

U.S. market share expected to triple by 2015, but shift to 35-mpg standard will be expensive

Sales of diesel-powered vehicles and gas-electric hybrids are expected to grow sharply, tripling their share of the U.S. auto market to a combined 17 percent by 2015, as carmakers strive to meet tougher fuel-economy standards, according to a study by J.D. Power and Associates. It predicted sales of vehicles equipped with four-cylinder engines would outpace sales of more powerful cars and trucks, and that automakers would find ways to halt a longtime trend in rising vehicle weight to increase fuel-efficiency to an industry-wide fleet average of 35 mpg by 2020. "There isn't one single solution," said Mike Omotoso, senior manager of global powertrain at J.D. Power, who prepared the study.
Source:  The Detroit News

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Luxury Car Sales Show the Rich are Spending Less

Adding to a turnabout in once-resilient upscale goods, most luxury car brands saw sales drops last month. Overall, luxury vehicle sales are off almost 13 percent this year. Purveyors of the finer things in life are finding their well-heeled customers are caught in the same economic riptide tugging at the less well-off. "It's a recession that has a double whammy: Your real estate is down, and your investment portfolio is down," says Milton Pedraza, CEO of the Luxury Institute. "Even the ultrawealthy are saying, 'Let me pause here and see what's going on.'" When it comes to luxury cars, buyers aren't trading down. They're holding off.
Source:  USA Today

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UAW: Five GM Plants Face Strike

The United Auto Workers union is threatening to strike five General Motors Corp. factories, including ones in Flint, Warren and Lansing, if deals aren't reached soon on local contracts for each of the plants. The ultimatum comes as GM's production is hobbled by a six-week UAW strike at auto parts maker American Axle & Manufacturing Holdings Inc., which has forced GM to shut down or cut shifts at 30 factories in the United States and Canada. Until now the parts shortage created by the American Axle dispute has affected some of GM's slowest sellers, helping the automaker to pare bloated inventories. But a stoppage at the other factories could be far more serious.
Source:  The Detroit News

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Opinion: Calif. Board Can't Force its Will on Auto Market

California got it wrong again. When the California Air Resources Board ruled that automakers must sell at least 66,000 plug-in hybrids from 2012 through 2014, the board really mandated that Californians must buy 66,000 plug-ins. CARB also ordered the six largest automakers to sell at least 7,500 zero-emission vehicles — either electric cars or fuel cell vehicles — in California during the same period. Specifying the amount of hybridization in the market is beyond the competence of state regulators. They might as well conjure up the number of vehicles with stop-start systems, variable valve timing or displacement on demand that automakers must sell and consumers must buy. It doesn't work that way in a market economy. Here is the central issue about curbing carbon dioxide: The only acceptable standard is a stiff federal fuel economy requirement that lets automakers and consumers decide how to do it with a market-driven solution. You cannot regulate the development of technology or force consumers to buy it. It's high time that regulators in California figured that out.
Source: Automotive News (Subscription required.)

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Opinion: Getting All the Carbon Out of Cars
by Joe White

California's embrace of plug-in hybrids shows how hard zero emissions really is

Plug-in hybrid cars, once the domain of tech enthusiasts and tinkerers, just got a big boost toward the mainstream from the State of California. But the latest move by the state's regulators to push plug-in hybrids into the market also highlights the difficulty of taking all of the carbon out of cars. This decision to anoint plug-in hybrids as an acceptable alternative to pure zero-emission vehicles dismayed some environmental groups. But it satisfied some carmakers -- mainly GM and Toyota -- because now they can concentrate on the plug-in models they already have in development. There are ... unanswered questions. Where will car makers get hydrogen for fuel cell or hydrogen internal-combustion vehicles? How will the state manage the surge in electricity demand if plug-in hybrid owners recharge their cars during the peak daytime and evening hours? Will someone develop a payment system that would allow someone to plug-in a car at a friend's house without sticking the friend with the tab? What if it turns out that plug-in hybrids really aren't a great idea -- because the battery technology required doesn't get perfected, for instance? Eliminating entirely the contribution cars make to the load of carbon dioxide in the atmosphere requires far more than forcing the installation of traps and filters and fuel injectors. It requires a ground up transformation of the concept of personal mobility, as well as substantial investments in fueling infrastructure and, perhaps, power generation that go well beyond America's big automakers.
Source:  The Wall Street Journal (Subscription required.)

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NADA Update
IRS Issues Guidance on Dealership Cost Segregation Studies

The IRS has issued new technical guidance to its field examiners on dealership cost segregation studies, which many dealerships use to determine the appropriate depreciation period for different components of its facility. The new guidance and a Motor Vehicle Technical Advisor Automotive Alert explaining it are available at www.nada.org/regulations under “Recent Federal Agency Publications.”

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2009 Convention Workshop Proposals Now Being Accepted

Proposals are now being accepted for speakers who are interested in presenting a workshop at the 2009 NADA Convention & Exposition in New Orleans January 24-27. To download the proposal, go to www.nada.org/workshops. Please read through the entire application before submitting. Completed proposals should be postmarked by midnight, April 25, 2008.  For more information, contact NADA Management Education at (703) 821-7227 or workshops@nada.org.

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Dealer Executive Education Students Complete First Week

The first 25 students enrolled in NADA's new Executive Education program at Babson College have completed their initial week of classes. Among the 25 students who make up the program's charter class, NADA Dealer Candidate Academy graduates account for 17 students, five are Canadians and three are truck dealers. Students met from March 16-21 at Babson's executive education campus in Wellesley, Mass., for instruction on "Leading in a Dynamic Environment." The week's lessons laid the groundwork for further discussions on leadership, management and entrepreneurship, says Dealer Academy Director Allan Jones. The same 25 students will return to Babson College's campus for a second session June 16-20 to focus on "Developing Strategies for Innovation and Growth."

The second group of Executive Education students will begin classes on Sept. 21. For more information on NADA's Executive Education program at Babson College or to download an application, visit www.DealerExecEd.org.

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NHTSA Publishes 2008 Insurance Cost Information Booklet for Car Dealers

The 2008 insurance cost information booklet that all car dealers must make available to prospective purchasers is now available.

Pursuant to 49 CFR 582.4, all car dealers must make available to prospective purchasers booklets that include comparative information regarding differences in vehicle collision loss experience that could affect auto insurance costs. Each year the National Highway Traffic and Safety Administration (NHTSA) produces a new version of this booklet.

According to the Federal Register, NHTSA is mailing a copy of the 2008 booklet to each dealer that the Department of Energy uses to distribute the “Gas Mileage Guide.” Dealers who do not receive a copy of the booklet by April 1 should contact NHTSA’s Office of International Policy, Fuel Economy, and Consumer Programs at (202) 366-0846 to receive a copy of the booklet.

Dealers may also obtain a copy of the booklet through the NHTSA web site at http://www.nhtsa.gov/.   NADA suggests a copy of the guide be kept readily available and that it be reproduced for customers upon request.

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Lenovo Offers NADA Members Discount on Thinkpad Notebooks

NADA members can save three ways during the month of April:

  • Instant savings with discounted Web pricing
  • Save even more with your NADA discount
  • Extra savings with eCoupon USXSAVE4SPRING at checkout

To take advantage of these savings, visit www.nada.org/ProductsServices/Technology, click on "PC Purchase Program" (member log-in required), then click on Lenovo, or call 800-426-7235. Enter eCoupon USXSAVE4SPRING at checkout for your cumulative discount. Free ground shipping is offered on all Web orders! Visit the Web site often for special limited-time eCoupons.

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STAR Answers Dealers' Questions About DMS Vendors
Standards for Technology in Automotive Retail (STAR) has developed new guidelines when dealers are evaluating Dealer Management Systems Dealer Management System vendors. Visit STAR's Dealer Infrastructure Guidelines (DIG) publication.  To learn what issues to consider when choosing a network provider, click here.
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Quotable
 
"Sometimes, just by educating dealers about their capabilities based on data in the marketplace, it helps them make the best decision for them and their families."

    -- Joe Chrzanowski, GM's executive director of dealer network planning and investment, explaining that the company is not forcing dealers to close or consolidate, Automotive News, April 7


"Eliminating entirely the contribution cars make to the load of carbon dioxide in the atmosphere requires far more than forcing the installation of traps and filters and fuel injectors. It requires a ground up transformation of the concept of personal mobility, as well as substantial investments in fueling infrastructure and, perhaps, power generation that go well beyond America's big automakers."

    -- Joe White, columnist and senior editor, The Wall Street Journal, April 7
Video Reports
 
April is Automotive Career Month. Learn About Careers in the Auto Industry.

 Learn about careers in the auto industry. 

 NADA/USA Today Innovation Award Goes to "Green" Dealership in Vermont.
 NADA Convention Heads to New Orleans in 2009.
 NADA Foundation Contributes to Canine Companions for Independence.
 2008 Convention Highlights

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