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Top Stories
Schwarzenegger, Carmakers at Odds Over California Rules
Future Shock: Ford Optimistic, Toyota Forecasts Gloom
Small Cars, Bigger Price Tags
GM to Pay Up to $200M to Help End American Axle Strike
CEO: BMW Needs U.S.
Change of Plan: No Kia or Hyundai Pickup for U.S.
NADA Update
Director Nominations Mailed to NADA Members
Looking for a Competitive Edge? Check Out NADA's Used-Vehicle Seminar
NADA Insurance Launches New Site for Hole-in-One Insurance
NADA to Provide Members with Free Red Flags Educational Guide
STAR Answers Dealers' Questions About Internet Content Filtering
Save Up to 35 Percent on ThinkPad Notebooks Through May 19
Top Stories
Schwarzenegger, Carmakers at Odds Over California Rules

SACRAMENTO — Gov. Arnold Schwarzenegger said Thursday that pressure from the auto industry will not deter California from attempting to impose strict emission rules for vehicles sold in the state. The Republican governor met privately with seven auto executives. In an interview afterward, he said he told them ... 'While you're whining, you should be creating new technologies. That's how you meet the date.’  California wants emissions to be cut by nearly one-third for all vehicles sold in the state by 2016. That's four years earlier than similar emission rules proposed by the federal government.  Auto manufacturers say the California benchmark can't be met on time, and they have successfully blocked them from taking effect for now. The industry sued California in federal court over a 2002 auto emissions rule, delaying the tougher standards. Although the state successfully defended the legal challenge, the rules have been blocked by the Bush administration, which has denied giving California the waiver from federal law it needs to implement them. The 2002 law adopted by California requires the auto industry to cut its greenhouse gas emissions 30 percent by 2016, equivalent to an average fuel-economy level of 35.7 mpg. In addition, California regulators are moving ahead with plans to strengthen the auto rules and require the equivalent of 43 mpg by 2020 as part of a broader global warming law Schwarzenegger signed in 2006.  Under federal fuel-efficiency rules proposed in April, new cars and trucks will have to meet a fleet-wide average of 31.6 mpg by 2015. Passenger cars will need to achieve 35.7 mpg, while trucks will need to reach 28.6 [mpg]. The federal plan is expected to add an average cost of $650 per passenger car and $979 per truck by 2015. More than a dozen states have sided with California and are challenging the administration in federal court.
Source: Associated Press 

[Editor's Note: The states that have sided with California plan to implement their own individual fuel economy programs. Dealers should continue to urge their legislators to support the national fuel economy standard of at least 35 mpg by 2020, signed into law last year, which is aggressive but doable. Congress should reject a multi-state approach to fuel economy increases -- and proposed legislation (S. 2555, H.R. 5560 and S. 2806) -- which fails to look at the national economic impact, limits consumer choice and ignores passenger safety concerns. For more information visit www.nada.org/CAFE.]

Future Shock: Ford Optimistic, Toyota Forecasts Gloom

Japanese Carmaker Predicts Profit Dip
The previously surging Toyota Motor said yesterday that it expects a 27 percent decrease -- yes, de crease -- in profit in the coming fiscal year, news that came on the same day that long-beleaguered Ford Motor was holding what almost amounted to a love-in at its annual shareholders meeting. The Japanese automaker has been challenging General Motors in recent months to become the world's biggest vehicle manufacturer, thanks to its high-end Lexus division, its growing light-truck segment and the Camry, which has become the sedan of the American middle class. But Toyota is finally feeling the crippling effects of a strengthening yen at home and the slumping economy in the United States, analysts said. Meanwhile, Ford's decade of poor sales necessitated severe cost-cutting and renegotiated contracts with union employees, which analysts say are starting to yield benefits. That means that for the first time in years, Ford sees blue skies ahead and Toyota does not. The first half of 2008 was solid for Toyota, the company wrote in its earnings release yesterday. For the year, the company reported $16.5 billion in profit on $253 billion in revenue, up 5 percent and 10 percent, respectively, and both company records. Ford, on the other hand, had something unusual to talk about at the company's annual shareholders meeting in Wilmington, Del.: a fresh quarterly profit and interest from a big-money investor who thinks the company is a good buy. "Our plan is working, and we're sticking to it," chief executive Alan Mulally said. "In spite of the head winds we face, we are more excited than ever about the incredible new Ford we are creating." Ford reported last month that its first-quarter profit was $100 million, testament to what it said was cost-cutting, restructuring and surging South American vehicle sales, which offset the ongoing North American sales slump.
Source: The Washington Post (Subscription required.)

Small Cars, Bigger Price Tags

Growing Demand Spurs Opportunity for Automakers
The accelerating shift away from pickup trucks and sport-utility vehicles powered by eight-cylinder engines is a painful one for U.S. auto makers, but a trend in consumer demand is helping them earn better pricing on the smaller vehicles they sell. Small-vehicle buyers, who are opting for gas-sipping four-cylinder engines amid record-high fuel prices, aren't skimping when it comes to creature comforts such as leather seats, sunroofs, navigation systems and other automotive technologies. As a result, purchase prices on small cars are actually rising by $2,000 to $3,000 as downsizing affluent customers and tech-savvy first-time buyers are pairing rich option packages with their smaller selections. The trend, which mirrors what has happened in Europe, won't offset the revenue and margin hit for General Motors Corp., Ford Motor Co. and Chrysler LLC as fewer buyers pick SUVs and pickups. However, it has helped the auto makers improve pricing within some vehicle classes and allowed them to introduce option packages that were never offered before. "You used to pay for more cylinders and more horsepower," [GM North American Sales Chief Mark LaNeve said.] "Now, environmental awareness has kind of negated that."
Source:  The Wall Street Journal (Subscription required.)

GM to Pay Up to $200M to Help End American Axle Strike

DETROIT -- General Motors Corp. has agreed to kick in up to $200 million to help bring an end to a bitter 10-week strike at parts supplier American Axle and Manufacturing Holdings Inc. The automaker said Thursday in a government filing that the money would go for temporary payments to buffer reduced wages for the workers, as well as employee buyout and early retirement packages. About 3,600 United Auto Workers at five American Axle factories have been on strike since Feb. 26 in a dispute over the company's quest for lower wages and benefits. The strike has crippled GM's production of pickup trucks and sport utility vehicles and hurt its bottom line. About 30 GM factories have been either fully or partially closed due to the strike. No deal had been reached between American Axle and the UAW as of Thursday afternoon, but American Axle spokeswoman Renee Rogers said talks were continuing.
Source:  The Associated Press

CEO: BMW Needs U.S.

BMW's chief executive told shareholders Thursday that maintaining the automaker's presence in the United States was not a knee-jerk reaction to the strong euro, but a long-term strategy. "To be successful and respected in our industry, a company has to be active in the world's largest car market," Norbert Reithofer said at the company's annual general meeting in Munich, Germany. Earlier this year, the automaker announced that it would take advantage of the weak dollar by expanding production at its plant in Spartanburg, S.C. The plan calls for spending $750 million on facilities for its X5 SUV and the new generation of its X3 SUV to boost output from the current 160,000 vehicles a year to 240,000 annually by 2012.
Source:  The Detroit Free Press

Change of Plan: No Kia or Hyundai Pickup for U.S.

SEOUL -- Neither Hyundai nor Kia will sell a pickup in the United States in the near future. Hyundai Motor Co. CEO Kim Dong-Jin said the board in “a recent decision” scrapped plans for a unibody pickup in the United States. “Because of high oil prices, the light-truck market is declining significantly, so now is not the right time to produce a pickup truck,” he said at a media event here. Ahn Byung-Mo, CEO of Kia Motors America, discussed the truck with the Kia dealer council in February. He told dealers the company was considering models such as the Honda Ridgeline, a front-drive unibody mid-sized pickup.
Source:  Automotive News (Subscription required.)

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NADA Update
Director Nominations Mailed to NADA Members
Ballots for nominating members to serve as NADA directors have been mailed to members in Arizona, Northern California, Southern California, Colorado, Connecticut, Hawaii, Idaho, Illinois, Iowa, Massachusetts, Minnesota, Mississippi, Metropolitan New York, New York State, Ohio, Eastern Pennsylvania, South Carolina, South Dakota, Metropolitan Washington, DC and West Virginia. All ballots should be returned postmarked by May 30. If two or more nominees receive at least 10 percent of the votes and agree to seek election, ballots will be mailed June 27 to be returned postmarked by July 18. Directors elected will take office on Jan. 27, 2009 at the convention in New Orleans.
Looking for a Competitive Edge? Check Out NADA's Used-Vehicle Seminar

Used-Vehicle Department Profit Accelerator (May 21–22 in St. Louis, Mo.) will explain the crucial elements of a successful used-vehicle operation, including purchasing inventory, reconditioning, financing and advertising.

Twenty Group consultant Steve Emery will cover best practices for increasing profits, including managing aging inventory, marketing, maintaining a business plan and more. Dealers, general managers, used-vehicle managers and sales managers are encouraged to attend.

This 1½-day seminar will be held at the Hilton Ballpark Hotel. For more information, including member and non-member fees, visit www.nada.org/seminars.

Want to log on from your own dealership? Take a look at NADA's upcoming Web-based seminars:

  • How to Prepare and Interpret a Cash Flow Statement (Steve Lane, May 13)
  • How to Drive Traffic in a Tough Market (Ron Wheeler, May 22)
  • Using All the Tools in Your F&I Toolbox (Ron Reahard, June 3)
  • Totally Trucks: Best Practices in Cost and Expense Management and Reduction (ATD) (Keith Ely, June 11)
  • Increasing Collision Repair Sales (Robert Rick, June 12)
  • Managing Fixed Operations from the General Manager's Desk (Randy Brenckman, June 24)

The fee for each virtual seminar is $199 per computer connection. Additional attendees can participate from the same connection at no additional cost.

For more information on these and other upcoming seminars, visit www.nada.org/seminars or call 1-800-248-6232, ext. 7061.

NADA Insurance Launches New Site for Hole-in-One Insurance

NADA Insurance announced the launch of a new Web site for its hole-in-one insurance program, ACECO. The redesigned site includes new graphics, improved interactivity, navigation and FAQ page. The new site can be accessed by visiting www.nadainsurance.com and clicking on “NADA Hole-in-One.”

“We redesigned the site to make it even easier for members to find the information they need about our hole-in-one insurance program,” said NADA Insurance Vice President Lin Peacock. “ACECO offers very competitive premiums combined with excellent service. I strongly encourage dealers who sponsor golf tournaments to give us a try.”

ACECO guarantees a 24-hour turnaround on all their no-obligation quotes. Visit www.nadainsurance.com today to obtain a quote for your next golf tournament sponsorship.

NADA to Provide Members with Free Red Flags Educational Guide

Dealers and other creditors and financial institutions must comply with the FTC Red Flags Rule by Nov. 1, 2008. To assist dealers with this new requirement, NADA will mail to its members a free educational guide by August 1, 2008 that will explain dealers' responsibilities under the new rule and provide a template to assist dealers in preparing the required written Identity Theft Prevention Program. Additional information will be available from fee-based Webinars that NADA will conduct from 1-3 p.m. EST on August 26, 2008 and Sept. 23, 2008. (Registration information will be announced soon.)

STAR Answers Dealers' Questions About Internet Content Filtering

Standards for Technology in Automotive Retail (STAR) has developed new guidelines to help dealers evaluate Internet Content Filtering. To learn what is recommended for general maintenance of a hardware based system, click here. To download STAR's Dealer Infrastructure Guidelines (DIG), click here.

Save Up to 35 Percent on ThinkPad Notebooks Through May 19

NADA members can save in three ways:

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

Visit NADA's PC Purchase Program online (member log-in required), then click on www.lenovo.com/shop/deals/nada or call 800.426.7235, Option 1, Ext. 4838 to take advantage of these savings.  Enter eCoupon USXSAVE4SPRING at checkout. Free ground shipping is available on all Web orders.

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Quotable
 
"This is a journey. This is not the final outcome. We are committed to reducing CO2."

   
-- Dave McCurdy, chief executive of the Alliance of Automobile Manufacturers, following Thursday's meeting with California Gov. Arnold Schwarzenegger to discuss reducing greenhouse gas emissions, Associated Press, May 9


"While you're whining, you should be creating new technologies. That's how you meet the date."

   
-- Gov. Arnold Schwarzenegger said Thursday that pressure from the auto industry will not deter California from attempting to impose strict emission rules for vehicles sold in the state, Associated Press, May 9


"Our plan is working, and we're sticking to it. In spite of the head winds we face, we are more excited than ever about the incredible new Ford we are creating."

    -- Ford CEO Alan Mulally referring to the company's first-quarter profit of $100 million, cost-cutting, restructuring, surging South American vehicle sales and interest from a big-money investor, The Washington Post, May 9


"You used to pay for more cylinders and more horsepower. Now, environmental awareness has kind of negated that."

    -- GM North American Sales Chief Mark LaNeve, referring to the recent trend of consumers wanting smaller cars with rich option packages, The Wall Street Journal, May 9


"Most people can see the progress that we are making. It's because of Alan's [Mulally] leadership and motivational skills."

    -- Ford Motor Co. Executive Chairman Bill Ford Jr. told a small group of investors on Thursday, The Detroit News, May 9
Video Reports
 
NADA Data and Used Car Guide Show Decline in SUV and Truck Values.  [Source: WUSA-TV, Washington, DC]

 NADA data supports declining used vehicle values 

 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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NADA For more information on NADA, visit www.nada.org or contact NADA, 8400 Westpark Drive, McLean, VA 22102. This email may contain an advertisement of NADA products and services. Any opinions or statements contained herein do not necessarily reflect the views of NADA. Factual errors are the responsibility of the listed publication. If you are a franchised new-car or -truck dealer and would like to become a member of NADA, please visit the Join NADA section of www.nada.org. Questions or comments concerning NADA Headlines content may be directed to media@nada.org.