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Wednesday, May 14, 2008 RSSSEND TO A FRIENDPRINT
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Top Stories
GM Sales Focus to Get 'Dramatic Redesign' as Gas Prices Soar
GM Dealership Goes Green in $15M Facility
Honda May Boost U.S. Car Prices as Steel Costs Rise
Nissan's Ghosn Warns of Price Increases, Flat U.S. Sales
Smart Puts 'High Level of Safety into Very Small Package'
Nissan and Renault Set Venture with Bajaj Auto
Retail Sales Dip for Second Time in 2 Months
Opinion: Today's Gas-Guzzling Exotic Cars May Get Zapped by New Fuel Rules
NADA Update
Director Nominations Mailed to NADA Members
Looking for a Competitive Edge? Check Out NADA's Used-Vehicle Seminar
Save Up to 35 Percent on ThinkPad Notebooks Through May 19
Top Stories
GM Sales Focus to Get 'Dramatic Redesign' as Gas Prices Soar

After months of holding out hope that U.S. truck sales would rebound, General Motors Corp. is accepting that the market shift toward more fuel-friendly vehicles isn't likely to end. The automaker ... said Tuesday that it's been over-promoting its largest vehicles and plans to change course. Instead, GM will implement a "dramatic redesign" of its marketing strategy that places a much greater focus on its high-mileage cars, new hybrids and other fuel-efficient vehicles. Through April, full-size SUV sales are down 30 percent and large pickup sales are down 17 percent industrywide. GM's light truck sales are down 17 percent through April compared with a year ago; car sales fell 4 percent. "There have been a lot of questions about whether the U.S. economy is in recession," GM Chief Operating Officer Fritz Henderson told [a] bankers' conference [yesterday.] "The U.S. auto industry is definitely in a recession."
Source:  The Detroit News

GM Dealership Goes Green in $15M Facility

HIGHLAND TOWNSHIP -- On the western edge of Oakland County, the LaFontaine family is building a $15 million General Motors branded dealership with almost $2 million in ecological and trend-setting provisions. It opens in early June and a black tie celebration follows in mid-July. "Going green isn't just the best way to go -- it's the only way to go," said Ryan LaFontaine, 30, general manager of the 63,000-square-foot structure set on 24 acres, one of the first in Michigan to go green from the ground up. He expects the features -- from waterless urinals to computer monitored solar panels -- will save energy and drive destination shoppers. The most costly enhancements will be invisible to shoppers of the Buick, GMC, Pontiac and Cadillac campus. A $600,000 geothermal system with 64 wells provides heating and cooling. The car wash will recycle 85 percent of the water normally wasted in conventional systems while vegetable oil lubricates the hoists in the service department. "I've never seen a client do all that the LaFontaines are doing to enhance a green concept," said Al Bloom, CEO of Bloom General Contracting. "The design isn't just green. It incorporates gorgeous stuff." The National Automobile Dealers Association, General Motors, the U.S. Environmental Protection Agency and the nonprofit U.S. Green Building Council are working to help more car dealers build or retrofit Earth-friendly facilities. The Washington, D.C.-based dealer organization offers a portfolio management system with data, tools and strategies to reduce energy and conserve precious resources.
Source:  The Detroit News

Honda May Boost U.S. Car Prices as Steel Costs Rise

Honda Motor Co., Japan's second-largest automaker, may increase prices for its vehicles in North America and other markets to offset higher steel and other raw materials costs. "We will definitely consider it," Yoichi Hojo, chief operating officer of Honda's business management operations, said in an interview on May 12 in Tokyo. "It may be difficult to raise prices right away in Japan and North America, as market conditions are tough." Honda, which gets about 70 percent of its operating profit from North America, may follow Toyota Motor Corp. and Nissan Motor Co. in boosting prices in the region. Honda expects a 32 percent drop in operating profit this fiscal year as raw materials prices and a stronger yen erode earnings. Steel, precious metals and other car-making materials will erode Honda's operating profit by 75 billion yen this fiscal year, the Tokyo-based company said on April 25. The carmaker at that time said operating profit will tumble 32 percent to 650 billion yen. A stronger domestic currency will cut 303 billion yen from operating profit.
Source:  Bloomberg

Nissan's Ghosn Warns of Price Increases, Flat U.S. Sales

TOKYO -- Nissan CEO Carlos Ghosn said there is “no doubt” higher sticker prices lurk around the corner as raw material costs soar, and he warned that the U.S. economic slump will run into 2009. The pessimistic outlook came [yesterday] as Ghosn said Nissan expects a 30 percent drop in operating profit this year, partly because of the rising costs of steel and oil. “You cannot continue to say, ‘All my raw materials are increasing, all the components of my car are increasing, but I’m not going to increase prices,’ ” the Nissan Motor Co. chief said here while releasing earnings for the fiscal year. “At a certain moment, you’re going to have significant inflation in cars. This month, Toyota Motor Corp. boosted prices on at least 11 Toyota and Lexus models sold in the United States, citing rising raw material costs. He described 2008 as a “tough year for the entire industry.” “I think 2008 is not going to be a great year for the car market, and unfortunately, also we are not seeing a revival in 2009,” Ghosn said. “We’re seeing a couple of years at a very low level.”
Source:  Automotive News (Subscription required.)

Smart Puts 'High Level of Safety into Very Small Package'

The tiniest car sold in the USA posted some of the best crash-test results, the Insurance Institute for Highway Safety will announce Wednesday. The Smart ForTwo, the twin-seat micro that's so small that two can fit in a single parking space, earned the top rating in front- and side-impact crash tests. It was rated "acceptable" for whiplash protection in rear-end crashes, the agency says. There's an important caveat: While the frontal tests do a good job of replicating a crash against a fixed object, there is no overcoming the laws of physics when it comes to crashes against larger, heavier vehicles such as SUVs and big pickups. "All things being equal, bigger and heavier is always better," says institute President Adrian Lund. "But among the smallest cars, the engineers of the Smart did their homework and designed a high level of safety into a very small package." About 7,000 Smart cars are plying American roads since the French-made car went on sale earlier this year. Smart USA is part of Detroit's Penske Automotive Group, which struck a deal to import the little cars that are already sold throughout the world under a deal with Smart's parent, Germany's Daimler.
Source:  USA Today

Nissan and Renault Set Venture with Bajaj Auto

NEW DELHI -- Nissan Motor Co. of Japan and its French partner Renault SA will form a joint venture with Bajaj Auto Ltd. to produce a minicar in India that will cost as little as $2,500 as they seek to challenge Tata Motors Ltd. in this growing automobile market. "The car will initially have a gasoline engine...later, it will also have a diesel engine," said S. Ravikumar, Bajaj Auto's vice president in charge of business development. The initial joint-venture contract is expected to be signed in June, he said. The three companies announced that the car -- code-named "ULC" -- will have a wholesale price range starting at $2,500. The joint-venture company will be 50 percent-owned by Bajaj, with Nissan and Renault holding 25 percent each. The car will be built at a new factory at Chakan, near Pune, with an initial capacity of 400,000 vehicles a year, they said. Sales will start in early 2011 in India, with exports to other emerging markets to follow. Mr. Ravikumar said the car will be exported using the global sales network of Nissan and Renault.
Source:  The Wall Street Journal (Subscription required.)

Retail Sales Dip for Second Time in 2 Months

WASHINGTON - Consumers, battling soaring gasoline prices and a slumping economy, cut back further on their spending in April. The Commerce Department reported Tuesday that retail sales dipped 0.2 percent last month, right in line with economists' expectations. It was the second drop in the past three months and was led by a 2.8 percent decline in auto sales, the biggest setback in this category in 10 months. It reflected the problems that automakers are having as a weak economy and soaring gasoline prices cut into demand for new cars. Excluding autos, retail sales rose by 0.5 percent, a better performance than had been expected as sales at general merchandise stores, a category that includes big chains such as Wal-Mart, posted a 0.5 percent increase, much better than the tiny 0.1 percent rise in March.
Source:  The Associated Press

Opinion: Today's Gas-Guzzling Exotic Cars May Get Zapped by New Fuel Rules

Most of the discussion of federal efforts to boost the average fuel efficiency of new vehicles to 35 mpg by 2015 has focused on how the new standard will do in large sport-utility vehicles. But high-performance cars -- particularly those sold by relatively small manufacturers such as Porsche, Lotus, Ferrari and Subaru -- are also targets of the proposed reforms to the CAFE regime. Overall, the new standards put a tougher burden on luxury and specialty manufacturers. By 2015, BMW AG, for example, is supposed to sell a fleet of cars that averages 37.7 mpg. Toyota, however, will have a fleet-wide passenger car target of 34.6 mpg, and General Motors Corp.'s car fleet will have to average 34.7 mpg. The challenge to high-performance sports cars is a consequence of the government's move to regulate the fuel efficiency of cars and trucks according to "footprint," essentially the number of square feet a vehicle covers when parked in the driveway. "In choosing the footprint" as the basis for fuel-economy regulation, "smaller high performance cars get nailed," says Mike Stanton, president of the Alliance of International Automobile Manufacturers. Of course, nothing in Washington is over until it's over, and even then fights over regulation can drag on and on. The government hasn't made its CAFE proposals final, and is awaiting comments on its proposals. It will get plenty, including arguments that the law should allow an exemption for specialty cars made by low volume manufacturers such as Ferrari or Porsche.
Source:  The Wall Street Journal (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

NADA 20 Group consultant Steve Emery will present "Used-Vehicle Department Profit Accelerator," held May 21–22 in St. Louis, Mo. The seminar will explain the crucial elements of running a profitable used-vehicle operation, such as purchasing and managing inventory, reconditioning, financing, marketing and advertising, maintaining a business plan and more.

The 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. Dealers, general managers, used-vehicle managers and sales managers are encouraged to attend.

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 upcoming seminars, visit www.nada.org/seminars or call 1-800-248-6232, ext. 7061.

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
 
"Going green isn't just the best way to go -- it's the only way to go."

   
-- Ryan LaFontaine, general manager of a new $15 million General Motors branded dealership with almost $2 million in ecological and trend-setting provisions, The Detroit News, May 14 


"We are going into this with the idea that we aren't going to compromise our ultimate driving machine characteristics. We are going to find a way to have the best of both worlds. That means more aggressive use of sophisticated engine technology, lighter weight materials, fuel-saving systems such as idle stop and further 'electrification' of the car. BMW ... will likely offer more four-cylinder engines, including diesels, going back to its roots as a high-performance, four-cylinder car company."

   
-- Tom Baloga, vice president of engineering for BMW's U.S. arm, The Wall Street Journal, May 12


"The U.S. auto industry is definitely in a recession."

    -- GM Chief Operating Officer Fritz Henderson, The Detroit News, May 14
Video Reports
 
NADA Chief Economist Paul Taylor's 2008 Sales Forecast.

 Paul Taylor delivers '08 sales forecast 

 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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