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Wednesday, July 2, 2008 RSSSEND TO A FRIENDPRINT
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At a Glance...
Top Stories
Honda, Hyundai Avoid Slump as Asians Top U.S. Brands
Auto Sales Likely to Get Worse
Carmakers Urge Lowering Fuel Economy Rules They Call 'Excessive'
Insurers Offer Some Info on Totaled Vehicles to Fight Title Fraud
SUV Drivers Burned Twice: At the Pump, on the Car Lot
Lithia Withdraws Outlook, Cites Weak Car Sales
GM Extends Zero Percent Financing Deals
Toyota Dealer Rejoins Ford as U.S. Sales Head
Opinion: Can Teflon Last for GM's Wagoner?
NADA Update
NADA Offers Consumer Tips to Avoid Flooded Vehicles
Nomination Ballots for NADA Director from Kansas due July 18
Runoff Election to be Held for NADA Director from N. Calif.
Applications for NADA's Executive Education Program due July 16
NADA and EPA to Recognize Energy Star Efficient Dealerships
STAR Answers Dealers' Questions About Wireless Networks
Lenovo Offers NADA Members Savings on ThinkPad Notebooks
Top Stories
Honda, Hyundai Avoid Slump as Asians Top U.S. Brands

Honda Motor Co. and Hyundai Motor Corp. increased June U.S. sales amid an industry decline, leading Asia-based automakers to outsell General Motors Corp., Ford Motor Co. and Chrysler LLC for a second straight month. Demand for fuel-efficient cars boosted sales for Honda and Seoul-based Hyundai about 1 percent each from a year earlier while the U.S. total fell 18 percent. "Small cars like Honda's Civic will remain popular," said Koichi Ogawa, who helps oversee $28 billion at Daiwa SB Investments Ltd. in Tokyo. "With these gasoline prices, U.S. consumers will definitely go for cars with better fuel economy." Fuel prices, the housing slump and weakest economic growth in five years pushed June's annualized sales rate to the lowest in any month since 1993. "There are things weighing on the consumer conscience that we haven't seen since the oil embargo of 1973," Jim Lentz, president of Toyota's U.S. sales unit, said on a conference call yesterday.
Source:  Bloomberg

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Auto Sales Likely to Get Worse

GM, Toyota predict lowest yearly numbers in more than decade after weak June
General Motors Corp. and Toyota Motor Corp., the biggest players in the U.S. auto market, predicted Tuesday that sales would fall this year to their lowest levels in more than a decade after already-weak demand tumbled further in June. Sales of cars and light trucks slid 18.3 percent last month because of record-high gas prices, sinking consumer confidence and insufficient supplies of the most popular small and fuel-efficient models. The selling pace in June translated to 13.6 million cars and trucks on an annual basis, the weakest level in 15 years. "This past month's auto sales clearly reflect a very difficult situation for our customers, and we think it's going to persist for many, many months to come, possibly longer," said Jim Farley, group vice president of sales at Ford Motor Co. The decline was exacerbated by the fact that there were three fewer selling days last month than in June 2007. Stripping out the difference, June sales were down 8.1 percent, according to Autodata Corp. "The overall market is depressed. You've got people worried about housing values. You've got inflation, you've got people worried about unemployment," said Mark LaNeve, GM's vice president for sales. The automaker cut its sales forecast for 2008 to 14.7 million cars and light trucks. Toyota also lowered its forecast for the year to between 14.8 million and 15.2 million vehicles. That would make this year's sales the lowest since 1997, when 15.1 million cars and trucks were sold.
Source:  The Detroit News

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Carmakers Urge Lowering Fuel Economy Rules They Call 'Excessive'

WASHINGTON -- Automakers including Detroit's Big Three said Tuesday that increased fuel economy rules are too aggressive and called for them to be lowered. General Motors Corp., Ford Motor Co., Chrysler LLC, as well as Toyota Motor Corp. and six other carmakers urged federal regulators to lower the proposal that would increase fuel efficiency standards by 4.5 percent annually through 2015. In a filing early Tuesday, the Alliance of Automobile Manufacturers -- the trade group that represents Detroit automakers and some foreign companies -- blasted the April 22 proposal by the National Highway Traffic Safety Administration that would raise fuel economy requirements to a fleetwide average of 31.6 mpg, including 35.7 mpg for passenger cars and 28.6 mpg for light trucks, starting in the 2011 model year. "This goes beyond what is technologically feasible and economically practical," the alliance said, calling the proposal "excessive." The alliance said the proposal would eliminate up to 82,000 auto jobs and reduce auto sales by as many as 856,000 vehicles by 2015. It said the regulations would increase the cost of light trucks by an average of $4,000. When it passed an energy bill last year, with the support of automakers, Congress required the NHTSA to set fuel economy standards at the "maximum feasible," level with a minimum industry fleetwide average of 35 mpg by 2020. The NHTSA's April proposal is the first regulatory step toward reaching that and achieves more than half of the target. The automakers said the costs of the proposal outweigh the benefits and criticized the NHTSA's cost-benefit analysis, saying it "systematically underestimates the economic costs imposed by the rules on manufacturers and consumers."
Source:  The Detroit News

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Insurers Offer Some Info on Totaled Vehicles to Fight Title Fraud

Commercial Access Not Yet Available
The National Automobile Dealers Association—a leader in the fight for total-loss vehicle disclosure—today applauded the efforts of the National Insurance Crime Bureau (NICB) for creating a new Web-based service with total-loss data for consumers. “This is a step in the right direction, but because the information is limited, we still need federal legislation that would expand total-loss disclosure,” said Ivette Rivera, NADA’s executive director of legislative affairs. “We would like all insurers and rental car companies to leverage existing technology, such as vehicle history reports, to keep dangerous, rebuilt cars and trucks off the road to truly protect consumers,” Rivera said. The NICB’s VINCheck (http://www.nicb.org/) allows consumers to check five vehicles per day—one VIN at a time—for reports of severe damage, flood, or theft.  The Web site includes mostly insured vehicles, but lacks access to the records of self-insured vehicles, rental fleets and insurers who are not NICB members. This information, available to consumers via a limited Web-database, gives consumers the ability to check whether a vehicle has been severely wrecked, flooded or stolen.  NADA continues to seek further transparency—through support of total-loss legislation in Congress—by urging insurers to make this same total-loss information commercially accessible to vehicle history providers so that dealers, wholesalers, auctions and remarketers of used cars can provide another layer of protection for consumers. “With hundreds of cars underwater throughout the Midwest, used car buyers need every tool available to ensure that they do not unknowingly end up with one of these refurbished flood cars,” Rivera said.
Source:  NADA Newswire

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SUV Drivers Burned Twice: At the Pump, on the Car Lot

Some Unload Vehicles for Less Than They Owe
Americans' love affair with 22-inch rims, eight cylinders and four-wheel drive wrapped in an 8,000-pound package is over. And the breakup is going to cost. With $4-a-gallon gas coming between drivers and their very large vehicles, consumers are dropping their once-beloved rides, fast. But not fast enough, it seems. As the price of gas has gone up, the value of sport-utility vehicles has gone down. In the past six months, the price of a used Chevrolet Suburban has dropped as much as $8,000, said Mike Parker, manager of used-car sales at Lustine Toyota/Dodge in Woodbridge. For those determined to swap their fuel-thirsty behemoths for gas-sipping subcompacts, the glut increasingly means taking a financial hit. In the worst cases, declining SUV values leave owners owing more money to the bank than their vehicle is worth. The question they face is: Which is worse for the wallet -- the cost of gas or the money lost selling the vehicle?
Source:  The Washington Post

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Lithia Withdraws Outlook, Cites Weak Car Sales

DETROIT -- U.S. auto dealer Lithia Motors Inc. said on Tuesday it would withdraw its earnings outlook, citing weak June vehicle sales and the shift in consumer demand due to rising gas prices. Lithia said it would continue with a restructuring plan it laid out in early June and had successfully raised $45.1 million of new capital during the second quarter from the financing and sale-leaseback of real estate. "We have not been immune to the drop in national sales volumes for most every manufacturer we represent," Lithia Chairman and Chief Executive Sid DeBoer said in a statement. "Until these factors stabilize, predicting future earnings is difficult." The Medford, Oregon-based dealer withdrew forecasts for the second quarter and for the year. It plans to discuss more details of the restructuring plans later in July.
Source:  Reuters

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GM Extends Zero Percent Financing Deals

Dealers reporting improved traffic from sales
DETROIT -- General Motors notified its dealers this morning that it will be extending its 0 percent financing sale through Monday, July 7. The sale conditions remain the same -- 0 percent financing for 72 months on most GM vehicles. The so-called 72-hour sale ran from June 24 through June 30. “I think it’s a good move on GM’s part to start July out strong,” said Lynn Thompson, owner of Thompson Sales Co. in Springfield, Mo. Thompson sells Buick, Pontiac, GMC, Cadillac and Saab vehicles. Thompson said his floor traffic improved dramatically during the sale, and he sold some full-sized pickups and SUVs. But some customers need more time to make a purchase decision. Another Detroit area dealer said he was losing sales because of the short period of the original sale. At Jones Dealerships in Lancaster, Pa., the sale helped the dealership finish June up from a year earlier, says owner Steve Jones. “It was a roaring success,” Jones says. “The week before we had not sold a single GM vehicle. That’s how slow it was. When they announced the sale last week, we sold 18. Our traffic was up by at least 50 percent compared to the beginning of the month.” In Flint, Mich., Randy Lauria saw floor traffic in three stores increase by 30 percent in the last few days of the month due to the 72-hour sale. Still Lauria is angry with how GM handled the sale, especially with the last minute extension to July 7. “GM said this would absolutely not be extended,” Lauria says. “We were here until 11:30 last night delivering cars and telling customers it was the absolute last day. So our credibility is out the window and we’re the representative of GM and for GM to mislead us makes me mad.”
Source:  Automotive News (Subscription required.)

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Toyota Dealer Rejoins Ford as U.S. Sales Head

Prominent Toyota distributor Ken Czubay will join Ford Motor Co. as head of its U.S. sales and marketing organization, the automaker said Tuesday. Czubay, 59, will start at Ford on July 16 and will report to Jim Farley, group vice president for marketing and communication. Czubay will be responsible for day-to-day sales and marketing of the Ford, Lincoln and Mercury brands in the U.S. A ... former Ford employee, Czubay also worked for Nissan North America before moving to auto dealership positions. He is now president of Southeast Toyota Distributors LLC based in Deerfield Beach, Fla., the largest distributor of Toyota and Scion, according to Ford. He also is president of JM Lexus, billed as that brand's largest volume dealership. "Once you have been at Ford, it's always in your blood," Czubay said. "I couldn't be more excited to be coming home." Czubay first joined Ford in 1970 as a financial analyst with Ford Motor Credit Co. and held management and executive jobs at Ford through 1983.
Source:  The Detroit News

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Opinion: Can Teflon Last for GM's Wagoner?
by George Anders, news editor, The Wall Street Journal

Rick Wagoner painted a rosy picture in June 2000 when he became General Motors Corp.'s chief executive. Global market share for GM and its affiliates could climb to 28 from 25 percent, he said. Profit margins would stay strong. GM would be in the top quarter of stock-market performers. "Future opportunities are virtually unlimited," he declared. It hasn't worked out that way. Instead, Mr. Wagoner [is] ... perpetually struggling to fix what may be unfixable. Some years, he makes progress cutting costs or perking up the product line. Then, a new crisis comes along, leaving GM in worse shape than before. At most companies in similar straits, angry shareholders and directors would have sacked the CEO long ago. So why does Mr. Wagoner still have his job -- and is there anything that could send him packing? GM's directors also have played a crucial role in Mr. Wagoner's longevity. GM's lead independent director, George Fisher, the former head of Eastman Kodak Co., has declared at several crucial junctures that he believes GM is on the right track with current leadership. Mr. Wagoner's boosters have been willing to reset the scoreboard every year or two, letting lower levels of profitability and market share become acceptable as business conditions worsen. Supporters say Mr. Wagoner has made major headway in negotiating lower labor costs in North America. They also give him credit for expansion in China, Brazil and other emerging markets, for pushing GM to develop battery-powered cars and for improvements in GM's quality rankings. But Mr. Wagoner's decision a few years ago to tilt GM's product mix more toward trucks and SUVs isn't looking good, as soaring gasoline prices hurt demand for those vehicles. He also hasn't figured out how to turn GM's quality gains into a compelling marketing story to win back car buyers on both coasts, who generally buy foreign models instead. Now GM's looming liquidity squeeze could prove to be Mr. Wagoner's toughest challenge yet. The company's operating losses are eating into its cash on hand, which was about $24 billion as of March 31, and is shrinking by at least $3 billion a quarter. If GM's fate in 2009 depends on its financial resourcefulness, directors may want to revisit the question of whether Mr. Wagoner still is the best person for the job. One prospect to watch: Fritz Henderson, GM's former chief financial officer, who was promoted earlier this year to president and chief operating officer.
Source:  The Wall Street Journal (Subscription required.)

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NADA Update
NADA Offers Consumer Tips to Avoid Flooded Vehicles

The record-setting floods in the Midwest have left a large number of flood-damaged vehicles. NADA urges consumers, even in unaffected areas, to remain alert to the possibility that some individuals may attempt to sell or trade flood-damaged used vehicles in the months to come. “Through awareness and education, dealers and consumers can make sure severely damaged vehicles remain off of the nation’s roads,” says David Regan, NADA vice president of legislative affairs.

NADA offers 10 inspection tips -- available online in both English and Spanish -- that may be used to detect significant water damage. While these inspection suggestions will not detect flood damage in every case, they do provide some information that may help to protect consumers from purchasing a vehicle damaged by water or flood. Mechanics at dealerships or repair shops can also be helpful in inspecting used vehicles. Along with offering tips to consumers, NADA continues to urge insurers to publicly disclose the Vehicle Identification Numbers (VINs) of flooded and totaled vehicles on a more complete and timely basis, citing safety and consumer protection concerns. For more information about NADA’s campaign to permanently red flag flooded vehicles, visit www.nada.org/tld.

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Nomination Ballots for NADA Director from Kansas due July 18

Ballots for nominating members to serve as the NADA director from Kansas have been mailed to members in that state. Current director Dale Willey will be leaving the board effective Jan. 26, 2009. Nomination ballots must be returned postmarked by Friday, July 18. The newly-elected director, who takes office Jan. 27, will be announced at the 2009 NADA Convention & Exposition in New Orleans.

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Runoff Election to be Held for NADA Director from N. Calif.

Two nominees have received at least 10 percent of the votes for the position of NADA director from Northern California forcing a runoff election. Election ballots have been mailed to members in Northern California and are to be returned postmarked by Friday, July 18. The winner, who will serve a 3-year term beginning Jan. 27, will be announced at the 2009 NADA Convention & Exposition in New Orleans.

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Applications for NADA's Executive Education Program due July 16

Over the next three weeks, NADA will be accepting applications for the new Dealer Executive Education class scheduled to begin in September at Babson College. Applications must be submitted by July 16.

Babson is the leading provider of entrepreneurial executive education training in the U.S. It has been ranked No. 1 in entrepreneurship for 13 consecutive years by U.S. News & World Report. The customized six-module program focuses on leadership, management and entrepreneurship for the retail side of the automotive and truck industry. All six week-long classes are being held on campus at the Babson Executive Education Center in Wellesley, Mass., over a 16-month period.

Click here to enroll and find out more about the program or contact Dealer Academy Director Allan Jones at (703) 821-7210 or ajones@nada.org.

Click here to see why NADA's executive leadership program is No. 1 for executive education.

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NADA and EPA to Recognize Energy Star Efficient Dealerships

  

As part of NADA's Energy Stewardship Initiative, both NADA and EPA’s Energy Star program are eager to recognize dealerships that have met or exceeded the Energy Star Challenge by improving their energy efficiency by at least 10 percent.

NADA will award these “green” dealers with a certificate, a press release distributed to the dealership’s local media, and coverage on www.nada.org, as well as recognition at NADA’s annual Washington Conference in September.

If you have improved the energy efficiency of your dealership or dealerships by at least 10 percent and you can show us, please send an email to RegulatoryAffairs@nada.org. Candidates for recognition will be asked to submit their dealership’s energy information. For more on NADA’s partnership with Energy Star, visit www.nada.org/energystar.

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STAR Answers Dealers' Questions About Wireless Networks

 

Standards for Technology in Automotive Retail (STAR) has developed new guidelines to help dealers evaluate their wireless network. Visit STAR's Dealer Infrastructure Guidelines (DIG) publication. To learn "What version of wireless should I use?" click here.

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Lenovo Offers NADA Members Savings on ThinkPad Notebooks

 

NADA members can save up to $650 on ThinkPad notebooks by using the eCoupon USXSUMMERHEAT at checkout until July 29. To take advantage of the discount, visit NADA's PC Purchase Program Web site (member login required), then click on the link for Lenovo or call 1-800-426-7235, Option 1, Ext. 4838. Enter eCoupon USXSUMMERHEAT at checkout. Free ground shipping is available on all Web orders.

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Featured Video
 

Iowa Dealership Endures Extensive Flood Damage

More Video Highlights
Quotable
 
"For the last 120 days, at least, with higher availability on some of our cars and crossovers, we would have sold more vehicles. The industry could have sold about 40,000 more cars in June, and GM would have captured 8,000 to 10,000 more buyers. We have been outright constrained in some cases where dealers were just out of cars."

    -- Mark LaNeve, GM head of North American sales and marketing, responding to June sales results, USA Today, July 2


"With these gasoline prices, U.S. consumers will definitely go for cars with better fuel economy." 

    -- Koichi Ogawa, who oversees $28 billion at Daiwa SB Investments Ltd. in Tokyo, Bloomberg, July 2


NHTSA's cost-benefit analysis "systematically underestimates the economic costs imposed by [fuel economy] rules on manufacturers and consumers."

    -- According to comments filed by the Alliance of Automobile Manufacturers arguing that the cost of NHTSA's April 22 proposal outweigh the benefits. The proposal would raise fuel economy requirements to a fleetwide average of 31.6 mpg, including 35.7 mpg for passenger cars and 28.6 mpg for light trucks, starting in the 2011 model year, The Detroit News, July 2


"This is a step in the right direction, but because the information is limited, we still need federal legislation that would expand total-loss disclosure."

   
-- Ivette Rivera, NADA's executive director of legislative affairs, referring to the National Insurance Crime Bureau's efforts to create a Web-based service with total-loss data for consumers, NADA Newswire, July 1


"It was a roaring success. The week before we had not sold a single GM vehicle. That's how slow it was. When they announced the sale last week, we sold 18. Our traffic was up by at least 50 percent compared to the beginning of the month."

   
-- Steve Jones, dealership owner in Lancaster, Pa., referring to the success of GM's 72-hour, zero percent financing program, Automotive News, July 1
Video Highlights
 
 

Click Here to see why NADA's executive leadership program is No. 1 for executive education.


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