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Top Stories
Opinion: McCain Is Wrong Again on Auto Industry Rules
MPG Now! Automakers Race to Boost Efficiency
Ford to Retool U.S. Plants for European Cars: Report
Honda Goes Whole Hog for Hybrids
Consumers Change Buying Habits, But Will it Last?
Crossovers Go Into Slump
Auto Dealers Combat Sputtering Sales With Market Research, Flexibility
Telematics Connects with Consumers
VW Chief Hopeful in Tough Market
Opinion: Former GM CEO Stempel On the Future of Electric Cars
NADA Update
Auto Dealers Invited to SEMA Show to Learn about $38 Billion Accessory Market
NADA Director Receives Award from Minority Dealer Association
Lenovo Offers NADA Members Savings on ThinkPad Notebooks
STAR Answers Dealers' Questions About Dealership Data Security
Top Stories
Opinion: McCain Is Wrong Again on Auto Industry Rules
The Detroit News

Every time Sen. John McCain flip-flops on automotive industry issues, he lands on the wrong square. Friday, at a town hall meeting at the General Motors tech center in Warren, [Ohio] the presumed Republican presidential nominee said he guessed he supported the right of California and other states to set their own individual emissions standards for cars and trucks. "I guess at the end of the day, I support the states being able to do that," McCain said in answer to a question. That would seem to take him back to his original position on the issue, as expressed early in the primary season. But just a few weeks ago, McCain shifted significantly and to the great relief of Detroit's Big Three automakers, saying he favored a national standard that would allow automakers to build vehicles to one set of requirements. That was a better place to be, although McCain complicated his stance with a curious idea for a $300 million prize to whoever is first to develop a marketable battery for electric vehicles. The senator is apparently unaware that the first company to reach the market with a workable battery will reap billions of dollars in profits, prize enough. McCain added to his government giveaway scheme Friday, pledging to establish $5,000 tax breaks for the purchasers of zero-emissions vehicles. So far, McCain hasn't got much of anything right when it comes to the auto industry. Allowing states to set their own emissions standards would default to California the job of regulating automobiles. That won't be good for Michigan or for American auto workers. If McCain and [Sen. Barack] Obama want to help, they might consider urging their congressional colleagues to back off any additional government mandates on an industry that is among the most endangered in the nation. The domestic automakers are struggling to survive the worst downturn in the market in recent years. Loading them down with the additional expense of meeting ever-changing federal safety, fuel-efficiency and emissions standards will strip them of cash needed to retool their product line-ups for the new demands of the marketplace. If the automakers succeed in meeting those demands, the nation will end up with a vehicle fleet that consumes a lot less gasoline and generates far fewer harmful emissions.
Source: The Detroit News

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MPG Now! Automakers Race to Boost Efficiency

DETROIT — During the 18 months he worked on a new version of the Chevrolet Cobalt, Mike Danowski saw consumer tastes change before his very eyes. When he started, studies showed that styling was the No. 1 reason people bought Cobalts. By the time the vehicle rolled out, fuel economy had leapt to the top of the list, the Cobalt XFE project manager says. The Cobalt team's timing couldn't have been better. A combination of revised gear ratios, engine recalibration and low-rolling-resistance tires improved highway fuel economy 9 percent, from 33 mpg in highway driving for the base Cobalt to 36 mpg for the [Cobalt] XFE. Across the automotive world, designers and engineers are bending sheet metal, trying new tires, tweaking powertrains, and performing automotive liposuction to eke out better mileage. Huge changes will be needed in the future, but many are years away. Carmakers need better mileage today. The top candidates for near-term improvement: Better aerodynamics; adjust engines; and lose weight. While some engineers and designers scramble for immediate mileage gains, others are working on these future fuel-saving technologies: direct fuel injection; brake energy regeneration; turbocharging; and stop-start. "Aerodynamics is one of the best ways" to boost fuel efficiency, says Richard Gresens, [Ford] Flex chief designer. "If I'm going to change something a little bit on the sheet metal, and it gives me a little better aero co-efficient — hey, let's do it."
Source: Automotive News (Subscription required.)

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Ford to Retool U.S. Plants for European Cars: Report

CHICAGO -- Car maker Ford Motor Co. is drawing up plans to retool American plants to make small, fuel-efficient passenger cars that it mainly makes and sells in Europe, the Wall Street Journal reported on Saturday. The paper said Ford has looked at bringing over European models, including the mid-size Mondeo, in response to high fuel costs that have hit sales of larger, fuel-hungry trucks and sport utility vehicles. Citing people familiar with the matter, the Wall Street Journal said portions of this move could be announced on Thursday when the Dearborn, Michigan-based company reports second-quarter results.
Source: Reuters

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Honda Goes Whole Hog for Hybrids

To make up for lost time, the carmaker plans to sell 500,000 a year by early next decade
TOKYO -- With a solid lineup of small cars and superflexible factories that can quickly shift from SUVs to subcompacts, Honda Motor has prospered lately. In June the Japanese automaker saw its sales jump by 14 percent even as its biggest rivals slumped. But Honda's satisfaction with its results is tempered by the knowledge that they might have been far better if the carmaker had gotten its hybrid strategy right. While the company was the first major automaker to offer a hybrid in the U.S.—the Insight, introduced in 1999—Honda's efforts have long been overshadowed by Toyota Motor's success with the Prius. Honda misread what customers wanted, acknowledges research and development chief Masaaki Kato. As a result, the company has sold just 277,000 hybrids to date, compared with Toyota's 1.5 million. Now, Honda is fighting back. By early next decade, it aims to sell 500,000 hybrids annually, up from just 55,000 in 2007. Next year it expects to offer a new compact in the U.S., Japan, and Europe that, like the Prius, will be sold only as a hybrid. Honda has high hopes for the car, and wants to sell 200,000 units a year eventually.
Source:  BusinessWeek

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Consumers Change Buying Habits, But Will it Last?

NEW YORK -- Steve Pizzini got rid of his Cadillac Escalade in favor of a 16-year-old Acura and doesn't expect to have another gas-guzzler. "I had a paradigm shift," said Pizzini, a financial analyst. "I spent the money on a nice car. But to me, it's not worth it. I don't think I will go that route again." Every economic downturn changes shoppers in some way. But this time, experts say the new behavior -- fueled by higher gas and food prices, tightening credit and a slumping housing market -- are the most dramatic and widespread that they have seen since the mid-1970s. According to a survey released Thursday by market research company Nielsen Co., which tracks consumer habits, about two-thirds, or 63 percent, of consumers are cutting spending due to rising gas prices, up 18 percentage points from a year ago. According to the study, which queried nearly 50,000 consumers by e-mail during the first week of June, 78 percent of them are combining shopping trips and 52 percent are eating out less often. A rebounding economy may let some consumers revert to their old ways -- like people who switched to smaller cars when times were hard in the 1970s but flocked to sport utility vehicles when gas got cheap again. But with more economists believing that the current woes will last well into next year, many think the underlying frugality will linger. Auto executives predict that consumers' newfound appreciation for smaller cars will be permanent, causing major pain at auto plants.
Source:  Associated Press

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Crossovers Go Into Slump

For a while, car-based SUVs found a niche, but success didn't last long
DETROIT — When Ford Motor Co. came out with its new Edge crossover in 2006, the company hoped the truck-like vehicle built on a car frame would attract longtime Ford buyers trading in their inefficient sport utility vehicles. For a while, it worked well. But last month, sales of the Edge and nearly all crossover vehicles dropped dramatically, causing another worry for automakers struggling with the dramatic shift by U.S. auto buyers from trucks to cars. Automakers and some industry analysts say it's a temporary lull due to a combination of economic worries, sliding SUV values that prevent people from trading them in, and the lingering shock of $4 per gallon gasoline. The crossover market as a whole peaked this year in March, with all automakers selling 222,055, according to Autodata Corp. Sales dropped in April, rebounded in May and then slid in June to 184,871, down nearly 17 percent from March. Paul Taylor, the NADA's chief economist, said crossovers, which vary in size but generally get in the high teens in the city and mid-20s in highway gas mileage, are boxier than cars and right now are being shunned to a degree by buyers. "They're not even consulting the EPA rating or any other indicator of gas mileage," Taylor said. "They see the big box and see that's not enough mileage to suit me."
Source:  South Bend Tribune

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Auto Dealers Combat Sputtering Sales With Market Research, Flexibility

With new vehicle sales down, gas prices up and credit crunched indefinitely, auto dealers are struggling to understand a swiftly changing market in time to provide customers with relevant inventory. In a retail climate that demands flexibility, local dealers have responded with consolidations and shifts to stocking used-car only vehicles. Lance Roberts, spokesman for the New Car Dealers Association San Diego County, says the general marketplace is tougher than it’s been in years, both locally and nationally. “Tightening of credit, consumer uncertainty and the down-trend in the housing market all impact retail sales at some level,” Roberts said. Roberts said one bright side for customers and dealers this summer has been the federal tax stimulus checks and auto manufacturers’ rebate programs. “These incentives have made it possible to put someone in a new vehicle when it may have been a stretch a few months ago,” he said.
Source:  San Diego Business Journal

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Telematics Connects with Consumers

Buyers want services such as Sync; dealers await long-promised payoff
For auto dealer Annette Sykora, the promise of the connected vehicle is only beginning to come true. But she is upbeat about telematics — another term for the connected vehicle — because her customers are. Telematics proponents have long believed that using the technology to connect vehicles to the outside world will bring numerous benefits to dealers. Dealers were promised enhanced customer contact, better awareness of what repairs their customers' vehicles need and improved dealership-customer relationships. "The last decade we have been hearing about things that are going to be helpful in the repair process or for customers. We're beginning to see maybe the beginning of that true possibility," says Sykora, chairman of the National Automobile Dealers Association. Sykora says car dealers are interested in selling "connectivity" because their customers want it. "Dealers are all about serving the customer," Sykora says. "So anything that makes it easier for our customer, easier to serve our customer, we're very interested in."
Source:  Automotive News (Subscription required.)

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VW Chief Hopeful in Tough Market

WOLFSBURG, Germany -- Volkswagen AG Chief Executive Martin Winterkorn said he expects his company to cope better with the difficult market environment than other auto makers and confirmed VW's full-year targets of higher revenue, operating profit and vehicle sales. "We stand by what we've said," Mr. Winterkorn said Thursday. Last year, Volkswagen sold 6.2 million vehicles, raising its revenue 3.8 percent to €108.89 billion ($172.42 billion) from €104.88 billion a year earlier. Mr. Winterkorn said he is more worried about the years beyond 2008, when higher raw-material prices might translate into price increases. "We'll have to think about price hikes at some point," he said. "We can't compensate everything." Some of the world's top auto executives have similar worries. Carlos Ghosn, chief executive of France's Renault SA and Japan's Nissan Motor Co., has warned that his companies are unlikely to meet previously set sales targets because of slumping demand in markets such as Western Europe and the U.S.
Source:  The Wall Street Journal (Subscription required.)

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Opinion: Former GM CEO Stempel On the Future of Electric Cars
by Joe White

Almost 20 Years After He Approved the EV1 The Same Major Snag Remains: Batteries
One of the Big Ideas that's gotten a boost from the recent oil price shock is the notion that the energy for transportation should come from the electric grid, not an oil well in the Middle East. A number of big, established car makers have announced plans to produce cars that will pull from the electric grid all or part of the energy needed to make them go. For everyone excited about electrifying the morning commute, Robert C. Stempel, the former chairman and chief executive officer of General Motors Corp., has a few sobering words. Mr. Stempel believes in the idea of electric-drive cars – he uses the term "electric drive" to encompass both all-electric systems and plug-in hybrids. He gave the greenlight to development of GM's EV1, the first electric car to be offered by a mainstream car maker since the early years of the 20th Century. After he was pushed out of GM by a boardroom coup during the auto maker's last big financial crisis in 1992, Mr. Stempel continued to devote himself to the electric car idea. He spent more than a decade as chairman of U.S. battery maker Energy Conversion Devices, Inc. before leaving the company last year. "The business side of the case wasn't there. The EV1 was too expensive…We were way off the cost target," he says. Mr. Stempel, now a consultant with an office in suburban Detroit, says the obstacle to mass production of electric vehicles is the same issue as it was "when Mr. Edison told Mr. Ford that in a year he'd have a battery for his car. The weak link is the battery." None of this necessarily means the auto industry should once again give up on electric-drive cars. When it comes to reducing the economy's dependence on oil, the amount Americans burn up in cars isn't one issue. It is THE issue. But consumers need to take the latest flurry of press releases touting forthcoming electric-drive vehicle models with a few grains of salt.
Source:  The Wall Street Journal (Subscription required.)

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NADA Update
Auto Dealers Invited to SEMA Show to Learn about $38 Billion Accessory Market

DIAMOND BAR, Calif. -- While the nation’s new-car and -truck dealers continue to make major investments in their dealerships to improve sales and customer satisfaction, one area of potential new business has remained relatively untapped—the $38 billion accessory market. That’s why Phil Brady, president of the National Automobile Dealers Association (NADA), and Chris Kersting, president and CEO of the Specialty Equipment Market Association (SEMA), have announced a first-of-its-kind, comprehensive “Dealer Day” program designed exclusively for NADA members at the 2008 SEMA Show. “Dealer Day” is designed to give dealer principals several ideas, tools and resources on how to integrate a strong and successful accessory program at their dealerships. The half-day program is scheduled for Wednesday, Nov. 5 at the Las Vegas Convention Center. It’s the first time the SEMA Show will dedicate an exclusive program just for NADA members. There is no cost to attend "Dealer Day." "At a time when many dealers are looking for new ways to generate additional revenue and sales, this program will provide dealers with new ideas and strategies to help improve their bottom-line performance by creating profitable accessory programs," says Brady. “Through a series of activities and presentations, dealers will learn about what’s happening in the specialty industry and discover how profitable an accessory program can be, and they will learn how to successfully incorporate such a program at their dealerships,” Kersting says. As an added feature, participating dealers will have an opportunity to meet directly with proven experts who will share real-world case studies. To register or receive more information about the program, e-mail dealerlink@sema.org.
Source:  NADA Newswire

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NADA Director Receives Award from Minority Dealer Association

LA JOLLA, Calif. -- Dale Early was the recipient of the Jesse Jones Visionary Award presented by the National Association of Minority Automobile Dealers. Early is a director at-large of the National Automobile Dealers Association.

The award, which recognizes an individual’s vision, vigilance and work initiatives that have increased opportunities for ethic minorities, was presented to Early at the 2008 NAMAD Annual Membership Conference held July 9-12 in La Jolla, Calif.

"I am honored to receive this award because Jesse Jones was my first dealer role model," said Early, owner of Deerbrook Forest Chrysler Jeep in Kingwood, Texas, and chairman of NADA's public affairs committee. "To be honored with an award that bears his name as well as the principles he stood for is extremely special."

NAMAD also recognized three longtime members with Lifetime Achievement Awards. The winners were Nathan Conyers, Mel Farr and William Shack. The award recognizes individuals for a lifetime of significant contributions to the automotive industry and to the spirit of diversity and inclusion.

"These three pioneers—who founded NAMAD—together have created opportunities for all minority dealers," said Damon Lester, NAMAD president. "Today, we are the beneficiaries of their achievements and foresight."

"They committed their resources to building an institution dedicated to creating opportunities for minorities especially in the automobile industry but not limited to this industry," Lester added.

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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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STAR Answers Dealers' Questions About Dealership Data Security

Standards for Technology in Automotive Retail (STAR) has developed new guidelines to help dealers evaluate their data security. Visit STAR's Dealer Infrastructure Guidelines (DIG) publication for more information. Also, to learn what features to look for in a good backup and recovery system, click here.

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Quotable
 
"More than anything, the automakers need to be left alone for a while so they can develop and build the smaller cars consumers are now demanding. Until they get that, neither McCain nor Obama should not be considered a friend to Michigan's most vital industry."

   
-- The Detroit News (Opinion), July 21


"We need to treat every joule of energy in a vehicle like a precious commodity."

   
-- Derrick Kuzak, Ford group vice president of global product development, says little changes in vehicle design and technology to improve fuel economy all add up, Automotive News, July 21


"We're fighting for every mile per gallon in this ultracompetitive segment."

   
-- Chrysler spokesman Bryan Zvibleman referring to weight loss, engine tweaks and improved aerodynamics of the 2009 Dodge Ram, Automotive News, July 21
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