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Tuesday, July 22, 2008 RSSSEND TO A FRIENDPRINT
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At a Glance...
Top Stories
GM Eyes Electric Car Future, Joins With Power Companies
Ford to Make Broader Bet on Small Cars
Honda Cuts Odyssey, Pilot Output; Boosts Civic's
Buick, Pontiac, GMC Channel Working
Chrysler CEO Disputes Report of Loss of Low-Interest Loans
Dealers Cut, Shift Their Ad Spending
Billion-Dollar Makeover
Liberty Mutual Discloses Total Loss Information to Carfax
Opinion: The Lawnmower Men
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
GM Eyes Electric Car Future, Joins With Power Companies

SAN JOSE, Calif. — General Motors has joined with more than 30 utility companies across the U.S. to help work out electricity issues that will crop up when it rolls out new electric vehicles in a little more than two years. The Detroit automaker said the partnership, which includes the Electric Vehicle Research Institute and large utilities such as Southern California Edison and Duke Energy, will deal with issues from tax incentives for the vehicles to where and when they can be plugged in for recharging. GM is working to bring the Chevrolet Volt rechargeable car to showrooms in late 2010. "This vehicle is real. It's coming into production," said Britta Gross, a GM engineer who is helping to build the infrastructure for cars of the future. "We know that when the vehicle is in the showroom and ready for sale, it's got to work seamlessly with the infrastructure. It's the whole picture. We've got to make sure the infrastructure is ready." GM and the utilities planned to announcement the partnership Tuesday at a conference on plug-in hybrid electric vehicles in San Jose. A team of GM engineers and designers is working on the Volt, hoping to be the leader in plug-in electric vehicles. But the car will be priced anywhere from $30,000 to $40,000, far more expensive than most conventional cars.
Source:  Associated Press

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Ford to Make Broader Bet on Small Cars

DEARBORN, Mich. — The Ford Motor Company, which devoted itself for nearly 20 years to putting millions of Americans into big pickup trucks and sport-utility vehicles, is about to drastically alter its focus to building more small cars. The struggling automaker, reacting to what it sees as a rapid and permanent shift in consumer tastes brought on by high gas prices, plans to unveil its new direction on Thursday, when it will report quarterly earnings. Among the changes, Ford is expected to announce that it will convert three of its North American assembly plants from trucks to cars, according to people familiar with the plans. And as part of the huge bet it is placing on the future direction of the troubled American auto industry, Ford will realign factories to manufacture more fuel-efficient engines and produce six of its next European car models for the United States market. The company will also end speculation about its Mercury division by making the brand an integral part of its new small-car strategy, according to these people, who spoke on the condition that they not be quoted by name because of the timing of the official announcement on Thursday. Industry analysts believe Ford cannot wait any longer to reshape its manufacturing operations and step up production of smaller cars. “Trucks and S.U.V.’s have been so central to their strategy for so long, but the bottom line is that consumers have moved on,” said David E. Cole, chairman of the Center for Automotive Research in Ann Arbor, Mich.
Source:  The New York Times

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Honda Cuts Odyssey, Pilot Output; Boosts Civic's

Even Honda Motor Co. is feeling the pain of consumers’ stampede from light trucks to cars. The Japanese automaker said today that it will reduce production of the Honda Odyssey minivan and Honda Pilot crossover by a combined 10,000 units this year at its Lincoln, Ala., assembly plant. In the first half of 2008, Honda built 158,316 Odysseys and Pilots in Lincoln, down 2.4 percent from the same period of 2007. “Honda is not immune to the shift in the market,” said Honda spokesman David Iida. “We don’t want inventories to get too high.” Honda wants to keep Pilot and Odyssey inventory between a 45- and 60-day supply, Iida said. On July 1, Honda had a 78-day supply of Odysseys and a 99-day supply of Pilots, according to the Automotive News Data Center. There will be no layoffs at the plant, Iida said. Honda will use the time for employee training and other work. Workers also could take paid or unpaid vacation time, he said.
Source:  Automotive News (Subscription required.)

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Buick, Pontiac, GMC Channel Working

General Motors Corp. says its strategy of grouping its Buick, Pontiac and GMC brands into one distribution channel, which began in 2002, is working. The 1,600 dealers currently aligned with the B-P-G channel account for approximately 80 percent of the sales from the trio of GM nameplates. “This is a great channel, with three strong differentiating brands and a strong dealer body,” says Susan Docherty, named GM’s North America vice president-BPG channel, three months ago. “The B-P-G channel has some good momentum, and we plan to build on that.” Getting the dealers aligned into one channel has been one of GM’s top priorities for the last three or four years. “And we are continuing to work to align dealers along the B-P-G channel, because this makes good business sense,” she says. “In recent weeks, there have been several articles commenting on the numerous potential auctions by GM in response to these difficult industry and economic conditions. Though the significant shift from trucks to cars and crossovers is a new reality, General Motors and Buick-Pontiac-GMC have performed well in several growing segments.”
Source:  Ward's Dealer Business

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Chrysler CEO Disputes Report of Loss of Low-Interest Loans

Chrysler's financing arm is not in danger of losing the ability to offer consumers low-interest loans, Chrysler LLC Chairman and CEO Bob Nardelli told the automaker's employees Monday. Nardelli was responding to a Wall Street Journal report which suggested that Chrysler Financial's bankers are scrambling to avoid higher borrowing costs when the unit rolls over about $30 billion of short-term, car-loan-backed debt next month. If Chrysler pays more for its money, the Auburn Hills automaker may not be able to offer special rates on auto loans to entice customers to buy in a slow market, analysts say. The credit review process under way is nothing out of the ordinary, Nardelli assured staff. "As is customary for many auto finance companies, this renewal process takes place every year," he wrote in an e-mail sent to employees and obtained by The Detroit News. "We will continue to offer competitive financing and lease options for our customers and dealers." "We knew something was going on with Chrysler Financial, but we didn't know what," [said Alan Helfman, owner of Rivers Oaks Chrysler Jeep in Houston.] "It's a big-time concern, because there is a copious amount of deals that I can't get done today that last year I could make a phone call and they'd be willing to work with us."
Source:  The Detroit News

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Dealers Cut, Shift Their Ad Spending

Internet grabs bigger share of media budget
Auto dealerships are slicing their advertising budgets to cope with depressed profits. But because new-vehicle sales have plummeted so abruptly this year, the cost of advertising per new car or truck sold — a standard metric of auto retailing — has increased to a record level. In the first four months of 2008, the National Automobile Dealers Association reports dealership ad spending fell 4.1 percent from the year-ago period, to about $2.35 billion. The spending figures do not include ad subsidies from automakers. At the same time, NADA chief economist Paul Taylor says, the average dealer spent $626 on advertising for every new vehicle he or she sold from January through April — a 5.5 percent increase from the same period of 2007. This year, dealerships "are looking to save money any way they can," Taylor told Automotive News. "The risk of not advertising is to be overlooked by the consumer. But given the difficulties to cash flow, it requires a major effort." For the rest of this year, NADA's Taylor predicts the decline in dealership ad spending will moderate. For all of 2008, he forecasts that spending will fall about 2 percent from 2007. Initiatives such as Chrysler LLC's $2.99-a-gallon gasoline promotion and new 0 percent financing on many General Motors models are giving dealers renewed reason to talk to consumers, Taylor says. "With the return of strong incentives," he says, "we should see additional advertising.
Source:  Automotive News (Subscription required.)

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Billion-Dollar Makeover

Dealerships are leading a green revolution
Ecofriendly dealerships are still relatively unusual. But dealers across the country are beginning to catch on to the pluses of “going green” — such as saving money and drawing increasingly green-minded customers, not to mention ridding the world of tons of greenhouse gas emissions. The trickle of activity a few years ago has become a flood of facility upgrades and new construction totaling nearly $1 billion. Some stores employ cutting-edge heating and cooling methods and efficient lighting; others are brand-new, state-of-the-art “carbon neutral” facilities using alternative energies like wind and solar power. Nearly 750 dealerships are now members of Energy Star’s Small Business Network and have taken the first step toward reducing their energy use by 10 percent under NADA’s Energy Stewardship Initiative. Meanwhile, the U.S. Green Building Council’s Leadership in Energy and Environmental Design (LEED) rating system has two stores (Pat Lobb Toyota, McKinney, Tex., and Toyota of Rockwall, Tex.) already certified and two dozen others well on the way. With dealers investing so much money in energy-saving upgrades, the move toward green dealerships has all the markings of an industry-changing trend.
Source:  NADA's AutoExec Magazine

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Liberty Mutual Discloses Total Loss Information to Carfax

BOSTON — To help prevent consumers and dealers from purchasing or reselling vehicles totaled in crashes, floods and other disasters, Liberty Mutual is providing Carfax with data on every car it declared a total loss and sold for salvage over the past five years. This information will then be disclosed to buyers via Carfax vehicle history reports. "Varying state laws and a deceitful practice called 'title washing' allows salvaged cars to be sold without any documentation they were once totaled," explained Ted Gramer, Liberty Mutual executive vice president of personal claims. "In the aftermath of disasters like the recent Midwestern floods and hurricanes, consumers need added protection from increased fraudulent activity," he added. Furthering its consumer safety responsibility, Liberty Mutual also recently announced its support of the National Insurance Crime Bureau's VINCheck buyer protection program. Via this program, consumers can input any vehicle's unique 17-character VIN at www.nicb.org to determine if a participating insurance company, such as Liberty Mutual, had previously declared the car a total loss.
Source: Auto Remarketing

[Editor's Note: Liberty Mutual’s action represents another significant step toward NADA’s goal of making insurer data on total-loss vehicles readily available to the public and dealers. Liberty Mutual's announcement comes on the heels of another recent, positive initiative -- the creation of a limited total-loss database by a coalition of auto insurers and law enforcement agencies. NADA will continue to push all insurance companies and large rental car agencies to make total-loss records available to all used car buyers.]

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Opinion: The Lawnmower Men

Al Gore blew into Washington on Thursday, warning that "our very way of life" is imperiled if the U.S. doesn't end "the carbon age" within 10 years. No one seriously believes such a goal is even remotely plausible. But if you want to know what he and his acolytes think this means in practice, the Environmental Protection Agency has just published the instruction manual. Get ready for the lawnmower inspector near you. In a huge document released last Friday, the EPA lays out the thousands of carbon controls with which they'd like to shackle the whole economy. Central planning is too artful a term for the EPA's nanomanagement. Thankfully none of it has the force of law -- yet. However, the Bush Administration has done a public service by opening this window on new-wave green thinking like Mr. Gore's, and previewing what Democrats have in mind for next year. The mess began in 2007, when the Supreme Court ruled 5-4 in Mass. v. EPA that greenhouse gases are "air pollutants" under current environmental laws, despite the fact that the laws were written decades before the climate-change panic. The EPA was ordered to regulate if it decides that carbon emissions are a danger to the public. The 588-page "advance notice of proposed rulemaking" lays out how the EPA would like it to work in practice. Justice Antonin Scalia noted in his dissent that under the Court's "pollutant" standard "everything airborne, from Frisbees to flatulence, qualifies," which the EPA appears to have taken literally. It is alarmed by "enteric fermentation in domestic livestock" -- that is, er, their "emissions." A farm with over 25 cows would exceed the EPA's proposed carbon limits. So would 500 acres of crops, due to harvesting and processing machinery. But never fear. The EPA would regulate "farm tractors" too, plus "lawn and garden equipment." For example, it "could require a different unit of measure [for carbon emissions] tied to the machine's mission or output -- such as grams per kilogram of cuttings from a 'standard' lawn for lawnmowers." In fact, the EPA has new mandates for everything with an engine. There's a slew of auto regulations, especially jacking up fuel-efficiency standards well beyond their current levels, and even controlling the weight and performance of cars and trucks. Carbon rules are offered for "dirt bikes and snowmobiles." Next up: Nascar.
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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Featured Video
 

NADA and "SeeMore's Playhouse" Team Up to Promote Child Passenger Safety

More Video Highlights
Quotable
 
"This vehicle is real. It's coming into production. We know that when the vehicle is in the showroom and ready for sale, it's got to work seamlessly with the infrastructure. We've got to make sure the infrastructure is ready."

    -- Britta Gross, a GM engineer helping to build the infrastructure for the Chevy Volt, Associated Press, July 22


"Trucks and S.U.V.'s have been so central to their strategy for so long, but the bottom line is that consumers have moved on."

   
-- David E. Cole, chairman of the Center for Automotive Research in Ann Arbor, Mich., referring to Ford's drastic shift to build smaller cars, The New York Times, July 22


"Honda is not immune to the shift in the market. We don't want inventories to get too high."

    -- Honda spokesman David Iida, citing reasons for their decision to cut production of the Odyssey and Pilot, and boost production of the Civic, Automotive News, July 21


"This is a great channel, with three strong differentiating brands and a strong dealer body. The B-P-G channel has some good momentum, and we plan to build on that."

    -- Susan Docherty, GM’s North America vice president-BPG channel, Ward's Dealer Business, July 21


"It's a big-time concern, because there is a copious amount of deals that I can't get done today that last year I could make a phone call and they'd be willing to work with us."

    -- Alan Helfman, owner of Rivers Oaks Chrysler Jeep in Houston, referring to Chrysler financial arm's ability to offer low-interest loans, The Detroit News, July 22


"The risk of not advertising is to be overlooked by the consumer. But given the difficulties to cash flow, it requires a major effort. With the return of strong incentives we should see additional advertising."

    --  NADA Chief Economist Paul Taylor, Automotive News, July 21


"I think that within 10 years this will be the standard way to build a car dealership. Not only is it the right thing to do; it’s also the smart thing to do."

    -- Dealer Jay Caldwell, Jack Caldwell Toyota, Conway, Ark., NADA's AutoExec Magazine, July 2008


"... the EPA has new mandates for everything with an engine. There's a slew of auto regulations, especially jacking up fuel-efficiency standards well beyond their current levels, and even controlling the weight and performance of cars and trucks."

   
-- An opinion published in The Wall Street Journal referring to an EPA document that lays out thousands of carbon controls that could shackle the economy, July 19

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