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At a Glance...
Top Stories
U.S. Car Sales in September Were the Worst Since 1993
Senate Passes Bailout Bill; House May Vote by Friday
Bill Adds Plug-In Tax Breaks
GM Exec Stresses Importance of Bailout Bill
Ford Chief Urges U.S. to Approve Market Rescue Plan
Opinion: Call Your Congressman: Survival Hinges on Credit
All Revved Up With No Place to Borrow
As Sales Decline, Incentives Increase
VW Sees Earnings Growth Amid Global Auto-Sales Slump
NADA Update
Time is Running Out for NADA-SEMA Dealer Day Registration
ALERT: Be Sure to Work with NADA-Approved Convention Vendors
Two New Legal Compliance Publications Now Available Online
STAR Answers Dealers' Questions About Internet Access Methods
Save Up to $760 on Select ThinkPad Notebooks
Top Stories
U.S. Car Sales in September Were the Worst Since 1993

Americans felt too broke to buy new cars and trucks last month, making September the first month with total sales below a million since February 1993. A drumbeat of bad economic news drove a sales decline for every major automaker as total light-vehicle sales tumbled to 964,873, down 26.6% compared with September 2007, sales tracker Autodata reported Wednesday. "I'm shocked by what's happened," says Clinton, Iowa, auto dealer John McEleney. Gas prices "have been trumped by the credit crisis" in spooking would-be buyers, he says. His Iowa dealerships sell Toyota, Hyundai, General Motors and Chrysler brands. General Motors saw sales slide 15.6%. But gas price concerns receded so dramatically that truck-heavy GM's slide was only half as bad as onetime industry darling Toyota, off 32.3%. The broad-based sales collapse shows "the ridiculous, horrible position the auto industry is in right now is not limited to the domestics," notes Stephanie Brinley, senior analyst at consultant AutoPacific.
Source:  USA TODAY

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Senate Passes Bailout Bill; House May Vote by Friday

WASHINGTON — The Senate strongly endorsed the $700 billion economic bailout plan on Wednesday, leaving backers optimistic that the easy approval, coupled with an array of popular additions, would lead to House acceptance by Friday and end the legislative uncertainty that has rocked the markets. In stark contrast to the House rejection of the plan on Monday, a bipartisan coalition of senators — including both presidential candidates — showed no hesitation in backing a proposal that had drawn public scorn, though the outpouring eased somewhat after a market plunge followed the House defeat. The Senate margin was 74 to 25 in favor of the White House initiative to buy troubled securities in an effort to avoid an economic catastrophe.
Source:  The New York Times

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Bill Adds Plug-In Tax Breaks

WASHINGTON -- Congressional leaders have added $1 billion in tax breaks for plug-in electric vehicles to a $700 billion Wall Street bailout bill. The rescue package would grant the U.S. Treasury wide authority to buy distressed mortgage-backed securities and other troubled financial instruments, including car loans and student loans. It includes $150 billion in tax breaks for individuals and businesses. The provision would grant all-electric vehicles or plug-in models with at least a four-kilowatt battery pack a $4,168 credit. A vehicle like the extended range Chevrolet Volt with a 16-kwh battery would qualify for the maximum $7,500 credit for vehicles under 10,000 pounds. "We fully support the plug-in vehicle tax credit," said General Motors Corp. spokesman Greg Martin. "Consumer tax incentives are traditionally one of the most effective ways to accelerate early adoption of energy-saving technology."
Source:  The Detroit News

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GM Exec Stresses Importance of Bailout Bill

PARIS -- General Motors Corp. President Frederick Henderson said Wednesday that he did not expect U.S. auto sales to recover quickly from their weak levels, which he attributed to the challenges that American consumers face. And he said it was urgent that Congress pass the Wall Street bailout bill. "Our judgment is that the first half of 2009 will continue to be weak," he said. He said he didn't know about the second half of next year. "We'll plan the business on a conservative basis because it's the prudent thing to do."
Source:  The Detroit News

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Ford Chief Urges U.S. to Approve Market Rescue Plan

Ford Motor Co.'s chief executive officer urged Congress to approve a U.S. financial rescue plan, saying "decisive action" is needed to jumpstart the country's economy. "The most important thing for all of us is to stabilize the U.S. economy," Alan Mulally, head of the Dearborn, Michigan-based automaker, said in an interview today at the Paris Motor Show. "The auto industry is going to be closely linked with economic development," the CEO said. "We have a lot of things in play. We are trying to figure out what this change means for the mix as well as what it means for the volume."
Source:  Bloomberg

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Opinion: Call Your Congressman: Survival Hinges on Credit
by David Sedgwick

As the U.S. economy lurches into recession, will banks start redlining Detroit 3 dealerships? In his Sept. 29 report to investors, Richard Kwas -- an analyst for Wachovia Capital Markets LLC -- reported that approximately 55 to 60 dealerships have closed since mid-summer. I have no idea how many stores will close -- my crystal ball is cloudy -- but it's safe to say that Bill Heard's demise is only the first salvo in this rout. In recent weeks, we've heard troubling reports of dealers who can't get financing. The captive lenders -- GMAC, Ford Credit and Chrysler Financial -- are struggling to raise enough capital to make car loans. So dealers are reaching out to independent lenders such as Chase, Bank of America, Capitol One and Wachovia. But as the credit crisis deepens, the independent banks are starting to back out of leasing, sub-prime loans and anything else with a whiff of risk. Perhaps I'm just paranoid, but my fear is that the banks will start redlining Detroit 3 dealers. Here's my advice: Any dealer with a Detroit 3 franchise ought to call their congressman and demand passage of the $700 billion Wall Street rescue package. As currently written, the rescue package would allow the Treasury Department to purchase automotive loans from captive lenders and banks. That would help the lenders stay in business and make fresh loans. For many dealers, it's a question of survival. Call your congressman. If your credit dries up, this game is over.
Source:  Automotive News (Subscription required.)

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All Revved Up With No Place to Borrow

Mortgages were among the first consumer products to be hit by the credit-market freeze. Now car loans and leases are drying up as dealers, auto-finance companies and other lenders are having trouble finding money to lend to car buyers. The upshot: Those with less-than-stellar credit are getting shut out of loans, and even some so-called prime borrowers are having trouble getting financing. For shoppers with good credit, financing is still usually available, especially among healthier foreign auto makers like Toyota Motor Corp. and luxury companies like BMW AG. But overall, financial institutions have become less likely to lend.
Source:  The Wall Street Journal (Subscription required.)

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As Sales Decline, Incentives Increase

As weak vehicle sales spread to Japanese automakers, they, too, piled on incentives last month, mainly on their pickups and SUVs. Toyota raised its average incentive by 24% or $257 in September to $1,315, according to Autodata Corp. Discounts on Toyota’s passenger cars rose 6% to $712, while incentives on light trucks rose 43% to $2,266. Meanwhile, Honda Motor Co., whose sales declined 24% last month, raised its incentives by 9.4%, driven by a 73% spike in the average incentive for its light trucks to $2,200. Throughout the industry, incentive spending went up an average of 13.5% to $2,933 per vehicle. Incentives on passenger cars declined an average of 8.4% to $1,714 and rose 29% to an average of $4,137 on pickups and SUVs.
Source:  Detroit Free Press

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VW Sees Earnings Growth Amid Global Auto-Sales Slump

Volkswagen AG, Europe's biggest carmaker, said its focus on smaller, more frugal models will help it post full-year earnings growth even as global auto sales slump. VW is confident of meeting its 2008 performance targets, Chief Executive Officer Martin Winterkorn said ... in a Bloomberg Television interview. The Wolfsburg, Germany-based company's goal is to post "slightly better" figures than last year, spokesman Stephan Gruehsem said, citing previous guidance. "The crisis is of a greater magnitude than we thought half a year ago," Winterkorn said. "But we believe we will be able to get through the year on the basis of the targets we announced. Things will be more critical in 2009. We don't know yet what will happen then."
Source:  Bloomberg

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NADA Update
Time is Running Out for NADA-SEMA Dealer Day Registration

Pre-registration for the inaugural NADA-SEMA "Dealer Day" program has been extended until Friday, Oct. 3. The event is being held in conjunction with the 2008 SEMA Show on Nov. 5 from 11 a.m. to 7 p.m. at the Las Vegas Convention Center. It will include a lively and informative panel discussion on four highly effective accessory sales profit models, a luncheon and four roundtable discussion lead by industry experts. A "Dealer Day" reception sponsored by NADA, SEMA and Automotive News will cap off the day.

Dealers can also take part in an optional SEMA Show tour from 8:45 to 10:45 a.m. The tour will depart from the Harley-Davidson store, located in the North Hall Lobby. Pre-registration is required for this event. To register visit www.sema.org/DealerDayReg or call (909) 396-0289 Ext. 158.

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ALERT: Be Sure to Work with NADA-Approved Convention Vendors

Both exhibitors and attendees planning to attend the 2009 NADA Convention & Exposition in New Orleans may receive email solicitations, phone calls, direct mail or other forms of communications from vendors and contractors claiming to be endorsed or approved by NADA, which many are not. Be on the lookout for these types of solicitations.

HERE IS A LIST OF OFFICIAL NADA VENDORS AND CONTRACTORS:              

  • Freeman (Service Contractor)
  • PSAV Presentation Services (Audio/Visual)
  • CCR Events (Computer Rental)
  • National Plant & Floral, Inc.
  • Experient (Lead Retrieval)
  • HMI – Holiday Models, Inc.
  • Oscar Einzig (Photography)
  • Marshall Robinson & Associates (Security)
  • Experient (Housing – Exhibitor & Attendee)
  • NADA's AutoExec Department (Advertising/Sponsorships)

Please use caution when dealing with any solicitations from companies that are not on this list. Contact NADA conventions at (703) 821-7141 if you have any questions.

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Two New Legal Compliance Publications Now Available Online

NADA has finalized two new publications aimed at helping dealers comply with several new federal legal requirements. All members will receive a free printed copy of A Dealer Guide to the FTC Affiliate Marketing Rule (L51) and Electronic Disclosure Rules for Dealership Online Commerce (L52) via mail. NADA Management Education is also making these two publications available immediately, in PDF form, free to members upon request.

The FTC’s Affiliate Marketing Rule specifies when certain credit-related information received from a company’s affiliates may be used for marketing purposes. The guide covering this new rule defines key terms, explains the new rule’s relationship to existing information-sharing restrictions under the Fair Credit Reporting Act, and provides examples of the notices required under the new rule.

The Federal Reserve Board’s Electronic Disclosure Rules affect dealers who currently engage in certain online activities (such as advertising leases online, advertising credit online, or providing access to/accepting online credit applications), or envision doing so in the future. This publication explains the rules, discusses amendments to certain regulations—including Regulations B, M, and Z—and provides context and compliance considerations.

Members may obtain a free PDF copy of each publication by sending an email to me@nada.org with their requests and member identification numbers.

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STAR Answers Dealers' Questions About Internet Access Methods

 

Standards for Technology in Automotive Retail (STAR) has developed new guidelines to to help dealers evaluate their Internet Access Methods. Visit STAR's Dealer Infrastructure Guidelines (DIG) publication for more information. To answer the question "How do I make sure I get a business-grade connection?" click here.

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Save Up to $760 on Select ThinkPad Notebooks

NADA members can save in three ways:

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

To take advantage of this offer, visit www.nada.org/Technology/PCPurchaseProgram/ (member login required), click www.lenovo.com/shop/deals/nada, then click "Special Offers," or call (800) 426-7235, Option 1, Ext. 4838. Enter eCoupon USXFALLSAVINGS at checkout. Free ground shipping is available on all Web orders.

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Featured Video
 
 
NADA-TV Reports on the Launch of the 'Green Checkup' Campaign. Pictured above is NADA Chairman Annette Sykora with Colorado Gov. Bill Ritter at a news conference in Denver.


More Video Highlights

Quotable
 
"I'm shocked by what's happened. Gas prices "have been trumped by the credit crisis" in spooking would-be buyers.

    -- Iowa auto dealer John McEleney responding to September auto sales results, USA TODAY, Oct. 2


"Consumer tax incentives are traditionally one of the most effective ways to accelerate early adoption of energy-saving technology."

    -- GM spokesman Greg Martin lending support to the plug-in tax credit added to the Wall Street bailout bill, The Detroit News, Oct. 2


"The auto industry is going to be closely linked with economic development."

    -- Ford CEO Alan Mulally indicating his support of the Wall Street bailout package, Bloomberg, Oct. 2


"Any dealer with a Detroit 3 franchise ought to call their congressman and demand passage of the $700 billion Wall Street rescue package."

    -- David Sedgwick, news editor (opinion), Automotive News, Oct. 2
Video Highlights
 
  
Registration for the NADA convention in New Orleans Jan. 24-27 is now open. Click here to see just how much progress New Orleans has made since Katrina.


NADA's New Orleans Project: Lusher Charter School
NADA's Return to New Orleans
NADA and 'SeeMore's Playhouse' Promote Child Passenger Safety Month in September


Click here for more NADA-TV reports.

 
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