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Top Stories
NADA Elects Iowa Dealer as 2009 Chairman
GM to Promote Dealer Financing Options
Finance Companies Want US to Buy Bad Auto Loans
General Motors Says Bankruptcy Not an Option
Ford Executive Rejects Talk of Mazda Stake Sale
Mazda: Dealers Will Get Floorplans
Automakers Pump Up Deals on Smaller Cars
Credit Crisis Stalls Oct. Car Sales
Opinion: Industry Slump May Benefit The Auto Makers That Survive
NADA Update
Coming Up: Another Virtual Seminar on the Red Flags Rule
Player Slots for Pre-Convention Charity Golf Tournament Filling Up
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
NADA Elects Iowa Dealer as 2009 Chairman

Top priority: Reassuring car buyers that credit is available 

 

 John P. McEleney

SAN DIEGO -- The National Automobile Dealers Association (NADA) has elected John P. McEleney as chairman for 2009. McEleney’s election comes amid economic turmoil and concerns about access to credit. The tight credit market has left many car buyers worried about whether they will be able to finance their purchase. Ninety-four percent of new-car purchases are financed. With the current economic troubles expected to spill over into next year, NADA’s 2009 chairman views the credit issue as one of the association’s top priorities.

“It’s important for consumers to know that credit is available,” said McEleney, who will represent the nation’s 20,000 new-car and -truck dealers starting in January. “It may be a tough time for business, but it’s a great time for consumers who have a stable job and solid credit scores. There are plenty of incentives that lower costs. Dealers can help find financing. And the quality of today’s vehicles is the best ever,” McEleney added.

McEleney, owner of McEleney Autocenter, Inc., in Clinton, Iowa, and McEleney Autoplex, Inc., in Iowa City, has been part of NADA’s leadership for the past five years. He currently serves as the association’s vice chairman. “Most people have heard the expression, ‘All politics is local.’ The same is true of credit. All credit is local,” McEleney said. “The fact is local dealers have access to multiple sources of financing, including many community banks and credit unions that have plenty of money to lend.”

Auto sales account for $690 billion of U.S. retail sales, which is about 20 percent of all retail sales in the country. The NADA board of directors also elected Edward C. Tonkin as 2009 vice chairman. Tonkin is vice president of Ron Tonkin Dealerships in Portland, Ore.
Source:  NADA Newswire

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GM to Promote Dealer Financing Options

Move comes in response to new GMAC lending restrictions
General Motors, in the wake of lending restrictions by its partially owned finance unit, will begin an advertising campaign reminding consumers that they can still finance vehicles through GM dealerships. News of the advertising message follows GMAC Financial Services's stringent new restriction on credit, announced Monday. GMAC said it would only finance retail customers with credit scores of 700 and above. GM needs to emphasize that dealers have financing options besides GMAC, say dealers who listened in on the call. "GM would put in its ads that dealers have financing available so customers don't have the impression that they have nowhere to go," said Mike Bowsher, president of the Carl Black Automotive Group in suburban Atlanta.
Source:  Automotive News (Subscription required.)

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Finance Companies Want US to Buy Bad Auto Loans

WASHINGTON -- Finance companies are preparing to seek authority from the U.S. Treasury Department to sell bad auto loans to the government as part of Washington's sweeping plan to restimulate credit markets and boost the flagging economy. "The onus is now on us to make the case for our companies to be able to sell non-mortgage related assets to the government," Bill Himpler, executive vice president of the American Financial Services Association, said late on Tuesday. "We're in the process of putting together our case ... that auto paper is key to financial market stability," Himpler said. He said the association would try to "cast as wide a net as possible" to ensure that companies holding loans that consumers failed to pay back would be eligible to improve their books and extend credit to new borrowers.
Source:  Reuters

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General Motors Says Bankruptcy Not an Option

DUBAI -- General Motors said on Tuesday bankruptcy for the firm is not an option and called for coordinated federal action to assist the ailing U.S. automobile industry. "It would not benefit our customers, our dealers or our employees," [said Maureen Kempston Darkes, Group Vice President and President, GM Motors Latin America, Africa and Middle East.] "There is a strong need for coordinated federal action," she said.
Source:  Reuters

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Ford Executive Rejects Talk of Mazda Stake Sale

DEARBORN, Mich. -- The head of Ford Motor Co.'s U.S. operations said news reports about the auto maker selling its controlling stake in Japan's Mazda Motor Co. are speculative. The possible sale was approved by Ford's board as part of an effort to bolster its finances amid a downturn in global auto sales and investor questions about the U.S. auto maker's cash reserves, according to two people familiar with the matter. Mr. Fields, who is president of Ford's Americas operations, said Monday that Ford and Mazda have worked closely over the decades on the basic architecture of vehicles that each company sells under different model names. Nonetheless, each company would be able to function without the other because their design and manufacturing operations remain wholly independent, he said.
Source:  The Wall Street Journal (Subscription required.)

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Mazda: Dealers Will Get Floorplans

This week, Mazda switches from Ford Motor Credit Co. to Chase Auto Finance as the automaker's chief source of U.S. retail financing. Ford Credit will continue to floorplan Mazda dealers who also sell Ford Motor Co. brands, said Ford Credit spokeswoman Brenda Hines. But Ford Credit is canceling floorplan accounts for 92 dealers who do not sell Ford, Lincoln, Mercury or Volvo vehicles. Chase Auto Finance will decide whether to finance those dealers' inventories "on a case-by-case basis," said Chase spokeswoman Mary Kay Bean. Eric Johnston, Mazda's vice president of sales and field operations, predicted that Chase or other automakers' captive finance companies will floorplan the great majority of those accounts. "Less than 10 percent of those 92 dealers will have an issue" in lining up inventory financing, he said. "We will make it easy for them to go to Chase," Johnston told Automotive News. "Chase is the most stable auto lender. They are dealing from a position of strength and confidence with our dealers."
Source:  Automotive News (Subscription required.)

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Automakers Pump Up Deals on Smaller Cars

Recently hot vehicles sport low-rate financing, rebates and special leasing offers
They're this year's hot vehicles. But as the effects of the financial crisis deepen, even small and midsize cars are seeing declining sales... "Consumers are just not in the mood to buy anything," says John Casesa, managing partner at Casesa Shapiro Group LLC, a New York consulting firm that owns some dealerships. "It's that simple." He says that dealers will be "anxious" about having too much stock during typically slow winter months. "There's going to be motivation to deal on anything except the absolute hottest models."
Source:  The Wall Street Journal (Subscription required.)

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Credit Crisis Stalls Oct. Car Sales

Forecasters say monthly selling levels may hit 20-year low
Deepening concerns about the economy and tight credit dried up demand for cars and trucks in early October, leading some forecasters to predict a drop in the monthly selling pace to the lowest level in more than 20 years. Several analysts said the government's move to inject $250 billion into banks to pump more credit into the system would benefit the economy. But they said it would take time to restore the confidence of consumers alarmed by plunging financial markets and mounting job losses. Auto executives said it was too early to make predictions, noting that most sales occur in the last 10 days of the month. But most executives agreed that demand remains weak and is unlikely to rebound soon. But as the economy has weakened, oil and gas prices have retreated from more than $4 a gallon to around $3.20, on average, said Paul Taylor, chief economist at the National Automotive Dealers Association. "That's the bright spot in the month."
Source:  The Detroit News

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Opinion: Industry Slump May Benefit The Auto Makers That Survive
by Joe White

Car makers often do best work with their backs against the wall
Whatever doesn't kill the auto industry just could make it stronger. In September, the pace of U.S. car and light truck sales came in at a 12.5 million vehicle per year pace, adjusted using a government statistical formula. If it turns out that the levels of vehicle sales in the U.S. and elsewhere during the past nine years represented a bubble, car makers are in trouble -- and not just the ones in Detroit. Where's the good news in this? Car makers often do their best work when their backs are against the wall. Environmentalists might not like to think so, but the sport-utility vehicle was, in many ways, an innovation born of the industry's desperation for new and profitable ideas during the early 1990s. Now, all the major car makers are reassessing the risks and rewards of technology and designs aimed at fuel efficiency and clean operation. The ones that get to market first with genuine innovations (affordable hybrids, high-mileage family haulers, highly profitable small cars made in America) will find a faster way out of the wreckage. None of this will be easy. The hardest challenge of all may be simply making it through 2009.
Source:  The Wall Street Journal (Subscription required.)

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NADA Update
Coming Up: Another Virtual Seminar on the Red Flags Rule

Due to the unprecedented demand—so far, more than 1,100 individuals and dealer groups have logged on to NADA’s Red Flags seminars—we are offering another virtual seminar on what you need to do by Nov. 1, 2008 to comply with the new FTC Red Flags Rule. The seminar will be repeated on Monday, Oct. 20 from 1-3 p.m. EST.

Like past sessions, the seminar will be presented live and online, and invite participation by attendees. Participants are encouraged to ask questions, which will be answered by presenters, Bert Rasmussen, author of NADA’s A Dealer Guide to the FTC Red Flags and Address Discrepancy Rules: Protecting Against Identity Theft, and Paul Metrey, NADA director of regulatory affairs. The seminar will address what you need to do by Nov. 1, 2008 to comply with the Red Flags Rule, such as:

  • Preliminary risk assessment
  • Construction of a written Identity Theft Prevention program
  • Knowing the indicators of identity theft (Red Flags) and how to detect and respond to them
  • Training requirements
  • Service provider oversight
  • Involvement of dealership’s board of directors

Dealers, general managers, CFOs, controllers, finance managers, sales managers, IT managers and outside compliance professionals are encouraged to attend. The fee is $199 per computer connection. Be sure to have your copy of A Dealer Guide to the FTC Red Flags and Address Discrepancy Rules: Protecting Against Identity Theft at hand during the seminar. To register online, go to www.nada.org/seminars, or call (800) 248-6232, Ext. 7273. To order A Dealer Guide to the FTC Red Flags and Address Discrepancy Rules: Protecting Against Identity Theft, go to www.nada.org/RedFlags.

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Player Slots for Pre-Convention Charity Golf Tournament Filling Up

Registrations for the "Dealers for Charity" golf tournament in New Orleans are starting to roll in, reports Lin Peacock, vice president of NADA Insurance. The tournament, hosted by NADA’s hole-in-one insurance partner, ACECO, is slated for Friday, Jan. 23, 2009 before the opening of the NADA Convention and Exposition. Proceeds from the event will benefit the Brees Dream Foundation, a charitable organization founded by New Orleans Saints quarterback Drew Brees. The tournament will be held at TPC Louisiana, the only PGA Tour course in the state. The event is open exclusively to NADA members. Registration fees are $300 per player. Participation is limited to the first 144 golfers who sign up. The registration deadline is Nov. 9. Visit www.ACECOinsurance.com and click on the "Dealers for Charity" logo to sign up.

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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
 

Registration for the NADA convention in New Orleans Jan. 24-27 is open. Click here to see just how much progress New Orleans has made since Katrina.


More Video Highlights

Quotable
 
"It’s important for consumers to know that credit is available. It may be a tough time for business, but it's a great time for consumers who have a stable job and solid credit scores. There are plenty of incentives that lower costs. Dealers can help find financing. And the quality of today’s vehicles is the best ever."

   
-- John McEleney, incoming NADA chairman, NADA Newswire, Oct. 15


"GM would put in its ads that dealers have financing available so customers don't have the impression that they have nowhere to go."

    -- Mike Bowsher, president of the Carl Black Automotive Group in suburban Atlanta, describing the automaker's new advertising strategy, Automotive News, Oct. 14 


"The ones that get to market first with genuine innovations (affordable hybrids, high-mileage family haulers, highly profitable small cars made in America) will find a faster way out of the wreckage."

   
-- Columnist Joe White explaining why the industry slump may benefit the automakers that survive, The Wall Street Journal, Oct. 13


... as the economy has weakened, oil and gas prices have retreated from more than $4 a gallon to around $3.20, on average. "That's the bright spot in the month."

    -- NADA Chief Economist Paul Taylor, The Detroit News, Oct. 15
NADA Convention 2009
 
  
Convention Workshops Keyed to Today’s Economy

Now more than ever, dealers need to meet, talk and learn how to survive and thrive in tough times. In that spirit, workshops planned for NADA’s upcoming convention in New Orleans will focus on recession-proof business operations. NADA Headlines will spotlight three convention workshops each week.

(1) Selling Up in a Down Economy
(2) Survive or Thrive in the Used-Car Superstore Era
(3) Exposing the Myths of Automotive Internet Sales

Selling Up will feature Mark Walsh, veteran car salesman and manager, who will present a recession-busting blueprint to jump-start sales and revenues.

Survive speaker Dale Pollak, chairman of vAuto, Inc., will reveal how to use superstore techniques to realize your profit potential.

The Internet Sales Myths workshop will feature Howard Polirer of AutoTrader.com and Joe Lescota of Northwood University. They will show you how to turn online vehicle shoppers into buyers.

Join us in New Orleans at the 2009 NADA Convention and Exposition Jan. 24-27. Click here to register.

Video Highlights
 


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.


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


Click here for more NADA-TV reports.

 
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NADA For more information on NADA, visit www.nada.org or contact NADA, 8400 Westpark Drive, McLean, VA 22102. This email may contain an advertisement of NADA products and services. Any opinions or statements contained herein do not necessarily reflect the views of NADA. Factual errors are the responsibility of the listed publication. If you are a franchised new-car or -truck dealer and would like to become a member of NADA, please visit the Join NADA section of www.nada.org. Questions or comments concerning NADA Headlines content may be directed to media@nada.org.