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At a Glance...
Top Stories
For Car Dealers, Tight Credit is Fueling a 'Catastrophe'
California Dealers Say GMAC Rules Cut 40% of Customers
Honda: We're Still Lending
GM Dealers Told Profits Could Decline 18%
Banks Join GM-Chrysler Talks
Levin: Fed Could Aid a Merger
Chrysler Weighs Renault-Nissan Alliance
NADA Update
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
HP Offers NADA Members Small Business 'Smart Deals'
Top Stories
For Car Dealers, Tight Credit is Fueling a 'Catastrophe'

...it's hard not to have sympathy for car dealers these days. These business owners are manning the bucket brigades in an auto industry meltdown. "Most car dealers were down over 30% last month, and that is a catastrophe," [Ray Ciccolo, owner and CEO of Village Automotive Group in suburban Boston.] In September alone, 61 dealers — two a day — closed shop or downsized to used car lots, says the National Automobile Dealers Association (NADA). The plight of car dealers is being watched closely by economic analysts because vehicle sales are a key indicator of the economy's health. The auto industry overall supports one in 10 U.S. jobs, according to the Alliance of Automobile Manufacturers. Dealers alone employ more than 1.1 million and generate nearly 20% of retail sales in most states. "We've not had trouble getting customers financed, but terms have been restrictive, down payment requirements higher," says dealer John McEleney of Clinton, Iowa, [NADA's chairman-elect.] Even creditworthy buyers are being hit with higher interest rates, "And in some cases, that makes the payment go up enough that the customer just can't do it," he says.
Source:  USA TODAY

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California Dealers Say GMAC Rules Cut 40% of Customers

WASHINGTON -- The head of the California Auto Dealer Association warned that as many as 40 percent of California consumers wouldn't qualify for an auto loan under new stricter guidelines announced by GMAC last week and that many General Motors Corp. dealers could be forced into bankruptcy. In a letter late Monday to GMAC CEO Alvaro G. de Molina, the California auto dealers president and CEO Peter Welch warned that GMAC's curtailment of financing for dealers stock -- called floorplan financing -- would put dealers out of business. "Unless immediately stopped, GMAC's actions will directly lead to insolvency of a number of our GM dealer members and will significantly erode GM's California market share," Welch wrote in the letter that also went to Treasury Secretary Henry Paulson and a top Cerberus Capital Management LP official, William Richter. "At a time of their greatest need, our GM dealers feel completely abandoned by GMAC's rogue actions," according to the letter.
Source:  The Detroit News

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Honda: We're Still Lending

LOS ANGELES — Credit is tight these days, but Honda dealers say the company's finance arm is still making consumer loans aggressively. Honda Financial Services also is offering special rates. "Honda is financing just like they always have," says John Hawkins, president of Great Metro Autogroup. "The one caveat is they verify everything."
Source:  Automotive News (Subscription required.)

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GM Dealers Told Profits Could Decline 18%

General Motors Corp. annual dealer profits could fall by 18% this year, executives told dealers during a meeting in Detroit last week. "It certainly doesn't surprise me," said Russ Shelton, owner of Shelton Pontiac, Buick, GMC Inc. in Rochester Hills. GM spokeswoman Susan Garontakos said the regional dealer meeting was the last of nine that the automaker has held across the country to share product plans, marketing ideas and information about what GM is doing to respond to the current economic environment.
Source:  Detroit Free Press

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Banks Join GM-Chrysler Talks

Deal still not close; analysts say bank role could be crucial, given restructuring costs
WASHINGTON -- Talks about a possible deal between General Motors Corp. and Chrysler LLC continued Monday... The talks -- resuming from discussions held in New York during the weekend -- included a group of banks led by JPMorgan Chase, which holds about $10 billion in Chrysler debt after the banks failed to sell it to other investors last year. "While a GM-Chrysler tie-up would clearly be a high risk transaction from an operational perspective, such a transaction may give GM leverage over two key stakeholders: the UAW and banks," JP Morgan auto analyst Himanshu Patel wrote in a research note Monday. "By saving Chrysler from a liquidity event, GM may also be able to get itself much needed secured bank financing from the same banks that are currently holding Chrysler debt." Both Cerberus Capital Management LP, which owns the Auburn Hills automaker, and GM would like to conclude talks by Nov. 4. Among the hurdles to any deal is whether Congress would agree to provide financing to help a merger.
Source:  The Detroit News

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Levin: Fed Could Aid a Merger

Senator says that if a Chrysler pairing with another carmaker needs help, it should be offered
DETROIT -- Sen. Carl Levin on Monday suggested that the federal government may have a role in helping Chrysler complete a merger. "If they need support to make some kind of a merger between Chrysler and another auto company happen, we clearly ought to do that," Levin said during a debate with state Rep. Jack Hoogendyk, his opponent in Michigan's U.S. Senate race. "No other country in the world would stand by and watch major corporations go under this way without trying to do something about it."
Source:  The Detroit News

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Chrysler Weighs Renault-Nissan Alliance

Chrysler LLC may join an existing manufacturing and development alliance between Japan's Nissan Motor Co. and France's Renault SA, according to people familiar with the matter. But a sale of the Auburn Hills, Mich., company to General Motors Corp. is still its preferred path, according to these people. Carlos Ghosn, who serves as chief executive officer of Nissan and Renault, has long expressed interest in adding a North American partner to the alliance. In an interview earlier this month, he reiterated that "it would be logical" to add a third partner but said his companies are not interested in mergers or acquisitions. "We are not looking to save anyone," he said.
Source:  The Wall Street Journal (Subscription required.)

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NADA Update
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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HP Offers NADA Members Small Business 'Smart Deals'

NADA members can save up to 30 percent on HP's dc5750 desktop PCs or $791 on HP's Compaq 2710p. This offer is valid on call-in orders only. To take advantage of this offer, call (800) 888-0365 and mention passcode "NAD1." To see more "Smart Deals," visit NADA's PC Purchase Program online at www.nada.org/Technology/PCpurchaseprogram (member login required), then click on www.hp.com/go/promos/nad1 then "Smart Deals" on left navigation bar.

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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
 
"We've not had trouble getting customers financed, but terms have been restrictive, down payment requirements higher. Even creditworthy buyers are being hit with higher interest rates. And in some cases, that makes the payment go up enough that the customer just can't do it."

    -- Dealer and NADA's Chairman-elect John McEleney of Clinton, Iowa explaining how the auto industry meltdown is affecting him and other dealers nationwide, USA TODAY, Oct. 21


"Unless immediately stopped, GMAC's actions will directly lead to insolvency of a number of our GM dealer members and will significantly erode GM's California market share. At a time of their greatest need, our GM dealers feel completely abandoned by GMAC's rogue actions."

    -- Peter Welch, president and CEO of the California Auto Dealers Association, in a letter to GMAC CEO Alvaro G. de Molina, Treasury Secretary Henry Paulson and Cerberus Capital Management LP official, William Richter, warning of the effect of GMAC's tightened lending rules on the state's auto dealers, The Detroit News, Oct. 21


"Honda is financing just like they always have." 

    -- John Hawkins, president of Great Metro Autogroup, located in suburban Los Angeles, Automotive News, Oct. 20


"We are not looking to save anyone."

   
-- Carlos Ghosn, chief executive officer of Nissan and Renault, in a discussion about a possible alliance with Chrysler, The Wall Street Journal, Oct. 21
NADA Convention 2009
 
  
Convention Workshops Keyed to Today’s Economy

Now more than ever, dealers need to meet, talk and learn how to survive 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) Single-Point Dealerships can Survive and Thrive in Today’s Market 
(2) Five Sure-fire Techniques to Increase Special Finance Volume and Profit
(3) Improving Attitudes, Efficiency and Communication in the Dealership

Survive and Thrive speakers Chip Maher and Steve Risso, both of NADA 20 Group, will demonstrate how to substantially improve performance in a shrinking market economy. Learn how to adapt and thrive through rightsizing and performance tracking.

Special Finance will feature Mike Tamas of American Financial and Automotive, who will explain how to turn a prospect into a satisfied customer while increasing gross profit.

Improving Attitudes will feature Art Niemann, Sr., of Art Niemann and Company. He will outline specific ways to implement four “absolutes” for achieving sales success: integrity, positive outlook, meaningful relationships and open communication.

Join us in New Orleans at the 2009 NADA Convention & 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.