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At a Glance...
Top Stories
U.S. Auto Sales Plunged in October
Car Dealerships Reeling from Economic Downturn
Credit? Come and Get it, Industry Groups Say
Urgent Auto Aid Pleas to Resume
Congress Weighs More Aid for Big 3
Auto Parts Industry Seeks U.S. Loans
Ford Credit Seeks to Tap $700 Billion Package
Chrysler CEO Says 'Rumors' Distracting to Business
Honda Cuts U.S. Sales Goal, Predicts Full-Year Drop
nada update
NADA Insurance Offers New Plan to Protect Dealerships from Identity Theft Liability
Red Flags Enforcement Delayed Six Months
Player Slots for Pre-Convention Charity Golf Tournament Filling Up
STAR Answers Dealers' Questions About Content Filtering Systems
NADA Members Can Save on Lenovo's ThinkPad Notebooks
Top Stories
U.S. Auto Sales Plunged in October

The dismal U.S. auto market took a turn for the worse in October, with sales plunging by about a third as the financial crisis and tightening credit kept buyers away from showrooms. Auto makers sold 838,186 cars and light trucks last month, according to a tally by Autodata Corp. General Motors Corp. said it was the worst October in 25 years. When adjusted for increases in the U.S. population, last month was "the worst month in the post-World War II era," Michael DiGiovanni, GM's top sales analyst, said in a conference call. "This is clearly a severe, severe recession." A closely watched industry figure, the seasonally adjusted annualized selling rate, was 10.6 million vehicles, compared with 16 million a year earlier, according to Autodata. Slumping auto sales are among the factors that have prompted GM to contemplate a merger with Chrysler LLC and spurred calls for federal help for the industry. The National Auto Dealers Association last week urged President George W. Bush to offer tax credits to boost new-car purchases. The auto makers said Monday they need a policy response to help promote sales.
Source:  The Wall Street Journal (Subscription required.)

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Car Dealerships Reeling from Economic Downturn

More closing as credit crisis puts new autos out of reach for many
One in 30 new-car dealerships will be out of business by the end of the year, with 1,000 more expected to fail in 2009. The disturbing trend shows the domino effect the nation’s credit crunch is having on a wide range of industries. The auto industry, once one of the most vibrant in American commerce, is now among the most vulnerable. Most of the nation’s 21,000 new-car dealers haven’t had a profitable year since 2006. Now, the industry is bracing for what experts say will be a slow and painful recovery. Like their customers, auto dealers and lenders also are making adjustments. Lenders are requiring auto buyers to make larger down payments, offering shorter loans and demanding higher credit scores... Many dealers are cutting staff and using other strategies to cut costs or boost revenues. One such strategy has dealers focusing more on the service side of the business, which can generate 40 percent of a dealer’s gross profit, said [Rex Henderson, an analyst with Raymond James and Associates.] “... parts and service business is something they can use to stabilize” the dealership, he said.
Source:  The Atlanta Journal Constitution

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Credit? Come and Get it, Industry Groups Say

Following the three best-selling automakers in the United States, industry groups aim to assure wary consumers they can get financed despite the credit crunch. Credit is available, say groups as varied as the used-vehicle retailer CarMax Inc. and trade associations that represent new-vehicle dealers and auto lenders. General Motors, Toyota Motor Sales U.S.A. Inc. and Ford Motor Co. are running similar advertising campaigns. "There's been negative press regarding the financing situation on new vehicles," says Chevrolet dealer John Phelan, chairman of the Chicago Automobile Trade Association, which represents more than 500 franchised dealers in metropolitan Chicago. "We had to counteract that." The dealer group is broadcasting TV and radio commercials that tell new-vehicle customers that they can get competitive rates for loans and leases. "People are in gridlock," [says Chicago dealer group spokesman Paul Brian.] "They don't know what to do. We have to reassure them."
Source:  Automotive News (Subscription required.)

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Urgent Auto Aid Pleas to Resume

Automakers' efforts to get federal assistance to weather the current financial turmoil plaguing the industry are expected to resume their urgent pace after today's elections, the Free Press was told Monday. General Motors, which is pursuing a merger with Chrysler, is still seeking federal assistance for help in general to sustain it through this economic downturn. No such aid is likely before GM and Ford Motor publicly disclose their third-quarter losses and cash flow, said a person familiar with the situation. GM announced late Monday that it will report its third-quarter earnings on Friday, the same day as Ford. Detroit automakers are now working to get money through the U.S. Energy Department's $25 billion low-interest program quicker than previously expected to get the industry through the recession.
Source:  Detroit Free Press

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Congress Weighs More Aid for Big 3

WASHINGTON -- House Speaker Nancy Pelosi met with key House Democrats on Monday to consider a variety of ways to aid the struggling U.S. auto industry. The hourlong meeting focused on whether Congress should move to quickly approve up to $25 billion in "bridge financing" to aid automakers through a mounting fiscal crisis. The money would be in addition to the $25 billion auto loan program funded by Congress in September to help retool factories to build more efficient vehicles. Another option discussed was to route the money through the Federal Reserve's discount window, which makes low-cost loans, typically to banks, or other Federal Reserve programs. "The industry is in serious trouble and we need to get them the cash as soon as possible," [Rep. Dale Kildee (D-Flint, Mich.), who is chairman of the House Auto Caucus] said in an interview.
Source:  The Detroit News

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Auto Parts Industry Seeks U.S. Loans

WASHINGTON -- The U.S. auto parts industry asked the Bush administration Monday to set up a loan-guarantee plan for auto suppliers as part of the $700-billion financial bailout plan, as well as to speed $25 billion in loans for retooling. The request from the Motor & Equipment Manufacturers Association means that the entirety of the U.S. auto industry -- automakers, suppliers and dealers -- has now asked for government help to survive the economic downturn. MEMA, along with Detroit automakers, has been pressing the U.S. Department of Energy to move quickly on loaning $25 billion to the industry approved by Congress in late September. The association also asked the Treasury Department to set up a loan guarantee program, saying a lack of capital and access to commercial credit had driven layoffs in recent weeks.
Source:  Detroit Free Press

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Ford Credit Seeks to Tap $700 Billion Package

DETROIT — Ford Motor Co. wants to share in the $700 billion bailout package approved by Congress last month. CEO Alan Mulally acknowledged that Ford is talking to officials in Washington about whether Ford Motor Credit Co. could be eligible for assistance under the legislation. "I think that would be a really positive thing," Mulally told Automotive News. "I think it would help the economy and help Ford. Yeah, absolutely." One roadblock: Only banks qualify outright for assistance, and Ford Credit is not a bank. So Ford is looking into whether an industrial bank charter would give the company more standing, Mulally said.
Source:  Automotive News (Subscription required.)

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Chrysler CEO Says 'Rumors' Distracting to Business

Chrysler LLC employees were warned to brace for the worst today with the release of U.S. sales figures that will show a 31 percent drop in October on the heels of a terrible September, chairman Robert Nardelli said in a letter to employees. But the CEO had little solace for those fearing massive job losses from a potential tie-up with General Motors Corp. "In addition to the current economic conditions and competitive pressures, we at Chrysler also face the additional distraction of rumors concerning the future of our company," Nardelli said, adding he understands "the anxiety that such speculation can cause."
Source:  The Detroit News

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Honda Cuts U.S. Sales Goal, Predicts Full-Year Drop

Honda Motor Co., Japan's second-largest automaker, cut its 2008 U.S. sales forecast by 4.1 percent because of the faltering economy, predicting the first decline in the country in 15 years. The company expects to sell 1.51 million vehicles for the 12 months ending Dec. 31, compared with its earlier estimate of 1.575 million vehicles, Chief Financial Officer Yoichi Hojo said in an interview in Tokyo... The sales decline will be 2.6 percent from 1.55 million vehicles in 2007.
Source:  Bloomberg

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nada update
NADA Insurance Offers New Plan to Protect Dealerships from Identity Theft Liability

NADA Insurance is offering a new Identity Theft Insurance Plan to NADA members. The plan will provide dealers and its employees with the financial resources needed in case they are implicated in an identity theft incident. The wide use of data processing, electronic loan origination, e-signature and Web-based transactions has dramatically increased the incidence of identity theft. Since 2005, more than 88 million Americans have been victims of identity theft. “Identity theft is one of the fastest growing crimes in America,” says Lin Peacock, vice president of NADA Insurance. The insurance plan covers the following identity theft expenses:

• Legal Liability
• Regulatory Action Expenses
• Notification Costs
• Identity Theft Recovery Services
• Defense Costs
• Crisis Expenses

“An identity theft case could cost your dealership hundreds of thousands of dollars and negatively impact your dealership’s reputation,” Peacock added. The new plan also protects dealers and employees individually in case a customer files a civil suit against specific employees. The plan’s coverage ranges from $100,000 to $5 million. For more information or to apply for coverage, contact NADA Insurance at (888) 302-4342 or go to www.nadainsurance.com.

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Red Flags Enforcement Delayed Six Months

The FTC has announced a six-month “delay of enforcement” of the Red Flags rule. Dealers and other creditors now have until May 1, 2009 to develop and implement a written identity theft prevention program (“ITPP”). This does not affect the address discrepancy rule, which continues to have an effective date of Nov. 1, 2008.

Dealers who have already drafted and implemented their ITPP are not required to do anything. NADA encourages those dealers who have not yet finalized their ITPP to complete their work as soon as possible in advance of the new deadline. 

All NADA members received a copy of A Dealer Guide to the Red Flags and Address Discrepancy Rules: Protecting Against Identity Theft (http://eseries.nada.org/scriptcontent/ProductDetail.cfm?pc=MEDPRL50E) in August 2008. For more information, see http://ftc.gov/opa/2008/10/redflags.shtm and http://ftc.gov/os/2008/10/081022idtheftredflagsrule.pdf.

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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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STAR Answers Dealers' Questions About Content Filtering Systems

Standards for Technology in Automotive Retail (STAR) has developed new guidelines to help dealers evaluate their Dealership Security. Visit STAR's Dealer Infrastructure Guidelines (DIG) publication for more information. To learn if you should choose a hardware or software content filtering system click here.

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NADA Members Can Save on Lenovo's ThinkPad Notebooks

Lenovo's ThinkPad SL notebook built for small businesses with legendary ThinkPad reliability, plus advanced wireless and multimedia features, starts at only $450 with eCoupon USXTHANKSGIVING for a limited time. To take advantage of these savings, visit NADA's PC Purchase Program online (member log-in required), click www.lenovo.com/shop/deals/nada, then click Special Offers, or call (800) 426-7235, Option 1, Ext. 4838. Enter eCoupon USXTHANKSGIVING 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
 
When adjusted for increases in the U.S. population, last month was "the worst month in the post-World War II era. This is clearly a severe, severe recession."

   
-- Michael DiGiovanni, GM's top sales analyst, summing up October's industrywide sales decline, The Wall Street Journal, Nov. 4


"People are in gridlock. They don't know what to do. We have to reassure them."

    -- Chicago Automobile Trade Association spokesman Paul Brian referring to the availability of credit through dealerships, Automotive News, Nov. 3


"The industry is in serious trouble and we need to get them the cash as soon as possible."

    -- Rep. Dale Kildee (D-Flint, Mich.), chairman of the House Auto Caucus, referring to efforts by House Democrats on Monday to consider ways to aid the struggling U.S. auto industry, The Detroit News, Nov. 4

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) Grass Roots Marketing: Building a Valuable Connection between your Dealership and your Community

(2) Increase Traffic and Sales for Every Department with a Video Marketing Strategy

(3) The Lost Art of the Business Manager…A Credit Score is Not F&I

Grass Roots speakers Scott Toland of The Marketing Academy and Denise Scattergood of Sale-in-a-Box will teach participants how to build valuable connections between their dealerships and communities through grass roots marketing. Attendees will learn how to engage customers where they live and work to increase traffic, word-of-mouth sales networking and earning free positive publicity.

Video Marketing will feature Sean Bradley of Dealer Synergy, who will explain how dealers can implement targeted, cost-effective video marketing strategies online. Participants will learn how to create videos and use popular search engines to raise the visibility of their dealerships and drive more traffic to their Web sites and showrooms.

Credit Score, presented by Tony Dupaquier of American Financial & Automotive, will examine all of the elements that a lender considers when deciding on a deal. Attendees will learn how they can approve more car shoppers for financing by taking a closer look at the credit application and asking the right questions.

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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