For optimal viewing through your web browser or PDA, click here.

NADA.org
Thursday, Jan. 29, 2009 RSSSEND TO A FRIENDPRINT
Home | AdvocacyAffiliates | Convention | Jobs | Programs | Publications | Training | Services
At a Glance...
Top Stories
More Consumers Ready to Buy Cars, Data Show
Auto Dealers See Uptick at Lots Since Bailout
Ford Loses $5.9B in 4Q, Says Still Won't Seek Aid
GM Ends Job Bank; Chrysler Warns Suppliers
Struggling Auto Parts Suppliers Prepare to Seek Federal Aid
Ford Hybrid Owners to Get Tax Credit
Toyota Recalls Yaris Cars Over Safety Issue
NADA Update
NADA Study Finds Double Regulating Fuel Economy by States Harmful to Struggling Auto Industry
NADA, SBA and NAMAD Launch Campaign on Dealer Eligibility for SBA Guaranteed Loans
Understanding TALF
Top Stories
More Consumers Ready to Buy Cars, Data Show

Conference Board survey: 5.3% will act in next 6 months
The percentage of consumers who intend to purchase vehicles in the next six months has risen since November, despite back-to-back months of record lows in consumer confidence. In the Conference Board’s monthly consumer confidence survey, 5.3 percent of respondents said they planned to buy a vehicle in the next six months, the market information group said yesterday. That’s the highest percentage since April’s 5.8 percent. Auto purchase intent in November fell to 3.8 percent, the lowest point in the board’s 42-year survey history. The recovery could stem from pent-up demand, as the U.S. auto sales rate hit bottom in November at well below the scrappage rate, said Matt Nemer, an analyst with Thomas Weisel Partners.
Source:  Automotive News (Subscription required.)

[back to top]

Auto Dealers See Uptick at Lots Since Bailout

NASHUA, N.H. – Local auto dealers are seeing slight improvements in showroom traffic and some loosening in credit restrictions since the recent U.S. Treasury bailout of the big three automakers. While the state is faring slightly better than the rest of the country, the Treasury's move was welcome relief, said Peter McNamara, president of the Auto Dealers Association of New Hampshire. "Anecdotally, dealers are saying since the Fed loans, they are seeing more floor traffic," McNamara said. "We won't see actual numbers until the end of January. But I think what's happened is that the loans gave consumers the confidence to go out and buy." "We have seen more customers," said Cheikh Dieng, finance manager for Allen Mello Dodge in Nashua. "They are still a bit cautious and they still come in asking whether warranties will be honored if Chrysler goes out of business and things like that. I think people are feeling more comfortable that the government will honor warranties and that the government is doing something . . . We're also seeing people buy cars that are within their means. People are being more realistic about what they can afford."
Source:  Nashua Telegraph

[back to top]

Ford Loses $5.9B in 4Q, Says Still Won't Seek Aid

DEARBORN, Mich. – Ford Motor Co. said Thursday it lost $5.9 billion in the fourth quarter as auto sales slumped, but it has no plans to seek federal aid unless economic conditions worsen. The second-largest U.S. automaker said it burned through $5.5 billion in the quarter, less than the $7.7 billion it used in the third quarter. Revenue fell to $29.2 billion from $45.5 billion in the fourth quarter of 2007. Dearborn-based Ford also announced that its credit arm would cut 20 percent of its work force, or 1,200 jobs, and it has reached agreement with the United Auto Workers union to end the "jobs bank" in which laid-off workers get most of their pay, although the effective date is still being negotiated. Company spokesman Mark Truby said Ford's position on seeking federal loans is unchanged. The company has asked for a $9 billion line of credit from the government but has said it has enough cash to make it through 2009 and doesn't intend to use government loans unless conditions worsen. "We don't plan to or foresee using it," Truby said Thursday.
Source:  Associated Press

[back to top]

GM Ends Job Bank; Chrysler Warns Suppliers

DETROIT -- General Motors Corp. and Chrysler LLC moved to reduce costs as required by the terms of the federal bailout loans they were granted earlier this month to keep both auto makers from running out of cash. GM on Wednesday said it has reached an agreement with the United Auto Workers union to end the so-called jobs bank program, in which laid-off workers continued to get most of their pay. Separately, Chrysler issued a letter to at least some of its suppliers saying "all production suppliers" will have to cut their prices by April 1. The letter doesn't specify the size of the cuts Chrysler is seeking. Both companies are also required to negotiate with their banks and bondholders to reduce their debt, and must limit executive pay. They must present restructuring plans by Feb. 17 that show they can become "viable." On Wednesday, the Treasury released loan contracts showing that the two companies also must provide the government with detailed monthly financial reports through 2010 and submit annual reports from 2010 through 2014.
Source:  The Wall Street Journal (Subscription required.)

[back to top]

Struggling Auto Parts Suppliers Prepare to Seek Federal Aid

Bruised by plummeting car sales and production cuts, automotive parts suppliers are gearing up to lobby for federal aid in the coming weeks. Suppliers hope to present a request by March 1 to avert a string of bankruptcies in their sector, said [Ann Wilson, senior vice president of government affairs for the Motor & Equipment Manufacturers Association,] who yesterday met with more than a dozen chief executives and chief financial officers to discuss their options. The avenue most favored by suppliers is for the government to loan automakers additional funds so they can pay back the suppliers faster, said Neil de Koker, president of the Original Equipment Suppliers Association. Automakers and suppliers typically rely on a trade credit system, in which suppliers provide parts to the automakers under an agreement that they'll be paid later. Suppliers then put those billings, or receivables, up as collateral for working capital loans. When General Motors and Chrysler said last year that they were in danger of bankruptcy if they didn't receive government loans, many suppliers had trouble using those receivables as collateral with banks. And the situation hasn't improved.
Source:  Washington Post

[back to top]

Ford Hybrid Owners to Get Tax Credit

Consumers who order or purchase a new 2010 hybrid vehicle from Ford Motor Co. by the end of March are eligible for a tax credit, the company said today. Purchases or orders of new Ford Fusion and Mercury Milan hybrids made by March 31 will qualify for a $3,400 credit on their 2009 tax returns. The company unveiled its hybrid version of the Ford Fusion last November that can go up to 47 miles per hour on battery power alone. The Fusion gets 41 miles per gallon in the city and 36 mpg on the highway. The Ford Escape and Mercury Mariner hybrids are still eligible for a $3,000 tax credit. The credits vary due to the performance of the vehicle. Ford said its Fusion hybrid would be in showrooms by March 31, but did not offer pricing details. Consumers have shied away from the electric-gas combo cars as gas prices have fallen rapidly since last summer, as the cost savings deteriorated. “The whole idea is to encourage early adopters,” said Ford spokeswoman Jennifer Moore. New Ford hybrids purchased on or after April 1, 2010 will not be eligible for a tax credit.
Source:  Associated Press

[back to top]

Toyota Recalls Yaris Cars Over Safety Issue

NEW YORK -- Toyota Motor Corp. said Wednesday it will recall almost 1.3 million vehicles world-wide due to a defect that could cause a foam pad near the seat belt to ignite during collisions. The Japanese auto maker said the recall includes 134,900 model-year 2006 and 2007 Yaris subcompacts that were sold in the U.S. Toyota Motor Sales USA said it is working with the National Highway Traffic Safety Administration to recall the vehicles. Toyota Motor Sales USA will mail letters to consumers who own the affected cars next week... Toyota will pay the cost of the repair, which should take an hour at a Toyota dealer...
Source:  Associated Press

[back to top]

NADA Update
NADA Study Finds Double Regulating Fuel Economy by States Harmful to Struggling Auto Industry

Industry Needs Single National Standard, Not Patchwork of State Regulations
WASHINGTON — A comprehensive analysis released today by the National Automobile Dealers Association (NADA) on a California Air Resources Board’s (CARB) rule that would allow individual states to regulate  fuel economy standards finds numerous unintended consequences that will cause economic harm and provide little or no environmental benefit over the proposed federal standards. “With new national fuel economy standards expected to be finalized by the Obama administration by April 1, complying with the additional state standards would create a regulatory patchwork that would undermine the national fuel economy program at a time when the auto industry needs regulatory certainty and stability,” says David Regan, NADA vice president of legislative affairs. “Separate and apart from the stringency of standards set by the federal government or California, the establishment of 13 state-based fuel economy regimes would cause irreparable harm to an already struggling automobile industry.” Regan added that a major slump in auto sales forced 900 dealerships to close their doors in 2008 and put the domestic automakers in the difficult position of needing billions in bridge loans from the federal government to prevent bankruptcy.  GM and Chrysler have already received $17.4 billion in loans. Ford has yet to ask for assistance.  “It makes no sense for the federal government to aid the auto industry with one hand, and then burden it with a duplicative rule that regulates fuel economy completely differently than the federal government,” Regan continued. Click here for the report, "Patchwork Proven: Why A Single National Fuel Economy Standard Is Better for America Than A Patchwork of State Regulations."
Source:  NADA Newswire

[back to top]

NADA, SBA and NAMAD Launch Campaign on Dealer Eligibility for SBA Guaranteed Loans

NADA, the National Association of Minority Automobile Dealers (NAMAD), and the Small Business Administration (SBA) have developed a joint Motor Vehicle Dealer Loan Guaranty Campaign to inform small new-car and -truck dealers about their eligibility for SBA 7(a) guaranteed loans. Small dealers who’ve been affected by recent economic conditions may benefit from the program. The SBA guarantees loans made by local lenders for small business applicants who cannot obtain credit on a conventional basis. SBA staff will be available at NADA’s Federal Regulatory Outreach Pavilion at the NADA Convention to answer dealers’ questions about the program. Questions may also be directed to the NADA Hotline at (888) 672-5147 between 8:30 a.m. and 4:30 p.m. EST, Monday through Friday. When calling, mention that you are seeking assistance in applying for or obtaining a SBA-guaranteed loan. Click here for the campaign fact sheet.
Source:  NADA Newswire

[back to top]

Understanding TALF

A new Web page on nada.org explains in greater detail what the Federal Reserve Board's Term Asset-Backed Securities Loan Facility (TALF) program means to dealers and how they will benefit from the action taken on Dec. 19 to include securities backed by dealer floorplan loans as a qualifying asset class. The information is helpful in explaining this action to dealers and the media. Click here for "Understanding the TALF."
Source:  NADA Newswire

[back to top]

 
Featured Video
 
  
Click here to see why New Orleans is still America's premier convention city.



More Video Highlights

Quotable
 
"Anecdotally, dealers are saying since the Fed loans, they are seeing more floor traffic. We won't see actual numbers until the end of January. But I think what's happened is that the loans gave consumers the confidence to go out and buy."

    -- Peter McNamara, president of the Auto Dealers Association of New Hampshire, noting local dealers have seen an uptick on car lots since the bailout of the Big 3, Nashua Telegraph, Jan. 29


"We have seen more customers. They are still a bit cautious and they still come in asking whether warranties will be honored if Chrysler goes out of business and things like that. We're also seeing people buy cars that are within their means. People are being more realistic about what they can afford."

    -- Cheikh Dieng, finance manager for Allen Mello Dodge in Nashua, referring to an uptick on car lots since the bailout of the Big 3, Nashua Telegraph, Jan. 29

Video Highlights
 
 
'NBC Nightly News with Brian Williams' reports: "Demise of a local car dealership leaves a big dent."



NADA's New Orleans Project: Lusher Charter School
NADA's Return to New Orleans


Click here for more NADA-TV reports.

 
Search Back Issues | Unsubscribe | Subscribe | Manage your subscription | email us
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.