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Monday, Feb. 2, 2009 RSSSEND TO A FRIENDPRINT
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Top Stories
NADA Issues Legislative Call-to-Action in Support of Tax Incentives for Auto Purchases
Industry Battles State-by-State MPG
Opinion: Compromise Likely in Obama's Fuel Rule Push
In Hard Times, Carmakers Ease Demands on Dealers
Obama Aides Set to Tour Washington Auto Show
Chrysler Is Hobbled by Former Finance Arm
Fiat Deal May Risk Chrysler Loans
Before You Buy: How to Size Up Used Cars
Opinion: It Was a Remarkable Convention
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
NADA Issues Legislative Call-to-Action in Support of Tax Incentives for Auto Purchases

Mikulski bill would provide a needed boost to auto sales
NADA's Legislative Office is urging all dealers to call their senators and ask them to work with Sen. Barbara Mikulski (D-Md.) to include an auto sales tax incentive in the stimulus package. It's important for dealers to call their senators today because the Senate opens debate on a nearly $900 billion economic stimulus package. There are many competing provisions. NADA strongly supports a bill sponsored by Sen. Mikulski that would allow consumers to deduct their loan interest, as well as state and local sales taxes, on vehicles costing less than $49,500 and purchased before Dec. 31, 2009. Sen. Mikulski is working hard to gain support for her provision (S. 333), which would save car buyers about $1,500 on a $25,000 vehicle. The Senate is expected to debate the stimulus package this week. "It's important for the dealer voice to be heard," says David Regan, NADA vice president of legislative affairs. "Senators need to recognize the pressing need to jump start auto sales." Senators can be contacted through the Capitol Switchboard at (202) 224-3121. If you have any questions, contact NADA's Legislative Office at (800) 563-1556 or legislative@nada.org.
Source: NADA Newswire

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Industry Battles State-by-State MPG

Even new national rule on fuel economy could be tough
WASHINGTON — Automakers and their allies are gearing up for an intensive lobbying campaign to convince Washington that national standards for greenhouse gas emissions are better than state-by-state rules. But if national standards are adopted, they are likely to require much tougher fuel economy mandates than the Transportation Department's 35 mpg target. Last week, President Barack Obama told federal regulators to set corporate average fuel economy standards only for 2011 model cars and trucks and to rethink requirements for 2012-15. Obama also ordered the EPA to reconsider a proposed waiver for California to set its own limits on greenhouse gas emissions. California and at least 13 other states expect the waiver within months. If the California rules became national standards, they would require vehicles to average about 34 mpg by 2016 and 42 mpg by 2020. Federal standards call for fuel economy of at least 35 mpg by 2020. Dealers also worry that a state-by-state patchwork would create chaos in the marketplace, says David Regan, vice president of legislative affairs for the National Automobile Dealers Association. NADA argues that dealerships in states with tough rules — such as California — would lose sales as customers migrate to nearby stores in unregulated states. Moreover, smaller automakers would have a big advantage over large automakers.
Source: Automotive News (Subscription required)

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Opinion: Compromise Likely in Obama's Fuel Rule Push
by Mark Phelan

While most people see President Barack Obama's order telling the Environmental Protection Agency to reconsider its decision that banned California's tougher greenhouse-gas emissions as a victory for environmentalists, I think it's more likely to lead to a compromise that California and the automakers could live with. The California standard calls for automakers to reduce carbon dioxide emissions from the vehicles they sell in the state 30% by 2016. Lower CO2 emissions are directly proportional to reduced consumption of gasoline, so automakers calculate the rule effectively requires an average fuel economy of 26.7 m.p.g. for pickups and SUVs and 43.2 m.p.g. for cars. Challenging, you say, but fair. All the automakers will have to play by the same rules, after all. Except they don't. Only automakers that sell lots of vehicles -- 60,000 a year or more -- in California have to meet that toughest standard. Those that sell fewer -- luxury brands, fringe players and the new brands that will inevitably come from China and India -- get a pass. Automakers that sell fewer than 4,000 vehicles a year in California never have to hit 43.2 m.p.g. Those that sell fewer than 60,000 get years longer to meet that standard. That means gas guzzlers like the 10-m.p.g. Lamborghini Murcielago exotic sports car and 12-m.p.g. Bentley Continental GTC luxury sedan would remain available in Beverly Hills, but farmers in Barstow might spend years on the waiting list for a new Ford F-150, Dodge Ram or Toyota Tundra pickup."People will drive to the next state," says Rebecca Lindland, analyst with IHS Global Insight. "It will be great business for non-California car dealerships, and the vehicles there will cost less because there's more supply and they don't have all the expensive technology you need to meet the California standard."
Source: The Detroit Free Press

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In Hard Times, Carmakers Ease Demands on Dealers

NEW ORLEANS — As hard times settle in, many vehicle manufacturers are backing off costly demands that they usually place on dealers. Chrysler, for example, is again trimming the required size of stores. BMW is relaxing training requirements. Nissan is giving dealers more leeway on warranty reimbursement. A year ago at the National Automobile Dealers Association convention, General Motors pushed dealers to upgrade their stores. This year company executives quietly said it is no longer a priority. "Dealers don't know what tomorrow looks like," GM spokeswoman Susan Garontakos said. "The economy is too unstable. What matters when everything is OK is different from what matters when things are as devastating as they are now." Chrysler LLC for the second time in a year has reduced the size requirements for stores. The company is trimming requirements by 20 percent, reflecting Chrysler's lower sales, said Steven Landry, executive vice president of North America sales. Acura will not ask dealers for store additions because of the tough economy, but it is still asking for improvements where necessary. BMW of North America is relaxing demands on staffing and service training, CEO Jim O'Donnell said. Ford Motor Co. plans to eliminate a diesel fuel surcharge that it was adding to its invoices for parts deliveries to dealers.
Source: Automotive News (Subscription required)

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Obama Aides Set to Tour Washington Auto Show

Carmaker group touts opportunity to show new technologies as industry regulations considered.
WASHINGTON -- Several top officials in the Obama administration will tour the Washington Auto Show this week, getting a firsthand look at the auto industry's newest offerings at a time when they are considering significant auto regulations. Environmental Protection Agency Administrator Lisa Jackson, Transportation Secretary Ray LaHood and Carol Browner, White House coordinator for climate and energy policy, are to tour the show and meet with top auto industry officials, the White House confirmed late Sunday. Rep. Ed Markey, D-Mass., chairman of the House Select Committee on Energy Independence and Global Warming, and Mary Nichols, chairwoman of the California Air Resources Board, also will attend, spokesmen for the pair confirmed. Sen. Barbara Boxer, D-Calif., chairwoman of the Environment and Public Works Committee, is also expected to attend. The unusual number of top officials attending the show reflects the high priority the Obama administration is placing on automotive issues. During the campaign, Obama called for doubling fuel efficiency standards to a fleet-wide 50 miles per gallon by 2027, and vowed to grant California the right to set its own tailpipe emissions limits.
Source: The Detroit News

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Chrysler Is Hobbled by Former Finance Arm

DETROIT -- Chrysler LLC's bid to boost vehicle sales and drum up revenue has run into resistance from an unexpected source: its former financing arm, Chrysler Financial. A new measure of Chrysler's trouble is due on Tuesday when auto makers report U.S. vehicle sales for January. Analysts have warned that total sales for the month could fall 35% from a year earlier to fewer than 800,000 cars and light trucks, and Chrysler is expected to be among the hardest hit. In December, it suffered the biggest drop, with sales falling 53%. Along with cutting back auto financing, Chrysler Financial has also imposed new charges on Chrysler dealers for vehicles that are languishing in inventory, adding financial pressure on dealers as many are struggling to stay in business. For the past week, top executives have been traveling the country pleading with dealers to stock up. To entice them, the company has announced a major incentive program, including deep price reductions on the vehicles themselves and a limited offer of 0% financing from Chrysler Financial. The lending unit also lowered the inventory fees it imposes on dealers.
Source: The Wall Street Journal (Subscription required)

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Fiat Deal May Risk Chrysler Loans

But it also could mean a comeback
For the third time in 30 years, the fate of Chrysler LLC lies in the hands of the U.S. government. The automaker made it clear last week that it needs $3 billion more in federal loans to close its proposed alliance with Italian automaker Fiat SpA -- a deal that many view as essential for Chrysler's long-term survival. But that deal, which would give Fiat an initial 35% stake in Chrysler, also could lead to Fiat owning a majority stake in the Auburn Hills automaker. That has sparked some political leaders to question whether Chrysler, which already is operating on $4 billion in federal loans, should receive any more U.S. money -- especially since Chrysler is asking for federal money to close the deal, even though Fiat is not offering any of its own. New Jersey Democratic Sen. Robert Menendez asked the Obama administration last week to take back the loans if Fiat takes control of Chrysler, saying he did not want "American taxpayers paying to prop up the foreign auto industry." Whether Chrysler will receive the additional $3 billion it has requested from the federal government is a tough call, said Rebecca Lindland, director of IHS Global Insight's automotive group. "I think their chances are a lot better if they continue to develop this Fiat alliance," Lindland said.
Source: The Detroit Free Press

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Before You Buy: How to Size Up Used Cars

In the market for a used car? New online database lets you do your research
On Friday a federal database 16 years in the making finally went public to help consumers learn whether the used automobile they're interested in buying has ever been stolen or wrecked. Each year, some 40 to 50 million used cars are sold in the U.S. The new online database allows potential buyers to type in a car's vehicle identification number to check on a used car's record. States, salvage yards and insurance companies will be required to submit information so consumers can access information on a car's past – whether it was damaged in a flood, rebuilt after a wreck or stolen. Law enforcement will also be able to tap into the information to help combat auto theft or fraud. "We really think there's a shell game that goes on, where criminals will shift states that have weak salvage disclosure laws, and this does hurt consumers," said Ivette Rivera, executive director of legislative affairs for the National Automobile Dealers' Association. "... we want the dealer and the consumer to have this information before a car is purchased." The database, called the National Motor Vehicle Title Information System, is long overdue. Congress mandated the resource in 1992, but in part due to pressure from the insurance industry, it has taken court action and 16 years to make it happen. Still, the resource is not complete. "This is all built on a 1992 statute, so this was before the Internet," said Rivera. "We think there are a lot of improvements that can be made in terms of making it more timely."
Source: ABC News

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Opinion: It Was a Remarkable Convention
by Keith Crain

Just over a week ago, dealers showed up at the NADA convention in New Orleans for what many of us thought would be a disaster. We were wrong. Sure, everyone knew exactly what was going on. General Motors and Ford execs were there in force, and Chrysler left it up to Jim Press to wave its flag. One thing was obvious: This is not a Detroit recession. This is a global automotive recession that affects every nameplate from every country. Attendance at the convention was way down, which was not unexpected. But dealers are a positive bunch, and those who went to New Orleans were still optimistic about the retail car business despite the huge problems. All in all, it was a lot more upbeat than I had expected. No one thinks the market will turn around anytime soon, but both NADA and AIADA are realistic about what their members must do to survive.
Source: Automotive News (Subscription required)

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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

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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

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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

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Featured Video
 

"The next two months are critical to the future of our industry as we know it," NADA Chairman John McEleney addressing a crowd of about 5,000 attendees during the general session at the NADA convention in New Orleans.


More Video Highlights

Quotable
 
"It's important for the dealer voice to be heard. Senators need to recognize the pressing need to jump start auto sales."

   
-- David Regan, NADA vice president of legislative affairs, referring to NADA's strong support for a bill sponsored by Sen. Barbara Mikulski that would allow consumers to deduct loan interest, as well as state and local sales taxes, on new vehicle purchases, NADA Newswire, Feb. 2


"[The dealers] who went to New Orleans were still optimistic about the retail car business despite the huge problems."

   
-- Keith Crain, Automotive News, Feb. 2


"... we want the dealer and the consumer to have this information before a car is purchased."

    -- Ivette Rivera, NADA executive director of legislative affairs, referring to a new online database that allows potential buyers to type in a car's vehicle identification number to check on a used car's record, ABC World News, Jan. 31
Video Highlights
 
 
'NBC Nightly News with Brian Williams' reports: "Demise of a local car dealership leaves a big dent."



2009 Convention in New Orleans
NADA Tackles Industry Crisis


Click here for more NADA-TV reports.

 
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