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Thursday, Feb. 5, 2009 RSSSEND TO A FRIENDPRINT
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At a Glance...
Top Stories
Obama: 'Catastrophe' if Congress Delays Stimulus
Ford Urges More Buyer Incentives
Plan May Give Owners $10,000 for Old Cars
Auto-Parts Makers Seek Bailout
Aurora Car Dealer Sets Sales Record Amid Recession
Chevrolet Malibu Sales Jump 51.5%; Dealers Pleased
NADA Update
FTC Civil Penalties to Increase Feb. 9
Webinar Feb. 12: Shore Up Your Bottom Line by Saving Energy
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
Obama: 'Catastrophe' if Congress Delays Stimulus

WASHINGTON — President Obama said Wednesday the recession will turn into "a catastrophe" if the federal economic stimulus is not passed quickly, lobbying anew for the plan as its price tag climbed above $900 billion and drew more criticism. The president rejected several complaints about the plan, including arguments that tax cuts alone would solve the problem or that longer-term goals such as energy independence and health care reform should wait. Obama opposed such piecemeal approaches. Instead, he argued that recalcitrant lawmakers need to get behind him, saying the American people embraced his ideas when they elected him president in November. "No plan is perfect, and we should work to make it stronger," Obama told reporters at the White House. "Let's not make the perfect the enemy of the essential. Let's show people all over our country who are looking for leadership in this difficult time that we are equal to the task." In a victory for auto manufacturers and dealers, Sen. Barbara Mikulski, a Democrat, won a 71-26 vote to allow most car buyers to claim an income tax deduction for sales taxes paid on new autos and interest payments on car loans. The break ... could mean savings of $1,500 on a $25,000 car. "Just as we need to get the housing market going, we need to get auto sales going," said Sen. Debbie Stabenow, D-Mich.
Source: The Associated Press

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Ford Urges More Buyer Incentives

A day after the U.S. automobile industry reported its worst sales since 1982, Ford Motor Co. executives said they were encouraged by moves in Washington to bolster car and truck sales, but added that the government needs to do more to give consumers the confidence to return to their showrooms. "I see some real exciting developments in the stimulus package," said Jim Farley, head of sales, marketing and service at the Dearborn automaker. Congress is considering a number of incentives to boost the sale of more efficient vehicles as part of the federal government's $900 billion stimulus package. Late Wednesday, Sens. Tom Harkin, D-Iowa, and Debbie Stabenow, D-Lansing, said they will introduce an amendment dubbed the "Sell Fuel Efficient Cars Amendment" that would provide a rebate of $10,000 to buyers who trade in a car more than 10 years old for a new car assembled in the United States. The amendment provides $16 billion which would cover more than 1.5 million purchases. The program would end once the funds ran out, but no later than Sept. 30, 2010.
Source: The Detroit News

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Plan May Give Owners $10,000 for Old Cars

Old-vehicle owners could get up to $10,000 toward buying a new car or truck under a plan introduced by Michigan Sen. Debbie Stabenow on Wednesday, a version of the "cash-for-clunkers" idea geared toward domestic automakers. The plan from Stabenow and fellow Democrat Tom Harkin of Iowa would set aside $16 billion to take 1.5 million old vehicles to crushers. The owners would have to use the money to buy a U.S.-made model with better fuel economy than the trade-in. Only families with adjusted gross incomes below $75,000 could qualify. Stabenow and Harkin said the bill would be offered as an amendment to the Senate stimulus plan, which has swelled to about $900 billion. While several groups support similar ideas, there's no consensus on important details.
Source: The Detroit Free Press

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Auto-Parts Makers Seek Bailout

Trade Group Asks Treasury for $25.5 Billion as Lawmakers Discuss Detroit
Beleaguered auto-parts suppliers are following the lead of Detroit's Big Three in seeking aid from the federal government. In a request dated Monday to the Treasury Department, an industry group representing 400 parts makers asks for $25.5 billion in aid and guarantees. "Without immediate assistance to suppliers, the country will face massive job losses and the eventual breakdown of the entire automotive sector in the United States," says the 11-page request from the Motor & Equipment Manufacturers Association. The suppliers are seeking $7 billion in federal funds to create a "quick pay program" to funnel money to auto makers so they can pay suppliers within 10 days of receiving parts, instead of the 45 days or more they typically take to pay. The group also seeks $10.5 billion to guarantee receivables of suppliers whose customers have taken federal loans, which means GM and Chrysler. The guarantee would provide a backstop to commercial-lending losses on loans to suppliers. Lastly, the suppliers want $8 billion in direct access to federal loans.
Source: The Wall Street Journal

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Aurora Car Dealer Sets Sales Record Amid Recession

There's a lot of bad economic news in the auto industry, but some local dealerships are finding a way to beat the recession. The new year is off to a bad start for car makers. Most had sales fall dramatically in January, and there is little relief in sight. But some automakers are in better position. Hyundai saw a 14 percent increase in the number of vehicles sold. Subaru's was up 8 percent. The news is also good for Tynan's in Aurora. Cars are moving off the lot -- so much so that January shattered the record books. In 46 years of business this was their best January ever. "We sold a lot of used cars," Mike Tynan said. Tynan says customers shop with the economy in mind. It's a theory that held true with customer Jessie Carrington. She says her priorities are "definitely price, reliablity -- depending on how many miles -- what I can get for my dollar." This used car trend is backed by Mercedes-Benz of Westminster. It's No. 1 in sales for Mercedes dealerships in the central region, which include cities like Dallas and Chicago. Mercedes-Benz of Westminster in January sold 73 certified pre-owned cars. Last year in January it sold 10.
Source: CBS 4 (Denver)

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Chevrolet Malibu Sales Jump 51.5%; Dealers Pleased

A little over a year after its launch, the redesigned Chevrolet Malibu is a bright spot for troubled General Motors Corp. When industrywide U.S. sales are down 18%, the Malibu -- which competes in the hyper-competitive midsize car market -- finished 2008 with U.S. sales up 51.5% from the year before. In 2008, GM's U.S. dealerships sold 177,088 Malibu sedans -- 60,209 more than in 2007. "I think we had a very well-coordinated effort," said Mike Weidman, Malibu's marketing manager. "We knew going into it that we had a big social-acceptability issue to overcome. We knew that a lot of import-type buyers wouldn't trust what we had to say as the manufacturer." Because of that, GM made a big public relations push, along with a strong effort to train dealers on how to sell the new vehicle's features. Dealers rave about how the Malibu is doing so far. "It was a well-orchestrated introduction," said Ken Thompson, fleet and commercial manager at Classic Chevrolet in Grapevine, Texas. "The whole thing was timed very nicely. We didn't run out of product." Paul Stanford, president of Les Stanford Chevrolet in Dearborn, echoed those thoughts, praising the design and quality. "It's a great, great value vehicle," he said.
Source: The Detroit Free Press

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NADA Update
FTC Civil Penalties to Increase Feb. 9

The FTC has announced an increase in civil monetary penalty amounts effective Feb. 9, 2009.  The adjustments are based on the increase in the Consumer Price Index (CPI), and include an increase in the maximum penalties per knowing violation of the Fair Credit Reporting Act (examples of which would include the Red Flags, Address Discrepancy, and Affiliate Sharing Rules) from $2,500 to $3,500. In addition, the maximum statutory penalty per violation for certain FTC rules that are enforced under the FTC Act will also increase from $11,000 to $16,000. Under the FTC Act, when a rule (such as the GLB Safeguards Rule, Privacy Rule, or the Red Flags and Address Discrepancy Rules) continues to be violated despite an order to comply with a rule, the FTC can file a lawsuit in federal court seeking $16,000 for each violation of that rule as well as equitable relief. For more information, click here.

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Webinar Feb. 12: Shore Up Your Bottom Line by Saving Energy

In uncertain economic times, every dollar counts. And the money dealers spend on energy is a controllable expense. To learn how to begin reducing your dealership’s energy bills, a free Webinar, “Energy Savings 101” hosted by EPA’s ENERGY STAR, will be offered Thursday, Feb. 12 at 11:30 a.m. EST. The Webinar covers ENERGY STAR guidelines for energy management, including general and dealership-specific upgrade opportunities. Participants will also learn about the importance of benchmarking. The Webinar will demonstrate what energy savings can mean for your dealership, your customers and your bottom line. NADA and ENERGY STAR are entering their third year of an Energy Stewardship Initiative that challenges dealers to cut their energy expenses by at least 10 percent. If all dealers reduced energy consumption by about 10 percent, they would save more than $190 million a year and “green” their stores. Click here to register for the free “Energy Savings 101” Webinar. It lasts one hour and includes time for Q&A. For more information about NADA’s partnership with ENERGY STAR, go to www.nada.org/energystar.

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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 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 have 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. 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
 
 

 NADA Tackles Industry Crisis


More Video Highlights

Quotable
 
"No plan is perfect, and we should work to make it stronger. Let's not make the perfect the enemy of the essential. Let's show people all over our country who are looking for leadership in this difficult time that we are equal to the task."

   
-- President Barack Obama, speaking to reporters at the White House on Wednesday. President Obama predicted "catastrophe" if the stimulus bill is not passed quickly, The Associated Press, Feb. 4
Video Highlights
 
  

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


NBC: "Demise of local car dealerships leaves big dent."
2009 Convention in New Orleans
NADA on the Front Lines


Click here for more NADA-TV reports.

 
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