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At a Glance...
Top Stories
NADA Urges EPA to Give a Fair Review of California Waiver Decision
EPA Revisits California Waiver Decision
Car Buyers, Dealers Want Proposed Incentive
Obama Defends Federal Car Plan
Chrysler Again Urges Dealers to Order More Cars
In the Red, Toyota Sees Loss Tripling
Saturn Dealers: We're in The Dark on Future
Ford Said to Be in Talks to Sell Volvo Unit to Geely
U.S. Automakers 'Choking' Without Credit Await Fed Loan Program
Strong Start to 2009 for Auctions?
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
NADA Urges EPA to Give a Fair Review of California Waiver Decision

The following is a statement of John McEleney, chairman of the National Automobile Dealers Association, in reaction to the Environmental Protection Agency’s announcement on the California waiver public comment process.

“It is apparent from its notice that EPA has all but made up its mind to allow for state-by-state fuel economy/greenhouse gas regulations, which is contrary to the President’s statement against a 'confusing and patchwork set of standards that hurts the environment and the auto industry.' 

The nation’s auto dealers instead urge EPA to have a fair and frank national debate over the California Air Resources Board’s (CARB) continued campaign to regulate fuel economy at the state level. We are confident that once all the facts are known, the Administration will decide that the best policy is to maintain a single, national fuel economy standard. 

The state-by-state patchwork approach, advocated by CARB, should be rejected once and for all. The California approach is riddled with exemptions, loopholes and unintended consequences that are counterproductive to the stated goals of advancing energy security and reducing greenhouse gas emissions.”
Source: NADA Newswire

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EPA Revisits California Waiver Decision

WASHINGTON -- The U.S. Environmental Protection Agency will reconsider its decision denying California permission to set standards controlling greenhouse gases from motor vehicles. The waiver request was made by California on Dec. 21, 2005, to allow the state the right to control greenhouse gas emissions from motor vehicles. The request was denied by then-EPA Administrator Stephen Johnson on March 6, 2008. On Jan. 26, shortly after taking office, President Barack Obama requested that EPA revisit the matter of the denial. “EPA has now set in motion an impartial review of the California waiver decision,” said EPA Administrator Lisa P. Jackson. “It is imperative that we get this decision right, and base it on the best available science and a thorough understanding of the law.” EPA will take public comment concerning the reconsideration of the waiver for a period of 60 days after publication in the Federal Register. There will also be a public hearing to be held in March in Washington, D.C. Click here for more information about the California waiver.
Source: U.S. EPA

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Car Buyers, Dealers Want Proposed Incentive

Car shoppers' faces lit up when they learned they might get some money back if they buy a new vehicle this year, and dealers in Inland Southern California don't seem to mind it either. The plan to allow buyers of new vehicles to deduct the sales tax and interest was ratified by the Senate on Tuesday as part of the government's stimulus package. It still needs to be reconciled with the House version and signed by President Barack Obama. If it passes those hurdles it could help dealerships seeing weak sales, cities that depend on car sales tax revenues and consumers. Dealers in San Bernardino and Riverside counties like any idea that brings more prospective buyers into their showrooms. The industry is in a deep slump, and at least 11 dealerships in the two counties have been forced to close since March 2008, seven in November and December alone. "I think anything the government can do that makes an effort to stimulate the economy is a good thing," said Dave Allard, general manager of Moreno Valley Chevrolet. Vehicle sales account for about 20 percent of a typical Inland city's revenues, and the Senate's action will help at that end, Redlands-based economist John Husing said.
Source: The Press-Enterprise (Riverside, Calif.)

[Editor's Note: The next challenge is to preserve the NADA-backed auto incentive amendment, sponsored by Sen. Barbara Mikulski (D-Md.), as it moves through joint House and Senate conference negotiations. Differences in the House and Senate versions still need to be worked out. The measure would make interest and sales taxes deductible for new-vehicle purchases until the end of this year. It's important for dealers to thank their senators who voted in favor of this amendment.]

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Obama Defends Federal Car Plan

Critics blast $600M for 'green' fleet
WASHINGTON -- President Barack Obama defended plans Thursday to boost government spending to buy more efficient vehicles, saying it would create more jobs for the struggling auto industry. Obama also voiced support for $2 billion in advanced battery research funding... "It will not only save the government significant money over time, it will not only create manufacturing jobs for folks who are making these cars, it will set a standard for private industry to match." Obama still faces a series of key decisions on the fate of the struggling auto industry. First, he must appoint an auto czar or team of auto officials. Stephen Girsky, a longtime auto industry analyst who heads the private-equity firm Centerbridge Industrial Partners, is a leading candidate to become a key member of an auto restructuring team. Another private-equity figure, Steven Rattner, a partner at the Quadrangle Group in New York, is still a leading candidate to be auto czar.
Source: The Detroit News

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Chrysler Again Urges Dealers to Order More Cars

Press: "You can either help us or burn us all down"
DETROIT -- Chrysler LLC executives, making their second sales plea to dealers in two weeks, urged them [Thursday] to order 15,000 more cars by Monday to keep the company viable. “You have two choices,” said Chrysler co-President Jim Press. “You can either help us or burn us all down.” The executives said 70 percent of the dealer body had heeded the company’s request to order 78,000 vehicles they had been allocated for February. Press made the first plea Jan. 24 at the National Automobile Dealers Association convention in New Orleans. “We’ve got to get the cash flow coming in so we can get to March 31 as a viable company,” Press said in a conference call to dealers this afternoon. “By doing that right now, we can begin to harvest the long-term benefits of the investments we’re making.” “By successfully keeping the doors open in January and February, we’ll get the loan,” said Press, referring to $4 billion Chrysler has received from the U.S. Department of Treasury. Chrysler must submit a plan to the government by Feb. 17 to show it’s a viable company. The government will decide by March 31 whether to keep the loan in force. After Press’ fiery speech at the NADA meeting, some dealers emerged saying they were so inspired that they would change their plans and order vehicles.
Source: Automotive News

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In the Red, Toyota Sees Loss Tripling

TOKYO — Less than two months after forecasting its first ever full-year operating loss, Toyota Motor said on Friday that it now expected that loss to be three times larger than originally expected as global auto sales continued to plunge. Toyota said it expected to lose 450 billion yen, or $5 billion, in the fiscal year through March 31 in its vehicle-making operations. The new forecast underscored the deteriorating situation at Toyota, which until recently seemed unstoppable as it dethroned General Motors last year as the world’s biggest producer of vehicles. Toyota blamed the larger loss on both steep declines in global auto sales and strong gains by the Japanese currency, the yen, which lowers the yen-denominated value of overseas earnings. “Toyota is going to get worse before it gets better,” said Tairiku Sakaguchi, an auto analyst at Shinko Securities in Tokyo. “The question is how quickly they can move to deal with inventory, excess production capacity and other problems.” Toyota said it was still investing in hybrid and compact vehicles and expected to roll out a new version of its popular Prius hybrid sedan in May. The company said it will start selling the first hybrid model in its Lexus luxury brand this summer.
Source: The New York Times

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Saturn Dealers: We're in The Dark on Future

Saturn dealers say they're anxious and have been told little about the future of the brand as General Motors Corp. plans a restructuring under the terms of federal loans. Dealers left a private breakfast meeting last week with GM executives in New Orleans saying they learned little more than before about the future of the troubled brand. GM executives have said the brand is not profitable and that something must be done to correct the situation quickly. Mark LaNeve, vice president of GM North America, said the automaker has been talking extensively with its dealer body about various alternatives to improve the business model, noting the assets of Saturn -- the brand, its dealers and customers -- "are incredibly positive." But things just seem to be getting worse for Saturn. January sales figures for U.S. dealers released this week show a 59.8% drop by the Saturn brand compared with the same month last year. Saturn dealers said they are frustrated. "Let's face it, if you tried to sell a Saturn franchise today, there are no buyers. I just don't know about the future of Saturn," said John Pohanka, chairman of Maryland-based Pohanka Automotive Group, which owns three Saturn dealerships. GM officials would not disclose the details of a Thursday meeting in metro Detroit with a select group of dealers. "Of course, the discussion is related to the future of the Saturn brand," said Steve Janisse, a Saturn spokesman, who confirmed the meeting took place.
Source: The Detroit Free Press

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Ford Said to Be in Talks to Sell Volvo Unit to Geely

Ford Motor Co., seeking to raise cash to avoid a federal bailout, is in talks to sell its Volvo Car unit to China’s Geely Automobile Holdings Ltd., according to three people familiar with the discussions. Ford probably will get less than the $6.4 billion it paid for Sweden-based Volvo in 1999, said one of the people, who declined to be identified because the preliminary talks are confidential. Ford has also approached Chinese automakers Chery Automobile Co. and Chongqing Changan Automobile Co... Dearborn, Michigan-based Ford lost a record $14.6 billion last year and is trying to avoid asking for government loans to survive as U.S. auto sales plunge to the lowest level in almost 27 years. Buying Ford’s last European luxury brand would help Geely founder Li Shufu, 45, cut his reliance on selling low-cost compacts in China, even as Volvo’s sales plummet. “Whether it can consummate into a deal is a big question,” said Alice Chong, an analyst at CIMB-GK Securities. “The acquisition would help Geely break into new markets and get better technology, but Geely may have to suffer short-term losses as sales in Europe and the U.S. are collapsing.” “Chinese automakers want to tap foreign rivals’ resources in technical development,” said Zhang Xin, an analyst at Guotai Junan Securities Co. in Beijing. “To catch up with foreign automakers by themselves takes a lot of both time and capital. Acquisitions could help them.” Geely would likely seek to buy Ford’s entire equity stake in Volvo rather than negotiate with the Swedish unit over purchases of specific assets, the people said. Ford creditors are likely to receive some, or even all, of the proceeds from any sale of Volvo. Ford pledged Volvo as part of the collateral it put up for $23 billion in loans it secured in 2006.
Source: Bloomberg

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U.S. Automakers 'Choking' Without Credit Await Fed Loan Program

General Motors Corp. and Chrysler LLC, blaming tight credit for exacerbating sales declines, are counting on a new federal program to help provide financing to consumers. The Term Asset-Backed Securities Loan Facility is planned to start this month and will lend as much as $200 billion to investors to purchase securities backed by auto loans, credit cards and student loans. The commercial market for these loans is almost inactive. GM and Chrysler risk exhausting the $17.4 billion in U.S. loans that are propping them up as industry sales slump to levels not seen since the early 1980s. Even with government efforts to expand credit, consumers are finding it hard to borrow to buy new cars and trucks, the automakers say. GMAC LLC, GM’s lending arm, received $6 billion in direct aid in late December from the Troubled Asset Relief Program and Chrysler Financial got $1.5 billion last month. The Treasury Department’s actions allowed the companies to resume no-interest loan offers and expand the range of customers who could qualify for financing. The TALF program, orchestrated by the Federal Reserve Bank of New York, comes after the U.S. has committed $24.9 billion in direct aid to automakers and their finance arms. Auto suppliers this week requested as much as $10.5 billion to prevent widespread bankruptcies in their industry that could endanger the automakers. Details on how the TALF program will function haven’t been announced. The New York Fed will give an update soon, said spokesman Andrew Williams, who didn’t elaborate. TALF is designed to lend money to investors to buy highly rated bonds backed by auto loans, a market that has been frozen by the credit crunch. Without the ability to sell those loans to investors, auto lenders are using up their capital and can’t offer new credit to car buyers.
Source: Bloomberg

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Strong Start to 2009 for Auctions?

McLEAN, Va. — After wholesale pickup and SUV values bottomed out in November, the entire market has started off 2009 with what NADA Used Car Guide called encouraging signs, as auction prices showed month-over-month gains across the board. Though prices in all wholesale segments are soft compared to last January, there appears to be some recovery from the drastic declines that occurred from September to November, according to the latest AuctionNet Data from NADA Used Car Guide. "It is no surprise that 2009 would start out with significant price volatility — to the benefit of resale values in this case," explained Terrence Wynne, director of editorial and data services for NADA Used Car Guide. "There are ... things driving these price improvements ... the building demand for used cars, which is the norm in poor economic conditions; and ... the lack of trade-ins from new vehicle purchases has increased the demand for used units at auctions," he continued. "More people at the auction, with roughly the same supply of cars, equals higher prices," Wynne pointed out. For more information, visit www.nada.com/b2b.
Source: Auto Remarketing

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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
 
"The California approach is riddled with exemptions, loopholes and unintended consequences that are counterproductive to the stated goals of advancing energy security and reducing greenhouse gas emissions."

   
-- NADA Chairman John McEleney, in response to the U.S. Environmental Protection Agency reconsidering its decision that denied California permission to set its own standards controlling greenhouse gases from motor vehicles, NADA Newswire, Feb. 6


"I think anything the government can do that makes an effort to stimulate the economy is a good thing." 

   
-- Dave Allard, general manager of Moreno Valley Chevrolet in California, The Press-Enterprise (Riverside, Calif.), Feb. 4


"You have two choices. You can either help us or burn us all down."

   
-- Chrysler co-President Jim Press, making his second sales plea to dealers in two weeks, urging them to order more cars to keep the company viable, Automotive News, Feb. 5
Member Products & Services
 
 
Save Big with Lenovo
Lenovo is offering NADA members up to $815 off select ThinkPad notebooks. Enter eCoupon USXHOTSAVINGS at checkout. Free ground shipping is available on all Web orders. This offer ends Feb. 9. To take advantage of these savings, visit NADA's Online PC Purchase Program (login required), click the link for Lenovo, then "Special Offers," or call (800) 426-7235, Option 1, Ext. 4838. 
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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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.