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Tuesday, June 23, 2009 RSSSEND TO A FRIENDPRINT
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Top 10 Stories
Dealers a Critical Voice in Support of 'Cash for Clunkers'
Cash-for-Clunkers Site Launches, But Rules Aren't Ready
Preventing Fraud is Key Concern as Cash-for-Guzzlers Takes Shape
Quality Improves for Detroit Big 3
GM Trying to Strong-Arm Florida Dealers, McCollum Says
Mini to Add 17 U.S. Stores Over 18 Months
U.S. to Start Financing Efficient Car Design
Nissan to Mass Produce Electric Cars in 2012
Iacocca's Advice: GM, Chrysler Should Repay U.S. Loans Fast
Coming to an Ex-U.S. Car Dealer Near You: Pickups From India
Top 10 Stories
Dealers a Critical Voice in Support of 'Cash for Clunkers'

President Obama this week is expected to sign legislation that includes $1 billion for a “cash for clunkers” fleet modernization program. Since the push for the legislation earlier this year, dealers and NADA have been an important voice in the program’s creation. Association staff will continue to work with the federal government as the regulations to implement it are developed over the next 30 days.
 
From the program’s inception, NADA sought to ensure that is was simple, voluntary and made sense for car buyers and dealers.  NADA worked with House and Senate leadership to make sure that all automakers could participate and that dealers would be paid within 10 days of the transaction. The association also worked to eliminate confusing retroactive provisions.
 
The legislation faced numerous hurdles, which were overcome thanks to dealers’ grassroots efforts spearheaded by NADA. Sen. Debbie Stabenow, D-Mich., recognized NADA’s endorsement of the measure on the Senate floor noting the endorsement of the program from the automakers, “... but it is also, of course, supported by the National Auto Dealers [Association] very strongly,” she said.
 
Under the program, eligible “clunkers” include passenger cars and light trucks MY 1984 and newer that get no more than 18 mpg combined city/highway. For cars, the credit value will be $3,500 if the new vehicle gets at least 4 mpg more than the “clunker” or $4,500 if it gets at least 10 mpg more. For light trucks, the credit value will be $3,500 if the new truck gets at least 2 mpg more than the vehicle being traded in or $4,500 if it gets at least 5 mpg more.  New vehicles must cost no more than $45,000 MSRP and used-vehicle purchases are not eligible for the program.
 
“It’s very positive,” says NADA Chairman John McEleney. Because a customer’s decision to purchase usually comes down to the monthly payment, “a $3,500 credit translates to $75 to $100 a month in savings, which is very significant.” McEleney also noted that the measure will help buyers save on fuel and repairs by having a more fuel-efficient new vehicle with warranty coverage.
 
The credit will be applied to a buyer’s down payment, with dealers being reimbursed by the government.  NADA will work with the Department of Transportation (DOT) on the program’s rules to ensure that they are easy to understand for both customers and dealership employees. McEleney noted that salespeople are eager to call customers, but that dealers need to wait until the program is officially launched, probably sometime in mid-to-late July, with the program running through November. McEleney cautioned that any “clunker” transactions completed before the DOT publishes the program’s rules may not qualify for reimbursement.
 
Dealers will benefit from increased showroom traffic under the “cash for clunkers” program, says McEleney. And even if the vehicles of would-be buyers aren’t eligible for credit, “they might be surprised at what their trade-in is worth.”  Buyers will still be able to take advantage of the new-vehicle sales and excise tax deduction, which NADA lobbied for in the stimulus legislation earlier this year. Combining the two federal benefits, along with automaker incentives, will help put a new vehicle within reach for many families, says McEleney.
Source: NADA Newswire

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Cash-for-Clunkers Site Launches, But Rules Aren't Ready

The federal government launched a Web site Monday for the cash for clunkers plan passed by Congress last week, but the rules to oversee the program may take up to a month to craft. The Web site, www.cars.gov, offers information on how the process of trading an older vehicle for a more-efficient model will work, and urges customers to call dealers to see if they will register for the program. On Thursday, Congress sent the $1-billion measure to President Barack Obama for his signature.
Source: Detroit Free Press

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Preventing Fraud is Key Concern as Cash-for-Guzzlers Takes Shape

Obama expected to sign bill into law this week
WASHINGTON -- Amid widespread confusion about how the cash-for-guzzlers legislation will be carried out, the U.S. Transportation Department said its biggest challenge will be devising a fraud prevention program in the next month or so. "The billion-dollar question for us is when and how this will be implemented," said Bailey Wood, a spokesman for the National Automobile Dealers Association. "The vast majority of dealers want to participate because it will bring people into dealerships."
Source: Automotive News

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Quality Improves for Detroit Big 3

J.D. Power's study finds new domestic cars match imports for first time
The brands of Detroit automakers are outpacing the industry as a whole in quality improvement, according to an annual study released Monday by J.D. Power and Associates. The 23rd Initial Quality Study also suggests that the industry -- despite a severe sales slump, drastic production cuts and financial losses -- continues to make gains in new vehicle quality. "Without question, vehicles today are better than ever before," said Dave Sargent, vice president of automotive research at J.D. Power ...
Source: The Detroit News

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GM Trying to Strong-Arm Florida Dealers, McCollum Says

Florida Attorney General Bill McCollum has filed an objection in the General Motors Inc. bankruptcy case saying the auto manufacturer’s plan to convert into a “new General Motors” could put some dealers in jeopardy. In the filing, McCollum said that General Motors has “misused [its] bankruptcy-enhanced bargaining power and forced automotive dealers to waive the very state laws that were designed to protect them from such overreaching conduct.”
Source: Orlando Business Journal

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Mini to Add 17 U.S. Stores Over 18 Months

Mini will add 17 U.S. stores in the next 18 months, mostly in new markets, the company said today. The following cities will get new dealerships: Birmingham, Ala.; Pensacola, Fla.; Alexandria, Va.; Austin, Texas; Seattle, Wash.; Fort Myers, Fla.; El Paso, Texas; Ontario, Calif.; Louisville, Ky.; Raleigh, N.C.; Knoxville, Tenn.; Loveland, Colo.; Madison, Wisc.; Mount Laurel, New Jersey; Allentown, Pa.; San Diego and Tempe, Ariz.
Source: Automotive News

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U.S. to Start Financing Efficient Car Design

After months of uncertainty, the Energy Department is beginning to lend money from a $25 billion loan program to develop fuel-efficient cars. Ford Motor Company, Nissan Motor Company and Tesla Motors are slated to get the first round of loans. Absent from the loan program are General Motors and Chrysler, two companies that have asked for billions of dollars in loans, but are prevented from receiving aid under terms of the program because they do not qualify as “financially viable” companies.
Source: The New York Times

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Nissan to Mass Produce Electric Cars in 2012

Nissan Motor Co. said [today] its electric vehicles will be affordable, setting sights on the potentially lucrative market with a plan to mass produce zero-emission cars globally from 2012. Along with production in Japan and Europe, [Chief Executive Carlos Ghosn] said Nissan would make electric vehicles in the United States at its Smyrna plant in Tennessee with initial output capacity of more than 100,000 units per year.
Source: The Associated Press

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Iacocca's Advice: GM, Chrysler Should Repay U.S. Loans Fast

Former Chrysler CEO Lee Iacocca has some advice for the people who are running his old company, and those who will lead the new General Motors: Get the government out of your business as soon as possible. Iacocca, a slick pitchman who became an American hero in the early 1980s when he used over $1 billion in government loan guarantees to rescue the nearly defunct Chrysler, said ... government intervention was strong motivation to repay the loan early. “They’re on you day and night. Their oversight is just too extreme,” said Iacocca, who is promoting a new limited-edition customized Iacocca Ford Mustang.
Source: The Associated Press

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Coming to an Ex-U.S. Car Dealer Near You: Pickups From India

Dramatically weakened by recession, U.S. automakers in the next few years are likely to be challenged on their home turf by car manufacturers from the developing world. But, while the Chinese were expected to be the first to land in North America, it now looks like India will beat China to the U.S. market — and not with cars, but with light trucks. By the end of the year, Mumbai-based conglomerate Mahindra & Mahindra ... plans to launch two-door and four-door compact pickups that would compete with established brands such as the Toyota Tacoma ... and the Ford Ranger.
Source: TIME

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Quotable
 
"A $3,500 voucher translates to $75 to $100 a month in savings, which is significant."

    -- NADA Chairman John McEleney, who says the “cash for clunkers” incentive will appeal to many consumers because purchasing decisions usually come down to the monthly payment, NADA Newswire, June 23


 "[GM] misused [its] bankruptcy-enhanced bargaining power and forced automotive dealers to waive the very state laws that were designed to protect them from such overreaching conduct.”

    --  Florida Attorney General Bill McCollum, who has filed an objection in the GM bankruptcy case saying the automaker's plan to convert into a “new General Motors” could put some dealers in jeopardy, Orlando Business Journal, June 22


"They’re on you day and night. Their oversight is just too extreme. The bureaucracy kills you."

    -- Former Chrysler CEO Lee Iacocca, who urged people running his old company to get the government out of its business as soon as possible, The Associated Press, June 22


"Without question, vehicles today are better than ever before."

    -- Dave Sargent, vice president of automotive research at J.D. Power and Associates, The Detroit News, June 23

Video Highlights
 

Media Coverage on Dealership Closings (NADA-TV)


NADA's New Buy Now PSA, 'No Kidding'



No Dent in Demand for Some U.S. Cars (NBC)



Car Dealers Trying to Buy More Time (NBC)



Fighting the Dealers' Fight (CNBC)



Cutting Dealers a Mistake (Fox Business Network)



Vice Chairman Tonkin on Chrysler Closures (Bloomberg)



Should Government Decide Dealers' Fate? (CNBC)



The Case Against Closing Dealerships (CNBC)



In-Depth Look - Pent Up Auto Demand (Bloomberg)



NADA on Floorplan Credit Crisis (NADA-TV)


John McEleney's Testimony to Senate Committee (CNBC)
 Senate Testimony on Floorplan Loans (NADA-TV)
 Banks Turning on American Car Dealers? (WTNH-TV)
 NADA Tackles Industry Crisis (NADA-TV)
 McEleney Speaks at NADA Convention (NADA-TV)
 Demise of Dealerships Leaves Big Dent (NBC)
NADA on the Front Lines  (NADA-TV)


Click here for more video reports.

 


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