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Top Stories
Congressional Support for Bills to Restore Dealer Rights Continues to Gain Momentum
Close a Guzzler Deal? Not So Fast, Say Dealers
Dealers Urged to Await Final Cash for Clunkers Rule
Chrysler Financial Leans on Dealers
GM, Chrysler Bankruptcies Make Targets of Dealers, Suppliers
GM May Speed Pontiac Dealer Closings as Buyers Grab Last Models
With Sales Slow, Businesses Remember to Say Thank You
Honda to Expand Hybrid Lineup to Compete With Toyota
Dealers Urged to Take Survey on Floorplan Loan Availability
Top Stories
Congressional Support for Bills to Restore Dealer Rights Continues to Gain Momentum

Dealer fly-in set for Tuesday, July 14
WASHINGTON -- About 100 of the nation's auto dealers will meet with Members of Congress on Tuesday urging them to support legislation that would restore the protections of state franchise laws as they existed prior to the bankruptcies of General Motors and Chrysler. The fly-in is timely as the House may soon consider legislation that seeks to restore the economic rights of automobile dealers.

The House Appropriations Committee on July 7 approved an amendment by Rep. Steve LaTourette, R-Ohio, to the financial services appropriations bill that would require automakers that have taken government funding (GM and Chrysler) to restore dealers terminated during bankruptcy. While there is strong support for the LaTourette amendment, there may be efforts to strip the amendment from the bill because policy changes such as the dealer amendment are not supposed to be included in spending bills. The spending bill may be on the House floor as early as July 15.

Similar legislation, H.R. 2743, introduced by Rep. Maffei, D-N.Y., has 238 bipartisan co-sponsors and S. 1304, introduced by Sen. Grassley, R-Iowa, has 18 co-sponsors. The bills are designed to reinstate fairness and balance to the dealer-automaker relationship. And state franchise laws also benefit consumers by providing a reliable, convenient and competitive auto-retail market. Fewer dealers mean less competition and higher prices for consumers. Most important, the bills help protect jobs. The forced closure of nearly 3,000 dealerships has jeopardized the jobs of about 150,000 dealership employees.

Members of Congress should co-sponsor H.R. 2743/S. 1304 and support legislative efforts to restore dealer rights. Lawmakers can be reached through the Capitol switchboard at (202) 224-3121. Click here for a list of current co-sponsors.
Source: NADA Newswire

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Close a Guzzler Deal? Not So Fast, Say Dealers

The federal government's cash-for-guzzlers incentive program has dealers in the unusual position of not wanting to close a deal. The program covers vehicles sold from July 1, but the government has not crafted regulations for it. The U.S. Transportation Department is to issue those rules by July 24. The National Automobile Dealers Association is "strongly advising" dealers to wait until the rules are spelled out before selling vehicles under the program, says spokesman Bailey Wood. Dealers who sell vehicles without knowing the rules risk not getting paid the incentive if they don't comply with the law, Wood says. He also points out there is a $15,000 fine if dealers violate the law.
Source: Automotive News

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Dealers Urged to Await Final Cash for Clunkers Rule

Second 'clunkers' Webinar planned after rules are in place
Interest in the “Cash for Clunkers” program is high, as shown by the 500-plus attendees at the first of a two-part NADA/NHTSA Webinar on the Car Allowance Rebate System (CARS) Act. The first Webinar—an opportunity for NHTSA to provide an overview of the program and to hear what questions were on our members’ minds—also demonstrated the clear need to await the finalized implementation details from NHTSA before undertaking any “clunkers” transactions. Dealers engaging in transactions before July 24 risk violating the rules and could lose $3,500 to $4,500 or face fines of up to $15,000 per violation. NADA members are strongly encouraged to participate in the second Webinar, to be held once NHTSA finalizes the CARS rules, on or around July 24, the government’s deadline for CARS rules completion. The special rate of $199 includes both Webinars. All participants in the first Webinar will be emailed login information for the second Webinar automatically. Registrants for the second Webinar will receive a link to the archive of the first Webinar, which they’ll be able to view and hear in its entirety, as well as login instructions for the second. For more information, visit www.nada.org/seminars or call (800) 252-6232, ext. 2.
Source: NADA Newswire

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Chrysler Financial Leans on Dealers

Lender wants retailers to cover possible loan losses
Chrysler Group dealers, already struggling with plunging sales, have a new problem: Chrysler Financial is asking many of them to pay large sums to handle possible loan losses. Chrysler Financial says it is asking about 3,000 dealerships — its customers before Chrysler LLC went bankrupt — to pay the reserves. But some have the option to be billed as charges come in — and not pay a lump sum upfront. It's not clear how many Chrysler Group dealerships got the choice.
Source: Automotive News

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GM, Chrysler Bankruptcies Make Targets of Dealers, Suppliers

General Motors Corp. and Chrysler Group LLC dealers and suppliers ... are becoming targets of product-liability lawsuits in the wake of the automakers’ bankruptcies. Some state laws turned dealers into targets after the bankruptcies, plaintiffs’ lawyer John Gsanger said. In Texas, accident victims normally can’t sue a dealership for a manufacturing flaw, said Gsanger, of Corpus Christi, Texas. That changes if the automaker becomes insolvent, he said.
Source: Bloomberg

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GM May Speed Pontiac Dealer Closings as Buyers Grab Last Models

General Motors Co. may pull down signs at its remaining Pontiac locations nine months sooner than planned as buyers snatch up the last models of the discontinued brand more quickly than expected. U.S. dealers had only 50,000 autos left in inventory through June, said Susan Docherty, North American president for the GMC, Buick and Pontiac brands. GM had planned to keep selling Pontiacs through the end of next year if necessary, she said. Pontiac production ends this month.
Source: Bloomberg

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With Sales Slow, Businesses Remember to Say Thank You

It may be too early to declare the dawning of a new era in customer service. But anecdotally, consumers and consumer-watchers say many industries seem to be paying more than lip service to the notion of bending over backward for their customers. Paul Taylor, chief economist for the National Automobile Dealers Association in McLean, Va., said more companies are "focusing on things they know they need to be doing," such as dishing out extraordinary service in order to survive the recession.
Source: The Star-Tribune (Minneapolis, Minn.)

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Honda to Expand Hybrid Lineup to Compete With Toyota

Honda Motor Co., Japan’s second-largest carmaker, plans to expand the number of hybrid vehicles it offers domestically to compete with Toyota Motor Corp.’s best-selling Prius. The carmaker will bring out a hybrid version of the Fit car next year and the hybrid CR-Z sports coupe in February, Chief Executive Officer Takanobu Ito told reporters today in Tokyo. “Applying the hybrid system to smaller vehicles will help Honda boost sales,” said Yoshihiro Okumura, who helps manage the equivalent of $365 million at Tokyo-based Chiba-gin Asset Management Co. “Once the U.S. market starts to pick up, they’ll be well-positioned.”
Source: Bloomberg

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Dealers Urged to Take Survey on Floorplan Loan Availability

While access to credit is still limited for both domestic and import dealers, NADA is working with Congress, the Department of the Treasury and the Federal Reserve Board to expand the availability of financing for dealers to purchase vehicle inventory. Expanding loan guarantee programs such as the Small Business Administration’s (SBA) Dealer Floorplan Financing Program is just one step in NADA’s federal efforts to get lenders to provide financing again. NADA is pursuing initiatives that will ensure dealers have access to financing at competitive rates, but it is important for NADA to have a full picture of the difficulties dealers are facing. While there is a great deal of anecdotal evidence, little numerical data is available related to the constriction of floorplan lines of credit and its impact on dealers. NADA urges dealers to take a few moments to participate in a 16-question online survey. Click here to take the survey.
Source: NADA Newswire

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Video Highlights
 

Media Coverage: The Tragedy of Dealer Closings (NADA-TV)


NADA's New Buy Now Campaign



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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