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Tuesday, Jan. 5, 2010 RSSSEND TO A FRIENDPRINT
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Top Stories
For Car Buyers, Lending Market Sees Signs of Thaw
Reality Check: US Auto Dealers Cheer December Sales Gains
Grassley Expects Action in First Quarter on Estate Tax, Extenders
Enthusiasts to Descend on Detroit to Save Saab
Opinion: Showtime in Detroit
NADA Convention & Expo
National Time Magazine 'Dealer of the Year' to be Named at NADA Convention in Orlando
NADA University Set to Launch at Convention in February
NADA Offers Dealers $200 Voucher as an Extra Incentive for Attending Convention
NADA Enhances Convention Experience Through Social Media
Top Stories
For Car Buyers, Lending Market Sees Signs of Thaw

For car buyers, four words mean the difference between going home in a new sedan or their old clunker: Your loan is approved. They are being uttered more often these days, spurred by a trillion-dollar government program that provides guarantees when those loans are sold to investors. That is helping banks, credit unions and auto finance companies make auto loans at a quickening pace. And consumers are paying less to borrow. It's bit of good news for the auto industry in the U.S. Partly because of loosening credit, industry analysts expect more than 1 million cars and light trucks to be sold in December, the best monthly performance since Cash for Clunkers in August. (Auto sales are expected to be released later today.) Financial firms wrote 5.5 percent more car loans in the third quarter compared with the prior three months, Experian Automotive says. Paul Taylor, chief economist for the National Auto Dealers Association, said used-car prices also have stabilized due to limited supply, making used-car loans more attractive to banks.

Although demand for autos has picked up from depths seen at the start of 2009, the lending machine really got moving thanks in large part to grease from the government's TALF — or Term Asset Backed Loan Facility — program. The program began last March and allows investors to borrow money from the Federal Reserve to buy the loans off lenders' books. This raises money and makes room for financial firms to write more loans. There is evidence it's working. Financial institutions raised more than $19 billion by selling securities made of bundled auto loans in the third quarter last year. That's up nearly 60 percent from the second quarter and more than sixfold from the same period in 2008, according to the Securities Industry & Financial Markets Association.  
Source: The Associated Press

Editor’s note: As previously reported, since the outset of the financial crisis, NADA has been aggressively working to ensure that the TALF was available to restore securitizations backed by both retail and dealer floorplan loans. Support of the TALF has been the centerpiece of NADA efforts to repair the dysfunctional credit markets and to ensure that adequate credit is available at both the retail and wholesale levels. "The success of these efforts has been significant," says Andy Koblenz, NADA vice president of legal and regulatory affairs. From March through December 2009, finance sources were able to sell nearly $43 billion of TALF-eligible auto retail asset backed securities (ABS), which is more than any other asset class in the TALF program. From August through December, floorplan finance sources were able to sell $4.4 billion in TALF-eligible auto floorplan ABS. To help continue increasing liquidity into the floorplan ABS market, NADA has urged the Federal Reserve Bank of New York to extend the TALF program for floorplan ABS beyond its planned March expiration date.

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Reality Check: US Auto Dealers Cheer December Sales Gains

NEW YORK -- U.S. new-vehicle retail sales volume closed the year on an upswing, topping year-ago commerce and starting 2010 in the right direction, according to auto dealers. Dealers said credit access continues to widen, and some of the most stringent requirements of the past year have loosened a little. But until auto financing eases significantly, new-vehicle sales volume is unlikely to bounce back dramatically, some dealers said. "I think maybe we've turned a corner," said Tim Hall, general sales manager of Bale Chevrolet, in Little Rock, Arkansas.
Source: Market News International

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Grassley Expects Action in First Quarter on Estate Tax, Extenders

... the Senate’s top Republican tax writer predicted that lawmakers would revive the (estate tax) levy, in some form, within the first three months of 2010. Under the terms of the 2001 tax cut law (PL 107-16), the estate tax (which expired Jan. 1), remains repealed for a year, and then snap back to pre-2001 levels in 2011. Lawmakers have seen this scenario — widely considered a tax-planning nightmare — coming for eight years, and have debated many long-term solutions. But in the end, they did not act before adjourning for the year.

President Obama and Democratic tax writers wanted to extend the 2009 estate tax structure, with its $3.5 million exemption and 45 percent tax rate. But the Senate, consumed by the health care debate, did not take up House-passed legislation (HR 4154) that would set those levels permanently. And Senate Finance Chairman Max Baucus, D-Mont., fell short in his last-minute efforts to win support for a short-term extension.

In his weekly conference call with Iowa reporters, Charles E. Grassley of Iowa, the ranking Republican on the Finance Committee, said that he expects tax writers to act quickly to revive the estate tax either permanently or on a temporary basis. “The timetable will be the first quarter of ... the year,” Grassley said. One possibility, Grassley said, would be extending current law. Another — which he said was the best Republicans could hope for — would be an estate tax with a $5 million per person exemption, indexed for inflation, and a 35 percent top rate. That’s the approach that won support last April, when the Senate voted 51-48 to adopt an amendment to the fiscal 2010 budget resolution (S Con Res 13) offered by Blanche Lincoln, D-Ark. Ten centrist Democrats — including Baucus — voted for her amendment, and they will be critical to the development of any new estate tax.
Source: CQ Today Online News (subscription required) 

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Enthusiasts to Descend on Detroit to Save Saab

“Sell Saab!” That’s the message of a group of Saab owners and enthusiasts who will gather, with their vehicles, at General Motors’ Renaissance Center headquarters in Detroit today for a last-ditch appeal to preserve the embattled brand. The event was organized by Ryan Emge of Portland, Me., who operates the Saab History Web site and founded the New England Saab Association. The cause is international; other gatherings are scheduled for Sweden, the Netherlands and Great Britain, he said.
Source: The New York Times

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Opinion: Showtime in Detroit
By Paul Ingrassia

As the industry breaks into a 'Medium Six,' plans to unveil 700 new cars this month
When the North American International Auto Show opens Jan. 16 an expected 700,000 visitors will see more than 700 new cars on display, including more than 30 global debuts. They'll also see an industry transformed. The stakes at this year's auto show are enormous because the focus won't be only on the cars but also on the companies themselves. In the wake of last year's upheaval, auto makers will be trying to show that they have not just new cars but also promising futures. It's a critical message because the next chapters in automotive history will be radically different from the past. As the aftershocks continue it's clear GM, Chrysler and Ford—the only Detroit car company to avoid bankruptcy—will be America's Big Three no more. America instead will have a Medium Six: GM, Ford, Toyota, Honda, Nissan and one more, perhaps Fiat-Chrysler or Volkswagen or Hyundai. Each of the six will have between 8% and 20% of the U.S. market. It's an industry structure that will mirror what Europe has had for decades.
Source: The Wall Street Journal

Editor's note: Ingrassia, a former Dow Jones executive, won a Pulitzer Prize for his coverage of GM in 1993 for the Wall Street Journal.

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NADA Convention & Expo
National Time Magazine 'Dealer of the Year' to be Named at NADA Convention in Orlando

NEW YORK -- Forty-five new-car dealers from around the country have been nominated for the national Time Magazine Dealer of the Year Award. The award is presented by Time Magazine in partnership with Goodyear. This is the 41st annual Time award recognizing dealers who exhibit exceptional business performance combined with distinguished community service. It will be presented during the opening session of the NADA Convention & Expo in Orlando on Saturday, Feb 13. A panel of faculty members from the University of Michigan’s Graduate School of Business Administration will select the winner. Click here for the list of nominees.
Source: NADA Newswire

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NADA University Set to Launch at Convention in February

NADA University, an unprecedented online education and cutting-edge resource for NADA and ATD dealer members to enhance their business performance, will launch at the NADA Convention & Expo in Orlando, Feb. 13-15. Demos and access credentials will be provided on site at the NADA University booth (#1801) and the NADA University studio. The launch will include substantial training and free services for members. LightSpeed VT, a global leader in interactive-based training systems focused on the auto industry, will deliver NADA University to users in both online and classroom-based solutions. NADA University encompasses four "Automotive Centers of Excellence," which are the NADA/ATD Academy, Learning Hub, 20 Group and Resource Toolbox. Click here for more details.
Source: NADA Newswire

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NADA Offers Dealers $200 Voucher as an Extra Incentive for Attending Convention

As an added incentive to attend NADA's upcoming Convention & Expo, all dealers and their managers will receive a $200 voucher when they check in at the convention in Orlando. The $200 voucher can be used to purchase any product or service from any exhibitor on the expo floor during the three-day convention, February 13-15, 2010. "During these challenging times, this is our way of showing our support for dealers around the country and the future of their businesses," says Steve Pitt, NADA vice president of conventions and expositions.
Source: NADA Newswire

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NADA Enhances Convention Experience Through Social Media

Follow the latest convention developments and interact with attendees, workshop presenters and exhibitors on LinkedIn, Facebook, Twitter and YouTube
To enhance the experience for attendees, NADA—for the first time—has launched a social media campaign using the popular LinkedIn, Facebook, Twitter and YouTube platforms. “By using these social media sites, dealers and exhibitors can get a head start on what to expect at the convention,” says Steve Pitt, NADA vice president of conventions and expositions. “Attendees will receive breaking news announcements. Dealers and their managers will also be able to interact online with instructors before workshops begin and get a jump-start on reviewing exhibitor products and services that can improve their businesses.” To follow convention developments on the social media sites, visit www.nada.org/convention and click on the icons.
Source: NADA Newswire

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Quotable
 
"The stakes at this year's auto show are enormous because the focus won't be only on the cars but also on the companies themselves. In the wake of last year's upheaval, auto makers will be trying to show that they have not just new cars but also promising futures."

    -- Paul Ingrassia, Pulitzer Prize-winning journalist, on the North American International Auto Show, which opens Jan. 16, The Wall Street Journal, Jan. 2
2010 Convention
 


NADA Chairman: Convention is the 'Must-Attend Event'

Did you know?

NADA’s new online matchmaking program networkNOW! can connect you to nearly 400 exhibitors in 30 product categories, set up appointments and even create your own floor plan route at the convention. Access networkNOW! with the “Ecode” and Web address you received after registering. Once your profile is submitted, networkNOW! works 24/7 to match you with products and services that can help improve your business. And don’t forget, dealers and managers will receive a $200 voucher to spend on the expo floor. Register today! For more information, contact expo@nada.org.

Be in the know
at the NADA convention Feb. 13-15.


 

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