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Top Stories
Upcoming Fuel Economy Regulations Expected to Drive Car Prices Higher Through 2016
Dealers Will Start to Feel Inventory Pinch this Month
Used Cars Are Fetching Premium Prices
Car Dealerships Are Hiring and Remodeling Again as Sales Rise
Lawmakers Await Details of Compromise Spending Bill
Top Stories
Upcoming Fuel Economy Regulations Expected to Drive Car Prices Higher Through 2016

CLEVELAND, Ohio — Get ready to pay more for less the next time you buy a car. Over the next five years, automakers are going to have to raise prices on vehicles big and small as they struggle to stay profitable and meet stringent 2016 fuel economy mandates. Fuel economy regulations "will put a $4,000 to $7,000 price premium on larger vehicles as companies try to migrate customers down" to smaller, more fuel-efficient cars, said Jeff Schuster, lead automotive analyst for research company J.D. Power & Associates. To make those targets, car companies need to sell significantly more small cars and cut their truck and sport utility vehicle sales to a tiny fraction of where they are today. Their challenge: persuade drivers to drive small, and figure out a way of making money at it. 
Source: The Plain Dealer (Cleveland, Ohio) 

Editor's note: In addition to the “$4,000 to $7,000 price premium” from the 2012-2016 fuel economy rulemaking, the next round of fuel economy mandates for 2017-2025 could add as much as an additional $9,000 to a vehicle, as well as restrict the availability of certain models. "These enormous new regulatory costs are a direct result of having three different fuel economy programs," said Andy Koblenz, NADA vice president of Legal and Regulatory Affairs. NADA will continue to advocate for one national standard under the CAFE program, where consumer affordability and choice must be considered. NADA opposes duplicative regulation by California and EPA regulators.

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Dealers Will Start to Feel Inventory Pinch this Month

Lean inventories will begin to hamper U.S. auto sales this month, a situation that will worsen as global production slows as a result of Japan's earthquake and tsunami. "Most likely lean small-car inventories will be a headwind on the industry's sales rate," Ford sales boss Ken Czubay said. The first U.S. dealers to be affected will be Japanese-brand stores, as deliveries of vehicles assembled in Japan stop or are sharply curtailed this month. Toyota is working to make sure U.S. dealers have high-demand vehicles such as the Prius, said Bob Carter, head of Toyota Division. "While there may be spot shortages here or there, we are prioritizing distribution efforts to minimize those," Carter said.
Source: Automotive News

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Used Cars Are Fetching Premium Prices

A new Toyota Prius these days starts at a list price of $22,410, which might prompt the cost-conscious buyer in this fragile economy to scout around for a used version. But even a two-year-old model of the hybrid fuel miser costs almost as much, at about $20,800, according to National Automobile Dealers Association. The dealers association reports that prices on late-model used cars sold to dealers at wholesale auctions jumped 4 percent in March alone, and they're up 12 percent over the past year. The price increases are highest among fuel-efficient cars. Prices for these type of cars — which include models such as the Honda Civic, Toyota Corolla and Ford Focus — jumped 11 percent at wholesale auctions last month alone, according to NADA.
Source: St. Louis Post-Dispatch

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Car Dealerships Are Hiring and Remodeling Again as Sales Rise

Some big auto dealerships are even spending millions of dollars snapping up independent dealers and smaller chains — a sign of renewed confidence in the industry, analysts said.

With shoppers flocking back to showrooms, auto dealers are making money again and have begun sprucing up reception areas and hiring back workers. Some big auto dealerships are even spending millions of dollars snapping up independent dealers and smaller chains — a sign of renewed confidence in the industry, analysts said. "We are seeing some daylight in the automotive business," said Dan Turner, general manager of Power Ford in Torrance. "It is starting to become an exciting time again." Since 2008, the number of U.S. auto dealers has plunged 15% to 17,680, according to the National Automobile Dealers Assn. Now, rising car sales are helping the surviving dealers recover.
Source: Los Angeles Times

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Lawmakers Await Details of Compromise Spending Bill

A government shutdown was narrowly averted early Saturday morning, but the battle over fiscal 2011 funding isn’t yet over for Congress. Congress passed a weeklong stopgap measure that expires Friday, giving lawmakers this week to consider and vote on a compromise spending package for the fiscal year, which ends Sept. 30. But as several lawmakers pointed out on the Sunday morning news shows, the details of that compromise, which would cut about $38 billion from spending levels set earlier this year, have yet to trickle out. “They’re still sifting through the areas where they are going to make cuts,” House Budget ranking member Chris Van Hollen said on ABC’s “This Week.” However, the Maryland Democrat said he believed the bill would receive enough support to pass.
Source: Roll Call

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For more auto industry news, visit

SBA and Agility Recovery Solutions Host Webinar on Post-Disaster Leadership Strategies
Join Agility Recovery Solutions and the U.S. Small Business Administration on Tuesday, April 19, for a discussion on becoming a more resilient leader through a disaster that could destroy the company.

Analysts to Discuss Implications of Japan Supply Disruptions at Automotive Forum April 19
Economists will discuss the impact that high oil prices and the disaster in Japan are having on automotive markets during the NADA/IHS Automotive Forum in New York April 19.

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"If you try to put people into vehicles they don't like, you could actually delay the greening of the fleet."

    — Rebecca Lindland, analyst for research company IHS Automotive, on automakers' challenge to persuade drivers to drive small in order to mee stringent 2016 fuel economy mandates, The Plain Dealer (Cleveland, Ohio), April 9

Featured Videos
NADA Analyst Jonathan Banks Discusses Japan's Effect on Used-Car Market (AutoFocus)

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