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Inside this issue
Obama's Green-Car Plan Runs Into Alternative-Fuel Limits
U.S. Economy Expands at 3% Annual Pace, Greater Than Economists Estimated
Wells Fargo, Santander Said to Vie for Chrysler Car Loans
Chrysler Courts Peugeot
4 Reasons Why F&I Will Fly in 2012
LaHood Delays Rule That May Require Backup Cameras
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Top Stories
Obama's Green-Car Plan Runs Into Alternative-Fuel Limits

President Barack Obama’s administration is buying fewer hybrid and electric cars and more vehicles that can consume both ethanol and gasoline to meet 2015 environmental goals, favoring older technology over new. Obama gave speeches across the U.S. last year touting his twin goals of buying only alternative-fuel vehicles for the U.S. fleet by 2015 and getting 1 million electric vehicles on the country’s roads by that year. That’s looking more difficult as the federal government learns the same lesson that U.S. car consumers have already figured out: it is tough being green. Rather than leading the way, the government has discovered that the high cost of hybrids and electric cars and their lack of availability often mean it makes more sense to buy cars with fuel-efficient conventional engines.
Source: Bloomberg

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U.S. Economy Expands at 3% Annual Pace, Greater Than Economists Estimated

The U.S. economy expanded more than forecast in the fourth quarter as companies rebuilt inventories in anticipation of growing demand. Gross domestic product climbed at a revised 3 percent annual rate, the most since the second quarter of 2010, Commerce Department figures showed today in Washington. Income gains in the second half of 2011 were stronger than previously reported as employment growth accelerated, which may set the stage for a pickup in consumer spending that accounts for about 70 percent of the economy. At the same time, Federal Reserve Chairman Ben S. Bernanke, who testifies before Congress today, said earlier this month that bigger reductions in unemployment depend on faster growth.
Source: Bloomberg

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Wells Fargo, Santander Said to Vie for Chrysler Car Loans

Wells Fargo & Co. and Santander Holdings USA Inc. have joined banks vying to oust Ally Financial Corp. as Chrysler Group LLC’s preferred auto lender, according to three people with knowledge of the bidding. General Electric Capital Corp., U.S. Bancorp, JPMorgan Chase & Co. and Ally also are negotiating with Chrysler, which generates more than $25 billion in auto loans, said the people, who declined to be identified because the process is private. Chrysler may use a multi-bank approach where two or three lenders take pieces of the financing work from Ally, one of these people said. “We’re talking to a variety of providers of funding,” Sergio Marchionne, Chrysler’s chief executive officer, said in an interview in Brussels, declining to name any banks. “We haven’t made a final determination as to who’s going to be with us and whether effectively it’s going to be more than one party. We have received a number of expressions of interest from financial institutions.”
Source: Bloomberg

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Chrysler Courts Peugeot

Automaker interested in reviving talks as GM poised to take 7% stake in French firm
General Motors Co. may be poised to take a 7-percent stake in PSA Peugeot Citroën of France, but another Detroit automaker wants to join the fray. Sergio Marchionne, CEO of Auburn Hills-based Chrysler Group LLC and CEO of Fiat SPA of Italy, is interested in reviving talks with Peugeot, the automaker Marchionne approached at the Geneva Motor Show three years ago, in March 2009, amid a scramble to acquire GM's Adam Opel unit in Germany as well as Chrysler. Peugeot "solves a whole lot of problems internationally and otherwise," said an industry source familiar with Marchionne's thinking on the prospects of a Fiat-Chrysler alliance with Peugeot, particularly its operations outside of Western Europe.
Source: The Detroit News

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4 Reasons Why F&I Will Fly in 2012

The large public retailers saw a banner F&I year in 2011 and say they expect no letup this year. In separate conference calls this month, dealership group executives cited four common factors that point to even better F&I results in 2012:

1. Subprime and near-prime customers are having an easier time getting financed. 
2. Lenders are getting more competitive with each other.
3. F&I training and techniques such as selling extended-service contracts to service customers are now standard operating procedure.
4. F&I products, especially extended-service contracts and prepaid maintenance, build service retention and repurchase intent.
Source: Automotive News

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LaHood Delays Rule That May Require Backup Cameras

Secretary of Transportation Ray LaHood again has delayed a rule that could have required backup cameras in all cars and trucks on 2014 models -- a move the Department of Transportation says could save about 300 lives a year. In a letter [Tuesday] to members of oversight committees in the Senate and the House of Representatives, LaHood wrote: "I now anticipate the department can issue the final standards by Dec. 31, 2012." A 2007 law requiring the DOT to set rules to improve the ability to see pedestrians behind vehicles had set Feb. 28, 2011, as the deadline for regulations, but allowed the secretary to delay it. Safety regulators proposed a rule in December 2011, but LaHood put off the deadline citing, "the complexity and volume of issues identified in the public comments on our proposed rule."
Source: USA Today

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The NADA Story

The NADA story began in 1917 when 30 auto dealers traveled to the nation’s capital to convince Congress not to impose a luxury tax on the automobile. They successfully argued that the automobile is a necessity of American life, not a luxury. From that experience was born the National Automobile Dealers Association. Today, NADA represents nearly 16,000 new-car and -truck dealerships with 32,500 franchises, both domestic and international. For more information, visit

"It's our view that it takes about $4.50 [a gallon] to shock the consumer in this market. They've seen over $4 before. They've learned to accommodate it. So we think it will take a higher number this time to cause any real shift in the mix."

-- NADA Chief Economist Paul Taylor, on rising gasoline prices and auto sales, Automotive News TV, Feb. 27

NADA - National Automobile Dealers Association


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