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Inside this issue
Ahead of the Bell: February US Auto Sales
Small Car Sales Surge as Gas Prices Escalate
Audi Records Record Profits for 2011
Dealers Reminded to Consult with Their Tax Practitioners Soon about the UNICAP Safe Harbors
GOP Queries White House on Fuel Rules
Click here for more auto industry news at NADAFrontPage.com. .
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Ahead of the Bell: February US Auto Sales

U.S. auto sales are expected to keep up their strong pace in February, as Americans snapped up small, fuel-efficient cars to offset higher gas prices. Sales of new cars and trucks are expected to rise 3 percent from last February to nearly 1.1 million, according to LMC Automotive. Automakers report February sales later [today]. General Motors Co. is the only major automaker expected to report a sales decline for the month. GM inflated its sales last February with heavy discounts. Gas prices - which are up 45 cents since Jan. 1 and now average $3.73 a gallon - are causing a pronounced shift to smaller cars. Erich Merkle, Ford's top U.S. sales analyst, says small cars made up around 19 percent of industry sales in December. That rose to 21 percent in January and is expected to rise to at least 24 percent in February, he says. Sales of the Ford Focus compact car have doubled since last year.
Source: The Associated Press

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Small Car Sales Surge as Gas Prices Escalate

Consumers shopping for cars are already reacting to the recent surge in gasoline prices, but Detroit's automakers say this time around they have the right lineup of cars and trucks to handle it. General Motors is armed with the fast-selling Chevrolet Cruze and Sonic small cars, Ford has the Fiesta and redesigned Focus and Chrysler is launching the Dodge Dart, a new compact car, this spring. That gives the Detroit Three an improved lineup that should insulate them from market-share losses this year in the U.S., even if General Motors results dip when automakers report February sales today. Nationally, gas prices hit an average $3.73 per gallon on Wednesday, with prices near or above $4 in several states. "We're benefiting from having a very balanced portfolio," said GM spokesman Jim Cain.
Source: Detroit Free Press

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Audi Records Record Profits for 2011

German top-of-the-range carmaker Audi, the premium brand of Volkswagen, said on Thursday that profits rose to new records in 2011, and earnings would again match those levels this year. Audi said in its annual report that net profit soared by 69 percent to 4.44 billion euros ($5.90 billion) in 2011. "The Audi Group once again set records for deliveries, revenue and key earnings data in 2011," boasted management board chief Rupert Stadler.
Source: AFP

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Dealers Reminded to Consult with Their Tax Practitioners Soon about the UNICAP Safe Harbors

The IRS, on Nov. 9, 2010, issued Revenue Procedure 2010-44, which created two optional safe harbor methods of accounting for motor vehicle dealerships. If properly elected and applied, the new safe harbors permit dealers to (i) deduct, instead of capitalize, certain costs related to their inventories, and (ii) significantly simplify their computation of these costs (known as their Uniform Capitalization – or UNICAP – computation).  If qualifying dealers elect the safe harbor methods of accounting for their first or second tax year ending after Nov. 9, 2010, they may do so without having to consider most of the potential restrictions that apply to automatic method of accounting changes. Consequently, for dealers whose tax year corresponds with the calendar year and who did not elect these methods for the 2010 tax year, they should speak with their tax practitioner soon about whether they should elect the UNICAP safe harbors for the 2011 tax year. The election is made on IRS Form 3115. For more information, consult summaries of the revenue procedure by the IRS Motor Vehicle Technical Advisor and NADA.
Source: NADA Regulatory Affairs

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GOP Queries White House on Fuel Rules

House Republicans want to know advisers’ role in standards
House Republicans want the White House to answer more questions about the involvement of President Barack Obama's advisers in writing the 2017-2025 fuel efficiency standards. Rep. Darrell Issa, R-Calif., chairman of the House Oversight and Government Reform Committee, had sought information from White House Counsel Kathryn Ruemmler in August. "Your response seemed to imply that the (Executive Office of the President) was not significantly involved in the development of these fuel economy/greenhouse gas emissions standards," Issa wrote. Issa said his investigation has found that the White House's Office of Management and Budget, Domestic Policy Council, National Economic Council and Council of Economic Quality "participated directly and substantially in developing fuel economy/greenhouse gas emissions standards." Some Republicans charge the White House circumvented the normal rulemaking process by negotiating directly with the automakers.
Source: The Detroit News

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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 www.nada.org.

 
Quotable
"We're selling them faster than we can get them."

   
-- Cathy Anderson, the owner of two dealerships in the Huntsville, Ala., area, says her sales normally are dominated by F-series pickup trucks, but this month the top seller was the Focus because of rising gas prices, The Associated Press, March 1 



NADA - National Automobile Dealers Association

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