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Inside this issue
NADA/ATD Study: EPA Underestimated Emissions Control Costs for Model Year 2004-2010 Heavy-Duty Trucks
Expanded Alternative-Fuel Tax Credits Proposed
BMW Made Record $6.4 Billion in 2011
Honda Looks to U.S. Dealers to Boost Natural Gas Station Network
Geneva Show Debuts Over-the-Top Supercars
Click here for more auto industry news at NADAFrontPage.com. .
Top Stories
NADA/ATD Study: EPA Underestimated Emissions Control Costs for Model Year 2004-2010 Heavy-Duty Trucks

NADA and ATD released a new report today that calls into question the Environmental Protection Agency’s (EPA) cost analysis of emissions control requirements for model year (MY) 2004-2010 commercial trucks. The mandates resulted in substantially higher prices for commercial vehicles, depressed sales and delayed the environmental benefits that the EPA originally sought.

NADA/ATD released the following statement:

“Until now, few studies have ever compared the EPA’s cost predictions to the actual cost of meeting its motor vehicle emissions mandates. The study, which looks back at the 2004-2010 medium- and heavy-duty truck emissions mandates, reveals that the EPA underestimated actual compliance costs on average by a factor of two to five. It shows what can happen when a regulatory proposal – based on far in-advance predictions – seeks to set mandates far in the future. Importantly, the study documents the real-world market disruptions that can occur as a result.

“The lessons learned from this report apply directly to the proposed MY 2017-2025 fuel economy regulations for light-duty vehicles. That rulemaking, combined with previous Obama administration fuel economy mandates, will raise the average price of a vehicle by $3,000, according to EPA and National Highway Traffic Safety Administration estimates. When faced with unreasonable federal regulatory mandates that increase motor vehicle costs, buyers of light-duty vehicles – similar to what commercial truck buyers experienced – will seek out less expensive alternatives in the marketplace.” Click here for the report.
Source: NADA Newsroom

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Expanded Alternative-Fuel Tax Credits Proposed

President Barack Obama on Wednesday proposed bigger tax credits for advanced-technology vehicles whether they are powered by electricity, natural gas or other alternative fuels and announced a $1-billion initiative to help a dozen or so communities across the U.S. create infrastructure to support them. Obama outlined his plans ... during a speech Wednesday at Daimler Trucks' plant in Mt. Holly, N.C., one of several trips he and other members of his administration have planned for what could be a key battleground state in the election this fall. Under his proposal to Congress, Obama would raise the current tax credit of up to $7,500 for alternative-fuel vehicles to $10,000 and make it available at the point of sale, with the credit transferable to the auto dealer or financier instead of just allowing buyers to take the credit when they file their taxes.
Source: Detroit Free Press

Editor’s note: In response to President Obama’s March 7 proposal on tax credits for alternative-fuel cars and trucks, NADA issued the following statement: “While Congress has yet to consider the president’s transferability proposal, NADA will oppose any legislative provisions that would create transferable tax credits between taxpayers for vehicle purchases. Creating a tax credit that is transferable between taxpayers is virtually unprecedented in the U.S. Tax Code. The traditional consumer tax credit has worked efficiently to incentivize vehicle sales. This proposal for transferability would needlessly complicate the vehicle buying process, create uncertainty, increase transactional costs and deter sales."

According to NADA, if the dealer has to “fund” the tax credit at the point of sale, insurmountable problems arise, such as:
(1) The dealer would have to assume the administrative burden of documenting the credit at the IRS. 
(2) The dealer would have to assume the economic burden of the float pending payment by the IRS. 
(3) The dealer would have to assume the risk of a complete or partial denial of the credit in audit. 
(4) “Recapture” issues may arise that would be detrimental to the dealer. 
(5) At the time of each retail sale, it would be impossible to determine whether the dealer would have sufficient tax liability to offset the tax credit transferred from each consumer.
(6) The IRS might condition the dealer’s ability to claim the credit on the customer’s tax status, putting the dealer in a similarly untenable position at the time of sale.

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BMW Made Record $6.4 Billion in 2011

A sharp jump in sales of its luxury cars and sport utility vehicles in China helped German automaker BMW AG increase net profit by 51 percent last year to ... $6.43 billion. The company's sales also benefited from the recovery the United States. Sales rose 14 percent in the United States, where the company sold more than 340,000 vehicles.
Source: The Associated Press

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Honda Looks to U.S. Dealers to Boost Natural Gas Station Network

Honda Motor Co., the only automaker selling compressed natural gas-powered cars to U.S. drivers, wants some of its dealers to also install pumps to sell the fuel as its seeks to double sales of CNG vehicles. Boosting sales of Indiana-built Civic Natural Gas sedans requires more fuel stations, Steve Center, U.S. vice president for environmental business development, said in an interview. “If the dealer had a fueling station, it would really reduce some of that concern for the customer,” Center said at Honda’s U.S. headquarters in Torrance, California. “It’s not our place to create infrastructure, but it’s a chicken-and-egg situation and we’re going to have to nurse that egg along.” Currently, 270 U.S. Honda dealers plan to sell the Civic Natural Gas, a revamped version of the Civic GX compact sold since the 1990s.
Source: Bloomberg

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Geneva Show Debuts Over-the-Top Supercars
By Neil Winton

Bentley, Ferrari, Maserati, BMW dazzle journalists
Austerity might be the gloomy theme on the news every night in Europe, but excess was everywhere at the Geneva International Motor Show. Luxury cars are booming, judging by the number of new Bentleys, Ferraris, Maseratis and top-of-the-range BMWs and Porsches revealed here. New technology was on the backburner; sure, there were electric cars, hybrids, and fuel cell cars, but nobody was bragging about them.
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
"Until now, few studies have ever compared the EPA's cost predictions to the actual cost of meeting its motor vehicle emissions mandates. The lessons learned from this report apply directly to the proposed MY 2017-2025 fuel economy regulations for light-duty vehicles."

    -- NADA, in a study released today, calls into question the EPA's cost analysis of emissions control requirements for model year 2004-2010 commercial trucks, NADA Newsroom, March 8



NADA - National Automobile Dealers Association

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