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Wednesday, March 14, 2012 FacebookTwitterFlickrRSSSEND TO A FRIENDPRINT
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Inside this issue
Facilities Fight Goes Federal
Senate Defeats Tax Break for Natural Gas Trucks
Autos Restocking Lifts January Business Inventories
Despite Soaring Gas Prices, Plug-In Electric Cars Tempt Few Buyers
BMW Sees No Signs of End to Incentive War
NADA University Reports Sharp Rise in Workshop Attendance at 2012 NADA-ATD Convention
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Top Stories
Facilities Fight Goes Federal

Braman Cadillac accuses GM of illegal 2-tier pricing
The battle over dealership renovation programs has blossomed into a federal case. A lawsuit in Florida charging General Motors with illegal two-tier pricing because of incentives connected to facility renovations could affect dealers nationwide. Billionaire megadealer Norman Braman is suing General Motors over the manufacturer's Essential Brand Elements program. Last week in federal court Braman's lawyers amended the complaint, originally filed in Miami-Dade County Circuit Court in January, to allege that GM's program amounts to two-tier pricing in violation of the federal Robinson-Patman Act. Braman also says GM violated Florida law when it stopped paying program incentives to his Miami Cadillac store. Dealer Jack Fitzgerald also is suing General Motors in a Maryland state court over the Essential Brand Elements program. The Fitzgerald suit challenges the legality of GM's program under Maryland law, which says manufacturers cannot charge different prices for a vehicle, said [John] Forehand, who is handling that case as well as the Braman lawsuit.
Source: Automotive News

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Senate Defeats Tax Break for Natural Gas Trucks

A bipartisan proposal to provide tax incentives for natural gas vehicles was defeated in a Senate vote on Tuesday, but a key backer of the bill said it will be revised and reintroduced to address concerns from industry. The amendment to the Senate's highway bill needed 60 votes to pass, but was rejected in a 51-47 vote after conservative groups panned it as an unnecessary subsidy, and after some senators worried the bill could raise costs for the chemical and agricultural sectors.
Source: Reuters

Editor's note: NADA opposed the amendment because it included language that would make natural gas vehicle tax credits “transferable” to the dealer, allowing the dealer to provide a point-of-sale discount and then be paid by the IRS. NADA's Legislative Office will continue to advise members of Congress, especially members of the tax writing committees, that transferable tax credits are unworkable and would create needless confusion among vehicle purchasers. NADA thanks all dealers who responded to the legislative alert issued in anticipation of the vote.

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Autos Restocking Lifts January Business Inventories

Business inventories rose more than expected in January as auto dealers rebuilt stocks at the fastest pace since July 2010 to meet pent-up demand from households. The Commerce Department said on Tuesday inventories increased 0.7 percent to a record $1.57 trillion, after advancing by an upwardly revised 0.6 percent in December. The rise in inventories in January reflected a 2.6 percent jump in restocking by auto dealers to meet increased demand for motor vehicles from consumers, whose confidence in the economy has been lifted by a strengthening labor market. Auto inventories had increased 0.6 percent in December. Inventories are a key component of gross domestic product changes.
Source: Reuters

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Despite Soaring Gas Prices, Plug-In Electric Cars Tempt Few Buyers

It's the best of times and the worst of times for plug-in electric vehicles (PEVs). High gas prices and low tailpipe emissions make them an attractive buy, yet the cars are not rolling out fast enough to reach the mainstream marketplace anytime soon, and it is still unclear if they'll ever get there. New York-based battery company Ener1 Inc. filed for bankruptcy last year, and General Motors Co. suspended production of the Chevrolet Volt earlier this month in response to slow sales. Based on some analyses, the future doesn't look great, either.
Source: E&E (subscription required)

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BMW Sees No Signs of End to Incentive War

BMW, the world's largest premium carmaker, warned that more and more profit-eroding incentives are being offered to sell luxury cars at the moment, adding there are no signs this will change anytime soon. "What we see with the beginning of the fourth quarter is that the pressure on the pricing front has increased. When it will end is, at the moment, not clear," finance chief Friedrich Eichiner told analysts during a webcast. BMW does not break out separately the net effect of pricing power on its earnings due to competitive reasons, but the Automobile segment's earnings before interest and tax improved by 3.14 billion euros ($4.12 billion) last year thanks to a combination of balance of volumes, sales mix and pricing.
Source: Reuters

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NADA University Reports Sharp Rise in Workshop Attendance at 2012 NADA-ATD Convention

NADA U issues Call-for-Workshops for 2013 NADA convention in Orlando, Fla.
NADA University, the education and training arm of NADA, reports that attendance at its educational workshops held during the 2012 NADA-ATD convention in February skyrocketed by nearly 40 percent over last year’s totals. NADA U has also issued its Call-for-Workshops for the 2013 NADA convention, held Feb. 8-11, in Orlando, Fla. The 2013 ATD convention will be held as a separate event, April 19-22, in Tampa, Fla. In all, there were 18,302 attendees at the convention workshop sessions, compared to 13,220 last year, an increase of 38.4 percent. “This shows that the industry is renewing its commitment to quality training and education, especially as the market picture brightens and attention turns toward growth,” said John Lyboldt, NADA vice president of dealership operations. “There’s no better one-stop opportunity to gear up than our convention workshop program.”
Source: NADA Newsroom  

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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 the carrot-and-the-stick approach. It's almost like they've attached the carrot to the stick and they're beating people with it. It has put people in a position of being at a substantial disadvantage."

-- John Forehand, a Florida lawyer representing two dealers who are suing General Motors over its Essential Brand Elements program to renovate dealerships, Automotive News, March 12


NADA - National Automobile Dealers Association


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