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Inside this issue
Dealers Win Challenge in Chrysler Suit
Mazda Looks to Shed Workers as it Aims to Top 300,000 U.S. Sales for 1st Time Since 1994
Mitsubishi Seeks to Double U.S. Output
Why Are Used Cars So Expensive?
The Financial Page: Great Expectations?
Colorado Auto Dealers Looking to Hire as New-Car Market Grows
Click here for more auto industry news at NADAFrontPage.com. .
Top Stories
Dealers Win Challenge in Chrysler Suit

Two rejected Chrysler dealerships that won their arbitration cases in 2010 are closer to a trial date in their lawsuit against the automaker. In a March 9 ruling, U.S. District Court Judge Leonard Wexler denied a Chrysler motion seeking dismissal of the dealerships' complaint. He told the parties to file their pretrial orders. Leonard Bellavia, lawyer for the dealerships, said the ruling means the trial should be in 60 to 90 days. Bellavia declined further comment, other than to say he hopes his clients and Chrysler "can come together and work out an amicable solution." He wouldn't say whether there are active settlement discussions. The dealerships -- Eagle Auto Mall Corp. of Riverhead, N.Y., owned by Mark Calisi; and Terry Chrysler-Jeep of Burnt Hills, N.Y., owned by Charlie Morris -- sued Chrysler in August 2010, alleging that they received "unreasonable and unconscionable" letters of intent to enter into a franchise agreement after their arbitration victories.
Source: Automotive News

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Mazda Looks to Shed Workers as it Aims to Top 300,000 U.S. Sales for 1st Time Since 1994

Mazda wants to boost U.S. vehicle sales to levels not seen since the mid-1990s, even as it cuts its U.S. work force. In a March 7 memo, Jim O'Sullivan, CEO of Mazda North American Operations, laid out to all 700 employees the terms of voluntary buyout offers. Mazda's recent sales performance in North America has been strong. Mazda expects no major additions to its dealer base to support the sales growth, but it plans to boost North American advertising 25 percent in the fiscal year that starts April 1. Mazda spokesman Jeremy Barnes says the marketing plans are unaffected by the staff-cutting efforts. Mazda dealers support the company's U.S. strategy. Michael MacDonald, chairman of the Mazda dealer council and owner of two Mazda dealerships near Salt Lake City, says the council backs Mazda's plans for growth, product and advertising. "We as a council are unanimous in our support of their direction," MacDonald said. "The big plan is in place, and for a dealer, the plan is product, product, product. That's what we want to see, and that's what we are seeing."
Source: Automotive News

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Mitsubishi Seeks to Double U.S. Output

Car maker Mitsubishi Motors Corp. plans to double production at its automobile plant in Illinois to 70,000 vehicles per year, Japanese business daily Nikkei reported. The company's U.S. subsidiary, Mitsubishi Motors North America Inc., will stop making vehicles exclusively for the North American market and instead focus on assembling and exporting the Outlander Sport SUV this summer, Nikkei said. The company's plan to start making the compact SUV at the Illinois plant is a move to boost capacity, which has taken a hit due to sluggish sales, Nikkei wrote.
Source: Reuters

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Why Are Used Cars So Expensive?

Late-model used cars are in short supply, jacking up the price. Some cars, like the Mazda CX-9 Touring SUV, are cheaper new than used.
For the past seven months, the average price of a year-old used car has been less than 12 percent cheaper than a new car, according to the National Automobile Dealers Association (NADA) in McLean, Va. The discount three years ago: 16.7 percent. New car prices are rising, too. After a decade of producing too many cars, automakers have done a better job of keeping production in line with demand, says Laurence Dixon, a senior automotive analyst at NADA.
Source: The Christian Science Monitor

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The Financial Page: Great Expectations?
By James Surowiecki

One good sign is that Americans are buying new cars again. That’s a major shift.... New-car sales began to rebound over the winter, and last month they jumped sharply, up almost sixteen per cent from the previous year. Even if that figure was an outlier, at the current sales rate factories will soon be running at ninety per cent of capacity, which suggests that more demand will lead to more jobs. Indeed, in the past year automakers, and auto-parts makers, have added forty-five thousand workers. And, while Detroit is much smaller than it once was, the auto industry remains a huge business—many “foreign” cars sold in the U.S. are actually made here—so its return to health will have ripple effects across the economy.
Source: The New Yorker

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Colorado Auto Dealers Looking to Hire as New-Car Market Grows

It has no horsepower, no hybrid motor, no performance-boosting or gas-saving technology. But new to the Denver Auto Show this year is something even more telling about the state of the car and truck industry: a job fair. The long-suffering auto sector is suffering no more. Sales are up sharply over the past year. Along with the sales increase is a need to rebuild staffing at Colorado dealerships. Tim Jackson, president of the Colorado Automobile Dealers Association, said dealers decided this year for the first time to hold a "career fair" at the Denver Auto Show, which runs Wednesday through next Sunday at the Colorado Convention Center. Dealers and analysts now are seeing pent-up demand from buyers who are cautiously optimistic about improving economic conditions. "Overall, it's really looking positive," said Don Hicks, president and chief executive of Shortline Auto Group. "The dark days of '08 and '09 are behind us. 2010 was a nice year, 2011 was better year, and 2012 has come out of the chute just on fire."
Source: The Denver Post

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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 as a council are unanimous in our support of their direction. The big plan is in place, and for a dealer, the plan is product, product, product. That's what we want to see, and that's what we are seeing."

   
-- Michael MacDonald, chairman of the Mazda dealer council and owner of two Mazda dealerships near Salt Lake City, says the council backs Mazda's plans for growth, product and advertising, Automotive News, March 19
  

 

NADA - National Automobile Dealers Association

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