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Inside this issue
Low Interest Rates Put Cash in Americans' Pockets
Chrysler Dealer Council Would Support Automaker Bid for Ally
CEO: Chrysler Will Add Jobs
Report: 2011 Dealership Merger and Acquisition Activity Jumps 140 Percent
Rising Car Sales Will Drive Ad Spending
Dealers Aim Higher to Fill Jobs
Click here for more auto industry news at NADAFrontPage.com. .
Top Stories
Low Interest Rates Put Cash in Americans' Pockets

A historic drop in interest rates is helping U.S. households save more than $3,000 a year on average, allowing consumers to spend more even as their earnings fall, a USA TODAY analysis finds. Americans spent 5.8% of their after-tax income paying interest on mortgages, credit cards, car loans and other debt, according to the latest data from the Bureau of Economic Analysis. That's the smallest share since 1977 and a steep drop from a record high of 9.1% in 2007. The result: Low interest rates are reshaping household budgets and consumer spending, showing the economic force of the Federal Reserve's unprecedented effort to reduce mortgage and other long-term rates to restore an economy that was near collapse four years ago. "Even if people aren't paying attention to their interest payments falling, the money builds up in their checking account, and that especially benefits big-ticket items like cars," says Paul Taylor, chief economist for the National Automobile Dealers Association.
Source: USA Today

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Chrysler Dealer Council Would Support Automaker Bid for Ally

Chrysler Group LLC’s dealers prefer to continue working with Ally Financial Inc. for auto financing and would support an investment in the lender by the automaker, said David Kelleher, president of the carmaker’s dealer council. “Dealers would be extremely supportive of Chrysler, or some sort of alliance that included Chrysler, buying Ally,” Kelleher, a dealer in Glen Mills, Pennsylvania, said yesterday in a phone interview. “We’re very concerned that there isn’t anybody out there” for Chrysler to partner with as a full-service solution to dealers’ financing needs, he said. Chief Executive Officer Sergio Marchionne has said Chrysler is in talks with several financial companies as it weighs whether to let its preferred-lender agreement with Detroit-based Ally expire in April 2013.
Source: Bloomberg

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CEO: Chrysler Will Add Jobs

Chrysler CEO Sergio Marchionne says the company's failure to win up to $3.5billion in Energy Department retooling loans will slow the automaker's new projects and new jobs. "It's certainly going to slow it down," Marchionne said Wednesday in a Detroit News interview on Capitol Hill, where he held meetings with lawmakers. "You decide whether you want to add jobs this year or 12 months from now. And the risk that you are running is that in a 12-month period, options open." But Marchionne told Michigan members of Congress that he still plans to add more than 2,000 jobs in Michigan over the next 18 to 24 months.
Source: The Detroit News

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Report: 2011 Dealership Merger and Acquisition Activity Jumps 140 Percent

Last year’s merger and acquisition activity by public dealerships groups jumped 140 percent above the 2010 total, according to the Presidio Group’s Automotive Retail M&A Report. Presidio combed through corporate SEC filings to determine publicly held dealer groups completed $512 million in acquisitions in 2011. While making a significant year-over-year climb, Presidio acknowledged the total is still well-below the all-time record of more than $1 billion set in 2006.
Source: Auto Remarketing

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Rising Car Sales Will Drive Ad Spending

The U.S. auto industry is bouncing back, and according to Moody's Investors Service, that will be good news for media industries this year and next, and for broadcast television in particular. Among media companies, CBS Corp., with its heavy reliance on advertising, can expect to see the biggest boost in revenue. In a report Tuesday by analyst Neil Begley, Moody's forecast a 9.3% increase in auto sales this year over last, fed by pent-up demand following the recession. Japanese automakers are also expected to step up advertising in an effort to recover market share after the disruption caused by last year's earthquake. Auto ad spending totaled $13.9 billion in 2011, according to Kantar Media, and accounts for 20% to 25% of total ad revenue for cable systems and local TV stations, Tuesday's report stated.
Source: Crain's New York Business

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Dealers Aim Higher to Fill Jobs

The goals: Hire more college grads and put them on career paths
Kelly Wadlinger's chosen career was to watch grass grow -- literally. She was a biology major planning to get a Ph.D. Then she did an internship in a plant-genetics laboratory. "Boring!" Wadlinger says. "It was literally watching a little plant grow. The overall process is cool, but I didn't think it was for me. I need to be around people more." Wadlinger, 29, is around people a lot now as sales manager at Faulkner Fiat of Harrisburg in Harrisburg, Pa. The Shippensburg University graduate took a job in the auto industry in 2006 while preparing for another career -- and has never looked back. "You can have a great career," Wadlinger says.
Source: Automotive 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
"Dealers would be extremely supportive of Chrysler, or some sort of alliance that included Chrysler, buying Ally."

   
-- David Kelleher, president of the carmaker's dealer council, Bloomberg, March 28 
 

 

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