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Inside this issue
Study: New Fuel Rules Will Cut 7M Out of Car Market
A Proposed Rule Seeks to Stop Runaway Cars
VW Group Posts Record March Sales Led by Strong N.A. Gains
How Hyundai Went from Joke to Contender in US
Unprofitable Mazda May Need to Sell Some Assets
Opinion: New Auto Era Leaves No Time for Swagger
Click here for more auto industry news at NADAFrontPage.com. .
Top Stories
Study: New Fuel Rules Will Cut 7M Out of Car Market

NADA says higher vehicle prices resulting from higher fuel economy rules will cut as many as 7 million potential new-car buyers out of the market in 2025. The proposed rules will hike average fuel economy to 54.5 mpg for cars and trucks by 2025 — and will add about $2,000 to the typical cost of a car or truck, the Obama administration estimates. When combined with nearly $1,000 average cost hike for the 2012-2016 rules, a car in 2025 will cost $3,000 more than in 2011 — after adjusting for inflation. NADA says nearly 7 million lower income consumers, such as college students and working families, will not qualify for auto financing to cover the additional cost. "The unintended consequences of the proposed fuel economy increases are clear," said David Wagner, the primary author of the study and an analyst with the NADA Used Car Guide. "If the price of a vehicle goes up by the government estimate of almost $3,000, millions of people will no longer be able to finance a new vehicle." Doug Greenhaus, NADA's chief regulatory counsel for environment, health and safety, says the government needs to better understand the impact of the proposed fuel economy rules on consumers and auto lending before doubling down on new mandates. "Disregarding vehicle affordability will undermine the environmental and national security benefits the administration is seeking," Greenhaus said. "The proposed MY 2017-2025 fuel economy rules should be delayed until there is a more accurate picture of how prospective buyers likely will react."
Source: The Detroit News

Editor's note: NADA issued the study, “The Effect of Proposed MY 2017-2025 Corporate Average Fuel Economy (CAFE) Standards on the New Vehicle Market Population,” during a press briefing on April 12. Click here for the full study.

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A Proposed Rule Seeks to Stop Runaway Cars

Federal safety regulators plan to require all new cars and trucks to have a brake-throttle override system, giving drivers the ability to step on the brake to stop the car if the accelerator pedal sticks or malfunctions.
Source: The New York Times

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VW Group Posts Record March Sales Led by Strong N.A. Gains

Volkswagen Group increased global vehicle sales in March by 12.5 percent to 862,700, helped by strong growth in North America and China. But Europe's biggest carmaker said uncertainty in European markets is still a matter for concern. "We produced another strong performance in North America, China and Russia. However, uncertainty continues, particularly on the markets in western Europe," Christian Klingler, the group's head of sales, said in a statement today. The group's three-month vehicle sales rose 9.6 percent to 2.16 million, setting a new record for first-quarter sales. Demand continued to remain strong in the United States, where sales rose 34 percent to 124,400 units in the quarter.
Source: Automotive News

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How Hyundai Went from Joke to Contender in US

Americans were laughing at Hyundai's cars when John Krafcik joined the company eight years ago. The cars were ugly and often broke down. The only reason to buy one was because it was cheap. Jay Leno once joked that you could double a Hyundai's value by filling it up with gas. No one's laughing now.
Source: The Associated Press

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Unprofitable Mazda May Need to Sell Some Assets

It owns baseball team and other hometown favorites
Should Mazda Motor Corp. dump the Hiroshima Carp? Two weeks after selling $1.8 billion in new stock to replenish its depleted capital, Japan's only unprofitable automaker said last month it will sponsor the All-Star baseball game in July. Mazda is the only Japanese carmaker to own control of a team in the league and also has a professional soccer club, a hospital and more than $5 billion in land. The diversity of Mazda's assets illustrates why scrutiny may intensify on President Takashi Yamanouchi's plans to revive a company that's forecasting its biggest annual loss in 11 years.
Source: Bloomberg

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Opinion: New Auto Era Leaves No Time for Swagger
By Daniel Howes

With car sales surging to multi-year highs, the U.S. job market firming and solid earnings fattening wallets from the executive suite to the factory floor, the ol' — and dangerous — Detroit swagger should be arriving on cue to an automaker near you. How come it mostly isn't? "The near brush with death seems to be leaving a lasting impression," David Cole, chairman emeritus of the Ann Arbor-based Center for Automotive Research, said in an e-mail. "The companies are much leaner in every respect and also globally integrated to take full advantage of global scale, finally."
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
"If you add another $3,000 to the post, there are many people that will not qualify for the car that they want to buy. Prospective buyers look at the upfront cost, not the total cost of ownership."

   
-- Rebecca Lindland, an automotive analyst at IHS, referring to higher vehicle prices that will result from the Obama administration's proposed fuel economy rules, The Detroit News, April 12


"It only takes one small mistake with a critical part in a safety-related system to derail all of the good work that we've done."

   
-- John Krafcik, Hyundai's CEO of American operations, referring to the automaker's quality improvements over the past several years, which has resulted in a 60 percent sales increase since 2008, The Associated Press, April 12
 


 

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