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Inside this issue
U.S. Dealership Count: Going Up
Commentary: How Tough CAFE Delays EV Acceptance
New Study Reinforces Importance of Dealership Salespeople
Will GM and Ford Be Forced to Offer Big Car Discounts?
Tata Drives a Hard Bargain
Luxury-Car Makers Give New Attention to Back Seats
Click here for more auto industry news at NADAFrontPage.com. .
Top Stories
U.S. Dealership Count: Going Up

In a surprising swing after the severe cutback in U.S. dealerships during the recession, some automakers are again adding stores. This year is shaping up to be the second in a row with an increase in the dealership count. The U.S. dealership count rose 1 percent in 2011, to 17,859 stores, according to the Automotive News Data Center.
Source: Automotive News

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Commentary: How Tough CAFE Delays EV Acceptance
By Dave Guilford, Automotive News

As you may have noticed, the industry's enthusiasm for electric vehicles has dimmed considerably in the past year. You could cite several reasons: election-year attacks on the Obama administration's backing of EVs, the stubborn reality of high EV prices and limited range, and the predictable glitches of any new technology. But don't underestimate the effect of tougher federal fuel economy regulations.

Sounds counterintuitive, doesn't it? Logically, pushing the U.S. Corporate Average Fuel Economy standard to 54.5 mpg in the 2025 model year -- virtually doubling it in 14 years -- should boost EVs. It's not working out that way, though. Instead, automakers are pouring their resources into improving the efficiency of internal combustion engines. The most obvious reason for this is inertia, the tendency of the industry to find ways to use current technology rather than undertake a wrenching, expensive change.

Certainly there is ample potential to improve internal combustion powertrains. According to the Department of Energy, petrol-powered vehicles convert only 14 to 26 percent of the energy in their fuels into power that actually drives the vehicle. That explains the popularity of technologies such as direct fuel injection, variable valve timing and turbocharging. They all make combustion more efficient.

But the pressure of the CAFE standards for steady, year-over-year improvement is also steering the industry back to internal combustion. Big automakers make their billion-dollar powertrain bets a decade or more in advance. That means they need to have their plans in place now to meet their CAFE bogeys. Near-term, at least, automakers can't gamble on consumer acceptance of unfamiliar, expensive electrified drivetrains.

So even though most automakers continue to view EVs and plug-in hybrids as plausible long-term solutions, the imperative to meet fuel economy standards is, paradoxically, pushing them back to internal combustion. That's where they see quick, certain gains in fuel efficiency.
Source: Automotive News

Editor's note: Dave Guilford is enterprise editor of Automotive News.

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New Study Reinforces Importance of Dealership Salespeople

As one recent analysis showed the new-vehicle sales surge is being fueled by older buyers, the Maritz Research New Vehicle Customer Study revealed what’s the most influential source of information for buyers no matter the age. Contrary to a potential belief social media will soon replace traditional dealerships, Maritz found that the store salesperson most influences purchases.
Source: Auto Remarketing

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Will GM and Ford Be Forced to Offer Big Car Discounts?

General Motors and Ford are going to do all they can to maintain their new cars' pricing even if it means sacrificing sales. It's a gamble, but one they embrace as they look first to boost their stock price. If all goes well, the companies will continue to strengthen their pricing and maintain profits to offset the economic crisis in Europe.
Source: USA Today/Detroit Free Press

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Tata Drives a Hard Bargain

Tata Motors promises something for everyone. From one of the world's cheapest autos to sleek Jaguar sports cars to rugged Land Rovers. But overpromising can lead to under-delivering. Despite posting record quarterly earnings of $1.1 billion last week—more than double its year-earlier profit—Tata's stock is tanking.
Source: The Wall Street Journal

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Luxury-Car Makers Give New Attention to Back Seats

Long the domain of dogs and yappy kids, the back seats of luxury cars now are getting first-class attention from automakers. More of them are adding rear legroom to premium sedans to please empty-nest Boomers, who now see big back seats as a place to impress friends on the way to dinner or other events.
Source: USA Today

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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

"... even though most automakers continue to view EVs and plug-in hybrids as plausible long-term solutions, the imperative to meet fuel economy standards is, paradoxically, pushing them back to internal combustion. That's where they see quick, certain gains in fuel efficiency."

   
-- Dave Guilford, enterprise editor of Automotive News, in a commentary in today's edition, June 4


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