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Inside this issue
Ford Revamps Internal Outlook as Europe Woes Drag
FTC Announces Enforcement Action Against Dealer for Alleged Data Security Violations
Feds Looking at New Ways to Discourage Distracted Driving
Child Seat Requirements Change with 2014 Rule
GM Boosts 2013 Volt Mileage Rating, Beating Toyota Prius
Kia Will Introduce Luxury Cars by 2017
Automakers Struggle to Solve 'Car Obesity' Problem
Click here for more auto industry news at NADAFrontPage.com. .
Top Stories
Ford Revamps Internal Outlook as Europe Woes Drag

Ford Motor Co. is revamping its internal five-year business plan to take into account the marked deterioration in the European economy over the last year, the No. 2 U.S. automaker's chief financial officer said in an interview on Thursday. "We have to develop a better plan in response to what's going to be a much less favorable external environment," CFO Bob Shanks said. "How do we tack to respond to new realities? That's what we're in the process of doing." Europe's debt crisis has depressed demand for new vehicles in the 19 markets Ford tracks in the region, where automakers had already been contending with over capacity, paper-thin margins and tough price competition. Ford expects to lose between $500 million and $600 million in Europe this year.
Source: Reuters

Editor’s note: NADA Chief Economist Paul Taylor points out that economic deterioration in Spain, one of the key, large countries in Europe, is what’s driving much of the concern about the possibility of Europe going into severe recession. A failure of banks in Spain could possibly cause disruption and dissolution of the European Community. Banks in Spain need an infusion of no less than $65 billion and up to as much as $200 billion, says Taylor. NADA believes that $65 billion is closer to the amount needed to stabilize the banks in Spain, and that amount or more will be obtained from pan-European and/or international organizations. Like the U.S. several years ago, Spain has a bursting residential real estate bubble, and housing prices will have to fall another 25 percent in order for Spain’s economy to stabilize and recover. High unemployment and falling real GDP in Spain, says Taylor, means that efforts to restore confidence in the country’s banks must move swiftly over the summer months. Adding to the economic concerns in Europe is slow growth in Germany, whose real GDP grew at just 2 percent in the first quarter. Unlike Spain, Greece could likely leave the Euro and reestablish the Greek Drachma without catastrophic disruption for the rest of Europe.

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FTC Announces Enforcement Action Against Dealer for Alleged Data Security Violations

The action focuses on customer information made available on P2P networks

The FTC has announced an enforcement action against, and a proposed settlement agreement with, a franchised dealer for allegedly (i) violating the FTC Privacy Rule, (ii) violating the FTC Safeguards Rule, and (iii) engaging in an unfair or deceptive act or practice (UDAP). The enforcement action alleges that, as a result of the dealership’s failure to implement reasonable security measures to protect its customers' personal information (including names, addresses, social security numbers, dates of birth and driver’s license numbers), the personal information of 95,000 consumers was made available on a peer-to-peer (P2P) network. P2P file-sharing software can present significant data security risks, due in part to the fact that once a file has been shared to a P2P network, it may be viewed or downloaded by any computer user with access to the network, and it generally cannot be permanently removed from the network. In addition to the data security violations, the FTC alleged that the dealership engaged in a UDAP violation by misrepresenting in its privacy notice the measures it takes to protect customer information from unauthorized access. The proposed consent order between the parties contains, among other elements, a requirement that the dealership undergo data security audits by independent auditors every other year for 20 years. 

In conjunction with its announcement, the FTC posted a blog on the topic of P2P file sharing software. It is essential that dealers (i) review this information, (ii) consider threats that may arise from P2P software when assessing the adequacy of their current customer information safeguards and then adjust their customer information security program accordingly, and (iii) ensure that the representations in their privacy notices are consistent with their customer information security practices. In addition, it is essential that dealers protect customer information against this threat regardless of where it arises in the dealership (even in non-finance and non-lease transactions that may not be covered by the FTC Privacy or FTC Safeguards Rules). 

The FTC announcement states that this is the agency’s first action charging an auto dealer with violations of the Gramm Leach Bliley Act (which the FTC Privacy and Safeguards Rules implement). 
Source: NADA Regulatory Affairs

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Feds Looking at New Ways to Discourage Distracted Driving

Transportation Secretary Ray LaHood’s office fired a new warning shot across the bow of the auto and mobile infotainment industries Thursday, suggesting in a new “Blueprint for Ending Distracted Driving” that more regulation of in-car devices could be on the way.
Source: The Wall Street Journal

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Child Seat Requirements Change with 2014 Rule

Parents of many children ages 3 and up who should still be in child-safety seats will be warned not to use a federally required child-seat attachment system when a new rule takes effect in early 2014. The rule requires child-seat makers to tell parents not to use the lower anchors required in cars since 2001 if children and their car seats have a combined weight of 65 pounds, because the strength of the anchors cannot be guaranteed.
Source: USA Today

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GM Boosts 2013 Volt Mileage Rating, Beating Toyota Prius

General Motors Co.’s changes to the battery of the Chevrolet Volt will extend the 2013 model’s range beyond Toyota Motor Corp.’s plug-in Prius in miles-per-gallon equivalent. GM said the all-electric range of the 2013 Chevrolet Volt will be 38 miles (61 kilometers) on a single charge after the company increased battery storage capacity and changed the cell’s chemistry. That’s an increase of three miles.
Source: Bloomberg

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Kia Will Introduce Luxury Cars by 2017

Kia plans to introduce luxury vehicles by 2017 and participate in more sports sponsorships, according to The Korea Herald. The new models have names like Kia Cadenza and K9. While Kia has performed well in the U.S. and other markets in terms of sales, the brand's reputation has lagged, especially when compared with its kin Hyundai.
Source: USA Today

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Automakers Struggle to Solve 'Car Obesity' Problem

Americans have a weight problem, with more than a third of us estimated to fall into the obese category. It's a problem automakers are struggling with as well. Over the last several decades, the typical automobile has added hundreds of pounds, according to industry data, as it has grown longer and added more comfort, safety and convenience features. Engineers are now struggling with how to cut all that added car flab. There are a variety of reasons why, but the biggest factor is fuel economy.
Source: The Detroit Bureau

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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

"You've got tough new safety standards that add weight at the same time you have stringent new mileage standards. At some point, somebody's going to have to blink."

   
-- Jim Hall, an analyst with the Detroit-based 2953 Analytics, referring to the complex federal regulations that automakers must follow to reduce vehicle weight, The Detroit Bureau, June 7


NADA - National Automobile Dealers Association

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