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Inside this issue
Car Dealers Usually Like Getting Money, But Not Like This
Pushing Dealers to Upgrade Stores Fuels a 2-Tiered Price War
Limited Time, Lack of Storage Hurt N.Y. Dealers
Hyundai Surrenders 40 MPG Claims
Mulally, Then Fields and Then ...
Why China Isn't Going to Build Cars for the U.S. Anytime Soon
Toyota Raises Outlook as China Sales Tumble
Ghosn: We Need Another N.A. Plant
GM Lags in Europe Restructuring as Ford Closes Plants
NADA Special Section Featured in TIME Magazine
Click here for more auto industry news at NADAFrontPage.com. .
Top Stories
Car Dealers Usually Like Getting Money, But Not Like This

Not surprisingly, car dealers like it when the car companies pay them dealer incentives, but not so-called “stair-step” incentive programs. The National Automobile Dealers Association even took the extraordinary step of taking out ads last month to complain, “Stair-Step Incentive Programs are BAD for the Auto Industry.” Dealers and the car companies they represent disagree pretty often, but not usually in such a public way. NADA said in its ads: “Stair-step programs harm brand credibility … undermine relationships between dealers and the customers, have an adverse effect on Customer Satisfaction Index Scores, and destroy consumer confidence in dealers – and in manufacturers’ brands.”
Source: Forbes.com

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Pushing Dealers to Upgrade Stores Fuels a 2-Tiered Price War

Most of GM's 4,500 Chevy, Cadillac and Buick-GMC dealerships are being gutted or replaced with sleek storefronts and gleaming showrooms. GM is spending more than $5 billion on the transformation over seven years, through 2016 .... But the breadth and perceived inequity of the Essential Brand Elements program, especially among smaller dealers, has made GM the industry poster child in the controversy over two-tier pricing. A chief gripe about two-tier pricing is that customers lose trust when their dealer can't match the prices of rivals who are chasing one factory bonus or another.
Source: Automotive News

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Limited Time, Lack of Storage Hurt N.Y. Dealers

When auto dealers on New York's Long Island and in the boroughs of Brooklyn, Staten Island and Manhattan learned that Sandy was approaching, they faced an alarming challenge: lack of vehicle storage space on higher ground. The Greater New York Automobile Dealers Association had advised dealers to move vehicles upland over the Oct. 27-28 weekend, but many dealers could not find storage in time -- and were forced to leave vehicles on piers when Sandy hit the region on Monday, Oct. 29.
Source: Automotive News

Related Story:

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Hyundai Surrenders 40 MPG Claims

Hyundai Motor Co and Kia Motors Corp. overstated the fuel economy for more than a third of the vehicles they sold in the U.S. in the last two years, an embarrassing concession by two of the fastest-growing car makers in the U.S. On Friday, the U.S. Environmental Protection Agency said Hyundai and Kia issued incorrect mileage estimates on fuel consumption for about 900,000 vehicles sold since late 2010. Hyundai Motor Group, which owns both companies, acknowledged its estimates differed from the fuel economy figures produced by the EPA during its investigation. The South Korean company apologized for what it called "procedural errors" in its testing, issued new estimates and agreed to compensate buyers of cars and sport-utility vehicles that were incorrectly labeled.
Source: The Wall Street Journal

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Mulally, Then Fields and Then ...

Alan Mulally will stay Ford Motor Co. CEO at least through 2014. Joe Hinrichs will return from the Asia Pacific Africa region to head Ford's business in the Americas. Oh, yeah, and Mark Fields is Ford's COO. Fields' promotion had been expected. Hinrichs' move hadn't. Hinrichs goes from Ford's fastest-growing operations to its most profitable and most closely watched. The shuffle makes Fields, 51, the undisputed top candidate to replace Mulally, 67. But last week, when Executive Chairman Bill Ford unveiled the executive changes, which are effective Dec. 1, he stopped short of confirming that Fields will succeed Mulally. The changes position Hinrichs, 45, widely seen as Fields' primary rival to succeed Mulally, as next in line to follow Fields in the succession chain -- or to move up should Fields falter.
Source: Automotive News

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Why China Isn't Going to Build Cars for the U.S. Anytime Soon

Making cars in China has been used to scare voters and even Chrysler workers in the presidential campaign's waning days, but the reality is Chinese-assembled vehicles will not be exported to the U.S. anytime soon. It makes no economic sense for major Western carmakers to build there and ship here. China-based automakers have not met the safety and quality standards to compete here yet, say automakers and analysts alike. In addition, the Chinese economy has slowed; the nation's domestic automakers are in survival mode, struggling to make money at home with no desire to use precious resources to establish dealers to sell in the U.S.
Source: Detroit Free Press

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Toyota Raises Outlook as China Sales Tumble

Toyota Motor Corp. lifted its profit forecast for the current fiscal year Monday, dispelling concerns that tumbling sales in China amid anti-Japanese sentiment could derail plans for a robust recovery from damage to its business from last year's natural disasters.
Source: The Wall Street Journal

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Ghosn: We Need Another N.A. Plant

Infiniti production to migrate from Japan

Nissan Motor Co. CEO Carlos Ghosn says the company will need another assembly plant in North America within five years -- after it reaches his goal of taking 10 percent of the U.S. market. The additional capacity could be used to build Infiniti nameplates, Ghosn said during an interview at Nissan headquarters.
Source: Automotive News

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GM Lags in Europe Restructuring as Ford Closes Plants

Ford Motor Co., which clung to the road with a timely swerve before the 2009 crisis that bankrupted General Motors Co., may now be pulling a similar stunt in Europe. Ford is scrapping three European plants and thousands of jobs while its rival appears to be stuck on the starting grid. The speed of Ford's restructuring plan -- and the comparatively slow pace of GM's -- has become more important during a protracted slump in Europe's auto market, with sales down another 7.2 percent so far this year. Both companies last week unveiled hefty third-quarter losses in the region and warned they could lose a combined $6 billion or more in Europe in 2012-13. The bad news weighs heavily on GM's troubled Opel/Vauxhall unit, which has lost billions of dollars over the past decade, has a long history of ill will with its labor unions, has seen its products and brand image pummeled in the media and has shown the door to all but a handful of its top executives.
Source: Reuters

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NADA Special Section Featured in TIME Magazine

NADA has once again partnered with TIME magazine to create a special section, The New Age Consumer. The 10-page section features several stories, including how mobile technology and social media are influencing the car-buying process and what dealers are doing to reinvent the showroom experience to stay ahead of the changing industry, as well as how auto shows enhance the shopping experience for car buyers. Mike Shaw, owner of Mike Shaw Automotive Group and the 2012 TIME Dealer of the Year (held in partnership with Ally), is also featured in the publication. The special section also includes a story about the National Automobile Dealers Charitable Foundation, highlighting the Ambassadors program, Survivors Relief Fund and the Frank E. McCarthy Memorial Fund. This marks the 10th consecutive year the NADA insert has been published in TIME, a weekly publication with a global audience. Click here for the special section.
Source: NADAFrontPage.com

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"Small wins lead to big wins."  

   -- Steve Girsky, GM vice chairman and interim Opel chief, commenting on the automaker's lack of a restructuring plan in Europe, Reuters, Nov. 4

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