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Inside this issue
Auto Sales: Consumers Shrugged At Sequestration; Dealers Optimistic Despite Budget Cut Headwinds
GM Cash For Dealers Aims to Revive NYC Area Sales
American Suzuki Bankruptcy Plan Approved By U.S. Court
DOE Plans Modest Push For Fuel Cells
Ally Says U.S. Probing Retail Financing Practices
Car Firms: Delay Rule on Distracted Driving
Last Chevrolet Corvette Rolls Off GM Line
Click here for more auto industry news at NADAFrontPage.com. .
Top Stories
Auto Sales: Consumers Shrugged At Sequestration; Dealers Optimistic Despite Budget Cut Headwinds

The top eight largest automakers in terms of U.S. sales sold more than 1 million cars in the U.S. last month as Americans brushed off concerns about federal government spending cuts and flocked to showrooms, enticed by low interest rates, modest job growth, a rebounding housing market and the desire to replace aging vehicles. The Detroit Three -- General Motors, Ford and Chrysler -- sold 559,151 passenger cars and light trucks in February, with Ford and Chrysler saying they had the best February performance since before the 2008-2009 recession. Meanwhile, Korea’s Hyundai says it broke an all-time February record, while German auto giant Volkswagen said U.S. sales for the first two months of 2013 haven’t been higher since 1974. Japan’s Honda sales declined slightly, and Nissan’s fell 6.6 percent. Toyota reported a modest increase of 4.3 percent.

All indications so far point to growth of about 1 million new car and light truck purchases this year. Meeting earlier this month in Orlando, Fla., for the National Automobile Dealers Association Convention & Expo 2013, many of the nation’s auto vendors seemed upbeat. “I talked specifically about sequestration with several multi-franchise dealers around the country. Even our members in the Washington area, which we know will be affected by any government cutbacks, are not concerned that the effect will be substantial,” Paul Taylor, chief economist for NADA said.
Source: International Business Times

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GM Cash For Dealers Aims to Revive NYC Area Sales

General Motors is spending tens of millions of dollars to buff up its dealership network in metro New York, where its sales badly lag rivals. In recent months, GM agreed to make one-time payments for store improvements to as many as 60 dealers in New York City and surrounding areas, including northern New Jersey, Long Island and parts of Connecticut, according to three people familiar with the plans. The payouts range from $250,000 to more than $1 million, the sources said, and are being made to holders of all four GM franchises: Chevrolet, Cadillac, Buick and GMC. The cash comes atop payments to those dealers through GM's Essential Brand Elements store-enhancement program. In return, the dealers must agree to maintain their locations as exclusive GM stores for at least 15 years. If they don't, they must repay the money plus steep penalties, depending on when the exclusivity agreement is broken, the sources said.
Source: Automotive News

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American Suzuki Bankruptcy Plan Approved By U.S. Court

American Suzuki received bankruptcy court approval of its Chapter 11 reorganization plan to wind down its U.S. auto sales operation and continue selling motorcycles, ATVs and boat engines. A U.S. Bankruptcy Court in Santa Ana, Calif., approved the plan Thursday, leaving the company poised to complete its bankruptcy restructuring by March 31, according to a company statement. American Suzuki filed for Chapter 11 bankruptcy protection on Nov. 5. The plan calls for American Suzuki's motorcycle, ATV and marine engine businesses to exit bankruptcy as Suzuki Motor of America, a new, wholly-owned subsidiary of Suzuki Motor Corp., the corporate parent of American Suzuki. Suzuki's U.S. auto operations will cease after dealers sell remaining vehicle inventory.
Source: Automotive News

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DOE Plans Modest Push For Fuel Cells

Policy shift gives hydrogen a boost

The U.S. Department of Energy soon will launch a campaign to promote hydrogen cars, embracing a technology that was favored by the administration of President George W. Bush but initially shunned under Barack Obama. The project is tentatively called H2USA, in reference to the chemical symbol for hydrogen gas. The DOE is signing up automakers, suppliers and other companies that want to see hydrogen fuel cell vehicles hit the marketplace.
Source: Automotive News

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Ally Says U.S. Probing Retail Financing Practices

Ally Financial Inc. said in a securities filing on Friday that the Consumer Financial Protection Bureau has recently told the U.S. auto lender that it is being investigated for certain "retail financing practices." Ally said in the annual 10-K filing with the U.S. Securities and Exchange Commission that the probe could result in actions against the company. An Ally spokeswoman declined to comment. Ally's lending includes retail financing and leasing for new and used vehicles for consumers. Bloomberg reported on Feb. 21 that the CFPB has notified at least four banks that it may sue them over vehicle loans and interest-rate markups by auto dealers that appear discriminatory. It's unclear whether Ally was one of those four banks.
Source: Reuters

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Car Firms: Delay Rule on Distracted Driving

Major automakers are lobbying the White House to hold off finalizing voluntary guidelines on preventing distracted driving. The Alliance of Automobile Manufacturers, the trade association representing Detroit's Big Three automakers, Toyota Motor Corp., Volkswagen AG and seven other automakers, wants the Transportation Department to rethink its approach by creating guidelines that would apply to both automakers and cellphone companies. "The best thing to do is get everybody around a table and to try to drive a more expeditious comprehensive solution," said Mitch Bainwol, president and CEO of the alliance. NHTSA should work with automakers, app developments and cellphone makes to develop guidelines to more broadly address the issue of distracted driving, Bainwol said.
Source: The Detroit News

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Last Chevrolet Corvette Rolls Off GM Line

Normally, the last car coming off the assembly line is sad moment, especially when it is a storied model like the Chevrolet Corvette. But this one was cause for celebration, because the last sixth-generation Corvette that came down the line at 8:04 a.m., Thursday will give way to a seventh generation. And to anyone who appreciates 'Vettes, they already know the 2014 due next spring is something special.
Source: USA Today

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Quotable
"We have not seen a February this strong since 2008. The difference between then and now is that the escalator is heading up and not down."

    -- Kurt McNeil, GM's vice president of U.S. sales operations, commenting on rising auto sales, Automotive News, March 4

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