View Mobile Version | View Web Version

SPONSORED BY
  
NADA.org
March 22, 2013 FacebookTwitterFlickrRSSSEND TO A FRIENDPRINT
nada.orgAdvocacyAffiliates | Convention | Jobs | Programs | Publications | Services | Training
Inside this issue
Regulator Hits Lending Practices at Auto Dealerships
[State] Senate Passes Bill Backed By N.H. Dealers, Opposed By Automakers
March U.S. Auto Sales Will Rise 8 Percent, LMC Predicts
Ford Says Lincoln Sales Rising on Improving MKZ Shipments
New Detroit Electric Plans Battery Sports Car Soon
Bentley, Lamborghini Eye U.S. as Top Market For Ultraluxury SUVs
Should You Trust Your CARFAX Report?
Feds Offer Car Safety App For Recalls, Ratings
Bill Ford Jr. Mentors Fiat Chief John Elkann
Click here for more auto industry news at NADAFrontPage.com. .
Top Stories
Regulator Hits Lending Practices at Auto Dealerships

A federal consumer regulator Thursday said some lenders offering auto loans through auto dealerships charge minorities above-market interest rates and warned it will crack down on a profit-sharing practice between dealers and lending companies. The Consumer Financial Protection Bureau said a typical industry practice known as "dealer markup," in which a lender and a car dealer split interest-rate charges, may lead to lending discrimination. The regulator said its examination of the industry shows that some lender policies allow markups of interest rates, and that there is a "significant risk" the practice results in higher rates for African-Americans and Hispanics. The consumer regulator said lenders should consider eliminating the interest-rate markups and instead use a flat-fee system for originating loans. The agency said companies should also voluntarily monitor the impact of lending policies on minorities. It stopped short of proposing a comprehensive set of new rules.

The CFPB would force auto lenders "into changing the way they compensate dealers without any indication that the bureau has examined the effect this change could have on the cost of credit for consumers," the National Automobile Dealers Association and National Association of Minority Automobile Dealers said in a statement. The groups accused the agency of acting on dealer-assisted lending "through guidance and enforcement actions that lack transparency, the opportunity for public comment, and the benefits of a data driven analysis into the effects they would have."
Source: The Wall Street Journal

NADA/NAMAD Statement: The NADA and the National Association of Minority Automobile Dealers (NAMAD) issued the following statement Thursday in response to the guidance from the Consumer Finance Protection Bureau (CFPB) regarding dealer-assisted financing:

“The guidance issued by the CFPB today attempts to force auto finance sources into changing the way they compensate dealers without any indication that the Bureau has examined the effect this change could have on the cost of credit for consumers. The dealer-assisted financing model (indirect auto lending) has been enormously successful in both increasing access to, and reducing the cost of, credit for millions of Americans. Consumers overwhelmingly choose optional dealer-assisted financing because it’s convenient and competitive. The CFPB’s attempt to eliminate the dealer’s ability to discount the APR that it offers to consumers will only weaken the consumer’s ability to secure financing at the lowest possible cost. This anti-competitive approach is not in the interests of consumers and should not be accomplished through guidance and enforcement actions that lack transparency, the opportunity for public comment, and the benefits of a data driven analysis into the effects they would have on consumers and the automobile financing marketplace. It also should not be accomplished without the full participation of the Federal Reserve Board and the Federal Trade Commission, which are the two agencies that Congress vested with authority over auto dealers engaged in indirect lending. 

“NADA and NAMAD strongly oppose any form of discrimination in auto lending, and the CFPB guidance appropriately explains that unlawful discrimination has no place in the marketplace. However, it is relying on a theory of discrimination that is based on a statistical analysis of past transactions – not intentional conduct – and the CFPB has not provided any information about how it is conducting its analysis. Without such basic information as how the CFPB is identifying different groups of consumers, how it is controlling for factors that can affect finance rates but are unrelated to the consumer’s background, and what constitutes a finding of disparate impact, one can have little confidence that the CFPB is conducting its analysis in a statistically-reliable manner. Regrettably, no one is well served by such an opaque process. While NADA and NAMAD stand ready to work with all of the federal agencies with responsibilities in this area, NADA and NAMAD encourage the CFPB to approach this issue in a more considered, transparent and coordinated manner.”

[back to top]

[State] Senate Passes Bill Backed By N.H. Dealers, Opposed By Automakers

The state Senate overwhelmingly passed legislation yesterday that is supported by New Hampshire's auto dealers and opposed by automakers. On a 21-2 vote, the Senate approved a revision to the existing Dealer Bill of Rights, adding broad new protections for local dealers including a rule that manufacturers can only require their affiliated dealers to renovate facilities every 15 years. “We want to thank the Senate for listening to their local constituents,” said Pete McNamara, president of the New Hampshire Automobile Dealers Association, in a statement. “This proposal will stop the unfair pressure and spending mandates passed down to us from manufacturers, and will require basic fairness in the relationship.”
Source: Concord Monitor (Concord, N.H.)

[back to top]

March U.S. Auto Sales Will Rise 8 Percent, LMC Predicts

U.S. auto sales in March are expected to rise 8 percent and the annual sales pace should top 15 million for the fifth straight month as consumers shake off worries about the economy, according to research firm LMC Automotive. Sales of new cars and trucks in March are expected to rise to 1,465,100 vehicles, while the annual sales pace is forecast to hit 15.3 million vehicles, LMC said in a report. Since November, the annual rate has ranged from 15.3 million to 15.5 million. Auto sales are an early indicator each month of economic health.
Source: Automotive News

[back to top]

Ford Says Lincoln Sales Rising on Improving MKZ Shipments

Ford Motor Co., the second-largest U.S. automaker, said sales of its struggling Lincoln luxury brand are improving after the company ended an arrangement to ship its newest model through a second plant. Ford's plant in Hermosillo, Mexico, this month began sending MKZ sedans directly to dealers, Joe Hinrichs, Ford's president of the Americas, told reporters [Thursday] in Dearborn, Michigan, near the company's headquarters. Ford had been sending some MKZs to a plant in Michigan for additional quality inspections and to be equipped with missing parts. “The sales have been increasing, especially over the last week or so, as the inventories have improved,” Hinrichs, 46, said at an event with Michigan small businesses and suppliers. “We'll be certainly at normal levels in April. You'll see a more normal sales rate of the MKZ starting in April.”
Source: Bloomberg

Related Story:

[back to top]

New Detroit Electric Plans Battery Sports Car Soon

Detroit Electric, a once and future car company, says it's about to move from start-up to crank-up, aiming to begin producing a battery-power sports car in August. The maker says it will build as many as 2,500 sports cars a year in Michigan, but it didn't say exactly where. The modern Detroit Electric, founded in 2008 by a former Lotus executive, said Tuesday it signed a lease for offices on the 18th floor of the Fisher Building in downtown Detroit, and says it will create 180 sales and manufacturing-related jobs in the next 12 months. It gave no specifics on its planned sports car's price, range, power or other details.
Source: USA Today

Related Story:

[back to top]

Bentley, Lamborghini Eye U.S. as Top Market For Ultraluxury SUVs

Bentley and Lamborghini want to create a niche -- the ultraluxury SUV/crossover with a price tag of $200,000 to $250,000 -- and they're aiming for annual combined volume of more than 7,000 vehicles. The heads of both companies say the models are nearing approval from their parent company, Volkswagen, despite the meltdown of the European auto market. That's because the United States, where crossovers and SUVs sell briskly, will be the biggest market. In the United States, the two models will be the most expensive SUVs on offer and will compete with the upper end of British and German vehicles, such as the Range Rover Autobiography, priced at $130,99, and the high-performance $135,225 Mercedes-Benz G63 AMG.
Source: Automotive News

Related Story:

[back to top]

Should You Trust Your CARFAX Report?

Checking a Carfax report has become such an ingrained part of the car-buying experience that many consumers assume that it's a definitive document that captures the complete history of a car. It's not. Carfax is only as accurate as the information reported by its 76,000 sources. Which means that if an accident has yet to be reported to one of its sources, or if it never gets reported at all, it's not going to show up on the report. "I have seen reports that dealers use when shopping online for used vehicles that show a clean vehicle history report at the time of purchase, but only to find out a week or two later – when the report is re-run by the dealer – it includes an updated vehicle history, such as damage from some type of accident," said Stu Zalud, director of dealer services for the National Automobile Dealers Association [Used Car Guide]. Bottom line: "Everyone believes vehicle history reports are the Holy Grail," Zalud said. "This is not the case."
Source: AOL Autos

[back to top]

Feds Offer Car Safety App For Recalls, Ratings

Federal regulators released a mobile app Thursday with car safety information including vehicle safety ratings, searchable recalls and complaints and help with child seat installation. The National Highway Traffic Safety Administration's iOS SaferCar app for iPhones and the iPod Touch will also let users file a vehicle safety complaint and subscribe to automatic notices about vehicle recalls. It also provides directions to the nearest child seat installation location.
Source: USA Today

[back to top]

Bill Ford Jr. Mentors Fiat Chief John Elkann

Ties between Fords, Agnellis go back 100 years

When you are John Elkann, the young scion of the powerful Agnelli family and head of the Fiat-Chrysler group, whom do you call for advice? The answer — surprisingly — is Bill Ford Jr. "He's been giving me very good advice. He is very encouraging about what we were trying to do about getting more involved in the U.S. and really supporting Chrysler's turnaround," Elkann told The Detroit News in an exclusive interview this month. "It's great to have the opportunity to share this with someone like Bill, who has experienced many things and gone through many things ... especially linked to Detroit." While it may seem surprising that the 55-year-old Ford would be mentoring the 36-year-old head of a rival automaker, it is just the latest chapter in a century-long friendship between the Ford and Agnelli families that has flowered behind the scenes of the fiercely competitive global automobile business. Like Ford, Fiat SpA is a publicly traded company that is still controlled by its founding family.
Source: The Detroit News

[back to top]

More Articles
 
Quotable
The CFPB would force auto lenders "into changing the way they compensate dealers without any indication that the bureau has examined the effect this change could have on the cost of credit for consumers."

  -- The NADA and National Association of Minority Automobile Dealers said in a statement Thursday in response to the CFPB, The Wall Street Journal, March 22

Register Today for Auto Forum in NYC March 26

Videos

 Video: Relief Efforts Continue Months After Hurricane Sandy (NADA-TV) 

 More Videos

Chairman's Column
Consumer Protection Agency Reportedly Targets Dealer-Assisted Financing
  
Search Back Issues | Unsubscribe | Subscribe | Manage your subscription | email us
NADA For more information on NADA, visit www.nada.org or contact NADA, 8400 Westpark Drive, McLean, VA 22102. This email may contain an advertisement of NADA products and services. Any opinions or statements contained herein do not necessarily reflect the views of NADA. Factual errors are the responsibility of the listed publication. If you are a franchised new-car or -truck dealer and would like to become a member of NADA, please visit the Join NADA section of www.nada.org. Questions or comments concerning NADA Headlines content may be directed to publicaffairs@nada.org .