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Inside this issue
Toyota's Carter: Industry's Dubious Claims Hurt Consumer Trust
NADA: CFPB's Actions Detrimental to Consumers
Service Sales Staff “OT” Exemption Extended Through September
Consumers Are Buying More Cars Despite Economic Clouds
Luxury Car Market Looks to Boost '13 Sales
Cadillac Hopes New CTS Draws Younger, Richer Buyers
Ford, GM Trump Toyota in Customer Loyalty, Experian Says
Ford Prepares For Mustang's 50th Birthday
Click here for more auto industry news at NADAFrontPage.com. .
Top Stories
Toyota's Carter: Industry's Dubious Claims Hurt Consumer Trust

In the wake of bad publicity from inaccurate fuel-mileage ratings and other misleading marketing claims, the automotive industry has a trust problem with U.S. consumers a top Toyota official said [Tuesday]. Bob Carter, senior vice president of automotive operations for Toyota Motor Sales U.S.A., said in a speech that dubious marketing tarnishes the industry's reputation. What with "conflicting stories about mpg claims, pickup tow ratings, safety statements and other issues, we really can't blame customers for not fully trusting any of the marketing we put out there," Carter told the audience at the 2013 Automotive Forum, an industry conference sponsored by J.D. Power and Associates and the National Automobile Dealers Association. Without citing specific examples, Carter said suspect claims make it harder for any company's message to resonate with consumers because "they're putting blinders on" once they sense that a message can't be trusted.
Source: Automotive News

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NADA: CFPB's Actions Detrimental to Consumers

Last Thursday, NADA and the National Association of Minority Automobile Dealers (NAMAD) issued statements denouncing the Consumer Financial Protection Bureau (CFPB)'s recent actions against lending institutions and dealer participation programs. The trade groups claimed the bulletin the CFPB issued last week “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 CFPB's attempt to eliminate the dealer's ability to discount the APR will weaken the ability of consumers to secure financing at the lowest possible cost, according to the NADA. “Consumers overwhelmingly choose optional dealer-assisted financing because it's convenient and competitive,” the statement read. “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.” The NADA suggested ... that the CFPB's approach should not be completed without full participation of the Federal Reserve Board and the Federal Trade Commission. “Regrettably, no one is well served by such an opaque process,” stated the NADA. “While the NADA and the NAMAD stand ready to work with all of the federal agencies with responsibilities in this area, the NADA and the NAMAD encourage the CFPB to approach this issue in a more considered, transparent and coordinated manner.”
Source: F&I and Showroom

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Service Sales Staff “OT” Exemption Extended Through September

Legislation that funds the federal government’s activities through September and signed into law yesterday continues a 40 year precedent of exempting service advisors from federal overtime pay requirements. Two years ago, the U.S. Department of Labor (DOL) sought to overturn more than four decades of precedent by saying that service salespersons were no longer eligible for the federal “salesmen” overtime exemption.  This position directly conflicts with numerous federal district and circuit court decisions, including at least two issued in 2012, that have consistently found service writers to be exempt “salesmen.” In 2011, the National Automobile Dealers Association (NADA) urged Congress to exercise greater oversight on the matter.  Since then, language was included in the last three federal spending measures squashing any attempt by DOL to change its position or initiate any enforcement action. “NADA applauds Congress’ latest action and urges federal lawmakers to make the ban permanent,” said the association’s Chairman David Westcott, a dealer from North Carolina. Dealers with questions on this or other labor matters may contact NADA at 703-821-7000.
Source: NADA Legislative Affairs

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Consumers Are Buying More Cars Despite Economic Clouds

Fiscal cliffs, sequesters, Cyprus bailout? U.S. consumers are ignoring the headlines, feeling good about their personal finances, spending more and buying more new vehicles this year, say industry executives and analysts. “Every one of these crises is like the boy who cries wolf,” said IHS chief economist Nariman Behravesh on Tuesday at the NADA J.D. Power & Associates automotive conference before the opening of the New York International Auto Show. “Despite the sequester, despite the increase in payroll tax in January and despite rising gasoline prices, the fundamental of consumer spending has continued to strengthen and will continue to strengthen especially during the second half of the year.” The comments underscore a steady shopping pace U.S automotive dealers are seeing during the first few months of the year, increasing the likelihood the industry will meet its target of selling between 15.3 million and 15.5 million new vehicles this year. Sales reached 14.5 million last year.
Source: The Wall Street Journal

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Luxury Car Market Looks to Boost '13 Sales

Luxury automakers are bullish that well-heeled buyers will return to showrooms. With the stock market hitting record highs and housing values rising, automakers are introducing a large number of new luxury models at the New York International Auto Show. Last year, luxury sales accounted for 11.1 percent of total U.S sales in 2012, down from 11.2 percent in 2011. Southfield-based R.L. Polk forecasts luxury sales will rise to 11.7 percent in 2013 and 13.1 percent next year. Bob Carter, Toyota Motor Sales USA's senior vice president for automotive operations, said Tuesday the company projects the luxury segment "will be very healthy over the next few years."
Source: The Detroit News

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Cadillac Hopes New CTS Draws Younger, Richer Buyers

Cadillac's unveiling of the redesigned 2014 CTS [in New York] Tuesday night began a new phase of the brand's decade-long overhaul that began when the first CTS replaced the Catera in 2003. The next generation of CTS, a midsize sedan that was Cadillac's best-selling car last year, was uncovered at a glittery Lincoln Center in advance of the New York International Auto Show. The new CTS will give General Motors' luxury brand new versions of all its cars when the CTS goes on sale this fall.
Source: USA Today

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Ford, GM Trump Toyota in Customer Loyalty, Experian Says

Ford Motor Co. and General Motors Co., gaining ground over Japanese automakers with their most stylish sedans and small cars since the 1970s, are topping Toyota Motor Corp. in customer loyalty, researcher Experian Automotive said. Of Ford vehicle owners who returned to buy another auto in the fourth quarter, 47.9 percent bought a Ford or Lincoln, Dublin-based Experian said today in a report. GM's loyalty rate was 47.7 percent, followed by Toyota at 46.9 percent. After decades of losing car buyers to Japanese automakers such as Toyota and Honda Motor Co., Ford, GM and Chrysler Group LLC are luring back customers with models such as the Fusion sedan. The Detroit automakers' share of the U.S. small and mid- size car market will grow to 33 percent next year, from 26 percent in 2009, according to researcher LMC Automotive.
Source: Bloomberg

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Ford Prepares For Mustang's 50th Birthday

It may be a year away, but Ford Motor Co. is saddling up to celebrate the 50th anniversary of the original “pony car,” the Mustang. It's getting plenty of help, with 50 companies planning to join the celebration by producing products to commemorate the occasion, from Mustang-emblazoned jackets to watches to videogames. They'll use a new black-and-white logo featuring the familiar galloping horse over the words, “50 Years.” The Mustang is “a timeless statement,” says Ford Chief Creative Officer J Mays, who oversaw the creation of the new logo and who is crucial to the development of the next-generation Mustang expected to come to market sometime next year, closer to the official golden anniversary.
Source: MSNBC

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Quotable
"It's a reflection that consumer confidence is really taking off. The individual consumer is feeling more confident about their job, their income."

   
-- Bob Carter, Toyota Motor Sales USA senior vice president for automotive operations, commenting on the strong auto sales forecasted for 2013 during remarks at the NADA J.D. Power & Associates Automotive Forum, The Detroit News, March 27
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