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Inside this issue
Editorial: Stair-Steps Targets: 'Irrational,' Erratic and Disruptive
Toyota to Post Around $13 Billion Annual Operating Profit, Report Says
Treasury Updates GM Exit Trading Plan
Hyundai Chief Blunts Talk of New U.S. Plant
Candy for the Eyes, Music to the Ears
Click here for more auto industry news at NADAFrontPage.com. .
Top Stories
Editorial: Stair-Steps Targets: 'Irrational,' Erratic and Disruptive

It's time to stop the stair-step madness

Dealers report that some manufacturers have ramped up their use of stair-step incentives. Several major retailers, including some of the largest dealership groups in the country, say stair-step programs are worse than they were last spring, when the programs set off renewed debate about the practice. For example, AutoNation Inc. reports that more manufacturers are involved this year, and that "the targets are getting more and more irrational." Dealers complain that the tiered sales targets being given to dealerships to earn escalating stair-step bonus money are erratic. Some stores may have easy targets, but others have targets that they call impossible.

Manufacturers like the programs because they move the metal. But the programs cause major disruptions as stores chase bonus payments, which can be huge. They wreak havoc on dealerships' front-end new-car margins. And customer satisfaction suffers because buyers get aggravated when they pay significantly more than someone else purchasing near a stair-step deadline, when retailers may slash prices below cost to meet targets and earn retroactive payments. Venting his frustration in a story in this issue, one Volkswagen dealer says he's weary of hearing how well VW is doing because VW dealership profitability "is in the toilet." The time has come for automakers to find a more rational way to help dealers sell cars and trucks.
Source: Automotive News

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Toyota to Post Around $13 Billion Annual Operating Profit, Report Says

Toyota Motor Corp. is expected to post operating profit of around 1.3 trillion yen ($13.1 billion) for the year ended March, 3.7 times more than the previous year, the Nikkei business daily reported. That figure will be 150 billion yen more than the forecast the automaker made in February, the Nikkei, said without citing its sources.
Source: Reuters
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Treasury Updates GM Exit Trading Plan

The Treasury Department filed a new trading plan to shed its remaining 241.7 million shares of stock in General Motors it acquired as part of a $49.5 billion bailout, but didn't speed up its exit timetable. In January, Treasury filed its first trading plan and said it planned to completely exit GM by the end of March 2014. The plan details how much stock and when and at what prices its brokers sell its holdings. "Earlier this year, Treasury launched an effort to sell its remaining shares in GM common stock. We are pleased with the progress to date and will continue exiting this investment in accordance with our previously announced plan and timetable, and in a manner that maximizes returns for taxpayers," said Tim Massad, Treasury Assistant Secretary for Financial Stability. Treasury doesn't make any details public about its plan to try to prevent other investors from profiting as the government sells its shares.
Source: The Detroit News
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Hyundai Chief Blunts Talk of New U.S. Plant

Hyundai Motor Group does not immediately plan to build a new car factory in the United States, Chairman Chung Mong-koo said, downplaying speculation that the South Korean automaker would soon announce production facilities in the key market. "We have no plan (for a new U.S. factory) for now," the 75-year-old told reporters at Seoul's Gimpo airport before leaving for the United States. Hyundai Motor Group is a parent company for Hyundai Motor Co. and Kia Motors Corp., which combined are the world's fifth-biggest car company by sales. Chung, who has so far ruled out major capacity expansion, last week said the company "will look into whether there are opportunities" to expand production overseas, giving rise to industry talk that the automaker was considering building a new plant in the United States.
Source: Reuters
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Candy for the Eyes, Music to the Ears

As if playing musical chairs, ultraluxury carmakers have scampered to find a safe perch within the global automaking giants. Rolls-Royce and Bentley, brothers-in-arms for decades, were split up and absorbed by, respectively, BMW and Volkswagen. Both brands have achieved record sales since. VW also revived Lamborghini and Bugatti, lavishing resources and components to allow these tiny and often-troubled brands to thrive as never before. Ferrari and Maserati, once fierce Italian rivals, now share and share alike, playing nice within the Fiat family. Even Porsche, so proud of its record as a small independent, succumbed to hubris and tried to swallow Volkswagen in a takeover — and found itself eaten by VW instead. Yet Porsche, too, sells more cars than ever around the world.
Source: The New York Times
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More Articles
 
Quotable
"Why don't we focus on the brand, and let demand drive our sales -- not programs?" 

   
-- Jimmy Ellis, a VW dealer from Atlanta and chairman of the Volkswagen National Dealer Advisory Council, commenting on dealer frustrations with stair-step programs, Automotive News, May 6
Videos

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Chairman's Column
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NADA Foundation News
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