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Inside this issue
Opinion: Will Tesla Have To Give Up And Let Dealers Sell Its Cars?
Mercedes Dealer Review Opens Home Front in Luxury War [in Germany]
Penske: If Daimler Sells Stores in Germany, We're Interested
Pioneering Electric Car Battery Firm Dissolves
German Automakers Falter in Meeting Million-Electric Goal
IRS-Type Scandal Unlikely to Spread to Car Dealer Closures
How the Used-Car Market Could Undermine Obama's Fuel-Economy Rules
Chevy Powers Up Snail for DreamWorks' 'Turbo' Movie
Click here for more auto industry news at NADAFrontPage.com. .
Top Stories
Opinion: Will Tesla Have To Give Up And Let Dealers Sell Its Cars?
By Micheline Maynard

Tesla is going down a path that a number of carmakers have tried, with little long-term success. It owns and operates its own dealerships, and sells cars online, much to the displeasure of dealer groups across the country. Tesla is fighting a war with auto dealers in North Carolina, where the state Senate has passed a bill blocking Tesla from selling cars online to customers in the state. It would have to use franchised dealers, or else forego sales in North Carolina. Now, some experts are questioning whether Tesla would be better off dropping its Apple-like approach to selling cars, and adopt the same strategy used by General Motors, Ford and virtually every other major automaker in the United States. Tesla might be better off awarding franchises to dealers, who can peddle its product for it. But, if North Carolina is any indication, Tesla will face some significant legal battles as it expands in the United States. To avoid them, it could find that it is better off to switch than fight.
Source: Forbes

Editor's note: Micheline Maynard is the Donald Reynolds Visiting Professor of Business Journalism at Central Michigan University. Previously, she was Detroit bureau chief for The New York Times, and led Changing Gears, a public media project on the Midwest economy.
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Mercedes Dealer Review Opens Home Front in Luxury War [in Germany]

How many Mercedes staff does it take to sell a car? The answer, in the luxury carmaker's German showrooms, is more than it takes to shift an Audi - just part of the cost gap Daimler wants to close with its premium rivals. Among the top three, Mercedes depends on its unprofitable company-owned dealerships for a bigger share of domestic sales than either Volkswagen's Audi or BMW, which rely more on franchises. Now, according to documents seen by Reuters, Chief Executive Dieter Zetsche is targeting the company's "own retail" operations as part of a promised 2 billion euro ($2.6 billion) savings drive. Daimler, already in talks to sell four German outlets, could mount a bigger sell-off if those transactions go well, a person familiar with the company's thinking told Reuters. "Management wants to try this out to see exactly how it would work in practice," said the person, who asked not to be named.
Source: Reuters
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Penske: If Daimler Sells Stores in Germany, We're Interested

Penske Automotive Group Inc. says it would be interested in buying some dealerships in Germany owned by Daimler AG. Daimler may want to sell four stores as it seeks to boost faltering profits, an unidentified source familiar with the company's thinking told Reuters. Daimler could sell more dealerships if those transactions go well, the source said. "I really don't know much about Daimler's intentions," Anthony Pordon, Penske's executive vice president of investor relations and corporate development, wrote in an e-mail to Automotive News. "But if they were to sell dealerships, I am sure we would be interested in at least taking a look at some of the potential dealerships since we already have a presence in the German marketplace." Penske owns or holds a stake in 35 dealerships in Germany, according to its Web site. Those stores sell 11 brands, including Volkswagen Group marques, Toyota, Lexus and several high-end brands such as Ferrari and Maserati.
Source: Automotive News
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Pioneering Electric Car Battery Firm Dissolves

A few years ago, Shai Agassi and his company, Better Place, were full of ideas that put them at the forefront of the coming electric-car movement. Now that same company has been dissolved. The company was planning to set up shops across America that would swap out depleted electric batteries in cars and install fresh ones -- all in a matter of minutes. That electric cars would have unlimited range, only having to stop about as long as it would take to fill up on a tank of gas. With electric car sales plodding along in the U.S., Agassi took Better Place's model to Israel. It was there that Reuters reports that the company has asked a court to dissolve it and appoint a temporary liquidator.
Source: USA Today
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German Automakers Falter in Meeting Million-Electric Goal

As Joachim Sander looks for a new car, he's thinking it might be time to go electric. German Chancellor Angela Merkel will need the help of the Frankfurt IT consultant -- and a lot more like him -- to keep her word. Three years after Merkel said she wants to see 1 million battery-powered cars on German roads by 2020, there has been scant progress: On Jan. 1, only 7,114 of Germany's 43.4 million passenger vehicles were electrics. Even adding hybrids powered with both electricity and conventional fuels brings the number to just 72,109. “Our plans and projects are ambitious, but we have a good chance of fulfilling them,” Merkel said at a government conference on electric vehicles in Berlin yesterday. Skeptics say that even with German automakers poised to introduce a slew of electrics, the country is unlikely to reach Merkel's target. A goal of 600,000 electrics and plug-in hybrids in Germany by 2020 would be more realistic, said Thomas Schlick, a partner at consultancy Roland Berger.
Source: Bloomberg
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IRS-Type Scandal Unlikely to Spread to Car Dealer Closures

Rep. Jim Renacci is investigating whether the Treasury targeted conservatives in the closings of auto dealerships, but a 2010 report found no smoking gun

The ongoing IRS scandal has raised the specter of political favoritism in another program overseen by the Treasury Department - the closures of hundreds of car dealerships during the auto bailout. But WKSU's Jeff St.Clair reports the targeting of conservative car dealers will be hard to prove. Wadsworth Republican Jim Renacci and Pennsylvania Congressman Mike Kelly are asking the Treasury department to hand over all records regarding decisions to close GM and Chrysler dealerships during the government structured bankruptcies. GM closed Renacci's dealership in 2010 as part of the restructuring, one of the reasons he cites for running for Congress. A report issued in 2010 by a congressionally appointed special investigator found that Treasury officials exerted little oversight of the automakers closure criteria, but for unknown reasons, GM did not follow its own guidelines in deciding which dealerships to close.
Source: WKSU (Kent, Ohio)
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How the Used-Car Market Could Undermine Obama's Fuel-Economy Rules

Back in August, the Obama administration announced strict new fuel economy standards for all new cars and light trucks. By 2025, automakers in the United States will need to sell passenger vehicles that get, on average, 54.5 miles per gallon. But those rules only apply to new cars. There will still be millions of used cars out on the roads. And, as it turns out, the fuel regulations may have an unintended effect on that used-car market. A new study suggests that older, gas-guzzling vehicles will likely stay on the roads even longer — and reduce the effectiveness of the fuel rules by 13 percent to 23 percent. The idea here is that stricter fuel-economy rules will make new SUVs, pickup trucks, and other inefficient vehicles more expensive. That will spur more people to turn to the used-car market, which will raise the price of older SUVs and pickup trucks. And that, in turn, will give people reason to drive their gas-guzzlers for longer and postpone scrapping them.
Source: The Washington Post

Editor's note: To view the study, click here.
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Chevy Powers Up Snail for DreamWorks' 'Turbo' Movie

General Motors Co.'s Chevrolet brand said Friday it is helping move an animated snail who will make his debut on the big screen this summer. DreamWorks Animation SKG Inc. partnered with Chevrolet designers to help create animated versions of a Chevrolet Camaro and Indy cars that appear in the upcoming film “Turbo.” The movie hits theaters July 17. Turbo, a snail and the main character in the movie, receives his super speed after he encounters a Camaro, GM said. The Chevrolet bowtie is seen during the Indianapolis 500 in the film, as it at will be at the actual race [last] weekend.
Source: The Detroit News
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More Articles
 
Quotable
"Tesla is going down a path that a number of carmakers have tried, with little long-term success."

   -- Micheline Maynard, in a commentary referring to Teslsa's attempt to sell cars online in North Carolina, Forbes, May 23

"Consumers will only buy electric cars if they are reasonably priced and there is enough charging infrastructure. They don't yet feel confident enough to switch."  

   
-- Siim Kallas, Europe's transport commissioner, commenting on the slower than anticipated growth of electric vehicles, Bloomberg, May 28

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