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Inside this issue
GM Share Sale Highlights U.S. Auto Revival as an Economic Pillar
MarketBeat: May Sales Rise 12.3 Percent Over April
Colorado Gov. Signs Dealer-Protection Bill
Ford Dealers' Time to Shine is During a Recall
GM Offers Free Car-Care to Bolster U.S. Sales
Volvo Not Quitting U.S., North American Chief Says
Leasing Beats Expectations, Buoyed By Volume Brands
Ford's 3-Cylinder Repeats as Engine of the Year, Headed to U.S.
Opinion: The Answer Is Yes
Desert Dealer Goes Solar to Save
Click here for more auto industry news at NADAFrontPage.com. .
Top Stories
GM Share Sale Highlights U.S. Auto Revival as an Economic Pillar

The Obama administration's decision to sell more of its stake in General Motors Co. underscores the resurgence of a domestic auto industry that emerged from near-collapse to become a pillar of economic growth. The U.S. Treasury Department said Wednesday it will sell 30 million GM shares, leaving it with less than a 15 percent stake more than four years after rescuing the company along with Chrysler Group LLC. The plan coincides with GM's return to the Standard & Poor's 500 Index for the first time since its 2009 bankruptcy. Automakers in the U.S. contributed 14 percent of the 2.1 percent average rate of growth for gross domestic product in the recovery that began in the third quarter of 2009, according to data from the Commerce Department. U.S. auto sales are on pace for the best year since 2007 as GM, Ford Motor Co. and Chrysler Group all gained market share in the January-May period -- the first time that has happened in at least 18 years.
Source: Bloomberg
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MarketBeat: May Sales Rise 12.3 Percent Over April

The U.S. automobile industry sold 1.4 million light vehicles in May, which is an increase of 12.3 percent from April and an increase of 8 percent compared to May 2012 according to the May edition of MarketBeat, NADA Industry Analysis's new monthly report of light vehicle sales. The report also provides a breakdown of market share by brand, segment and power source as well as the top selling models for the month. To view the full report, click here.
Source: WardsAuto/NADA Industry Affairs
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Colorado Gov. Signs Dealer-Protection Bill

Colorado Gov. John Hickenlooper signed into law Wednesday a Senate bill that better empowers dealers when negotiating their franchise agreements with manufacturers. Introduced in March, Senate Bill 265 clarifies that a number of dealer-friendly statutes passed since 2009, including one that limits manufacturer-mandated renovations to no more than every seven years, can be applied to franchise agreements that took effect prior to the passage of those laws. Other laws impacted by SB 265 include one that gives dealers the first right of refusal when a manufacturer closes a store in bankruptcy but later wishes to open a franchise in the same market. “We are glad that Gov. Hicklenlooper signed our bill into law,” Colo. Sen. David Balmer (R-Centennial), one of the bill's sponsors, told F&I and Showroom in an e-mail.
Source: F&I and Showroom
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Ford Dealers' Time to Shine is During a Recall

A vehicle recall can be good for dealers

If handled right, a recall often helps boost a dealership's customer retention rate and increase service revenues, an industry observer says. Ford Motor Co. issued a global recall Monday on more than 465,000 vehicles. The vehicles have fuel tanks that can leak and cause fires. Dealers will replace the fuel delivery module, which includes the connector, on the vehicles, all of which are 2013 models. And the repair gives dealers an opportunity to impress the customer. “If you handle a customer concern properly, you're going to build a relationship with them,” says Chip Maher, dealership management consultant for National Automobile Dealers Association 20 Group Program in McLean, Va. “Most dealers would rather not have quality issues, but if they do, they are going to make the best of a recall now.”
Source: Automotive News
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GM Offers Free Car-Care to Bolster U.S. Sales

General Motors Co. will offer two years of free oil changes, tire rotations and vehicle inspections on most new vehicle sales to create consumer loyalty and much-needed buzz around the upgrade of its Chevrolet portfolio. Buyers of 2014 Chevrolet, Buick and GMC models will get free scheduled maintenance for two years or 24,000 miles, whichever comes first. The offer covers vehicles bought or leased since May. It also expands a program now offered on GMC Sierra and Silverado pickup trucks. Cadillac already provides a four-year maintenance program. "The new plan will kick off our customers' ownership experience on the right foot and keep our strong sales momentum going," Chief Executive Dan Akerson said on Thursday during the auto maker's annual shareholders meeting in Detroit. Holders re-elected the company's entire slate of board members, according to preliminary voting results.
Source: The Wall Street Journal
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Volvo Not Quitting U.S., North American Chief Says

John Maloney, president and CEO of Volvo Cars of North America, reassures dealers that the Swedish importer is staying put in the U.S. Concerns about the Chinese-owned auto maker's future here arose following The Wall Street Journal's republication of a blog contending Volvo has insufficient resources to be a viable player in the low-end luxury segment, and should follow Suzuki's lead in quitting the U.S. market. Maloney tells WardsAuto in a telephone interview that Volvo is introducing four facelifted vehicles and a new generation of four 4-cyl. engines. The auto maker also has committed to a 25% increase in its marketing budget and a 20% “competitive” increase in incentives.
Source: WardsAuto
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Leasing Beats Expectations, Buoyed By Volume Brands

Leasing hit a high point in the first quarter, helped by lower monthly payments, Experian Automotive says. "It certainly was higher than I was expecting to see it," says Melinda Zabritski, senior director of automotive credit for Experian Automotive. In the first quarter this year, leasing accounted for 27.5 percent of new-vehicle originations, the highest since Experian started keeping track in 2006, she said. The latest figure was a substantial increase since the first quarter of 2012, when it was 24.4 percent, and the fourth quarter of 2012, when it was 24.8 percent. For the first quarter, Experian said the average monthly lease payment for new vehicles was $414, down from $424 a year earlier. "It's no wonder leasing is higher," Zabritski told Automotive News.
Source: Automotive News
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Ford's 3-Cylinder Repeats as Engine of the Year, Headed to U.S.

Is America ready for a three-cylinder engine? Ford Motor Co. is about to find out. Ford's 1-liter, three-cylinder EcoBoost engine has become an instant success in Europe, where small cars and smaller engines dominate the market. Now, the Dearborn [Mich.] automaker will be the first to try a three-cylinder engine in a U.S. vehicle in more than a decade, when its revamped Fiesta subcompact debuts this fall. On Wednesday, Ford's small engine was for the second straight year named the International Engine of the Year, a prestigious award voted on by journalists across the globe. Last year, Ford became the first engine from a U.S. automaker to win the award; prior to 2012, the previous 12 awards went to engines in European or Japanese-built automobiles.
Source: The Detroit News
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Opinion: The Answer Is Yes
By Steve Wassman

An article appeared in the May 18 edition of the Detroit Free Press posing the question: “Are engineers too few or just harder to find?” I have been a recruiter in the automotive industry for the past 18 years and am constantly looking for a variety of engineers who possess a specific set of skills. As a result, it is a question I have considered often and I believe I know the answer: Yes. How can this be? The article goes on to reference a recent study by the Washington-based Economic Policy Institute that says there actually is a glut. The institute says there are more students graduating with technology-related degrees than ever before: engineering, manufacturing, technology and science. Assuming this is true, where are they? They certainly aren't in the Detroit area, which begs the question, why not? I believe the answer is twofold: technological advancements in the vehicle and the recent recession. In the past, mechanical engineers were the most sought after, and they still are in demand. However, there has been a major shift in current and future vehicles toward more electronic and IT-related content. This requires people with information-technology, computer engineering and electrical engineering degrees.
Source: WardsAuto
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Desert Dealer Goes Solar to Save

Tax breaks, rebate help build a business case for sun power

In balmy Palm Springs, Calif., the desert sun shines an average of 350 days a year. So converting an auto dealership to solar energy might seem to be a no-brainer. But Paul Thiel studied the economics of solar power for seven years before he took the leap and converted his Palm Springs Motors, a Ford-Lincoln store in Cathedral City, Calif. For a long time, he couldn't make the numbers work. "We started studying it in 2005. The price of the solar system was too high," Thiel says. "It didn't justify to where you could make it pencil, where it would pay off in a reasonable amount of time. The payback would have been 10 to 12 years." Waiting paid off in a big way for Thiel, 61, a South Dakota native who worked for Ford Motor Co. as a general field manager before buying his dealership in 2000. He estimates the system cost 60 percent less than it would have seven years ago because of a combination of factors: a $220,000 Southern California Edison rebate, a $600,000 federal energy tax credit and 50 percent bonus depreciation that reduces the dealership's tax bill. The result: After the less than five years it takes Thiel to pay off the $2 million system, his Southern California Edison electric bill will mostly disappear. Thiel's average monthly electric bill is $15,000 but goes as high as $30,000 during summer, when the temperature sometimes soars above 120 degrees.
Source: Automotive News
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Quotable
"The auto industry is alive and well." 

      --- George Magliano, senior economist at IHS Automotive, commenting on the U.S. auto industry leading the economic recovery, Bloomberg, June 6

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