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Inside this issue
Forecasters See Bountiful Times Ahead in North America
Economist Sees Scrappage Juicing U.S. Sales in Next Two Years
Big 3 Point to Better Supplier Relations
GM's Goal: Cut $1B From Material, Logistics Cost in N. America By 2016
Auto Retailers Donate CPR Equipment
Click here for more auto industry news at NADAFrontPage.com. .
Top Stories
Forecasters See Bountiful Times Ahead in North America

Economists continue to be bullish on the North American auto industry, despite a slow-growing economy, forecasting record production and a surge in sales in the next few years. In an annual roundtable on the state of the industry, a panel of six economists from automakers and consulting firms forecast a full recovery from pre-recession levels by 2016 and an expansion by 2020. They differed somewhat on the pace and the drivers of the expansion, but overall described a North American industry that will see increasing volumes and that is building better quality vehicles which last longer. Still, they see problems, especially in demand from younger buyers who are having trouble finding jobs and from a supply base that is reticent to invest, given its recent history.
Source: Automotive News
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Economist Sees Scrappage Juicing U.S. Sales in Next Two Years

U.S. auto sales will boom in 2015 when drivers replace aging vehicles, an economist with Citigroup argues. Itay Michaeli, director of U.S. autos and auto parts for Citi Investment Research and Analysis, argues that the 11.4 year average age of the U.S. fleet is approaching the point where scrap rates begin to explode. Using Polk data, Michaeli studied the makeup of the 11.8 million vehicles that were scrapped last year, and found that the rate of scrappage rises dramatically at 13 years. "No later than 2015, we should see an incredibly strong scrap recovery in this cycle, and it hasn't even begun," Michaeli said [Tuesday] at the 2013 CAR Management Briefing Seminars [in Traverse City, Mich.]. He predicts an annualized U.S. sales rate between 16 and 17 million no later than mid-decade, and Michaeli argues that automakers' product plans may be poised to take full advantage of what is to come.
Source: Automotive News
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Big 3 Point to Better Supplier Relations

General Motors Co. said Tuesday it is getting suppliers involved much earlier in the vehicle development process — sometimes more than two years earlier than the past. The automaker says that the more open communication is helping to improve relationships with suppliers. Grace Lieblein, GM's vice president of global purchasing and supply chain who has been in her job eight months, told reporters at the Center for Automotive Research's Management Briefing Seminars that it expects the number of suppliers it works with will decrease over time, but it has no targets for a reduction. “We want to nurture strategic relationships with our suppliers and move those relationships whenever possible from one-time transactions to longer-term arrangements,” she said in a speech here, according to prepared remarks. Automakers are discussing their purchasing and supplier relationships during the conference.
Source: The Detroit News

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GM's Goal: Cut $1B From Material, Logistics Cost in N. America By 2016

The size and scope of General Motors Co.'s logistics operations are as big as the some Fortune 500 companies. The $8 billion operation includes moving parts and materials worldwide to 168 manufacturing plants, as well as customs and duties, and shipping spare parts, cars and trucks to dealerships. It's an area watched carefully by GM Chairman and CEO Dan Akerson, who wants the company to trim costs and eliminate waste. It's been a focus globally for the past year. The Detroit-based automaker's goal is to cut $1 billion from material and logistics costs in North America by 2016. Trimming that amount will help boost its North America profit margin by 1 percentage point, GM North America Chief Financial Officer Chuck Stevens said in March during an investors conference. The company plans to cut costs in several ways: It's working with suppliers to bring parts plants closer to GM's assembly plants. It's extending rail lines directly to plants, and is adding stamping plants to assembly facilities that don't have them. And it's cutting waste.
Source: The Detroit News

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Auto Retailers Donate CPR Equipment

With the right tools and equipment, cardiopulmonary resuscitation (CPR) training can be the difference between saving a life and not. For the Green Township Fire Department, training will now be easier, thanks to a donation from the Greater Cincinnati Automobile Dealers Association, and the National Automobile Dealers Charitable Foundation. The CPR training unit, sponsored by Walt Sweeney Ford, was presented to Green Township Fire Chief Doug Witsken on Aug. 1 at the Walt Sweeney Automotive Service and Sales Center. “We really appreciate the donation of this CPR manikin. It really helps us provide training to the public at a time when our budget for this type of equipment is very limited,”, said Witsken. CPR training has been proven to increase the likelihood of survival from ventricular fibrillation. The National Automobile Dealers Charitable Foundation partnered with the local automotive retailers and their associations have donated over 4,600 manikins across the country, training more than two million people, and saving thousands of lives.
Source: Cincinnati.com

Editor’s note: If you know of an organization in your community that can benefit from the donation of a CPR training unit, contact the NADA Foundation at
foundation@nada.org or (703) 821-7233.
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Quotable
"In 2014 and 2015, the rate of vehicle designs and refreshes with tremendous new technology is going to come right at the time when we think the vehicle age will start to hit that ideal range when scrap rates tend to balloon." 

   
-- Itay Michaeli, director of U.S. autos and auto parts for Citi Investment Research and Analysis, commenting on his prediction that U.S. auto sales will boom in 2015 when drivers replace aging vehicles, Automotive News, Aug. 6
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NADA Webinars
(All webinars begin at 1 p.m. ET. Click webinar title to register.) 

- Aug. 7: Buyers' & Sellers' Perspectives on the Market

- Aug. 21: Redefine the Aftermarket Customer Experience

- Aug. 28: Profit Paradigm: Stop the Big Squeeze

 For more information about the webinars, click here.

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