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Inside this issue
Report Urges Changes at Consumer Protection Bureau
Fiat Needs Chrysler More Than Ever
GM Hopes to Raise $4.5B to Buy Back Stock, Prepay Debt
Luxury Car Firms Go Small, Sell Big
Calif. to Extend EV Tax Credits, Build Hydrogen Fuel Stations
Henry Ford's Century-Old Line Finds $15 Billion in China
Click here for more auto industry news at NADAFrontPage.com. .
Top Stories
Report Urges Changes at Consumer Protection Bureau

The Consumer Financial Protection Bureau should revamp aspects of the way it supervises financial institutions and be more open to public feedback, a centrist think tank says in a new report. The Bipartisan Policy Center on Tuesday will release an examination of the CFPB's first two years — a report that could prod the bureau to make changes. The regulator, created under the 2010 Dodd-Frank financial overhaul law to protect consumers from financial abuses, has been divisive since it was first contemplated. Republicans and many in the financial industry opposed the CFPB and say it wields too much power, while Democrats see a successful financial watchdog. But the report says the regulator has stumbled when it has issued guidelines without outside advice. Critics say many of these policy guidelines –such as a warning against discrimination in auto lending — have been difficult for industry players to put into practice. “Where they're open and transparent, they have a high success rate,” said Rick Fischer, a co-author of the report and a banking lawyer with Morrison & Foerster LP. “Where they develop guidance internally without the benefit of stakeholders, it's more problematic.”
Source: The Wall Street Journal

Editor's note: The CFPB, without public hearing or comment, issued guidance that threatens to eliminate the ability of dealers' to discount the interest rate offered to consumers to finance vehicle purchases. As a result of the CFPB's refusal to share any of its justification for this change, Senators Rob Portman, R-Ohio, and Jeanne Shaheen, D-N.H., are seeking signatures from other senators on a letter requesting transparency from the Bureau. All dealers are strongly urged to contact BOTH of their senators to ask that they sign the “Portman-Shaheen Auto Finance” letter. Senators can be reached through the Capitol switchboard at (202) 224-3121.
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Fiat Needs Chrysler More Than Ever

Italian auto maker's warning it could curb ties doesn't hold up

Fiat SpA is making noise that it could scale back its alliance with Chrysler Group LLC if it can't get full control of the U.S. auto maker. But given how critical the partnership has become to the Italian car maker, many consider the warning to be hollow. The Turin, Italy, company has come to depend heavily on Chrysler, as Fiat's European business hemorrhages hundreds of millions of euros a year amid a severe slump in demand for cars in the region, say analysts. Fiat's plan to take full control of Chrysler, tap its cash, and work more closely on new vehicles is key to its own turnaround and ambitions to go toe-to-toe with larger rivals. On Monday, Chrysler filed for an IPO of shares owned by the UAW Retiree Medical Benefits Trust. The trust holds a 41.5% Chrysler stake obtained for concessions before and through its U.S. government-led bankruptcy restructuring. The filing was the result of a contractual demand by a union health-care trust that is Chrysler's second-largest shareholder. While the IPO registration is widely seen as a way to set a market price on the trust's shares, it also puts a spotlight on Fiat Chief Executive Sergio Marchionne's urgent need to fully merge the two.
Source: The Wall Street Journal
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GM Hopes to Raise $4.5B to Buy Back Stock, Prepay Debt

General Motors Co. said Tuesday that it hopes to raise $4.5 billion in a debt offering of senior unsecured notes that will help it buy back 120 million preferred shares of stock from the UAW Retiree Medical Benefits Trust (UAW VEBA). The Detroit automaker said it will use about $3.2 billion of the proceeds to buy back the UAW VEBA shares and will use about $1.2 billion to prepay in full debt with a 7 percent interest rate, including accrued interest, to the Canadian Auto Workers' Union Health Care Trust. That note was to be paid in installments through 2018.
Source: The Detroit News
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Luxury Car Firms Go Small, Sell Big

Even budget-conscious will pay a little more for compacts, German companies discover

German luxury automakers BMW, Audi and Mercedes-Benz are gaining customers at the expense of mass-market rivals with a flood of small cars that even penny-conscious buyers are willing to pay extra to drive. During the six-year downturn in European auto sales, the BMW brand's market share has climbed to 5.1 percent from 4.2 percent, Audi has risen to 5.7 percent from 4.2 percent and Mercedes is at 5 percent, up from 4.5 percent. PSA Peugeot Citroen, General Motors Co. and Ford Motor Co. have each lost more than 2 percentage points of share in that time. Bayerische Motoren Werke AG, Volkswagen AG's Audi and Daimler AG's Mercedes have remade the region's competitive landscape by pushing into smaller cars.
Source: The Detroit News
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Calif. to Extend EV Tax Credits, Build Hydrogen Fuel Stations

The California legislature has approved measures to raise $2 billion to extend rebates for electric vehicles and to help develop up to 100 fueling stations over the next decade for vehicles powered by hydrogen fuel cells. The legislation, expected to be signed by Gov. Jerry Brown, would extend some vehicle fees to help pay for the programs. The state has made its zero emission vehicle program a cornerstone of its efforts to reduce smog and greenhouse gas emissions. One bill would extend funding for up to a $2,500 state tax credit for buying an electric vehicle or plug-in hybrid electric through 2024.
Source: The Detroit News
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Henry Ford's Century-Old Line Finds $15 Billion in China

On Oct. 7, 1913, Henry Ford's assembly line moved for the first time. A century later, among the changes in Ford Motor Co.'s production, none is more dramatic than simply where it takes place. Ford vehicles assembled in China and the rest of Asia now outnumber those built in Europe for the first time. By 2015, Ford will have the capacity to produce more cars and trucks in Asia than it made last year in North America. Wealth in Asia is surging even faster than it did in America following Henry Ford's manufacturing innovation and the five-dollar workday he introduced the following year. Just as when his Model T became the first car for millions of people, a burgeoning middle class in countries such as China means that at least two of three buyers in these markets are getting their first set of wheels. “It's so aspirational and such a big deal,” Joe Hinrichs, who led Ford's manufacturing and Asia operations before taking over the Americas late last year, said in an interview.
Source: Bloomberg
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"It's weathered the test of time very well."

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