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Inside this issue
CFPB's Richard Cordray to Testify at Senate Hearing
N.A. Auto Industry to See Big Supply Chain Bottleneck Within 5 Years, Study Warns
Chrysler Announces Executive Changes
The Hunt For Biofuels Looks Beyond Ethanol
Kia Aims For 120-Mile Driving Range For Soul EV
Subaru Boss: Upgrade Dealer Service to Keep Conquests
Opinion: Liberals' Investment Drives Tesla's Survival
Click here for more auto industry news at NADAFrontPage.com. .
Top Stories
CFPB's Richard Cordray to Testify at Senate Hearing

Richard Cordray, director of the Consumer Financial Protection Bureau, will provide the agency's semi-annual report to Congress at a hearing today held by the U.S. Senate Banking Committee. The National Automobile Dealers Association (NADA) has urged Senators to press Cordray on recent “fair lending guidance” that ends a dealer's ability to offer discounts to customers financing a vehicle.

“The CFPB is trying to eliminate my ability to be competitive with other lenders and that only hits consumers in the pocketbook,” said Dave Westcott, NADA chairman, and a new-car dealer in Burlington, N.C. “Senators should ask tough questions so that we can finally get some transparency into the CFPB's effort to radically change an almost $800 billion market.”

On March 21, the CFPB—without public comment or formal rulemaking—issued guidance that pressures lenders into compensating dealers arranging financing with flat fees and eliminating any discretion dealers have to meet or beat a competitor.

Since then, the CFPB has refused to release any of its research that supports the need to force these changes in auto lending. After multiple bipartisan requests from both the House and Senate, the CFPB admitted recently that there was no analysis performed as to how moving to flat fees will help or harm consumers.

“If you are going to force a massive shift in an extremely competitive and efficient market, shouldn't you study its impact on both the industry and consumers first?” Westcott asked. “These are questions we hope are asked of the CFPB.”

Six of the 22-members on the Senate Banking Committee signed a letter to Cordray on Oct. 30 expressing concern about the CFPB's guidance issued in March “that could curtail a pro-competitive feature of the indirect vehicle financing market and to request greater transparency for the bureau's activity related to this matter.” The six senators are Ranking Member Mike Crapo (R-Idaho), Kay Hagan (D-N.C.), Heidi Heitkamp (D-N.D.), Joe Manchin, III, (D-W.V.), Jerry Moran (R-Kan.) and David Vitter (R-La.).

The hearing will be held today, Nov. 12, in the Dirksen Senate Office Building (Room 538), from 2:30 p.m. – 4:30 p.m. EST. Click here to view the webcast, which will not be available until the hearing starts.
Source: NADAFrontPage.com

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N.A. Auto Industry to See Big Supply Chain Bottleneck Within 5 Years, Study Warns

The global auto industry in recent years has come to recognize risks inherent in its long and diffuse supply chain. Now it's starting to face an almost 40 percent bottleneck in the ability to make vehicles. Within five years, the North American auto industry will be almost $6 billion short of tooling capacity -- the ability to make the machines and molds automakers and their suppliers use to build auto parts -- according to a new study from Harbour Results Inc., a suburban Detroit consulting firm. As U.S. vehicle sales recover toward the annual record of 17.4 million, car companies will need toolmakers to be able to produce $15.2 billion in tooling each year, far more than the current capacity of about $9.3 billion, said Laurie Harbour, chief executive officer of Harbor Results. She called the tooling-needs estimate conservative.
Source: Bloomberg
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Chrysler Announces Executive Changes

Chrysler Group LLC announced Monday that Chrysler brand president Saad Chehab is being reassigned to Maserati, where he will become chief marketing officer, effective immediately. Chehab, a former Ford Motor Co. marketeer who was lured to Auburn Hills by Fiat-Chrysler CEO Sergio Marchionne, was one of the creators of the company's “Imported from Detroit” tagline and associated advertising campaign. His move to Maserati underscores the growing importance of the luxury brand in Marchionne's evolving global strategy. But it also cost Chehab his seat on the Fiat-Chrysler executive council. Chrysler appointed Al Gardner as president of the Chrysler brand, effective immediately. Gardner, who joined the company in 1986, had been director of Chrysler's Southeast Business Center.

The Auburn Hills automaker also named Steve Beahm as vice president in charge of supply chain management, effective Jan. 1. Beahm, who has been at the company since 1987, was vice president in charge of U.S. sales operations. Tim Kuniskis will assume responsibility for all fleet operations, in addition to his current position as head of the Dodge brand. The current head of fleet operations, Pete Grady, was named president of Maserati North America. Robert Graczyk was named head of sales for Fiat and Chrysler in Australia, effective immediately. He had been president of Maserati North America. Finally, Jeffrey Kommor was appointed vice president of U.S. sales operations, effective Jan. 1. Kommor had served as director of the company's Northeast Business Center. He joined Chrysler in 1985.
Source: The Detroit News

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The Hunt For Biofuels Looks Beyond Ethanol

A push is on to get more energy from nonedible plants

For biofuels, the future won't look much like the past. We're heading, some believe, for a post-ethanol age. Today, nearly all plant-based liquid fuels are either used to make ethanol, which is blended with gasoline, or biodiesel. But efforts to increase the amount of ethanol in gas are opposed by auto makers and others who say the environment and economy are better served by more efficient engines and the shift to hybrid, electric and natural-gas vehicles. There are critics, too, who say making biofuel from edible plants—most ethanol is based on corn or sugar cane—is a poor use of land and crops needed to feed growing populations. Now energy experts see a growing role for new biofuels that use nonedible plant material and are hydrocarbons, like petroleum fuels, and so don't require a separate infrastructure.
Source: The Wall Street Journal

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Kia Aims For 120-Mile Driving Range For Soul EV

Kia is targeting a 120-mile driving range on a single charge for the electric version of its Soul subcompact arriving next year in the United States. The Soul EV will be Kia's first electric vehicle sold outside South Korea. For comparison, the Nissan Leaf EV has an EPA-certified driving range of 75 miles. The Soul EV will have a 27 kilowatt-hour lithium ion polymer battery pack powering an electric motor that sends 109 hp and 210 pounds-feet of torque to its front wheels. Kia says the Soul EV's battery pack can be fully recharged in five hours using a 240-volt outlet.
Source: Automotive News
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Subaru Boss: Upgrade Dealer Service to Keep Conquests

Focus to stay small even as volume surges

Subaru boss Yasuyuki Yoshinaga, worried that customer service is being swamped by the brand's sales boom, is pushing U.S. dealers to upgrade to keep new conquest buyers loyal. The brand's U.S. operations introduced a new service improvement program Nov. 1 aimed at expanding after-service in line with the company's breakneck growth, Yoshinaga said. "We are enjoying growing sales, so that means we are getting new customers from our competitors," he said in an interview Monday at the global headquarters Fuji Heavy Industries Ltd., the parent company of Subaru. "It is of utmost importance that the service structure keeps them within the Subaru brand," he said. "Our expansion was so rapid, this is one of our challenges. The service expansion can't keep up with the sales themselves." Subaru is on pace for its fifth straight year of record U.S. sales, and Yoshinaga expects another record year in 2014.
Source: Automotive News
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Opinion: Liberals' Investment Drives Tesla's Survival
By Charles Lane

These are trying times for Tesla Motors. Its third-quarter sales and revenue disappointed the markets, causing a sell-off in its high-flying stock. Then a Tesla Model S burst into flames after a collision, the third time that's happened. Chief executive Elon Musk faces “crash and burn” jokes about both his car and his stock. Tesla might survive this rough patch. Those skeptical of Tesla and the rest of the electric-car industry must acknowledge that Musk's company has built a nifty car and has stayed afloat longer than expected by many short-sellers who bet on its demise. But even if widely adopted, Teslas would have little impact on climate change as long as drivers have to charge their vehicles from a coal- and natural gas-fired U.S. electric grid. In May, JPMorgan Chase analysts calculated that the Model S's annual fossil fuel “footprint” is bigger than that of a Honda Civic hybrid.
Source: The Washington Post
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Quotable
"We are enjoying growing sales, so that means we are getting new customers from our competitors. It is of the utmost importance that the service structure keeps them within the Subaru brand." 

   --- Yasuyuki Yoshinaga, head of Subaru, commenting on the brand's sales boom and its effect on customer service, Automotive News, Nov. 12

NADA Market Beat
October Sales Up From Last Year
Chairman's Column
A Season of Thanks
Videos

  NADA Chairman Speaks to Detroit Auto Press (NADA-TV)
NADA Webinars
(All webinars begin at 1 p.m. ET. Click webinar title to register.) 

- Nov. 13: U.S. Car Sales – The Year in Review and a Look Ahead

- Nov. 20: DMS Access Concerns (Part II)

For more information about the webinars, click here.

NADA Foundation News
Ambassador Spotlight: Richard Kull Promoted Charitable Giving through the NADA Foundation
 
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