View Mobile Version

SPONSORED BY
NADA.org
November 15, 2013 FacebookTwitterFlickrRSSSEND TO A FRIENDPRINT
nada.orgAdvocacyAffiliates | Convention | Jobs | Programs | Publications | Services | Training
Inside this issue
Regulators May Rethink Methods Used in Discrimination Investigations
Last Chance to Attend the 2013 Western Automotive Conference!
Government Shutdown Puts Used Vehicle Prices In A Tailspin
Auto Loans Boom Follows Car Sales Surge
Akerson Wants Next GM CEO to Be Risk Taker, 'Change Agent'
NHTSA Wants Automakers to Fast-Track Vehicle Technology
Now It's Gen Y Employees
Fiat Goes Back to Future with '1957 Edition' 500
Click here for more auto industry news at NADAFrontPage.com. .
Top Stories
Regulators May Rethink Methods Used in Discrimination Investigations

Financial regulators acknowledged Thursday that the data they use to determine fair lending violations in certain cases could be improved, but said they would not stop using such information. Officials from the Consumer Financial Protection Bureau and the Department of Justice were among a handful of federal agencies at a CFPB field hearing who said they would analyze their methods used to pursue indirect auto lenders for fair lending violations.

"Our commitment is to kick the tires on methodology and on all of our statistical analysis to ensure that at end of day, we get the answers right. And so we would welcome the indirect auto lenders we're investigating, or anybody else, to join us at kicking the tires," said Steven Rosenbaum, chief of housing and civil enforcement at the Department of Justice. "But at end of day, we have to have a process and methodology to identify who the borrowers are and figuring out whether there's discrimination going on."

The CFPB's auto hearing was its first public attempt to bring regulators, consumer advocates, dealers and lenders into one room after issuing a controversial bulletin about the industry in March. The bulletin has sparked concerns from industry advocates and lawmakers partly because it holds lenders responsible for unintentional discrimination at the partnering dealership — known as disparate impact — which could push dealers into a "flat fee" mentality where they threaten to raise costs elsewhere in order to be compensated.

Additionally, because an application for an auto loan is not legally allowed to contain information about a borrower's gender or race, regulators must use "proxies" to assume the customer's profile based on trends in surnames and census information. That has given rise to accusations by lenders and auto dealerships that regulators aren't even sure actual discrimination has taken place.

"The data should be uniform and it should be fair. Under the process that has been proposed and has been discussed, I would think it is definitely not one that is fair for someone like myself who is a part of the protected class as a consumer," said Damon Lester, president of the National Association of Minority Automobile Dealers. The regulators "really need to look more at the consequences of making sure that data collection is accurate."

Industry advocates ... have questioned dollar amounts being publicized by the CFPB and consumer advocates. They argue that the difference between the rate a lender offers at wholesale and what the dealer adds on before offering the loan factors in compensation for the dealer that could otherwise come out of other auto costs for the consumer.

"The actual number that dealers get compensated for is much lower," than the multi-billion figure consumer advocates have stated, said Andrew Koblenz, executive vice president and general counsel for the National Automobile Dealers Association. "The question the CFPB should be asking is... are we looking at the amounts being charged elsewhere to amounts being paid at the dealership."

Bill Himpler, executive vice president of government affairs at the American Financial Services Association, said his group is commissioning an independent study to analyze the costs and benefits of shifting to a flat fee structure after the CFPB told lawmakers last week that it did not need to do a cost-benefit analysis. "Many companies believe that moving to flat fees could actually create disparate impact by doing so," Himpler said. "Will this suggest a cure to kill the patient? We simply don't know. We do know these issues are complex."
Source: American Banker (Subscription required.)

Editor's note: As a participant in the forum, NADA's Paul Metrey effectively conveyed that the CFPB's effort to eliminate the incredibly competitive benefits of dealer-assisted financing would most certainly increase the cost of credit and make it less available to car and truck buyers. For more of NADA's perspective on the forum, click here. A fact sheet summarizing the issue and NADA's position can be found by clicking here. A copy of NADA's opening statement can be found here.

Related Story:


Share: LinkedIn Twitter Facebook

[back to top]

Last Chance to Attend the 2013 Western Automotive Conference!

The NADA and J.D. Power Western Automotive Conference will be held this Tuesday, Nov. 19, at the Biltmore Hotel in Los Angeles. The half-day conference is a unique opportunity to hear industry insights from Jose Munoz, Nissan's senior vice president of sales and marketing for the Americas; Steward Reed, chairman of the Tranportation Design Department at Art Center College of Design; David Westcott, NADA chairman; Finbarr O'Neill, president of J.D. Power; Beth Ann Bovino, chief U.S. economist at Standard & Poor's; and John Humphrey, senior vice president of global automotive operations for J.D. Power.

The second annual conference, which is held in partnership with the Greater Los Angeles New Car Dealers Association and the California New Car Dealers Association, precedes press days at the Los Angeles Auto Show. Attendees will also recieve a complimentary press pass for the auto show. Click here to register.
Source: NADAFrontPage.com
Share: LinkedIn Twitter Facebook

[back to top]

Government Shutdown Puts Used Vehicle Prices In A Tailspin

Let's be honest: no one enjoyed last month's federal government shutdown. Every politician worth her salt knew that the outcome was a foregone conclusion, and yet, they went through with it anyway, causing needless mayhem and panic. And that's not just what progressives are saying. Even the National Automobile Dealers Association ... has criticized elected officials for their actions. Why? Because all the screaming and shouting put a crimp in showroom traffic. Though car sales rebounded later in the month, the uncertainty caused by the shutdown made shoppers scale back on spending, at least temporarily. And as we all know, when demand drops, so do prices. Nowhere was that seen more clearly than in the used car market, where prices fell more sharply than they had in two years. According to NADA, used car prices tumbled 3.5 percent in October -- the kind of dip not seen since October 2011. NADA's Jonathan Banks says that the downturn in prices could've easily been prevented: "Without the drama created by federal lawmakers that resulted in the shutdown, it's likely that October's rate of decline would have been directly in line with recent seasonal norms."
Source: HighGearMedia.com
Share: LinkedIn Twitter Facebook

[back to top]

Auto Loans Boom Follows Car Sales Surge

A boom in auto loans continues to support a resurgence in U.S. car buying that has hit its highest sales pace since 2007. The total amount of outstanding auto loans topped $782.9 billion as of Sept. 30, up $103 billion from the same period last year, according to Experian Automotive's quarterly report. That total is the highest point in seven years, Experian said. At the same time, the rate of loan payments that are more than 30 days late declined to 2.58% as of Sept. 30, compared with 2.67% a year ago. Taken together, the report shows that the lending environment continues to be very healthy for both consumers and automakers, said Melinda Zabritski, Experian's senior director of automotive lending.
Source: Detroit Free Press
Share: LinkedIn Twitter Facebook

[back to top]

Akerson Wants Next GM CEO to Be Risk Taker, 'Change Agent'

General Motors CEO Dan Akerson believes his successor should be a "change agent" who can guard against any complacency that could allow the automaker to slip back into bad habits, he said during an interview this week. "There's no prototypical CEO," Akerson told Automotive News. "A good leader has to be innately bright, intellectually curious. They have to be a change agent, never satisfied with the status quo." Akerson, 65, didn't comment on a timetable for his departure. Reuters reported, citing unnamed sources, that Akerson could step down sometime in 2014, but that he hasn't formally notified the board of his plans and GM hasn't begun a search for his replacement. Akerson, who took GM's top post in September 2010, said that the choice of successor ultimately will be up to GM's board, of which he is chairman. "I think we do have people here that I think fit that bill," Akerson said, declining to name them. "Of course, I'm on the board and I'll have an opinion. But that's kind of what I would look for."
Source: Automotive News
Share: LinkedIn Twitter Facebook

[back to top]

NHTSA Wants Automakers to Fast-Track Vehicle Technology

The National Highway Traffic Safety Administration wants the auto industry to fast-track technological advances in order to reduce auto deaths, making it the Obama administration's most ambitious auto-safety goal to date. NHTSA hasn't yet proposed regulations that would mandate front-collision warning systems, advanced seat belt interlocks or alcohol detection systems, the three technologies it thinks are the most promising. Instead, the agency hopes it can prod automakers to “aggressively accelerate achievable technological advances that would significantly improve safety.”
Source: The Detroit News
Share: LinkedIn Twitter Facebook

[back to top]

Now It's Gen Y Employees

Dealers who see Generation Y'ers as tough customers are learning that young hires come with their own set of expectations, too. Those often butt up against traditional dealership work schedules, policies and environments. Discontented Gen Y workers seldom stick around waiting for things to get better. Instead, they bolt, as evidenced by data in a new study done for the National Automobile Dealers Association. Dealership employee turnover generally is high, especially among salespeople working on commission. But departure rates among 20-somethings are something else, says Ted Kraybill, president of DeltaTrends, the firm that conducted the study focusing on recruiting, hiring and retaining top talent. “The dealership turnover rate for Generation Y is much higher than for other generations,” he tells WardsAuto. Dealership turnover hit 62% for salespeople specifically. Overall, it dropped a percentage point to 35% in 2012 compared with the year before. But it's expected to increase as stores hire more Millennials, many of whom end up disliking aspects of the work, particularly the long hours.
Source: WardsAuto
Share: LinkedIn Twitter Facebook

[back to top]

Fiat Goes Back to Future with '1957 Edition' 500

In the beginning, there was the 1957 "Nuova Cinquecento," New 500 in English. That began the generation of 500s people picture dashing about European streets. Fifty seven years later, Fiat is bringing back a taste of that original with a new "1957 Edition" of the 2014 Fiat 500. Automakers love car birthdays. It lets them bring out special editions to promote that is a version of something they already build, adding some goodies and paint and boosting the price at only a modest cost to the car company. To accomplish the retro look, Fiat has dressed up the 1957 Editon in period green or blue with a painted roof, an ivory interior with brown leather seats and back-in-the-day 16-inch wheels. But, in this case, the special is not as made-up as many and this is not just any birthday. Fiat considers the 1957 500 the "rebirth of Fiat and its product range."
Source: USA Today
Share: LinkedIn Twitter Facebook

[back to top]

More Articles
 
Quotable
"A broad industry adoption of flat fees would remove the ability of dealers to meet or beat the most competitive offer available to a consumer from any another source. This will weaken competition and, in turn, drive up the cost of credit." 

    -- Paul Metrey, chief regulatory counsel for financial services at NADA, commenting on the negative impact flat fees would have on the auto industry during CFPB's Auto Lending Forum on Thursday, Automotive News, Nov. 14
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. 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
 
Search Back Issues | Unsubscribe | Subscribe | Manage your subscription | email us
NADA For more information on NADA, visit www.nada.org or contact NADA, 8400 Westpark Drive, McLean, VA 22102. This email may contain an advertisement of NADA products and services. Any opinions or statements contained herein do not necessarily reflect the views of NADA. Factual errors are the responsibility of the listed publication. If you are a franchised new-car or -truck dealer and would like to become a member of NADA, please visit the Join NADA section of www.nada.org. Questions or comments concerning NADA Headlines content may be directed to publicaffairs@nada.org .