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Inside this issue
GM's Grueling Comeback Sets the Stage for New CEO to Think Big
Tight Race for Top Job at Chrysler-Fiat
Regulation Stays on F&I Forefront for 2014
Mazda U.S. Dealer Network Faces Shake-Up
How Efforts to 'Invest in Digital' & Increase Engagement Can Lift Dealer Performance
'The City Will Have a Good Future,' Says Bill Ford
St. Joe Receives Ambassador Grant
Click here for more auto industry news at NADAFrontPage.com. .
Top Stories
GM's Grueling Comeback Sets the Stage for New CEO to Think Big

In a 24-hour span this week, General Motors slammed the lid on a five-year chapter that will forever be defined by bankruptcy, bailout and caretaker management. Now Mary Barra, the first woman to lead a global automaker, inherits a company untethered from government ownership, with a rock-solid balance sheet, a clearer European strategy and a vehicle-development enterprise that's cranking out plenty of hits. "This is a great company again," retiring GM CEO Dan Akerson told Barra and her new executive team in a ceremonial passing of the baton last week before hundreds of employees. "Don't lose it." For Barra, the 51-year-old engineer and outgoing product chief, the task must go beyond simply not being the Old GM. Akerson spent his three-plus-year tenure trying to disentangle GM's notorious bureaucracy and revitalize its worn brands. Barra will need to pick up those unfinished tasks and also define a vision for the next era, one in which GM can harness its size and engineering prowess to outgun more profitable rivals such as Volkswagen, Toyota and Ford.
Source: Automotive News

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Tight Race for Top Job at Chrysler-Fiat

Timing of Marchionne's departure remains murky

General Motors has a new leader in place, and Ford has one waiting in the wings. But as the CEO succession spotlight turns to Chrysler-Fiat it is still anybody's guess who will replace Sergio Marchionne, and what kind of management structure the company will install when the indefatigable Italian steps down. With Chrysler in a federally imposed quiet period because of its initial public offering, the company is officially mum on who comes next or when. Chrysler spokesman Gualberto Ranieri declined to comment. But one thing is clear: Whomever is chosen will have some big and well traveled Italian leather loafers to fill, and much work still to be done.
Source: Automotive News

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Regulation Stays on F&I Forefront for 2014

Auto finance regulation will stay on the front burner in 2014, with conclusions likely from investigations that began in 2013, according to attorneys who specialize in the area. Several auto lenders disclosed in 2013 that the Consumer Financial Protection Bureau had asked them for information regarding “certain retail practices,” language that was almost certainly shorthand for dealer reserve or dealer markup. Yet none of those CFPB investigations has produced any public statement from the CFPB or any additional word from the lenders so far.

“We do know the CFPB is investigating several lenders. Maybe there will be a conclusion -- maybe several” in 2014, Joseph Karam, a staff attorney for RouteOne said during a phone interview last week. Ally Financial Inc., American Honda Finance Corp. and Toyota Motor Credit Corp. all disclosed in 2013 filings with the Securities and Exchange Commission that they were under CFPB review. Several banks, including Chase Auto Finance and Bank of America, have sent letters to dealerships warning them about discrimination, almost certainly in response to issues raised by the CFPB.

Judging by recent history in other rulings, conclusions from the CFPB investigations now under way could include consent orders in which lenders agree to comply with additional direction from the CFPB, without admitting any violations. Paul Metrey, chief regulatory counsel for financial services at the National Automobile Dealers Association, said it “remains to be seen” how consent orders -- if there are any -- would affect the marketplace. Lenders have said they don't want to switch to flat fees unless their competitors switch, too.

“While many commentators anticipate that the CFPB could enter into consent orders with large banks to resolve disparate impact allegations, it is by no means inevitable that finance sources will move in lockstep to adopt whatever pricing parameters may result from any such consent orders,” Metrey told Automotive News in an e-mail last week.

Another shoe that's expected to drop in 2014 is the outcome of an independent study recently launched by the American Financial Services Association, a lender trade group, into the economic impact of reforms recommended by the CFPB, including flat fees. CFPB Director Richard Cordray said recently the CFPB had not performed such a study. Opponents of flat fees, including the NADA, have said flat fees could raise the cost of credit. Metrey said the AFSA study is “filling a huge need by actually considering how the Bureau's actions could affect the cost of credit for consumers.”
Source: Automotive News
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Mazda U.S. Dealer Network Faces Shake-Up

Underperforming stores must go

Mazda Motor Corp., targeting a one-third surge in U.S. sales over the next two years, plans a sharp rise in sales per outlet and will weed out those dealerships that underperform. The small carmaker, which relies on exports to North America for nearly a third of its global sales, is channeling its sales and marketing energies into 35 metropolitan markets that it has identified as key to its growth. Akira Marumoto, executive vice president in charge of North America, said Mazda began explaining the new strategy to dealers in October. The plan calls for opening showrooms to replace outlets in poor locations or dealerships that aren't performing.
Source: Automotive News
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How Efforts to 'Invest in Digital' & Increase Engagement Can Lift Dealer Performance

While it might be that traditional advertising venues are where dealers go to reach consumers, here’s the interesting twist: digital is where consumers are trying to reach dealers. Hence, the biggest take-away from FordDirect’s latest Consumer Marketing Survey: dealers need to invest in digital. After all, that’s where the customers are, said FordDirect vice president of communications Kate Bullach. Auto Remarketing talked with Bullach on Friday afternoon about the findings of the study, many of which underscore the importance of dealers engaging with shoppers, especially in the digital space.
Source: Auto Remarketing
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'The City Will Have a Good Future,' Says Bill Ford

Bill Ford recalls flying into Detroit and seeing the downtown area ablaze during the 1967 riot. And it seems like only yesterday the 2008 global economic crisis caused a meltdown for the entire area. But nothing compares to 2013 as far as an impact on the city in Ford's book. “We really hit rock bottom this past year,” said Ford, executive chairman of Ford, during an interview about the city where his great-grandfather, Henry Ford, started the auto company over 100 years ago. “I am more optimistic about Detroit than I have been in many, many years,” he added. “There's lots of business activity, new restaurants, new start-ups.”
Source: Detroit Free Press
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St. Joe Receives Ambassador Grant

Ben Keating of Port Lavaca Auto Group [in Victoria, Texas] recently designated St. Joseph High School to receive the National Automobile Dealers Charitable Foundation's Ambassador Grant. The grant will be used to purchase Vernier LabQuest 2 probes to collect and analyze data in biology and AP environmental science classes.
Source: The Victoria Advocate
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Quotable
"While many commentators anticipate that the CFPB could enter into consent orders with large banks to resolve disparate impact allegations, it is by no means inevitable that finance sources will move in lockstep to adopt whatever pricing parameters may result from any such consent orders." 

   -- Paul Metrey, NADA chief regulatory counsel for financial services, said it “remains to be seen” how consent orders -- if there are any -- would affect the marketplace, Automotive News, Dec. 11

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