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Inside this issue
Auto-Financing Study Aims to Get it Right
NADA Compliance Plan Sets Out Dealer To-dos
Automakers Push for Showroom Overhauls, and Dealers May Reap Rewards
Some See Chrysler-Fiat Merger as Loss for Big 3
Super Bowl Auto-Ad Blitz Pits Muppets Versus James Franco
Click here for more auto industry news at NADAFrontPage.com. .
Top Stories
Auto-Financing Study Aims to Get it Right

A finance-industry association is conducting an indirect-financing study amid federal government claims that certain car-lending practices discriminate against minorities. Defenders of dealer-assisted financing, which accounts for most auto loans, rebut the government discrimination charges, and question how such conclusions were reached. “We want to make the case correctly, with accurate statistics,” Chris Stinebert, president and CEO of the American Financial Services Assn., says in announcing the trade group’s impending study. “Our job is to make sure regulators understand the industries they regulate,” he says.

The study comes on the heels of an analysis by the Consumer Financial Protection Bureau that criticizes the so-called dealer-reserve system in which dealers increase loan rates by varying percentage points as payment for acting as middlemen between lenders and car buyers. “We remain in the dark as to the methodology,” says Andy Koblenz, executive vice president of legal and regulatory affairs for the National Automobile Dealers Association.
Source: WardsAuto

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NADA Compliance Plan Sets Out Dealer To-dos

There's more to the National Automobile Dealers Association's new compliance program than recommending that dealerships set a limit for dealer reserve and document all exceptions. The program, which NADA e-mailed to members Jan. 24, provides a dealership to-do list. The idea behind the NADA Fair Credit Compliance Policy & Program is to reduce the risk of discrimination charges stemming from the Consumer Financial Protection Bureau's oversight of auto lenders. The CFPB has lenders analyzing loans originated at dealerships, looking for what the bureau considers to be discrimination. NADA's 18-page program includes extensive, footnoted background material on the regulatory environment plus suggested forms and instructions for filling them out. For example, the program defines seven categories of what the NADA considers valid reasons for making exceptions to a dealership's self-selected cap on dealer reserve.

Paul Metrey, NADA's chief regulatory counsel for financial services, privacy and tax, said compliance is strictly optional. "We're not telling anyone they have to do this," he said during an interview last week. Metrey and Andy Koblenz, NADA general counsel, said dealerships that put the program into action should reduce "unexplained differential outcomes" in dealer reserve to zero.
Source: Automotive News

Editor’s note: The NADA Fair Credit Compliance Policy and Program, along with a cover memo from NADA, the American International Automobile Dealers Association, and the National Association of Minority Automobile Dealers, was e-mailed to all NADA members on Friday, Jan. 24, 2014. NADA members may access this publication at
www.nada.org/faircredit.

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Automakers Push for Showroom Overhauls, and Dealers May Reap Rewards

Automakers want new-vehicle showrooms that are better places to work, transparent in their practices and more customer-friendly overall, and data compiled by the National Automobile Dealers Assn. suggests dealers would benefit from forging such a transformation. Car makers, from top-end luxury brands to mass-market marques, say it’s time for a cultural overhaul in the way new cars are sold and serviced, citing the shift toward technology-laden vehicles and Internet-savvy shoppers who abhor high-pressure sales tactics and come through the door armed with detailed product and pricing information.They also want sales and service employees to be better-engaged in their jobs, because understanding and supporting the dealer’s mission to serve customers translates into higher sales, better profit margins and increased brand loyalty among consumers, say industry insiders at last weekend’s 2014 NADA Convention and Exhibition [in New Orleans].

Some retailers continue to resist OE demands, including a few BMW dealers who reportedly would rather sell their stores than commit to a mandatory upgrade that collectively will cost $2.5 billion. But a NADA-backed annual study of dealership salaries and employment issues, now entering its third year, suggests a financial reward awaits those willing to take these leaps of faith. Ted Kraybill, president of ESiTrends, the consulting firm that compiles the “Dealership Workforce Study Industry Report” for NADA members, says there is a close relationship between sales-staff retention, customer satisfaction and showroom profitability.
Source: WardsAuto

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Some See Chrysler-Fiat Merger as Loss for Big 3

Few know the changes and turmoil at Chrysler better than Cathy Smith, a millwright at the automaker’s Trenton Engine Plant the past two decades: In 1998, Chrysler merged with Diamler-Benz AG, and when that unhappy marriage failed, the automaker was sold in 2007 to private equity firm Cerebrus Capital Management LP. After Chrysler entered bankruptcy in 2009, it emerged with Fiat SpA as a stakeholder. “We’ve been through this before,” said Smith, 49. “It seems like Fiat is the most interested in making it work. I think we’re still kind of numb and we don’t know what to think. They own us now, but we don’t know what the effect will be yet.” A vocal minority of participants on social media websites has attempted to create momentum in recent weeks — since the Chrysler-Fiat merger plans were made public — to figuratively kick Chrysler out of the Big Three club.
Source: The Detroit News

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Super Bowl Auto-Ad Blitz Pits Muppets Versus James Franco

From the Muppets to James Franco, Hollywood will be working hard for carmakers at the Super Bowl. At least seven auto brands will advertise during Fox TV’s telecast of the National Football League championship game on Feb. 2, researcher Kantar Media said, making the industry the biggest sponsor for a third straight year. Jaguar, the British luxury sports-car brand owned by Tata Motors Ltd., plans its first spot ever, while Franco pitches Ford, Laurence Fishburne appears in spots for Kia and the Muppets ride in a Toyota. Carmakers are spending as much as $6 million per 30-second spot to grab consumers and promote a bumper crop of new vehicles during the telecast, typically the most-watched TV event of the year in the U.S.
Source: Bloomberg

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More Articles
 
Quotable
"Our job is to make sure regulators understand the industries they regulate."

   
-- Chris Stinebert, president and CEO of the American Financial Services Association., says in announcing the trade group’s impending study, WardsAuto, Jan. 29
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