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Inside this issue
Americans Rethinking How They Buy Cars
Analysts: Global Vehicle Sales Will Likely Peak in Next Decade
Japanese Stay Atop Consumer Reports Rankings as Detroit Struggles
GM Expands Ignition Switch Recall to 1.6 Million Cars
Google Glass Faces Driving Bans as States Move to Bar Use
U.S. Senator from Idaho Visits Chevrolet Dealership to Discuss Small Business Issues
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Top Stories
Americans Rethinking How They Buy Cars

A new study shows car buyers around the world, including in the U.S., are changing how they buy new cars and trucks. Multiple visits to a series of auto dealers are out, while the trend of consumers doing more advanced research ahead of buying a car is in. "This is the most dramatic change we've seen in the auto industry and how people buy cars in the last fifty years," said Hans-Werner Kaas, McKinsey's senior partner. Kaas and his team conducted their study by looking at consumer auto buying patterns at dealerships around the world. The conclusion: car buyers are doing more of their own leg work on-line and spending less time at auto dealerships. The McKinsey report says the average buyer visits just 1.6 auto dealerships while car shopping, down from ten years ago when buyers visited an average of five dealerships. "The consumer now has more information on-line and through other sources, so they do not need to visit as many dealers," said Kaas.
Source: CNBC
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Analysts: Global Vehicle Sales Will Likely Peak in Next Decade

The world that Henry Ford put on wheels is poised for a stall. In the globe's growing megacities, pollution and gridlock are putting a damper on driving. In India, some commuters are leaving their cars at home to avoid traffic snarls and long prowls for parking. More young Americans are forgoing the dream of auto ownership for public transport, bikes and vehicle-sharing. Cars on the road are lasting longer than ever. All of that may herald a new era for an auto industry weaned on a century of global growth. The world will reach “peak car” — a point at which annual global sales growth will top out — in the next decade, several auto-industry analysts predict. Researcher IHS Automotive, for one, sees annual sales cresting at 100 million within that time. Peak car is at odds with the ambitious expansion plans of global automakers, which IHS says are gearing up to produce more than 120 million vehicles by 2016 — almost 50 percent more than last year's worldwide sales mark of 82 million. The dynamic also threatens the business plans of parts producers, suppliers of raw material and oil companies.
Source: Bloomberg
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Japanese Stay Atop Consumer Reports Rankings as Detroit Struggles

Lexus still on top; Ford, Jeep place last

Detroit has come clawing back from the brink with award-winning products, but Japanese and luxury brands still have the best lineups of cars and light trucks in the industry, the editors of the influential shopping guide Consumer Reports say. Japanese automakers captured seven of the top 10 ranked brands rated for overall reliability and road-test performance in tests conducted by the magazine; the top-ranked Detroit brands -- Buick and GMC -- tied to rank 12th, and five Detroit brands rounded out the bottom five. Consumer Reports' top-rated brand was again Lexus. Toyota Motor Corp.'s luxury brand received a score of 79 out of 100, the same as last year, for a car and SUV lineup the magazine deemed "quiet, plush, and very reliable" -- though less engaging to drive than those of some rivals/ Among the top 10 brands, Lexus was followed by Acura, Audi, Subaru and Toyota (tied for fourth place), Mazda, Honda, Infiniti, Mercedes-Benz and BMW and Volvo (tied for 10th place).
Source: Automotive News

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GM Expands Ignition Switch Recall to 1.6 Million Cars

General Motors Co. more than doubled the size of a recall, to 1.6 million vehicles world-wide, after consumer complaints pushed the company to expand a replacement of faulty ignition switches to additional models. On Tuesday, GM said the recall would include 2003 to 2007 model year Saturn Ions, 2006 to 2007 Chevrolet HHRs, and 2006 to 2007 Pontiac Solstice and Saturn Sky vehicles. "We are deeply sorry and we are working to address this issue as quickly as we can," GM North America President Alan Batey said in a statement. GM asked customers to use just a single key on their key rings. GM two weeks ago said it would recall 778,562 of its 2005 to 2007 Chevrolet Cobalt and 2007 Pontiac G5 compact cars. In all the vehicles, heavy key chains or a sudden impact could cause ignition switches to move out of the "on" position, shut off the engine and power systems—and disable air bags.
Source: The Wall Street Journal

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Google Glass Faces Driving Bans as States Move to Bar Use

Gary Howell has a vision, and it's a grim one, involving a cat. A motorist is driving down the road, wearing his Google Glass. He decides to watch a feline video and breaks into laughter. “When you're rolling down the road in a ton-and-a-half of metal at 65 miles per hour, you can do some serious damage,” said Howell. A member of the West Virginia House of Delegates, Howell, 47, wants to protect the roads from cat videos. He has introduced a bill to ban drivers from wearing Google Glass. Similar measures have been introduced in at least five other states, although the device is still in its experimental stage. Google Inc. is concerned enough about the bills that is has hired lobbyists in at least two states to, as the company puts it, educate lawmakers about Google Glass. “These ban bills could limit the marketability of Google Glass,” said Richard Bennett, a visiting scholar at the Washington-based American Enterprise Institute who co-invented Wi-Fi. “Driving is certainly one of the premier applications for Glass.” Google Glass looks like a pair of glasses. With them, the wearer can access the Internet, take photos with a blink and, yes, watch cat videos. Google, owner of the world's largest search engine, has been investing in Glass as it bets consumers will shift to wireless devices that let them snap photos, check e-mail or listen to music without smartphones or traditional computers.
Source: Bloomberg
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U.S. Senator from Idaho Visits Chevrolet Dealership to Discuss Small Business Issues


U.S. Sen. Jim Risch (l-r) meets last week with Con Paulos, dealer principal of Con Paulos Chevrolet in Jerome, Idaho, and auto technician Raymond Fish, who has worked at the dealership for 30 years.

Con Paulos, dealer principal of Con Paulos Chevrolet in Jerome, Idaho, hosted first-term U.S. Sen. Jim Risch (R-Idaho) at the dealership on Feb. 21. The purpose of the visit was to introduce Sen. Risch, who serves on the Senate Small Business Committee, to the dealership staff and discuss legislative and regulatory issues important to small business, including franchised auto dealers in Idaho. The topics discussed included recent actions by the Consumer Financial Protection Bureau to restrict dealer-assisted financing and the importance of protecting consumer data and access to dealer data by third parties. Paulos also provided the Congressman with a copy of NADA's Regulatory Maze, which highlights the large number of federal government regulations imposed on new-car and truck dealers. Sen. Risch, who is also a member of the Senate Energy and Natural Resources and Foreign Relations committees, has served as Idaho's governor, lieutenant governor and state senator.
Source: NADA Legislative Affairs

Editor's note: If you're interested in hosting your member of Congress at the dealership, contact Patrick Calpin, NADA Director of Grassroots Advocacy at (202) 547-5500 or pcalpin@nada.org.
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More Articles
 
Quotable
"The consumer still uses the auto dealer. Those who can change with their customers will succeed."

   
--- Hans-Werner Kaas, senior partner for McKinsey, commenting on consumers coming into a dealership more informed than ever before due to Internet research, CNBC, Feb. 26
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