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Inside this issue
Letter to the Editor: Car Dealers Provide Accountability
Editorial: Consumer Financial Cover-Up
Help Wanted: Industry Restocks for Recovery
Battle of the Body Style: Crossovers and Trucks Edging Out Cars
FTC Charges Arkansas Car Dealer with Not Displaying 'Buyers Guides'
Upcoming NADA Webinar: Comply with Federal Advertising Requirements
Nissan May Hit Electric-Car Sales Target Before 2020
Hyundai Overstated Mileage for Revamped Sonata Sedan
New Boss Hopes to Broaden Jaguar's Appeal in U.S.
Audi Launches A3 Campaign Starring Ricky Gervais, More 'Uncompromised' Celebs
Click here for more auto industry news at NADAFrontPage.com. .
Top Stories
Letter to the Editor: Car Dealers Provide Accountability
By Peter Welch, president of the National Automobile Dealers Association

In his March 13 op-ed column, “Tesla vs. the dealerships,” Charles Lane claimed that dealers have a monopoly on selling new cars. That's like saying doctors have a monopoly on the practice of medicine. There are 17,600 new-car dealerships in our country competing for customer business on price and service. Tesla fixes its car prices with no opportunity for consumers to benchmark or negotiate price. There are no other Tesla retailers to compete with, and that's bad for consumers.

Cutting out dealers would not lower car prices; a factory-owned retail network requires the same investment in physical assets and the same operating expenses that dealers now shoulder. However, taking dealers out of the mix would have a negative effect. Automakers have an economic disincentive to issue recalls or incur warranty expenses. Dealers earn money by performing safety and warranty work and, therefore, are always on the customer's side. Dealers also handle trade-ins, sell used vehicles and compete for service and financing business.

Each state has the right to determine which vehicle sales and service system works best for its residents. Some allow automakers to sell directly, while others require dealers as an additional layer of accountability. Most believe their residents are better served by multiple local retailers competing for their business.
Source: The Washington Post
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Editorial: Consumer Financial Cover-Up

An agency won't tell employers or Congress how it calculates bias

How does the Consumer Financial Protection Bureau figure out when employers unintentionally discriminate against minorities? The bureau's lawyers know, or maybe they're making it up as they go along. Whatever it is, they're not telling Congress or employers. That's the conclusion from a letter that Texas Republican Jeb Hensarling sent earlier this month to financial bureau director Richard Cordray. The Congressman reveals a nine-month, bipartisan effort to get the bureau to explain how it calculates disparate impact, a legal theory that purports to show discrimination through statistics without having to prove intent or bias in any particular case. The Obama Administration has used disparate impact to threaten employers with lawsuits and cow them into monetary settlements without ever going to court. Mr. Hensarling's concern is with companies that make car loans through auto dealerships. In March 2013 the financial bureau ruled that these lenders are subject to disparate impact under the 1974 Equal Credit Opportunity Act (ECOA). The agency didn't clarify how it would find such discrimination, and no wonder. ECOA explicitly prohibits lenders from collecting information on race, gender or ethnicity. The only way the bureau could prove discrimination would be to guess by using proxy measures, such as a surname. So is a Mr. Smith living in Atlanta black or white?

In May, 13 House Democrats asked the bureau to explain its "method" of identifying "different groups of consumers." Several weeks later, the agency responded that it was "committed to being open and transparent in all appropriate circumstances," but didn't disclose much else. In June 35 House Republicans asked for similar information. The bureau gave them the run-around. In October, the Senate weighed in when 11 Democrats and 11 Republicans asked for "complete details concerning the statistical methodology the Bureau employs to determine whether disparate impact is present in an auto creditor's portfolio." A few days later, the bureau responded that it makes "case-by-case assessments of whether to pursue supervisory or enforcement activity in response to statistically significant disparities." That non-answer left employers scratching their heads and worried about lawsuits. Then in December Ally Bank coughed up $98 million to settle bureau allegations of discrimination in auto lending. Banking sources tell us there are numerous similar investigations pending, which is no surprise. A government charge of racism is publicly damaging even without proof, and a lender can't fight the charges if it doesn't know which practices the bureau thinks are illegal.

All of which underscores the degree to which the financial bureau is accountable to no one but a White House that has shown its own disdain for the rule of law. The House voted 232-182 late last month to subject the bureau to Congressional funding and to remove its director in favor of a five-member commission. Mr. Cordray and the White House know that Senate Democrats will block it, so they will continue to extort cash from lenders to settle claims whose legality they never have to explain, much less prove.
Source: The Wall Street Journal
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Help Wanted: Industry Restocks for Recovery

Companies scour the auto world and beyond for talent

After a recession and restructuring that sent tens of thousands of workers to the curb, the U.S. auto industry's recovery has depended heavily on lean work forces toiling long hours. Now, it appears, relief is on the way. Showing increasing confidence in the pace and durability of the recovery, automakers are spending to restock depleted departments in core areas, such as sales, marketing, distribution, product planning and administration. They're also building up competency in fields such as information technology and digital marketing, and scouting for talent on college campuses and at nonautomotive businesses to fill new openings.
Source: Automotive News
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Battle of the Body Style: Crossovers and Trucks Edging Out Cars

Trucks continue to outsell cars and that could be a good sign. So far this year, cars account for 47.4% of U.S. sales, according to data from WardsAuto. Analyst Haig Stoddard forecasts light trucks will outsell cars for the foreseeable future. “Going forward, if cars can stay below 50%, it's a good economic barometer,” Stoddard said. Pickup sales continue to rebound with the housing industry. “As long as the economy keeps growing, pickups will be strong,” Stoddard said. And a seemingly insatiable appetite for crossovers is a sign that consumers have disposable income and are upgrading their purchase. Conversely, cars tend to be the most affordable body style and get the best gas mileage so their sales reflect a weaker economy or high gas prices. The fallen status of cars represents a structural shift in the industry but perhaps not an ominous one.
Source: Detroit Free Press
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FTC Charges Arkansas Car Dealer with Not Displaying 'Buyers Guides'

The Federal Trade Commission has charged an Arkansas auto dealer with failing to display a “Buyers Guide” on used vehicles it offered for sale, as required by the FTC's Used Car Rule. “Used car dealers are required to post a Buyers Guide providing warranty and other important information on the cars they offer for sale. That's the law,” said Jessica Rich, Director of the FTC's Bureau of Consumer Protection. “Consumers have a right to receive this information up-front to help them make an informed buying decision.” The FTC's Used Car Rule, which took effect in 1985 specifically requires used car dealers to disclose whether the car comes with a dealer's warranty or is being sold “as is.” If the car is sold with a dealer's warranty, the Rule requires the Buyers Guide to list its basic terms and conditions, including the duration of coverage, the percentage of total repair costs to be paid by the dealer, and the exact systems covered by the warranty. For more information, click here.
Source: The Federal Trade Commission

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Upcoming NADA Webinar: Comply with Federal Advertising Requirements

The upcoming "Comply with Federal Advertising Requirements" webinar will provide participants the opportunity to hear directly from a panel of FTC attorneys on key requirements and restrictions related to dealership advertising. NADA's Chief Regulatory Counsel, Paul Metrey, will moderate the discussion, which will highlight recent FTC advertising enforcement actions from dealerships around the country as examples of what to avoid. The 75-minute webinar is available to dealership employees, dealership compliance professionals, and persons who provide advertising services to dealerships. It will be held at 1 p.m. ET, this Wednesday, March 19. Click here to register.
Source: NADA University Online
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Nissan May Hit Electric-Car Sales Target Before 2020

Japanese car maker is looking to emerging markets for growth

Nissan Motor Co. may be able to sell more electric cars than initially thought as an increasing number of countries are embracing fossil-fuel alternatives, Billy Hayes, vice president of Nissan's global electric-vehicle business, said Saturday. "We have every reason to believe our new target is achievable. We believe we can hit it sooner than 2020," Mr. Hayes said in an interview on the sidelines of an electric-vehicle exhibition organized by the Korean government on Jeju island. Nissan unveiled its best-selling electric car, the Leaf, in Korea at the exhibition at the resort. The auto maker has sold more than 100,000 units of the vehicle globally since its launch in 2010. Other foreign auto makers, including Bayerische Motoren Werke AG, General Motors Co. and Renault SA, also put their latest electric-vehicle models on display.
Source: The Wall Street Journal

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Hyundai Overstated Mileage for Revamped Sonata Sedan

Hyundai Motor Co. said Monday it overstated the gas mileage of its revamped Sonata sedan in publicity material for the media. South Korea's largest automaker said it was a mistake that a tentative mileage figure from internal tests was included in a presentation to reporters. The government Friday said the mileage of the upcoming Sonata was 28.4 miles per gallon instead of the 29.6 mpg Hyundai said on March 4. In 2012, Hyundai and its affiliate Kia Motors Corp. were found to have overstated gas mileage on 900,000 vehicles sold in the U.S. They agreed to pay up to $395 million to consumers as part of a settlement. Then Hyundai blamed procedural errors. Hyundai vice president Hwang Chung-yul had touted the new family sedan's fuel economy, saying it was a 6 percent improvement from its predecessor's 11.9 kilometers, or 28 miles.
Source: The Detroit News

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New Boss Hopes to Broaden Jaguar's Appeal in U.S.

Joe Eberhardt understands the value of timing. After a successful career with Mercedes-Benz, he reached Chrysler at exactly the wrong time as DaimlerChrysler collapsed and then-owner Cerberus Capital Management was overwhelmed. He became the public face of falling sales, ballooning inventories and a near revolt by dealers. As Jaguar Land Rover's new U.S. boss, since December he's in time to catch a wave of promising new vehicles. "It was an easy decision to join Jaguar Land Rover," Eberhardt says. "They're two of the most iconic and historic brands in the auto industry." The brands once appeared to have a brighter past than future, but both have flourished since Indian conglomerate Tata bought them from Ford in 2008. New vehicles, engines, transmissions and all-wheel drive systems have made Jaguar and Land Rover appealing to a broader audience than ever before, and some of the most dramatic moves are yet to come.
Source: USA Today
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Audi Launches A3 Campaign Starring Ricky Gervais, More 'Uncompromised' Celebs

Audi of America launches a campaign today starring funnyman Ricky Gervais to tout its new car in the fast-growing entry-level luxury segment: the 2015 Audi A3 sedan, which goes on sale nationwide April 3 at a starting price of $29,900. The highlight of the new campaign is a 60-second spot called "Dues" starring Gervais, the British comedian who created "The Office" before moving on to feature films and taking down Hollywood's elite as host of the Golden Globes awards show. In the spot from Venables Bell & Partners, San Francisco, Gervais, U.S. gold medal winning boxer Claressa Shields, celebrity chef David Chang, comedian Kristen Schaal and other iconoclasts recite lines from Queen's hit song "We Are the Champions."
Source: Advertising Age
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More Articles
 
Quotable

"Cutting out dealers would not lower car prices; a factory-owned retail network requires the same investment in physical assets and the same operating expenses that dealers now shoulder." 

    -- NADA President Peter Welch, in a Letter to the Editor published in The Washington Post, March 16    

  

NADA Market Beat
Cold February Weather Dampens Light Vehicle Sales
Chairman's Column
NADA Releases Fair Credit Compliance Program for Dealers
Videos

 Meet NADA Chairman Forrest McConnell (NADA-TV)


NADA Used Car Guide's Jon Banks Highlights Feb.'s Guidelines (NADA-TV)

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NADA University Webinars
All webinars will be held at 1 p.m. ET unless otherwise noted.

-- March 19: Comply with Federal Advertising Requirements

-- March 26: Participate in the NADA Dealership Workforce Study

-- April 2: NADA’s Fair Credit Compliance Program

-- April 3: Tips for Submitting a Great Workshop Proposal 

NADA Foundation News
New Orleans' High Schools Receive CPR Training Manikins

ADESA and NADA Donate $37,000 to Canine Companions

NADA and Ally Donate $50,000 to Second Harvest Food Bank in New Orleans 

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