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Inside this issue
Lemon Suit Tests Tesla's Restrictive Sales Deals
Many GM Dealers Still Without Replacement Switch, But Customers Not Worried, Some Dealers Say
GM Twin SUVs Top Crash Test
New-Vehicle Sales Driven by Off-Lease Volume, Manheim Analyst Says
VW Brand Sales Rebound in March as Europe Recovers
Royal Ford Visit: Family Member, Company CEO Visit Cobb Dealership
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Top Stories
Lemon Suit Tests Tesla's Restrictive Sales Deals

A lemon-law suit by an unhappy Tesla Model S owner who wants his money back could be the first test of Tesla's restrictive customer sales agreements. The Wisconsin lawyer handling the state lawsuit against Tesla, a specialist in automobile lemon-law cases, says he believes state law there will overcome what he calls one of the the most unusual sales agreements that he's ever seen -- one he believes are aimed at keeping owners from being able to sue over bad cars in the first place. Milwaukee attorney Vince Megna also says that Tesla's policy of selling cars directly to consumers -- rather than having franchised dealers -- is another reason that it is tougher for customers to take action if they are dissatisified with their car. "They are a company that doesn't have to follow state rules," says Megna. "It really puts a person in [a] tough, tough situation."

Megna represents physician Robert Montgomery, who says the $94,770 Tesla Model S that he had delivered in March 2013 ... was out of service 66 days [during the first five months], according to Megna, and [Montgomery] wants a refund. Megna says that Montgomery's three demands for a buy-back under the Wisconsin lemon law went unanswered. Montgomery has had a laundry list of troubles -- not turning on, not going into "drive," door handles that don't work, a faulty battery coolant system and and more. Adding to the lost time, because Tesla has no Wisconsin facilities, the car had to be transported to Chicago for major repairs. Because the car was out of service for 30 days or more, according to the suit and Megna, it falls squarely under Wisconsin's lemon law -- state laws that generally provide recourse for car buyers if a car is faulty and the maker can't make good on it. But the case is complicated by Tesla's sales agreement that buyers sign, which Megna [says] is designed to thwart lemon-law suits. Megna argues, however, in the suit that Wisconsin's lemon laws supersede Tesla's sales contract and that is should be allowed to go forward there.
Source: USA Today
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Many GM Dealers Still Without Replacement Switch, But Customers Not Worried, Some Dealers Say

General Motors dealers were to start replacing defective ignition switches Monday, but many dealers said they did not have parts yet and car owners were not beating down their doors demanding the fix. GM said dealers would start getting the switches Monday for 2.5 million recalled small cars, mostly from 2003-2007, but production won't be finished for all the parts until late fall and some will just be trickling in at first. The defect is blamed for at least 31 crashes and 13 deaths and has spawned lawsuits and government investigations, including a Justice Department probe that could lead to criminal penalties. Matt Gilbertson, manager of Ed Koehn Chevrolet in Rockford, said his dealership has received “quite a few calls,” but many customers are waiting patiently for parts. He said GM's decision to pay for rental cars for customers who aren't comfortable driving their recalled vehicles has alleviated some of the pressure on dealerships.
Source: Detroit Free Press

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GM Twin SUVs Top Crash Test

The Insurance Institute for Highway Safety said the Chevrolet Equinox and its twin GMC Terrain were the only midsize SUVS out of nine tested to win a “good rating” in its new tougher front crash-test rating. The Equinox and the Terrain qualify for the Institute's highest award — the Top Safety Pick+ — in the new small-overlap front crash test. The Toyota Highlander, which received an acceptable small-overlap rating in December, also qualifies. Three other midsize SUVs tested rated marginal and three were poor, IIHS said.
Source: The Detroit News
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New-Vehicle Sales Driven by Off-Lease Volume, Manheim Analyst Says

Pent-up demand, move over. New-vehicle sales increases are being supported by consumers returning to the market as their vehicle leases expire, not just pent-up demand from the recession years, Tom Webb, chief economist at Manheim, the nation's largest auto auction company, said Monday. Webb said the increase in off-lease vehicle returns this year will approximate the total increase in new-vehicle sales. Next year, he forecasted, the increase in off-lease vehicles will likely exceed the total increase in new-vehicle sales. He predicted that off-lease vehicle volume will hit 2.1 million this year, up from 1.7 million in 2013 and will grow to 2.5 million in 2015 and top 3 million in 2016. A new-vehicle market supported by off-lease returns is a good thing, he said.
Source: Automotive News
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VW Brand Sales Rebound in March as Europe Recovers

Volkswagen Group increased sales at its core VW passenger car brand by 5 percent in March, the second-highest growth rate in the past 10 months, as recovering demand in Europe and Chinese growth outweighed declines in the Americas. Deliveries of VW brand vehicles rose to 557,800 from 532,400 a year earlier, extending the first-quarter rise to 4 percent or 1.48 million autos, VW said. A month earlier, sales of the VW namesake brand rose only 1.5 percent. The 5 percent March gain was the second-highest increase since a 7 percent rise last September. "Deliveries in Europe continued to improve and we saw further expansion in Asia in particular; however, this contrasted with a tense market situation in South America," VW sales chief Christian Klingler said in a statement on Tuesday.
Source: Automotive News
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Royal Ford Visit: Family Member, Company CEO Visit Cobb Dealership

Ford Motor Company CEO Alan Mulally, who was in town Friday to celebrate the reopening of the Wade Ford dealership, credited its owner for helping turn around one of the world's largest automakers. Mulally, an executive with Boeing before joining Ford in 2006, said the company was hemorrhaging money when he came on board. “When I accepted Bill's [Ford] offer, the first forecast I saw for profitability for the Ford Motor Company for 2006 — this is September — was a $17 billion loss,” Mulally said. “And we achieved it. Now, you can run out of money really fast losing $17 billion a year. And so this is where the parallels of Wade Ford come in and why Wade Ford is the very best example of the Ford Motor Company, not only the last eight years but also before it." Twelve years ago Steven Ewing sold his Ford franchise in Pennsylvania and bought the Wade Ford dealership ... The dealership started out in Atlanta in the 1930s before moving to Smyrna in the 1980s. Ewing said it was ranked No. 12 in the Southeast last month for total sales. He sells about 1,500 used cars and 1,400 new ones a year. Eight month ago, he gutted the dealership building and gave the 40,000-square foot structure a $2 million renovation. The building was filled with Ford executives, including a member of the Ford family, on Friday night, toasting the re-opening among the fresh-cut flowers, catering, music, candles and even an ice sculpture of the Wade Ford sign.

U.S. Rep. David Scott (D-Atlanta), a customer of Ewing’s, spoke to the audience about how the automobile transformed the country. Scott also said he was aware of the problem with the Consumer Financial Protection Bureau’s threat to eliminate dealers’ flexibility to discount the interest rate offered to consumers to finance vehicle purchases. “We want to let you know that we are going to make sure that the CFPB backs off of that threat, and we’re going to solve that for you. Because ladies and gentlemen, let me tell you, the auto dealers not just here, but in so many of our smaller communities, they are the solid rock in these communities, and we need to make sure that we do not have any stumbling blocks in the way of dealers being able to stay in business, small ones and large ones. And this threat could be a very serious threat.”
Source: The Marietta Daily Journal (Marietta, Ga.)
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Quotable

"Tesla's policy of selling cars directly to consumers -- rather than having franchised dealers -- is another reason that it is tougher for customers to take action if they are dissatisified with their car." 

      ---  Vince Megna, an attorney in Milwaukee, Wis., commenting on a lemon-law suit by an unhappy Tesla Model S owner that is being challenged by Tesla's sales agreement, USA Today, April 7  

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