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Inside this issue
Detroit News Commentary: The Benefits of a Franchised Dealer Network
NADA Releases Study by Maryann Keller on the Consumer Benefits of the Dealer Franchise System
GM's 2014 Recall Tally Tops 20 Million As Ignition-Switch Recall Doubles
Customers Most Satisfied with Lincoln, GMC Brands
Aluminum Cars Take Heat From ArcelorMittal's CEO
European Auto Sales Continue to Climb
Rockland Toyota Donates CPR Unit to Ambulance Corps
Click here for more auto industry news at NADAFrontPage.com. .
Top Stories
Detroit News Commentary: The Benefits of a Franchised Dealer Network
By Maryann Keller

At the height of the dot-com bubble, Wall Street analysts, academics and consumer advocates claimed that “factory-direct” new-car sales would reduce costs, lower prices and deliver superior customer experiences. Despite the lack of evidence to support this contention, the debate has resurfaced as state legislatures consider changing franchise laws to allow some factories to sell directly to consumers. Past experiments by factories to sell directly have rarely, if ever, proven successful, and the results have only reinforced the need and value of having a network of franchised new-car dealerships. In the end, the franchised dealer network benefits consumers and manufacturers alike, providing fierce price competition among dealers and an extremely efficient distribution network that is acutely sensitive to local markets. Click here for the full commentary.
Source: The Detroit News

Editor's note: Maryann Keller is managing partner at Maryann Keller & Associates LLC.

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NADA Releases Study by Maryann Keller on the Consumer Benefits of the Dealer Franchise System

America’s franchised new-car dealer network provides numerous benefits to both consumers and auto manufacturers, says auto industry consultant Maryann Keller in a new report released today. According to the report, “Consumer Benefits of the Dealer Franchise System,” factory-direct sales of new cars either sold online or through factory-owned and operated retail outlets have not resulted in lower prices for car buyers or increased market share for manufacturers. The report is part of a major new “Get The Facts” initiative from NADA to promote the benefits of America’s franchised new-car dealership network. The initiative includes a Web site and variety of multimedia resources available at www.nada.org/GetTheFacts.
Source: NADAFrontPage.com

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GM's 2014 Recall Tally Tops 20 Million As Ignition-Switch Recall Doubles

General Motors Co., which recalled 3.1 million cars in the U.S. since February to fix faulty ignition switches, said [Monday] it will recall an additional 3.2 million vehicles with similar defects. The company also announced five other new recalls involving 165,800 cars and trucks. The campaigns are to fix problems ranging from poorly designed air bag placement to faulty transmission cables and unattached floor mats. The latest recalls bring GM's total this year to more than 20 million vehicles. To that perspective, consider that sales of cars and light trucks in the U.S. last year totaled 15.4 million units. The company's previous recall high was 10.7 million vehicles in 2004.
Source: Forbes

Editor's note: For more information on the GM recall, go to www.gmignitionupdate.com or www.safercar.gov.

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Customers Most Satisfied with Lincoln, GMC Brands

Lincoln and GMC are the highest rated brands in the 18th annual Vehicle Satisfaction Awards released [Monday] by consulting firm AutoPacific. Mercedes-Benz S-Class posted the best overall score. Lincoln was the most satisfying top premium brand. The news is welcome for Lincoln which is in the middle of a makeover to restore its luster of years past. Lincoln just introduced the MKC compact crossover, its first entry in that segment. Lincoln rose from a sixth-place ranking a year ago. The Ford brand did not fare nearly as well but did move up to 19th from 25th. GMC moved up to eighth overall from 17th last year. Among other GM brands, Chevrolet improved to 16th from 21st.
Source: Detroit Free Press
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Aluminum Cars Take Heat From ArcelorMittal's CEO

Steel company fights back against claims that aluminum is invariably lighter

ArcelorMittal, the world's biggest steel company, is fighting back against aluminum's advances in the U.S. and European automotive industries by investing heavily in fast-growing car markets, such as China and Mexico, where steel still rules, according to CEO Lakshmi Mittal. Mr. Mittal also challenged claims that aluminum is invariably lighter, saying the aluminum industry uses outdated data when comparing its metal to steel.
Source: The Wall Street Journal
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European Auto Sales Continue to Climb

Europe's car market has continued to slowly regain the ground lost since the financial crisis, industry data showed on Tuesday, with sales in May posting a ninth straight month of advances. Registrations of new passenger cars in the European Union, a proxy for sales, rose by 4.5 percent from a year earlier, the European Automobile Manufacturers' Association reported from Brussels, as all major markets except Italy showed increases. The sales growth comes as welcome news for the Continent's beleaguered auto industry, but it is climbing out of a deep hole.
Source: The New York Times
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Rockland Toyota Donates CPR Unit to Ambulance Corps

Neale Kuperman, president of Rockland Toyota, Blauvelt, N.Y., presented a 'Resusci Anne' CPR training unit to the South Orangetown Ambulance Corps last week. The CPR training unit, worth more than $5,000, was donated by the National Automobile Dealers Charitable Foundation. It will allow South Orangetown Ambulance Corps personnel to train thousands of Rockland County residents on the correct way to provide cardiopulmonary resuscitation (CPR), allowing those trained to save the lives of countless people who suffer heart attacks and are in need of immediate attention. Rockland Country Executive Ed Day and Orangetown Supervisor Andy Stewart presided over the event.
Source: Rockland County Times (Nanuet, N.Y.)

Editor's note: For more information on the NADA Foundation's Medical Grants program, click here.
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Quotable

"The franchised dealer network benefits consumers and manufacturers alike, providing fierce price competition among dealers and an extremely efficient distribution network that is acutely sensitive to local markets."

   
-- Auto industry consultant Maryann Keller, in a commentary in The Detroit News, June 17.

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