View Mobile Version | View Web Version

SPONSORED BY

 
NADA.org
August 12, 2014 FacebookTwitterFlickrRSSSEND TO A FRIENDPRINT
nada.orgAdvocacyAffiliates | Convention | Jobs | Programs | Publications | Services | Training
Inside this issue
NADA Rebuts Misguided New York Times Editorial on Auto Lending
Here's Why the Auto Industry Is Making a Full Recovery in the U.S.
Rising Sales, New Models Test Ties Between Automakers and Suppliers
GM Customer Lawyers Jostle for Roles in Ignition-Switch Suits
Study: Cowboy State Most Expensive to Own a Car
UAW Ford Program to Train Veterans How to Weld
Click here for more auto industry news at NADAFrontPage.com. .
Top Stories
NADA Rebuts Misguided New York Times Editorial on Auto Lending
By Peter Welch / NADA President

The Times’ editorial, When a Car Loan Means Bankruptcy,” is an unfair and unfounded attempt to portray the auto lending industry as a hotbed of deceptive practices and a harbinger of insolvency that could trigger another recession. Nothing could be further from the truth. Auto loan defaults are at historic lows (less than 1 percent in June).

Franchised new-car dealers deliver widely-available and low-priced credit to a broad array of consumers, including those most in need of a car to start their way up the economic ladder. Before demonizing such a valuable and consumer-friendly system, check the facts:

  • During the Great Recession, auto loans were one of the best performing asset classes. Auto loan default rates never went higher than 2.74 percent, versus first mortgage default rates that hit 5.67 percent.
  • Extending credit for the purchase of a car – which rapidly depreciates in value – is not profitable unless it’s repaid, so putting consumers in car loans they can’t afford is not a sustainable business model.
  • New-car dealerships provide a valuable financing option to consumers. Credit offered by new-car dealers routinely carries lower interest rates than credit offered by other lenders for similar borrowers.
  • It’s illegal to misrepresent a borrower’s credit background and a lender who does so is liable for any default.

Enforcement of existing laws against a small minority of bad players is in everyone’s interest, but smearing an entire industry for the misdeeds of a few is just plain wrong.

Peter Welch is president of the National Automobile Dealers Association.

[back to top]

Here's Why the Auto Industry Is Making a Full Recovery in the U.S.

The recession that kicked off in late 2008 and had the world fully in its grasp by 2009 took its toll on businesses across the economic spectrum. From airlines to restaurants, there were few, if any, that didn't feel the effects either immediately or over time. The same is true with the automotive industry, which was heavily hit by the financial crisis and the resulting fall out. Big American auto makers like Ford and General Motors either flirted with or dove headfirst into bankruptcy, only to be saved by government action and taxpayer dollars. Despite the effects of the recession — which are still lingering and creating drag on many aspects of the economy — the auto market has actually been doing fairly well.

Of course, the actual job of moving vehicles from factory to consumers falls on the army of dealers spread across every corner of the continent, and the data seems to indicate that dealers are doing fine overall. According to data collected from the National Automobile Dealers Association, employment at dealerships is up 3.4 percent, warranty work topped $14 billion, and profits as a percentage of overall sales stuck at 2.2 percent, the same as the year before. Car dealerships work on notoriously slim profit margins, and although the profit percentage didn't see any growth, it was mostly due to increased competition amongst dealers, which is good news for consumers.
Source: Wall St. Cheat Sheet
Share: LinkedIn Twitter Facebook

[back to top]

Rising Sales, New Models Test Ties Between Automakers and Suppliers

An unprecedented number of new vehicle launches this year has forced Ford and its supply base to cooperate more closely to get quality right from the start, said Hau Thai-Tang, Ford global head of purchasing. Ford has 23 products coming to market globally this year — 16 in North America — including the 2015 Mustang and F-150. Other automakers face the same challenge. The industry is launching a new vehicle every week, said Dave Andrea, senior vice president of the Original Equipment Suppliers Association, a trade group that advocates for component manufacturers. More than ever, automakers and suppliers need each other.
Source: Detroit Free Press
Share: LinkedIn Twitter Facebook

[back to top]

GM Customer Lawyers Jostle for Roles in Ignition-Switch Suits

Lawyers for General Motors Co. customers are jostling to lead lawsuits over faulty ignition switches. They don’t know what they can sue for -- a judge will tell them that -- but they do want to be in charge. Car owners suing over the lost value of recalled vehicles have yet to learn whether they can claim $10 billion, a few hundred thousand dollars, or nothing. That number will be decided later by the bankruptcy judge who presided over GM’s bailout in 2009. “The biggest wild card is the bankruptcy court,” said Peter Henning, a law professor at Wayne State University in Detroit. The claims could be thrown out entirely or limited to a minor loss of value, he said. U.S. Bankruptcy Judge Robert Gerber in New York might not rule until late this year.
Source: Bloomberg

Related Story:


Share: LinkedIn Twitter Facebook

[back to top]

Study: Cowboy State Most Expensive to Own a Car

Wyoming may be home to cowboys, the Devils Tower National Monument and great fishing, but the Cowboy State also is the most expensive state in which to own a car, says a new study by Bankrate.com. Iowa, home to corn and soybeans, is the cheapest based on the annual cost of gas, insurance and repairs in the Hawkeye State, according to the site, which tracks interest rates. The national average annual cost of owning a car for the 50 states and Washington, D.C., is $2,223, Bankrate.com says.
Source: USA Today
Share: LinkedIn Twitter Facebook

[back to top]

UAW Ford Program to Train Veterans How to Weld

Brian Michael spent four years as a rescue swimmer in the U.S. Navy, but now the 40-year-old Wayne resident is looking for a way to keep himself afloat financially. The Enduring Freedom, Desert Storm and Desert Shield combat veteran is one of eight students enrolled in a new UAW-Ford veteran welding training program held in conjunction with Wounded Warriors Family Support, a national organization that helps returning military personnel. The six-week course will teach the former soldiers, sailors, Marines and airmen a skill that experts in the field say will be sought after. According to the UAW Ford program, the industry will need 290,000 skilled welders by 2022.
Source: Detroit Free Press
Share: LinkedIn Twitter Facebook

[back to top]

More Articles
 
Quotable

"Fierce price competition — whether from online research, a network of competing franchised dealers or compelling new vehicles — continues to dominate an industry with slim retailing margins."

   
-- NADA Chief Economist Steven Szakaly, commenting on the strong auto market, Wall St. Cheat Sheet, Aug. 11

 Sponsored by

NADA Market Beat
July's Light-Vehicle Sales Increase 9.1% over Previous Year




Chairman's Message
Auto Credit Must Remain Affordable and Accessible for Car Buyers
Videos

Get the Facts: Why Dealer Franchise Laws?


Fox News: NADA Study Says Federal Regs on Dealers Cost the Economy More Than $10 Billion


Get the Facts: The Benefits of Franchised Auto Dealers

Sponsored by

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

-- Aug. 20: Supercharge Local TV Ads by Targeting Real Customers 

-- Aug. 27: Avoid Hidden Tax Triggers When Selling/Restructuring

-- Sept. 3: The Power in Training: Sell a Car Backwards!

NADA Foundation News
Burns Kull Automotive Group Honors Employees through Ambassador Program

Dale Willey Supports Community through the NADA Foundation

Greater Cincinnati Auto Dealers Donate CPR Unit to YMCA

 
Search Back Issues | Unsubscribe | Subscribe | Manage your subscription | email us
NADA For more information on NADA, visit www.nada.org or contact NADA, 8400 Westpark Drive, McLean, VA 22102. This email may contain an advertisement of NADA products and services. Any opinions or statements contained herein do not necessarily reflect the views of NADA. Factual errors are the responsibility of the listed publication. If you are a franchised new-car or -truck dealer and would like to become a member of NADA, please visit the Join NADA section of www.nada.org. Questions or comments concerning NADA Headlines content may be directed to publicaffairs@nada.org .