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Inside this issue
Commentary: 'Engage' in New Opportunities
Length of Car Loans Rises, Helps Fuel Sales
Massive GM Recalls Put Strain on Dealers
GM, with Ignition Parts Shipped, Must Now Find Recalled Cars' Owners
The Incentives Debate: Who's Being 'Stupid'?
GM CEO Mary Barra Takes Ice Bucket Challenge
Click here for more auto industry news at NADAFrontPage.com. .
Top Stories
Commentary: 'Engage' in New Opportunities
By Forrest McConnell, III / NADA chairman

Looking ahead to 2015, the NADA Convention & Expo in San Francisco next January offers dealers and their managers as well as the entire auto industry a premiere forum to exchange ideas and learn new ways to improve business operations. And even if you’ve been to the NADA convention in the past, there’s always something new to learn. If you’ve never been to the convention before, what are you waiting for? The 24 dealer-manufacturer franchise meetings, 59 new workshop topics and 126 workshop sessions and numerous networking events are second-to-none. They’ll make you and your dealerships leaner, smarter and ready to tackle the challenges for 2015 and beyond.

Engage in new technology and social media. New to the workshop program in 2015 are the Super Sessions on Thursday, Jan. 22, which includes a panel of successful NADA NextGen dealers who will share their insight on how emerging technologies are reshaping auto retailing, as well as a DrivingSales.com presentation on best practices to win digital buyers; and on Sunday, Jan. 25, the Technology Town Halls feature Q&A sessions with key executive staff from eBay, Google and others on how they can help dealers sell more cars.

We’ve also expanded the Expo, which will include nearly 500 companies exhibiting in more than 600,000 square feet at the Moscone Center. The four-day event, dubbed the “Automotive Industry Event of the Year,” runs Thursday, Jan. 22, to Sunday, Jan. 25, at the Moscone Center. Online registration is open. Dealers and their managers should make their reservations as soon as possible. Hotels rooms are filling up quickly. Attendee registration is at its highest pace since 2007. Fourteen hotels have already sold out. Join us in San Francisco, and Engage in new opportunities. We look forward to seeing you there! For more information or to register, click here.
Source: NADA Public Affairs

McConnell is a Honda/Acura dealer in Montgomery, Ala.
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Length of Car Loans Rises, Helps Fuel Sales

Auto industry analysts say that longer term auto loans — some for seven years or longer — have helped fuel robust growth in new car sales. At some point, experts believe automakers and lenders will cap how long they'll extend loans. The big question is when. Steven Szakaly, chief economist for the National Automobile Dealers Association, said he isn't concerned with the length of auto loans, given the average age of cars on the road today — more than 11 years. “People have tended to have taken out loans for half that useful age of the car,” he said in a telephone interview, adding he would be concerned if car payments continue after a car's useful life. Buyers are taking advantage of low interest rates to get something a bit more expensive and pay for it over time, Szakaly said. But, he notes, the longer the loan term, the longer the buying cycle. And that can affect sales for dealers and automakers down the road. The average rate on a 60-month new car loan is 3.18 percent, according to Bankrate.com, a financial information website. Szakaly predicts auto interest rates will go up, but he predicts a stable, steady increase. “Over the next two years, we're going to see interest rates rise for sure,” he said.
Source: The Detroit News
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Massive GM Recalls Put Strain on Dealers

General Motors Co.'s record string of vehicle recalls has forced new car dealers including Todd DeNooyer to get creative to keep his Michigan dealership from falling behind on auto repairs. Mr. DeNooyer took the unusual step of hiring a full time "recall concierge" to take customers' calls and coordinate repairs, as an onslaught of service requests rolled in this summer. Some dealers have extended hours during the week and added weekend service appointments to handle the influx. Others have limited the number of recall appointments, just so they can get some of their regular service customers in. Brian Hamilton, a GM dealer in Kearney, Neb., said his dealership has hired three new service reps and is now open seven days a week. "We're really beefing up to get through this," he said. "It's working. The only negative is our staff is extremely stressed."
Source: The Wall Street Journal
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GM, with Ignition Parts Shipped, Must Now Find Recalled Cars' Owners

General Motors has passed a significant milestone in its campaign to replace potentially defective ignition switches in 2.6 million cars recalled worldwide: It cleared its backlog of parts orders. For months, GM dealers have watched parts trickle in as they packed their lots with recalled cars and put customers up in loaners. But this week, the number of replacement kits shipped by GM to U.S. dealerships hit about 1.2 million, enough to satisfy every owner who has ordered the repair. “There's no reason why any vehicle on this recall is not able to be repaired quickly at this point,” Tim Turvey, GM's vice president of North American customer care and aftersales, told Automotive News earlier this week. Now comes another tough task: Finding the roughly 1 million U.S. owners of Chevy Cobalts, Saturn Ions and other older small cars covered by the recall who haven't contacted a dealership to replace the flawed ignition switch, which GM has linked to 13 deaths and 54 crashes.
Source: Automotive News

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The Incentives Debate: Who's Being 'Stupid'?

American Honda's top sales executive turned heads last week with a grim warning — doing “stupid things” now to juice sales could mean big trouble later. Except that John Mendel's sense of alarm isn't shared by some of Honda's biggest rivals, and there are no signs they'll back off from the kinds of actions that Mendel finds so troubling. Mendel, the dean of U.S. import executives, had harsh words for rivals that are increasingly luring customers with seven-year loans, courting riskier subprime buyers and shipping larger percentages of their vehicles to rental-car lots. “It's a very, very short-term tactic,” he said, “especially in the subprime area, because you not only are pulling sales forward, you’re probably pulling people out of used cars into a new car that maybe they can't afford.” The debate shows the industry at a crossroads. The days of double-digit sales may be over and carmakers must work out how to proceed.
Source: Automotive News
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GM CEO Mary Barra Takes Ice Bucket Challenge

General Motors CEO Mary Barra joined the growing list of business leaders and celebrities to participate in the Ice Bucket Challenge to benefit ALS research. Barra posted a video to her Twitter account showing two people dump buckets of ice water into her head. She was challenged by Hewlett-Packard CEO Meg Whitman, GM Europe President Karl-Thomas Neumann and several other people online. In turn, she challenged Detroit billionaire and Quicken Loans chairman Dan Gilbert, NASCAR driver Jeff Gordon and General Dynamics CEO Phebe Novakovic.
Source: Detroit Free Press

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Quotable

"Rising car sales are leading the economic recovery. Dealers are hiring. And for the first time since the Great Recession, new-car dealerships across the country now employ more than 1 million people."

   
-- NADA Chairman Forrest McConnell, highlighting reasons to attend the 2015 NADA Convention & Expo in San Francisco, NADA Chairman's Column, Aug. 22 

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