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Inside this issue
Equifax Sees No Evidence of Subprime Auto Bubble
Price Slide from Record Highs for Used Vehicles to Continue
GM Catch-Up Work on Recalls Done, CEO Says
GM Expects to Offer Hands-Free Driving by 2016
German Automakers Boost Stake in South
How Dealers Can Boost Online Rep with Millennials
Click here for more auto industry news at NADAFrontPage.com. .
Top Stories
Equifax Sees No Evidence of Subprime Auto Bubble

Subprime auto lending has been fairly stable since 2012, and is not in danger of creating “the next bubble,” according to a recent report released by Equifax. The firm’s monthly Economic Trends Commentary, authored by Chief Economist Amy Crews Cutts and Deputy Chief Economist Dennis Carlson, examines the highly-publicized notion that subprime auto lending is creating a bubble. "The lending landscape today is not the same as it was in 2007 — both because lenders generally have a reduced appetite for risk and because regulatory scrutiny has increased," said Dennis Carlson, deputy chief economist at Equifax. "In this commentary, we discuss why we believe that while the subprime lending segment needs to be monitored carefully — the evidence at this time does not suggest there is a bubble forming." Using proprietary data from one of the Equifax databases, Cutts and Carlson reveal that originations have been shifting toward the higher end of the subprime credit-score spectrum and that recently opened subprime loans have been performing well year-to-date. To read the report, click here.
Source: Auto Dealer Monthly

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Price Slide from Record Highs for Used Vehicles to Continue

Car shoppers wary of blowing up their budget haven't had a lot of good options over the last couple of years. A number of factors have come together to push new and used cars to record high prices in recent months. Fancy options and high technology have helped catapult the average new vehicle past $32,000 this year. Meanwhile, used-car prices have shot skyward as dealers struggled to find inventory, and more people looked toward used cars in an unsteady economy. Some relief may be in sight, however. The National Automobile Dealers Association, which tracked a 17 percent rise between 2007 and 2013, said prices nudged up another 2 percent so far this year to a record $16,560. The group expects a little give back between now and the end of the year, with used car prices finishing the year in about the same place they started the year. From there, NADA thinks prices will fall by about 8 percent by 2017. “We're starting to see the improved sales years, some of those leases coming back, as well as people coming back into the market and looking for new cars,” said Steven Szakaly, NADA's chief economist.
Source: Toledo Blade
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GM Catch-Up Work on Recalls Done, CEO Says

General Motors is done cleaning house on old problems that result in recalls and now is "making sure we create defect-free vehicles as we move forward," GM CEO Mary Barra said in an interview with CNBC that will be aired Monday. A deadly problem with ignition switches, and government fines for delaying their recall for more than a decade, prompted GM to search its records for any other problems that might lead to recalls. In addition to the 2.6 million cars recalled worldwide in two actions in February and March for the switch defect, the GM house-cleaning has resulted in 63 other recalls though Aug. 8 The 65 total recalls involve nearly 29.1 million vehicles worldwide -- 25.75 million of those in the U.S. GM has written off $2.4 billion to cover the costs in the first two quarters. 
Source: USA Today

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GM Expects to Offer Hands-Free Driving by 2016

Automated steering system, vehicle-to-vehicle communications would seek to reduce crashes

General Motors Co. plans to launch by 2016 cars with a hands-free automated driving system and Wi-Fi-enabled vehicle-to-vehicle communications systems designed to help avoid collisions, intensifying the race among the world's auto makers to build cars that can partially drive themselves and avoid crashes without the help of their human drivers. The company will offer its "super cruise" system, which will allow a driver to ride in a car with hands off the steering wheel on a freeway with proper lane markings, on a yet-to-be named new Cadillac vehicle. Cadillac officials have said they intend to launch by 2016 a large sedan to compete with rivals such as the Mercedes S-Class.
Source: The Wall Street Journal
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German Automakers Boost Stake in South

Daimler, others increase output as demand grows

German automakers are aggressively expanding production in the U.S., announcing billions in new investments this year and adding thousands of American jobs. “North America is one of the places where we see growing demand,” Daimler Chairman Dieter Zetsche told reporters at a roundtable discussion after an event. “Capacity logically has to be installed where this growing demand is expected.” He said the company is considering another, smaller expansion in the United States, but declined to be more specific.
Source: The Detroit News
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How Dealers Can Boost Online Rep with Millennials

The thing about Millennials is, they can sniff out insincerity pretty easily. That's why when it comes to the dealership experience — be it online, in reviews or at the store — a transparent and genuine approach is the best route. As the chief executive officer of DealerRater, Gary Tucker has his finger on the pulse of what shapes satisfaction in the customer experience with this and other generations — and he shared some of these insights with Auto Remarketing, particularly as it relates to Millennials and their car-shopping behaviors. “I think to all consumers that rely on third-party reviews or user-generated content, both overtly and subconsciously, they're looking for genuine feedback from consumers like them,” Tucker told Auto Remarketing in an August interview. Millennials “have been just marketed to from sunrise to sundown their entire lives,” he said.
Source: Auto Remarketing
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Quotable
"We’re starting to see the improved sales years, some of those leases coming back, as well as people coming back into the market and looking for new cars."

   --- Steven Szakaly, NADA’s chief economist, commenting on improving auto sales, Toledo Blade, Sept. 7

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