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Inside this issue
NADA Refutes CFPB Proxy Methodology Report
Now, It's NHTSA Under Fire
GM, Ford, Chrysler Plants Gain Workers as Sales Rebound
Honda, GM, Crack Down on Certified-Used Rule Benders
Toyota's Big Leap to Aluminum
Mercedes Plans Plug-in Hybrids Across Lineup
Charity is a Priority, Not a Look-at-Me
Click here for more auto industry news at NADAFrontPage.com. .
Top Stories
NADA Refutes CFPB Proxy Methodology Report

In response to the Consumer Financial Protection Bureau’s white paper released last week concerning the use of proxy methodology to identify potential discrimination in indirect auto financing, the National Automobile Dealers Association issued a four point rebuttal:

  • The scope of CFPB's white paper is very limited. It is confined to an analysis of how the CFPB determines the probability that a consumer is a member of a particular group. It does not address how the CFPB uses those probabilities to calculate either pricing disparities or the margin of error surrounding those disparities.

  • The CFPB's white paper also does not address the essential question of what analytical controls the CFPB uses to ensure the consumers it is comparing are “similarly situated.”

  • With regard to probabilities, the CFPB’s testing indicates that, frequently, its proxy method, Bayesian Improved Surname Geocoding (BISG), fails to accurately reflect the consumer’s actual race or ethnicity.

  • Importantly, the white paper does not reveal how the CFPB corrects these problems to ensure its classification of consumers is accurate.

“Concerning the CFPB’s proxy methodology report, many of the questions that Congress and others have asked remain unanswered,” said NADA, the National Association of Minority Automobile Dealers and the American International Automobile Dealers Association in a statement last week. “We look forward to rigorous peer review to ensure that the tools the CFPB is using to address fair credit concerns may actually accomplish its goals.”
 
In March 2013, the CFPB issued guidance that threatens to eliminate the flexibility of dealers to discount the interest rate offered to consumers to finance vehicle purchases. The CFPB claims that negotiated interest rates between dealers and their customers create a significant risk of unintentional “disparate impact” discrimination.
 
“There are legitimate, market-based reasons for disparities in interest rates – from monthly budget constraints, to the presence of more competitive offers, to inventory reduction considerations – all of which are nondiscriminatory and all of which can be documented in the transaction,” added NADA, NAMAD and AIADA, the three trade groups that represent U.S. new-car dealers.
Source: NADA
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Now, It's NHTSA Under Fire

Lawmakers blast failures in GM crisis, want reform

In a rare display of consensus, Republicans, Democrats and safety advocates are coming to the conclusion that the National Highway Traffic Safety Administration is in dire need of reform -- even if they can't convince the agency of that. Seven months after General Motors' ignition-switch issue erupted into a full-blown safety crisis -- triggering several investigations of the company along with sweeping internal changes to safety protocols and personnel -- NHTSA is taking its turn in the hot seat, facing tough questions about its past and its ability to effectively police auto safety.
Source: Automotive News

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GM, Ford, Chrysler Plants Gain Workers as Sales Rebound

The Detroit Three have rebounded dramatically over the last five years as pent-up demand for cars and trucks has risen steadily to levels not seen since 2006. Shifts have been added at more than a dozen assembly plants. Large investments have led to job openings that have been filled primarily by new hires, who start at a lower wage than their colleagues hired before 2007.
Source: Detroit Free Press
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Honda, GM, Crack Down on Certified-Used Rule Benders

American Honda Motor Co. and General Motors are among the auto companies closely monitoring dealerships' compliance with their certified used-vehicle programs -- and sometimes cracking down on those who bend the rules. Brian Butts, manager of auto remarketing at American Honda, and Larry Pryg, national manager of GM Certified used operations, said most of their dealerships administer their programs properly. But those that don't, get temporarily suspended from the programs. It's all about maintaining the programs' integrity, Butts and Pryg said. Neither would say how many dealerships have been suspended from their programs or detail the violations.
Source: Automotive News
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Toyota's Big Leap to Aluminum

Lightweight hood coming for Camry

Toyota Motor Corp. is set to become the next global automaker to begin making the expensive shift from steel to aluminum for a high-volume vehicle. The U.S.-built Camry, the country's best-selling car, is slated to get an aluminum hood in 2018, according to a source familiar with the plans. Toyota's first foray into aluminum closures in North America will come next year when the 2016 Lexus RX 350 crossover, which is made in Cambridge, Ontario, gets an aluminum hood and liftgate, the source said.
Source: Automotive News
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Mercedes Plans Plug-in Hybrids Across Lineup

Mercedes-Benz will introduce plug-in hybrids throughout its lineup, said r&d chief Thomas Weber. “We will have a plug-in hybrid version of every volume model,” Weber said at a press event for the S550 plug-in hybrid, the brand's first plug-in hybrid. Besides the S class, the plan calls for plug-in hybrid versions of the C class, as well as the next E class and replacements for the GLK class (to be called the GLC class) and the M class (to be called the GLE class). He did not specify timing, but said Mercedes would launch 10 plug-in hybrids by 2017. The plug-in-hybrids based on Daimler's rear-wheel-drive architectures will use parts from a common hybrid toolbox.
Source: Automotive News
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Charity is a Priority, Not a Look-at-Me

George Nahas, a Chevrolet dealer in central Florida, gets requests for cash, cars and his time from charities nearly every week of the year. So far this year, Nahas has held a fundraising event at his store for a local humane society, helped send disadvantaged kids to a summer camp, given time and money for an annual golf tournament to benefit an epilepsy foundation and helped an organization raise money for families of sick children. Sifting through all the requests he gets from charities is time-consuming. So he sends most requests to the 9 Family Connection, an organization sponsored by Nahas and three other members of the Central Florida Auto Dealers Association. But Nahas also gets involved more directly with other causes, providing cars and cash or rallying support from other dealers and businesses.

Nahas says his annual budget for philanthropy has consistently been greater than $100,000 per year. His store, just north of Orlando, sells between 80 and 100 new and used vehicles each month. His donations are far greater than those of most dealers, according to a survey of 340 dealers conducted last year by Ally Financial and the National Automobile Dealers Association. The median donation was approximately $30,000 per dealer. Though Nahas says his charitable projects help him sell a few extra cars per year, additional business is never a factor when he evaluates a request. "If you do it for what it does for the business, you are doing it for all the wrong reasons," said Nahas. "You do it because it is the right thing to do."
Source: Automotive News

Editor's note: George Nahas is a member of NADA's board of directors. He represents new-car dealers in Florida.
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Quotable
"If you do it for what it does for the business, you are doing it for all the wrong reasons. You do it because it is the right thing to do."

   
-- George Nahas, a Chevrolet dealer in central Florida, commenting on his charitable donatations, Automotive News, Sept. 22

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