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Inside this issue
Commentary: Liberate the Auto Sales Market for All
Commentary: How to End Predatory Auto-Loan Practices
Register Now for NADART's INSIGHT Forum in Los Angeles
Ford Sets Goal of 9.4M Global Sales by 2020, Cuts Profit Outlook for '14
GM Fund Approves 23 Death Claims
Honda CR-V Goes High Tech to Prevent Crashes
Click here for more auto industry news at NADAFrontPage.com. .
Top Stories
Commentary: Liberate the Auto Sales Market for All
By Peter Ferrara

Tesla Motors is a pioneer in manufacturing electric-powered cars. But it is not taking the auto market by storm. Performance of these vehicles is competitive with ideologically maligned gas-powered cars – but the products are heavily subsidized, by both federal and state tax credits of up to $20,000+ to consumers, and zero emissions credits totaling tens of millions of dollars to the company. While the jury is still out on whether consumers will buy electric cars en masse, given their limitations and the reality that subsidies are likely to eventually end, people should be free to buy what they want, for whatever reasons. And legally free to sell what they want as well. Tesla Motors is also pioneering a new sales model for autos, as the only automaker selling directly to the consumer marketplace, rather than through franchised auto dealers.

However, while the automotive marketplace is not currently a free one for Tesla, neither is it for franchised dealers, who are drastically limited in their ability to negotiate freely with manufacturers, due to antitrust prohibitions against them. The dealer system was originally developed on the thinking that franchised dealers would have stronger incentives and knowledge about local markets to sell cars in those markets. But the dealers soon learned that despite their investments in land and capital, they were at the mercy of the manufacturers, who could replace them, or start up nearby competitors, if they were displeased.

Tesla is probably right that it has better incentives and knowledge to sell its new technology unfamiliar to consumers. Governments should not interfere with the free choice of manufacturers in this regard. But simply repealing the dealer franchise laws, as some on the right have suggested, would not leave a completely free market in its wake. Dealers would not be free under antitrust regulation from joining together in contract negotiations to match the market power of car manufacturers – despite the fact that dealers have invested more than $200 billion in land and facilities to retail those products.
Source: Town Hall

Editor's note: Peter Ferrara is general counsel for the American Civil Rights Union, a senior fellow at the Carleson Center for Public Policy and a senior fellow at the National Center for Policy Analysis.
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Commentary: How to End Predatory Auto-Loan Practices
By James B Treece

At a public hearing in Indianapolis this month, dealers, lenders, consumer advocates and senior officials from the Consumer Financial Protection Bureau heard damning testimony on how predatory car-loan practices hurt minorities and women. If they listened, they also heard the outline of a workable solution not entailing additional government regulation. That indefensible, discriminatory consumer gouging is not ancient, pre-civil rights era history. And it's why we need procedures to end such practices immediately. The solution is one endorsed by the National Automobile Dealers Association and the American Financial Services Association, a lender trade group in Washington, D.C., and laid out at the hearing.

The gist of the NADA recommendations is for dealerships to adopt a percentage ceiling on dealer reserve -- points tacked on to a vehicle loan as a dealership's fee for arranging the loan -- and then document a legitimate business reason every time they offer a discount below that ceiling. NADA has listed legitimate reasons for discounting the fee, such as matching a lower rate offered by a rival store or brand. Discriminatory lending will end at dealerships that adopt this solution. But it is a voluntary program, and there will always be auto retailers that won't. Discrimination can still rear its ugly head at those stores. So the next step is up to NADA, AFSA and their members. They must publicize the program so effectively that dealerships not using it are clearly identified as outliers.
Source: Automotive News

Editor's note: To download the NADA Fair Credit Compliance Policy & Program, go to www.nada.org/faircredit.
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Register Now for NADART's INSIGHT Forum in Los Angeles

NADART and NADA will host the INSIGHT Forum on Nov. 18 from 7:45-11:30 a.m. at the LA Hotel Downtown. The complimentary forum, which immediately precedes the NADA/J.D. Power Western Automotive Conference, will explore the auto industry's financial trends. Attendees will hear from industry experts including John Casesa of Guggenheim Partners, Summer Conley of Drinker Biddle, and Christopher Dionot of the Planning Solutions Group. For more information and to register, click here.
Source: NADART

Editor's note: The NADA/J.D. Power Western Automotive Conference will be held in Los Angeles on Nov. 18, which precedes press days at the Los Angeles Auto Show. For more information or to register, click here.
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Ford Sets Goal of 9.4M Global Sales by 2020, Cuts Profit Outlook for '14

Super Duty pickup next to get aluminum body

Ford Motor Co. aims to increase its global sales by 52 percent to 9.4 million annually by 2020 by tapping into fast-growing Asian markets, investing heavily in its Lincoln luxury brand, and expanding its global offerings of small cars and utility vehicles, executives said [Monday]. The automaker said it would use aluminum in the next generation of its Super Duty pickups and committed to two new vehicles to join the Lincoln lineup. CEO Mark Fields said the automaker plans to maintain the same “One Ford” plan developed by his predecessor, Alan Mulally, while accelerating its execution.
Source: Automotive News

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GM Fund Approves 23 Death Claims

The General Motors Co. compensation fund has approved 23 death claims for people killed as a result of defective ignition switches in since-recalled cars, an increase of two since last week. In addition, it has approved 16 claims for injuries, the fund said in a report Monday. The fund administered by lawyer Kenneth Feinberg has received 867 claims, including 153 for deaths, through Friday. It has received 70 claims for serious injuries and 644 for less-serious injuries.
Source: The Detroit News
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Honda CR-V Goes High Tech to Prevent Crashes

In a class of family vehicles where safety can be a big selling point, Honda is betting on high tech to avoid wrecks in its 2015 CR-V. The 2015 CR-V will be the first vehicle in Honda's lineup to get what the automaker has named Honda Sensing, a bundle of six technologies that the brand hopes will put it a step ahead of the razor-sharp competition in the compact crossover segment.
Source: USA Today
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Quotable

"But repealing state franchise laws without antitrust protections for dealers would be a case of the government picking winners and losers."

   
-- Peter Ferrara, general counsel for the American Civil Rights Union, in a commentary on the dealer franchise system, Town Hall, Sept. 29

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