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Inside this issue
Warren Buffet Bullish on Auto Dealerships
Here's Why Warren Buffett Is Buying Car Dealerships
GM's Bold Platform Plan Aims to Reduce Complexity, Save Billions
Next Jeep Wrangler Could Have Aluminum Body
BMW, Mercedes Standardize Models to Aid Buyers, Boost Margins
Ford Mulls Ranchero Reprise for Small-Truck Market
CPR Training Units Donated to Henry Ford Hospital
Click here for more auto industry news at NADAFrontPage.com. .
Top Stories
Warren Buffet Bullish on Auto Dealerships

Berkshire Hathaway will acquire the Van Tuyl Group, the nation’s largest privately-owned auto dealership group and which ranks fifth among all U.S. auto dealership groups. After becoming a part of the Berkshire Hathaway family of businesses, the company will be known as Berkshire Hathaway Automotive. Berkshire Hathaway Automotive -- which will be headquartered in Dallas --  will continue to be led by Larry Van Tuyl, who will become chairman, and Jeff Rachor, who will assume the role of chief executive officer.

"This is just the beginning for Berkshire Hathaway Automotive,” said Warren Buffett, chairman and chief executive officer of Berkshire Hathaway. The transaction is expected to be completed in the first quarter of 2015 and is subject to obtaining approvals from the major auto manufacturers as well as certain customary closing conditions, including various regulatory approvals.
Source: NADA Public Affairs

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Here's Why Warren Buffett Is Buying Car Dealerships

Warren Buffett announced Thursday on CNBC that Berkshire Hathaway is buying Van Tuyl Group, the fifth-largest car dealership company in the U.S. The dealership group has been privately owned since 1955, but the first order of business is a name change: It will be called Berkshire Hathaway Automotive. Buffett isn't done yet. He told CNBC that he may buy even more dealerships. Berkshire Hathaway already owns the Burlington Northern Santa Fe railroad and NetJets. He joked after the announcement that he now has automobiles covered, but of course he already owns almost 33 million shares of General Motors, worth $1 billion, according to Bloomberg.
 
So why did Buffett do the Van Tuyl Group deal? Money! Nothing complicated here. As Amy Wilson noted in Automotive News in March: "In 2013, the average U.S. dealership produced return on equity of 29 percent, according to the National Automobile Dealers Association. That figure has risen in four of the past five years and is now more than double the 12 percent return recorded in 2008 when U.S. vehicle sales collapsed." Return on equity is one thing. Profits are something else. "It's incredibly expensive to sell cars," said Steven Szakaly, chief economist for the National Automobile Dealers Association.
Source: Business Insider
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GM's Bold Platform Plan Aims to Reduce Complexity, Save Billions

Rivals VW, Toyota still sorting out similar, complex goal

It could be a defining element of CEO Mary Barra's legacy at General Motors: A drastic shift over the next 10 years from 26 global vehicle production platforms to just four by 2025, a bold stroke that could eventually save the U.S. automaker many billions of dollars in production costs. The radical streamlining of GM's basic architectures, announced on Wednesday at a day-long investor briefing near Detroit, is intended to simplify the engineering and manufacturing of GM's future cars and trucks, while enabling the company to deliver better-differentiated designs more quickly to customers around the world. If it succeeds, then GM will be able to save on components, tooling and other manufacturing-related expenses.
Source: Reuters

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Next Jeep Wrangler Could Have Aluminum Body

The next generation Jeep Wrangler might have an aluminum body and be assembled somewhere other than Toledo, where its roots go back more than 70 years to the first Willys MB was made for the U.S. Army. Fiat Chrysler Automobiles CEO Sergio Marchionne also hinted at the Paris Motor Show that the iconic Wrangler also could be built on a unibody, rather than a body on frame, structure.
Source: Detroit Free Press
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BMW, Mercedes Standardize Models to Aid Buyers, Boost Margins

Mercedes-Benz and BMW are aiming to sell more standardized cars and services to boost profit margins and simplify the complex list of options for buyers -- while also giving them the choice of a bespoke car if they want. The move is partly aimed at attracting customers who might struggle with the ever growing list of model variants, multimedia features and safety technology available in new cars, the companies say.
Source: Automotive News
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Ford Mulls Ranchero Reprise for Small-Truck Market

Ford Motor is considering a return to the U.S. small-pickup truck market, which it abandoned by axing its Ranger in December 2011. Ford is scouring its international models for one that it could make work. It won't be the updated Ranger that Ford now sells outside the U.S., often seen by people outside Ford as a logical candidate. "Too big. It's 90% of the F-150 size," says Dave Scott, Ford 's truck marketing manager. That means it could steal sales from the 2015 F-150 at a time an expensive redesign is fresh on the market.
Source: USA Today
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CPR Training Units Donated to Henry Ford Hospital

The National Auto Dealers Association Charitable Foundation recently presented two Resusci-Anne CPR training mannequins to the Henry Ford Hospital Center for Simulation, Education and Research during a brief presentation at Dick Genthe Chevrolet in Southgate. Richard Genthe, chairman of Dick Genthe Chevrolet presented the mannequins to Dwana Bass, Henry Ford Hospital Trauma Surgery injury prevention coordinator. The mannequins will be used as part of Henry Ford Hospital’s ongoing community education program that works with community partners on life-saving training.
Source: The News Herald (Southgate, Mich.)
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Quotable

"I fully expect we'll buy a lot more dealerships over time."

   
-- Warren Buffett, chairman and CEO of Berkshire Hathaway, CNBC, Oct. 2

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