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Inside this issue
Commentary: New Study Discredits CFPBs Fair Credit Testing Method
Dealers Offer Better Hours, but Still See High Sales Turnover, NADA Study Finds
Last Chance to Register for Today's NADA Webinar: 'Tales from the Other Side: A Regulator Speaks'
Cheap Gas Means Drivers Want SUVs, but Detroit Must Sell Hybrids
Consumers Buying Cars Again Like it's 2003
NHTSA Says No Need for National Recall of Passenger Airbags
NHTSA Urges GM Owners to Get Ignition Switch Repairs
Motor Trend Names Chevy Colorado 2015 Truck of the Year
Click here for more auto industry news at NADAFrontPage.com. .
Top Stories
Commentary: New Study Discredits CFPBs Fair Credit Testing Method
By Forrest McConnell / NADA chairman

A new comprehensive study of more than 8.2 million auto loan contracts by the consulting firm Charles River Associates concluded that the proxy method used by the Consumer Financial Protection Bureau to measure for unintended discrimination in an auto lender's portfolio is “conceptually flawed” and “inherently unreliable.” The peer-review study, Fair Lending: Implications for the Indirect Auto Finance Market, commissioned by the American Financial Services Association and released on November 19, found significant bias and high error rates. The CFPB, which issued its guidance in March 2013, has used a proxy method to support claims of unintended discrimination against—and extract settlements from—auto lenders and to pressure auto lenders to change the way they compensate dealers for originating finance contracts. The study found that the CFPB's methodology frequently misidentified the background of consumers and dramatically overestimated differences in dealer reserve paid by different groups of consumers. For example, the CFPB's method overestimates African-American borrowers by 41 percent. Click here for the full commentary.
Source: NADA
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Dealers Offer Better Hours, but Still See High Sales Turnover, NADA Study Finds

U.S. car dealerships are making progress in offering employees a better work-life balance, but continue to face challenges in retaining sales staff and recruiting women. Those were some key findings in the National Automobile Dealers Association's third annual Dealership Workforce Study released today. Its findings are based on data collected from more than 240,000 payroll records last year. “The report shows a growth industry with strong earning opportunity in a challenging work environment,” said Ted Kraybill, president of ESI Trends, the Largo, Fla., firm that compiled the study for the NADA. The median weekly earnings at dealerships outpaced those of the overall U.S. private sector workforce, and while the industry is “often characterized as a ‘high-turnover’ work environment, actual turnover at new-car dealerships is significantly less than the private-sector average,” Kraybill said.
Source: Automotive News

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Last Chance to Register for Today's NADA Webinar: 'Tales from the Other Side: A Regulator Speaks'

NADA University Online will host the webinar "Tales from the Other Side: A Regulator Speaks" today, Dec. 3 at 1 p.m. ET. The free webinar will discuss how federal and state agencies are more interested than ever in automotive retailing, which has amped up the risk in selling cars. For more information and to register, click here.
Source: NADA University Online
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Cheap Gas Means Drivers Want SUVs, but Detroit Must Sell Hybrids

These days ... auto executives have to worry about more than just what drivers want. Detroit needs to meet increasingly stringent federal mileage thresholds that are calculated on a fleet-wide basis called Corporate Average Fuel Economy (CAFE, for short). That means for every Cadillac Escalade, GM should sell a Chevy Volt—or three of them—in order to avoid steep fines. The big hurdle will come in 2025, when each company's fleet of cars and light trucks sold in the U.S. will need to post an aggregate fuel economy of about 54.5 miles per gallon. If gas prices don't steer customers to smaller, more efficient cars by that time, automakers will have to give them a nudge via the sticker prices they slap on the window. “The regulatory structure wants to force people into vehicles that consumers don't rationally want to buy,” said Steven Szakaly, chief economist at the National Automobile Dealers Association. “That's a problem.”
Source: Bloomberg Businessweek
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Consumers Buying Cars Again Like it's 2003

The auto sales pace of 17.2 million vehicles in November is the best since 2003

Consumers are buying new cars at a pace not seen since before the recession and Black Friday shoppers get much of the credit. You have to rewind the clock to 2003 to see the kind of November results that many automakers reported today: a sales pace of 17.2 million vehicles even though there was one less selling day in the month. The strong month reinforces similar results in August when the industry hit 17.5 million sales, suggesting there is staying power in the economic recovery as measured by the big purchase of a new car. Some of the credit goes to Black Friday. Analysts estimate as many as 30% of sales were conducted over the Thanksgiving holiday.
Source: Detroit Free Press

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NHTSA Says No Need for National Recall of Passenger Airbags

Supplier to audit inflator production with independent panel

The National Highway Traffic Safety Administration [Tuesday] confirmed that it is not yet ready to call for a nationwide recall of Takata-produced passenger airbags — easing fears that automakers could face shortages of replacement inflators. But the agency is sticking with its demand for a national recall of Takata driver-side airbag inflators — a step the supplier has not yet supported. The agency says it may yet demand a nationwide recall of passenger airbags if Takata's test data warrants it. Separately, Takata Chairman Shigehisa Takada announced plans to form an independent panel to audit his company's production of inflators — part of an effort to reassure lawmakers and regulators that it has fixed chronic quality-control problems.
Source: Automotive News

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NHTSA Urges GM Owners to Get Ignition Switch Repairs

The National Highway Traffic Safety Administration on Tuesday urged owners of nearly 1 million General Motors vehicles recalled for ignition switch problems to get them fixed immediately. The auto safety agency said in a consumer advisory that GM says there are enough parts available to fix all the faulty ignition switches “NHTSA urges owners of unrepaired GM vehicles to immediately contact their local dealer to arrange a service appointment. GM reports that many dealers will help owners get their vehicles remedied after work and on the weekends,” NHTSA said. To date, GM has repaired nearly 60 percent of the affected vehicle population covered under the recall, but many others remain.
Source: The Detroit News
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Motor Trend Names Chevy Colorado 2015 Truck of the Year

Motor Trend named the Chevrolet Colorado its 2015 Truck of the Year, edging out both the Ford Transit van and the 2015 Ford F-150. "After days of testing, hundreds of miles on the road, and our most rigorous truck testing program to date, our editors unanimously selected the Chevy Colorado as our 2015 Truck of the Year," said Edward Loh, the magazine's editor-in-chief. "Colorado is a smart, capable, and refreshingly honest truck that makes a strong value and efficiency statement. It's perfectly sized and suited for the needs of many truck users."
Source: Detroit Free Press
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Quotable

"Moving forward, the federal government should consider promoting broad industry adoption of NADA’s fair credit program, which addresses fair credit risks at the retail level while preserving competition in the marketplace."

   
-- NADA Chairman Forrest McConnell, in a commentary, NADAFrontPage.com, Dec. 2

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Urge Congress to Rescind Flawed CFPB ‘Guidance’ on Auto Finance
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NADA Webinars
All webinars will be held at 1 p.m. ET unless otherwise noted.

-- Dec. 3: Tales from the Other Side: A Regulator Speaks

-- Dec. 10: Total View of Customer Insights Drive Showroom Sales

NADA Foundation News
Hollins University Receives Grant from the NADA Foundation

Bradshaw and Family Support Local Organizations through the NADA Charitable Foundation


 
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