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Inside this issue
New Study Casts Doubt on Latest CFPB Allegations against Automaker Finance Arms
Takata Has Yet to Find 'Root Cause' of Airbag Ruptures, Executive Says
Nominee Pledges Tough Approach to Auto Safety
Deals and Pent-Up Demand Fuel Auto Sales
As Gas Prices Fall, Auto Buyers Abandon Greener Cars
2015 NADA Convention Mobile App Now Available
Click here for more auto industry news at NADAFrontPage.com. .
Top Stories
New Study Casts Doubt on Latest CFPB Allegations against Automaker Finance Arms

A new study by the research firm Charles River Associates (CRA) casts doubts on recent allegations made by the Consumer Financial Protection Bureau (CFPB) against Toyota Motor Credit Corp. and American Honda Finance Corp. concerning disparate impact in the pricing of auto loans.

Among the CRA study’s key findings was that, when measuring whether such unintentional discrimination has occurred, the CFPB overestimates the number of minority consumers by as much as 41 percent and the pricing differences between minority and non-minority consumers by as much as 87 percent.

CRA noted that several factors (which appear to be completely ignored by the CFPB) further account for pricing differences which are completely unrelated to a consumer’s background. 

CRA also noted that while the CFPB’s own study into its testing methodology reveals a significant overestimation of minority populations, the CFPB still does not explain whether or how it corrects for this flaw. Such failings can produce significant distortions and inaccuracies in the CFPB testing results, and should be fully explained by the CFPB before it relies upon them to support an allegation of discrimination.       

The study examined the accuracy and reliability of the method used by the CFPB to test for unintentional disparate impact discrimination in an auto lender’s portfolio. After examining 8.2 million auto finance contracts, CRA concluded in its comprehensive report that the CFPB’s testing method is “subject to significant bias and estimation error.”

The CRA study was commissioned by the American Financial Services Association and released on November 19. The allegations made against the automakers’ captive finance companies were publically disclosed on November 25 and December 2, respectively. Click here for the executive summary and complete study.
Source: NADA Newswire

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Takata Has Yet to Find 'Root Cause' of Airbag Ruptures, Executive Says

Lawmakers grill supplier about handling of recalls

Japanese supplier Takata Corp. today acknowledged that it still does not understand what is causing airbag explosions that have hurtled metal shards into vehicles even as it insisted that calls for a broader recall to remedy the problem were misguided. Takata is under pressure from U.S. lawmakers and safety regulators to expand to all 50 states a recall of driver-side airbags, but the company has said data does not support such a move and it could divert replacement parts from the most-needed areas.
Source: Reuters

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Nominee Pledges Tough Approach to Auto Safety

Mark Rosekind wins over lawmakers frustrated by NHTSA’s past

Mark Rosekind, nominated to be the top U.S. auto-safety regulator, pledged to lawmakers on Wednesday that he would bring a “fresh set of eyes” to the National Highway Traffic Safety Administration, aiming to turn the page on a difficult period for the agency. The Senate is racing to confirm Mr. Rosekind, a fatigue scientist, before Congress adjourns for the year amid frustration that the agency missed multiple opportunities to identify safety defects.
Source: The Wall Street Journal
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Deals and Pent-Up Demand Fuel Auto Sales

Auto sales recorded their strongest November in a decade, selling a seasonally adjusted annualized rate of around 17 million vehicles. Things were ... helped by old-fashioned bargains and promotions. Kirt Frye, who operates the Sunnyside Automotive Group near Cleveland, had a gift card deal going over Black Friday weekend. “We had them from 9 a.m. through 11 a.m. on a website, and at 9:05 all five of the $500 gift cards were already spoken for,” Frye said. “We sold five cars in about 15 minutes.” Compare that to an average day of three cars sold. In addition, gas prices have been falling, and cars are more fuel efficient than they were years ago. But Frye said gas prices are “probably not that much of an economic factor.”
Source: Marketplace

Editor's note: Kirt Frye is an NADA director representing Metro Cleveland.
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As Gas Prices Fall, Auto Buyers Abandon Greener Cars

Gas prices are down. Truck sales are up. And fuel economy standards loom

Plummeting gas prices have pushed car buyers away from smaller, greener cars and back into their traditional comfort zone: big SUVs and light-duty trucks. Amid robust sales last month, automakers saw consumers flock toward larger cars, while shunning traditional small cars. And although the strong sales are good news for carmakers right now, that could create problems later as the manufacturers work to meet tightening federal fuel economy standards.

Steven Szakaly, chief economist for the National Automobile Dealers Association, said that's largely because of a simple reflex: stable or low gas prices mean consumers aren't hedging their bets by buying more fuel-efficient cars. "If I'm worried about my budget and gas prices, I'll buy a hybrid or an electric vehicle to give me a natural way to mitigate those costs," said Szakaly, whose group lobbied against tighter fuel-economy standards. "We've seen gas prices be more stable and now they're declining, so that gives consumers a lot more confidence. … The economically rational consumer is not going to pay for technology that doesn't have a payback for them."
Source: National Journal
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2015 NADA Convention Mobile App Now Available

The mobile app for the 2015 NADA Convention & Expo is now available for download for smart phones and tablets.

The free app, which syncs with myNADAplanner, allows attendees to maximize their convention experience with the following features:

-- Access up-to-the minute session and event updates
-- Workshop session handouts & presentations
-- Ability to build a personalized schedule
-- Explore the Electronic expo hall, featuring company descriptions and booth locations
-- Easily search products and services on the expo floor
-- Walking maps
-- Custom notes to stay organized

The app is available for iPhone, iPod Touch, iPad and Android devices. To download, visit the App Store or Google Play Stores and search for NADA2015.

Click here to access myNADAplanner, a free, easy-to-use online tool for planning, scheduling and networking.

The NADA Convention will be held in San Francisco from Jan. 22-25. For more information and to register, visit www.nadaconvention.org.
Source: NADA Public Affairs
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Quotable

"We've seen gas prices be more stable and now they're declining, so that gives consumers a lot more confidence. … The economically rational consumer is not going to pay for technology that doesn't have a payback for them."

   
-- NADA Chief Economist Steven Szakaly, commenting on declining sales of smaller, green cars due to lower gas prices, National Journal, Dec. 3

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