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Inside this issue
US Consumer Sentiment at Highest Point in 8 Years
FTC Halts Texas Auto Dealer's Ads
Volvo Wants Online Leads, Not Online Sales, in U.S.
Recalls Lead List of 2014's Top 5 Auto Stories
Number of Cars Earning Top Safety Awards Nearly Doubles
Toyota Mirai: Miracle Machine or Vapourware?
Video: Hopes Ride High for Classic Car Boom in Havana
Click here for more auto industry news at NADAFrontPage.com. .
Top Stories
US Consumer Sentiment at Highest Point in 8 Years

U.S. consumers are more optimistic about the economy than at any other time in the past eight years, buoyed by more jobs and falling gas prices, a survey finds. The University of Michigan said Tuesday that its index of consumer sentiment has jumped to 93.6 from 88.8 in November. December's reading is the highest since January 2007, nearly a year before the Great Recession officially began. The improved sentiment was evident across age groups, income levels and regions, the survey found. Americans may finally be shedding some of their anxiety about the economy. Half the respondents expect the U.S. to avoid a recession in the next five years, the most in a decade.
Source: The Associated Press

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FTC Halts Texas Auto Dealer's Ads

Misleading ads claimed $1 gets consumers out of current loan or lease

An auto dealer in suburban Dallas has agreed to settle Federal Trade Commission charges that it used deceptive ads to promote the sale and lease of its vehicles, including an ad that claimed consumers could get out of their current loan or lease for $1.
 
According to the complaint, false or deceptive ads from TXVT Limited Partnership, doing business as Trophy Nissan (Trophy), violated the FTC Act as well as the Consumer Leasing Act (CLA) and Regulation M, and the Truth in Lending Act (TILA) and Regulation Z.
 
The FTC charged that Trophy advertised enticing prices, lease or finance terms, and promotions and then attempted to disclaim its attractive offers using small text in print and video ads. In addition to print and TV advertisements, Trophy also ran ads on its website, Facebook and Twitter. The dealership also ran print ads in a local Spanish-language newspaper, Al Dia.
 
Among the deceptive ads run by Trophy was one that misled consumers into thinking they could get out of their current loan or lease for only $1. The Commission’s complaint alleges the advertisement was deceptive since consumers could not get out of their loan or lease for that amount. In fact, Trophy would add the balance of any loan or lease obligation to the balance of a new loan.

In another promotion, “Max Your Tax,” Trophy claimed it would match tax refunds to use for a down payment, but the small print at the bottom of the ad disclosed it limited match refunds to no more than $1,000. The FTC alleges that Trophy failed to disclose adequately the additional terms.
 
As part of the proposed consent order, Trophy is prohibited from:

  • misrepresenting it will pay off a consumers’ trade-in;
  • misrepresenting material terms of any promotion or other incentive;
  • misrepresenting the cost of leasing or purchasing a vehicle; and
  • failing to clearly and conspicuously disclose material terms of a promotion or other incentive. 

The proposed consent order also requires Trophy to comply with CLA and Regulation M and TILA and Regulation Z.
 
The case is part of the Commission’s continued efforts to protect consumers in the auto marketplace. The FTC provides a variety of resources for consumers buying or leasing a vehicle, including Are Car Ads Taking You For A Ride?
 
The Commission vote to issue the administrative complaint and accept the proposed consent order was 5-0. The agreement is subject to public comment for 30 days, beginning today and continuing through Jan. 22, 2015, after which the Commission will decide whether to make the proposed consent order final. Submit a comment online or through the mail.
Source: FTC
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Volvo Wants Online Leads, Not Online Sales, in U.S.

N.A. chief: Company 'fully committed' to its dealers

Volvo's online vehicle sales in the United States will resemble a lead-generating service, with shoppers selecting a model and putting down a deposit, the company's U.S. chief says. Customers will then go to a dealership to finalize the sale. Volvo Car Group last week announced a major shift in the way it wants to sell vehicles, emphasizing online sales. But the move does not signal a change in Volvo's U.S. dealer strategy, said Tony Nicolosi, CEO of Volvo Cars of North America. Volvo is "fully committed" to its U.S. dealer network and is not looking to shift to a Tesla-like sales model. Nicolosi said the U.S. sales arm has discretion over how much of the European initiative it adopts.
Source: Automotive News
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Recalls Lead List of 2014's Top 5 Auto Stories

When it came to bumps in the road, the auto industry had its share in 2014. In the end, though, it was all about sales — and on that note, the year couldn't have been better. Barring some last-minute disaster, the industry will finish the year with sales above 16 million new vehicles for the first time since 2007. And in those days many makers were saddled with workforce and factory capacity in excess of true demand as the economy went sour, forcing them to offer steep, profit-killing discounts to lure motorists to trade in their jalopies. These days, factories are humming at near-capacity. Automakers have dramatically lowered costs, and most are showing profits. Among U.S. makers. General Motors reported profits of $1.4 billion in the most recent quarter, and Ford earned $835 million. But against some of the troubles of the year, it wasn't a cakewalk. Click here for USA Today's top five auto stories of the year.
Source: USA Today
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Number of Cars Earning Top Safety Awards Nearly Doubles

If you're looking for a new car or SUV, it should be easier to find a safe one from the current models: The Insurance Institute for Highway Safety says the number of vehicles winning its two safety awards jumped from 39 to 71 for the 2015 model year. The rise came despite tougher standards for current models to earn the IIHS's best ratings. The winners range from the Chevrolet Spark and Volvo S60 to the Honda Odyssey. You can see a full list, broken down by market segment, at the IIHS website.
Source: NPR
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Toyota Mirai: Miracle Machine or Vapourware?

As car companies go, Toyota has a good record of predicting – and dictating – consumer tastes. Consider two examples from its recent history: its ultra-reliable Camry has been the best-selling car in the U.S. for the last 12 years, and its Prius hybrids were not merely the best-selling cars of their kind, but the best-selling vehicles, period, in California in 2012 and 2013. In November 2013, Toyota announced a new vision, one that is more ambitious, and perhaps more fraught, than any other in the company's history. Fittingly, this vision is named after the Japanese word for “future,” Mirai. If the same executives who wagered on the Camry and Prius are to be trusted, then the future is hydrogen.
Source: BBC
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Video: Hopes Ride High for Classic Car Boom in Havana

Cuba's vintage cars may see new roads ahead as restored diplomatic relations with the U.S. raise hopes of an American tourist boom to see the 1950s 'yank tanks.'
Source: Reuters
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Quotable

"Consumers have become convinced that growing strength in the national economy will result in continued gains in jobs and wages during the year ahead."

   
-- Richard Curtin, chief economist for a University of Michigan survey, The Associated Press, Dec. 23

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