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Inside this issue
Reports of Growing Auto Loan Delinquencies are Overblown, Credit Bureaus Say
Resale Prices Tumble on Electric Cars
Automakers Choose Aerospace Firm to Run Takata Airbag Tests
Senate Panel Approves Auto Whistleblower Bill
Nissan Expects to Reach 10% U.S. Share Goal Ahead of Schedule
Study: Gen Z Wants Cars, Values Fuel Efficiency
Conferences, Workshops Help Dealers Stay Ahead of the Curve
Click here for more auto industry news at NADAFrontPage.com. .
Top Stories
Reports of Growing Auto Loan Delinquencies are Overblown, Credit Bureaus Say

60-day delinquencies remain flat

Despite media notions that U.S. auto loan delinquencies are accelerating, they are in fact trending flat, credit reporting bureaus Equifax and Experian Automotive said last week. The two companies also said their data show there’s no bubble in subprime auto loans. “From a data perspective, prime is growing faster than subprime,” Amy Crews Cutts, chief economist for Equifax Inc., told Automotive News last week. “Subprime is growing at half the rate prime is growing. For this to be a bubble, some kind of crazy period, you would think there would be more of an increase in customers coming from that [subprime] space, but that’s not the case.” According to Equifax, the rate of auto loans delinquent 60 days or more in January was 1.15 percent, down from 1.24 percent in the year-earlier month. The 60-day rate also ticked down slightly year over year in both November and December 2014, the company says. Meanwhile, Experian Automotive reported last week the rate of delinquencies of 60-plus days was also essentially flat for the fourth quarter of 2014 at 0.72 percent, down from 0.73 percent in the year-earlier period.
Source: Automotive News
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Resale Prices Tumble on Electric Cars

Tax credits on new models, worries about battery life undercut efforts to peddle used Nissan Leaf

Nissan Motor Co.’s Leaf electric car has been a big seller for Atlanta car dealer Pat Hoban over the past three years, thanks to its low monthly lease price. But as those car leases are beginning to expire amid cheap gasoline, the vehicle is becoming a bit of a headache. With gas prices down 33% from a year ago, and buyers cooling toward electric vehicles, some auto makers are offering deep discounts or attractive leases on battery-powered vehicles and plug-in hybrids. Other electric cars, including plug-in versions of Ford Motor Co.’s Focus and Toyota Motor Corp. ’s Prius, are depreciating as fast as the Leaf with the average trade-in value in 2014 falling between 22% and 35%, depending on model, according to the National Automobile Dealers Association’s Used Car Guide.
Source: The Wall Street Journal
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Automakers Choose Aerospace Firm to Run Takata Airbag Tests

A consortium of 10 automakers formed to investigate the root cause behind Takata airbag inflator ruptures said they have selected Orbital ATK to test the supplier's troubled inflators on their behalf. Orbital ATK is an aerospace and defense contractor with expertise in rocket propulsion systems -- a factor that should aid the probe’s look into Takata’s use of ammonium nitrate as the propellant in its suspect airbag inflators. The propellant has seen heightened scrutiny amid probes into the root cause of the Takata inflator explosions.
Source: Automotive News
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Senate Panel Approves Auto Whistleblower Bill

The Senate Commerce Committee approved the first piece of auto safety legislation in the wake of two massive auto safety crises — a bill to give automotive sector employees incentives to sound the alarm on vehicle defects. The legislation — first proposed in November — would let auto industry employee whistle-blowers potentially be paid millions if they reveal hidden dangers. Sen. John Thune, R-S.D., the chairman of the Commerce Committee, and Sen. Bill Nelson, D-Fla., the ranking member, reintroduced the Motor Vehicle Safety Whistleblower Act. Thune said the measure would be a powerful tool.
Source: The Detroit News
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Nissan Expects to Reach 10% U.S. Share Goal Ahead of Schedule

Nissan North America Chairman Jose Munoz outlined a four-prong capacity expansion plan that could power Nissan to its 10 percent U.S. market share goal ahead of schedule. He also said he targets increased North American operating profit margin of at least 8 percent, thanks to an influx of high-margin nameplates such as the Murano crossover and Maxima sedan. Munoz has previously said it would be difficult to reach 10 percent by the target of March 31, 2017, without added supply. But speaking Feb. 27 at Nissan Motor Co.’s global headquarters, Munoz said the company has a plan to meet it by opening capacity in the United States, Mexico, South Korea and Japan.
Source: Automotive News
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Study: Gen Z Wants Cars, Values Fuel Efficiency

Forget hot-selling compact SUVs and trucks; today’s youngest buyers want cars. MaritzCX, a data company that conducts a yearly new vehicle customer survey, found members of Generation Z — those ages 16-21 — value fuel-efficiency, prefer cars over sport utilities and trucks, and prefer Ford Motor Co. over any other brand. The study — which surveyed 1,061 young car-buyers — found four of the top five vehicle segments for Gen Z buyers are cars rather than sport utilities or trucks. About 41.1 percent opt for compact cars, 14.7 percent shop midsize sedans, and 11.6 percent shop subcompact cars.
Source: The Detroit News
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Conferences, Workshops Help Dealers Stay Ahead of the Curve
By Bob Verwey, TADA President

Auto retail has evolved into an industry itself, and to upgrade skills and knowledge personnel attend events like the National Automobile Dealers Assocation Convention and Expo

I’ve written about the need for skilled workers to continuously upgrade their skills and expand their knowledge base in order to remain competitive. This applies not just to the retail auto industry but to all industries today. Dealer principals and managers also need to stay current with new developments, in order to run their businesses more efficiently and competitively. The main industry event that I attend to upgrade my skills and knowledge base is the annual National Automobile Dealers Association (NADA) Convention & Expo in the U.S.
Source: Toronto Star

Editor's note: Bob Verwey is president of the Trillium Automobile Dealers Association in Canada.
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Quotable

"Now we are going to enjoy growth in segments which are naturally more profitable for us. Not to mention the boost in terms of our image because of the quality and design of the new products."

   
-- Nissan North America Chairman Jose Munoz, commenting on the automaker's goal to reach 10 percent market share in the U.S., Automotive News, Feb. 26

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