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Inside this issue
Lack of Transparency Continues at CFPB
NHTSA Faces Dilemma on Expediting Takata Recalls
GM to Buy Back $5 Billion in Shares
Lexus Leaps in Sales Per Franchise
Infiniti, Mini, Mitsubishi Stores Most-Improved in Responding to Internet Leads
Ford's Odell, Farley Inherit Each Other's Challenges in New Roles
Jaguar Land Rover's Performance Unit Could Make Stand-Alone Models
Say Hello to the Newest Antiques: The Class of 1990
Click here for more auto industry news at NADAFrontPage.com. .
Top Stories
Lack of Transparency Continues at CFPB

House Committee on Financial Services questions CFPB director on dealer-assisted financing at hearing
 
Several members of the House Financial Services Committee took turns last week questioning Richard Cordray, director of Consumer Financial Protection Bureau, who testified at a hearing on the agency’s semi-annual report to Congress.

“The CFPB undoubtedly remains the single most powerful and least accountable federal agency in all of Washington,” said Committee Chairman Jeb Hensarling (R-Texas) in opening remarks at the full committee hearing. “When it comes to the credit cards, auto loans and mortgages of hard-working taxpayers, the CFPB has unbridled discretionary power, not only to make those less available and more expensive but to absolutely take them away.”

Rep. Ed Perlmutter (D-Colo.), who cosponsored legislation in the last session of Congress to rescind the CFPB’s guidance on auto finance, told Cordray that he is concerned that the agency has overstepped its jurisdiction and is doing an “end-around” to regulate auto dealers through their financial lenders.
 
“I know you’re familiar with the Charles River [Associates] study, which calls into question the methodology of the CFPB,” Perlmutter said. “And I just think we should be able to work this out, but if we can’t, then I’m going to continue to pursue the legislation that I’ve cosponsored.”
 
The peer-review study of more than 8.2 million auto loan records, which was released on Nov. 19, 2014, calls into question the reliability of the testing methodology the CFPB has used to level allegations 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.
 
“As you may recall, the study concluded that there were significant flaws in the bureau’s methodology that lead to an overestimating of minority populations by as much as 41 percent,” Rep. Keith Rothfus (R-Pa.) told Cordray. “To date, the bureau has yet to publicly acknowledge the study.”

Cordray said the CFPB disagrees with study's findings and refused to elaborate further.
Source: NADA
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NHTSA Faces Dilemma on Expediting Takata Recalls

Regulator could issue order, but inflator capacity not enough

As U.S. auto safety regulators mull an order to speed the Takata airbag recalls, they face a vexing problem: capacity. It's unclear whether suppliers can speed production of the inflators beyond their current expansion plans, or how quickly they could do so, making any order to accelerate the Takata recalls much easier said than done. Scott Upham, a vice president at the Reputation Institute and an airbag industry analyst who has covered the sector for decades, says Takata already is racing to produce more inflators, and competitors that are expanding capacity will need at least several months to provide more inflators. Takata is producing 450,000 replacement parts per month and plans to expand output to 900,000 per month by September.
Source: Automotive News
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GM to Buy Back $5 Billion in Shares

General Motors Co. said Monday it will buy back $5 billion in company shares and has reached a deal with activist investor Harry J. Wilson, who will withdraw his request for a board seat and shareholder proposal. The buyback will begin immediately and continue through the end of 2016, GM said. It said a foundational element of its approach will be to return all available free cash to shareholders while maintaining an investment-grade balance sheet. Wilson, a former senior member of the Obama auto task force, had sought a board seat and asked the Detroit-based automaker to buy back $8 billion by the middle of next year. Both parties — GM and Wilson — called the announcements a result of “constructive dialogue.”
Source: The Detroit News

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Lexus Leaps in Sales Per Franchise

Brand takes No. 2 spot from Honda

It's great to be a Lexus dealer these days. Last year, the luxury brand bumped mass-market Honda out of the No. 2 spot for U.S. light-vehicle sales per franchise. Toyota-Scion remains the top brand in sales per franchise, or throughput. The overall number of both new-vehicle dealerships and franchises rose less than 1 percent last year, an exclusive annual dealership census compiled by the Automotive News Data Center shows. Amid that stability, most brands' per-franchise sales grew as U.S. new light-vehicle sales rose 5.9 percent last year. Throughput declined at just 11 out of 40 brands, including Volkswagen, Mini and Ford.
Source: Automotive News
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Infiniti, Mini, Mitsubishi Stores Most-Improved in Responding to Internet Leads

Lexus stays No. 1; Buick, Land Rover and Volvo have biggest declines

Infiniti, Mini and Mitsubishi dealerships had the industry’s biggest improvements in responsiveness to customer inquiries on the Internet, while Lexus stores led the way for the second consecutive year, according to a newly released study. Buick, Land Rover and Volvo had the largest drops in performance. The fifth annual Pied Piper Prospect Satisfaction Index Internet Lead Effectiveness Benchmarking Study measured the responsiveness of 13,637 dealerships representing all major brands between September 2014 and March 2015. The company gathers data through “mystery shopping” to score the dealerships. While dealerships slightly improved overall with a 1-point gain in the industry average since last year, 17 of 33 brands had their scores slip this year.
Source: Automotive News
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Ford's Odell, Farley Inherit Each Other's Challenges in New Roles

Ford execs deal with launches, Europe

When you talk to Ford Motor Co.'s "trading places" executives, Stephen Odell and Jim Farley, it's clear: They have inherited each other's challenges. And it's hard to say who got the better deal. Odell, two months into his post as global marketing chief, is looking to manage a year of crucial rollouts in the U.S. Ford lost share in the U.S. in 2014, and, while the changeover to the new F-150 played a part, several other vehicles also lagged the market. Farley, meanwhile, inherits an improving but still loss-making Ford of Europe. Although Europe is stirring into recovery, Ford is taking a hit in Russia, a market that it once saw as a major source of growth.
Source: Automotive News
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Jaguar Land Rover's Performance Unit Could Make Stand-Alone Models

Jaguar Land Rover's Special Vehicle Operations unit may create its own cars instead of just modifying existing ones to build a following among consumers seeking a high-performance alternative to BMW, Audi or Mercedes-Benz. "We're certainly looking at that, and we've got the capability to do that," said John Edwards, head of the company's performance unit. "Is there an opportunity for us to do a completely stand-alone car? Maybe." JLR, which has been adding new vehicles to broaden its reach in the market, would be following in the footsteps of Daimler's Mercedes if it commissions sporty models from the high-performance division it founded last year.
Source: Bloomberg
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Say Hello to the Newest Antiques: The Class of 1990

Maybe you've noticed that it's now 2015 and that means that a fresh crop of automobiles are now 25 years old. This renders them antiques in the eyes of many states as well as the Antique Automobile Club of America. If you're not great at math, that means that 1990 model year cars are now antiques. If that makes you feel like one, well, I can't help you there. But you might want to know about some of the more noteworthy models that debuted that year. Get ready; you're about to feel older. Click here for the list.
Source: Tribune News Service
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Quotable

"That makes Lexus one of the most attractive brands in the industry for an investor, if not the most attractive."

   
-- Tom Libby, an auto analyst with IHS Automotive, commenting on the automaker's increasing sales, Automotive News, March 9

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