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Inside this issue
U.S. Government Is Using Electric Vehicle Subsidies All Wrong
Volkswagen Makes a Big Push to Be No. 1
Fiat Chrysler CEO Hints at 'Feasible' Deal with GM, Ford
GM Cutting Warranty, Maintenance Programs
As BMW, Audi and Mercedes-Benz Race for Luxury-Car Sales Crown, Profits Get Dented
2015 Ford F-150 Expected to Retain its Value Better
Click here for more auto industry news at NADAFrontPage.com. .
Top Stories
U.S. Government Is Using Electric Vehicle Subsidies All Wrong

"Of the 1 billion vehicles on the world's roads, fewer than 1m are powered by electricity alone." -- The Economist, Feb. 24, 2015

And what's true worldwide is true here in the U.S. as well. The number of fully electric vehicles merging onto America's national roadways continues to just putt-putt along. According to the latest tally from InsideEVs, the online magazine tracking "all the plug-in sales for the United States by auto maker and brand," only 119,710 electric car sales were reported in the United States last year. Out of some 16.5 million total U.S. vehicle sales, that's just seven-tenths of 1 percent. Add in the 167,539 electric cars sold in 2010 through 2013, and we're still looking at something less than 300,000 "EV" cars and trucks roaming U.S. roads. Would you care to guess how much money the U.S. government has spent subsidizing the purchase of these cars?

Um, $1.05 Billion? Good guess! That's precisely right. According to a just-released U.S. National Science Foundation report on electric car sales from 2011 to 2013, the federal government spent (in the form of granting tax credits and deductions) $1.05 billion to subsidize Americans buying electric cars during this period. That's quite a lot of money to spend supporting the purchase of battery-operated cars for some of America's richest car-buyers. Surprisingly, though, $1 billion in subsidies (roughly $3,580 per car) hasn't put a lot of electric cars on the road. According to the NSF, this may be more a function of how the money was spent than of how much money was spent.
Source: Daily Finance
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Volkswagen Makes a Big Push to Be No. 1

Volkswagen Chairman and CEO Martin Winterkorn walked into the German automaker's annual meeting on Thursday and flashed a big smile. Who can blame him? Eight years after taking over the company, with the goal of making it the world's automaker No. 1, Winterkorn has just about accomplished that feat. In fact, while VW is careful not to declare it will pass Toyota to become the world's biggest automaker by volume sales, most in the industry expect it to happen in 2015.
Source: CNBC
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Fiat Chrysler CEO Hints at 'Feasible' Deal with GM, Ford

Fiat Chrysler CEO said a deal with Ford or GM is "technically feasible," but said there are no substantive discussions occurring now.

Fiat Chrysler Automobiles CEO Sergio Marchionne said Thursday a combination with General Motors or Ford Motor would be "technically feasible," in comments that reflect his often stated view that larger mergers in the auto industry are possible at almost any time. "We don't have any restrictions," Marchionne told Bloomberg News on Thursday in an interview in Geneva, Switzerland. The condition for any deal is "saving the highest amount of capital" on developing new vehicles.
Source: Detroit Free Press
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GM Cutting Warranty, Maintenance Programs

General Motors Co. is cutting the mileage limit of its powertrain warranty on Chevrolet and GMC vehicles — from 100,000 miles to 60,000 miles — starting on 2016 models. The five-year powertrain warranty limit will remain unchanged. The Detroit-based automaker on Thursday said the reduction is because the warranty is not a high priority for potential buyers. GM said it also is cutting its two-year free maintenance program from four to two visits a year for the same reason. “We talked to our customers and learned that free scheduled maintenance and warranty coverage do not rank high as a reason to purchase a vehicle among buyers of non-luxury brands,” GM said in a statement. GM said it will reinvest savings from the reduced programs “in features consumers value more, such as advanced connected-vehicle technology.”
Source: The Detroit News

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As BMW, Audi and Mercedes-Benz Race for Luxury-Car Sales Crown, Profits Get Dented

Spending by German auto makers is beginning to erode profits

German auto makers BMW AG, Audi AG, and Mercedes-Benz are racing pell-mell against each other for the industry’s luxury-car sales crown, but the huge sums they are spending to get ahead are beginning to erode profits. In their quest for growth, the three German brands that dominate the global market for premium cars and sport-utility vehicles are spending tens of billions of euros to develop new technologies, build factories and churn out new models. BMW defended its global lead last year, selling 1.81 million BMW brand cars, outpacing Volkswagen AG’s Audi, which sold 1.74 million cars, and Daimler AG’s Mercedes-Benz, which sold 1.65 million vehicles. But the competition is accelerating. BMW sales were up 9.5% last year while Mercedes-Benz sales rose a faster 13% and Audi posted a 10% gain. And in the first two months of this year, Audi outdistanced BMW in world-wide sales. The automotive brinkmanship is starting to hit profits.
Source: The Wall Street Journal
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2015 Ford F-150 Expected to Retain its Value Better

ALG estimates the 2015 Ford F-150 has increased its residual value by almost 12% over the 2014 model

Fighting back against critics of the switch to the use of aluminum for the bodies of the 2015 F-150 pickup, Ford executives released third-party data today showing residual values have improved and cost of ownership is lower than its main rivals. The resale value of a 2015 F-150 improved almost 12% from the outgoing model, to retain 58% of its value after three years, according to ALG.
Source: Detroit Free Press
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Quotable

"We were the fastest-growing premium brand last year and intend to keep that momentum this year or to accelerate. The gap is closing."

    -- Daimler CEO Dieter Zetsche, commenting on the race for the luxury-car sales crown, The Wall Street Journal, March 12

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