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Inside this issue
Video: CFPB's Richard Cordray Takes Tough Questions From Congress
Upheaval Hits Dealership Group Rankings
Leases Grease Pickup Sales
NADA Supports Efforts to Disapprove NLRB Ambush Rule
Dodge Stops Taking Hellcat Orders to Tackle Big Backlog
'Tier 2' Luxury Brands Struggle to Compete with Elite Germans, Lexus
Click here for more auto industry news at NADAFrontPage.com. .
Top Stories
Video: CFPB's Richard Cordray Takes Tough Questions From Congress

During a hearing with Richard Cordray, director of the Consumer Financial Protection Bureau, members of Congress expressed serious concerns about the CFPB’s guidance on dealer-assisted financing. Members on both sides of the aisle noted that the agency has overstepped its jurisdiction and continues to ignore an important Charles River Associates study that questions the CFPB’s testing methodology. The flawed methodology is being used in the CFPB’s overreaching guidance of auto loans, yet Cordray refused to discuss the CFPB’s reasoning in dismissing the study. Click here to view the hearing.  
Source: House Financial Services Committee
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Upheaval Hits Dealership Group Rankings

Van Tuyl tops Sonic; Lithia nears Asbury

Consolidation is shaking up Automotive News' ranking of the largest dealership groups. After staying fairly stable for several years, the top 10 spots underwent several changes in the latest list, and 2015 promises more turmoil. Dealership consolidation picked up in 2014, a year many buy-sell advisers say was the busiest in memory. That fact is amply illustrated in Automotive News' ranking of U.S.-headquartered dealership groups based on 2014 new-vehicle retail sales. The list expands this year to 150 from 125. Take Van Tuyl Group, which edged past Sonic Automotive Inc. to No. 4 on the list. Van Tuyl's new-vehicle retail sales of 139,538 topped Sonic's total by just 3,606, as Van Tuyl raised its dealership count to 78 at year-end from 75 a year earlier. Sonic's store count held at 102. But for Van Tuyl, 2014 wasn't about buying stores; it was the year the group was bought by Warren Buffett. And Buffett has said that the newly named Berkshire Hathaway Automotive intends to buy more stores -- a lot more.
Source: Automotive News

Editor's note: Warren Buffett and Larry Van Tuyl will participate in a panel session during the 2015 NADA/J.D. Power Automotive Forum in New York City on March 31. The session will be moderated by CNBC's Becky Quick.
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Leases Grease Pickup Sales

Higher residuals temper payments on pricey trucks

Pickups are beginning to emulate luxury vehicles, with their exclusive-sounding model names, fancy features such as vented seats, and $50,000 price tags. Here's another similarity: More customers are leasing them. Last year, leases accounted for about 14 percent of U.S. retail light-duty pickup sales, up from less than 3 percent in 2010, according to J.D. Power. That's small compared with the luxury segment's lease penetration of nearly half of all sales and the industry average of more than 20 percent. But it represents a widening avenue to ownership for pickup buyers, who traditionally have been leery of wear-and-tear charges and mileage limits. "It's becoming more of a tool to increase sales in a supercompetitive segment," IHS analyst Tom Libby says.
Source: Automotive News
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NADA Supports Efforts to Disapprove NLRB Ambush Rule

In December, the National Labor Relations Board (NLRB) issued the “ambush” election rule which shortens the time between when union organizers ask for a union election and when that election must take place. The rule forces companies to allow these elections to occur as soon as 11 days after they’re notified. The rule’s new timeframe limits an employer’s ability to communicate with employees prior to the election. The rule also requires employers to provide, within two business days of an election direction, employees’ personal telephone numbers and e-mail addresses. 

NADA opposed this rulemaking in a number of ways, through filing multiple sets of comments and our involvement with the Coalition for a Democratic Workplace (CDW). CDW filed a lawsuit in the United States District Court for the District of Columbia to stop the implementation of this rule and coordinated multi-industry Senate and House letters in support of S.J. Res.8., which NADA signed. (Click here to view the Feb. 26 letter and here to view the March 15 letter.) S.J. Res. 8 is a joint resolution nullifying this rule through the use of the Congressional Review Act. On March 4, the Senate approved S.J. Res. 8 by an almost party line vote of 53-46. The House is expected to take the measure up on March 18. The President’s advisors announced on March 3 that they will recommend a veto of the resolution. Congress would need a two-thirds majority to override a presidential veto.

NADA believes that the current election timeframe is reasonable and allows employees to hear from both the union and the employer before making a decision. The NLRB’s rule upsets this balance by putting employers at a disadvantage. Contact NADA Legislative Affairs if you are interested in learning more about the upcoming vote in the House by sending an email to legislative@nada.org.
Source: NADA Legislative Affairs
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Dodge Stops Taking Hellcat Orders to Tackle Big Backlog

Fiat Chrysler Automobiles has stopped taking orders for the Dodge Challenger and Charger SRT Hellcats so it can work through a lengthy backlog. Order-taking is expected to resume in August, according to Allpar.com, which reported the news this morning. FCA US confirmed the suspension but didn’t specify how long it would last. “Due to unprecedented demand for the 2015 Dodge Charger and Challenger SRT Hellcats,” the company said in a statement, “we are temporarily restricting orders while we validate current orders that are in the system.”
Source: Automotive News
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'Tier 2' Luxury Brands Struggle to Compete with Elite Germans, Lexus

Florida auto dealer Bill Wallace routinely stages special promotions at his Cadillac and Lincoln dealerships to lure BMW and Lexus owners in for a test drive -- offers such as a free dinner for two or Starbucks coupons. "We get the lowest response on those types of promotions of anything we do," he says. "But we continue to bang away at it." For Wallace and other dealers who sell luxury brands such as Cadillac, Lincoln, Acura and Infiniti, banging away is a fact of life. Try as they might, those second-tier brands, with the exception of surging Audi, have struggled to make inroads against the powerful triumvirate at the top: BMW, Mercedes-Benz and Lexus.
Source: Automotive News
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Quotable

"Size matters to us because it fulfills our promise to our team members that there are opportunities for them to grow. As we attract outside talent, [an initiative] which has been fairly successful, acquisitions allow us to further people's careers at a faster rate."

    -- Lithia CEO Bryan DeBoer, commenting on the group's plans to aquire more dealerships, Automotive News, March 16

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