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Inside this issue
Buffett Says He'll Buy More Auto Dealerships
New Study Outlines Best Practices to Improve Automotive Dealership Performance in the Digital Age
NADA Expects Interest Rates to Hold Through Summer, Boosting Sales
FCA Squeaks Out 2% March Gain, Extends Streak to Full 5 Years
Ally to Relocate its Headquarters in Downtown Detroit
NADA Charitable Foundation Donates CPR Training Unit to Shreveport Fire Department EMS
Click here for more auto industry news at NADAFrontPage.com. .
Top Stories
Buffett Says He'll Buy More Auto Dealerships

Successful investor Warren Buffett, who owns shares of General Motors and 78 auto dealerships in 10 states, says he'd like his Berkshire Hathaway to buy more stores. "It can be a good and very profitable business," he said at [the 2015 NY Automotive Forum on Tuesday], ahead of the New York auto show, which displays models to the news media this week and is open to the public Friday through April 12. "You'll find out over the next couple of years we're likely to make a few more acquisitions," he said.
Source: USA Today

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New Study Outlines Best Practices to Improve Automotive Dealership Performance in the Digital Age

McKinsey & Company study in cooperation with NADA examines new horizons for auto retailing

U.S. new-car dealers have tremendous opportunities to expand their businesses and improve profitability, despite challenges to current retailing models, consultants from McKinsey & Company said Tuesday at the 2015 NADA/J.D. Power Automotive Forum in New York City. During the forum, McKinsey & Company’s Stefan Knupfer, a senior partner and 20-year veteran in the auto industry, and Robert Mathis, a partner within the firm’s Automotive & Assembly Practice, unveiled Fast forward: How US auto dealers can drive sustainable economic performance in the digital age, a new study that provides a strategic perspective on opportunities and challenges in the U.S. retail-auto sector.  Among their key findings, McKinsey and NADA found that if carmakers and dealers make the necessary investments to achieve operational excellence and streamline marketing expenses, dealer profitability, on average, could hit the levels of today’s top quartile performing dealers. These benefits could include increased returns on marketing investments and higher customer satisfaction.

“A top industry priority should involve encouraging and creating high-performing auto dealerships,” says Knupfer. “Our research busts the myth that most of the factors that effectively drive dealer success, such as sufficient scale and brand strength, remain beyond the industry’s control. Instead, we discovered that internal operating practices differentiate highly-profitable retailers from their peers today even more than in 2006 when NADA and McKinsey conducted a similar analysis.”
Source: McKinsey & Company

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NADA Expects Interest Rates to Hold Through Summer, Boosting Sales

The National Automobile Dealers Association predicts the Federal Reserve will hold off on raising interest rates through the summer, giving vehicle sales a boost that can offset slow economic growth in the start of the year. Weak economic growth in the first quarter indicates that the Fed will maintain rates until September, Steven Szakaly, NADA’s chief economist, said Monday during a conference call. U.S. gross domestic product for the period will probably rise 2.1 percent, he said, which led NADA to reduce its 2015 forecast for GDP growth to 2.9 percent from 3.1 percent. Still, the group maintained its sales forecast for the year, anticipating that interest rates will remain low. “On the very positive side, we do see a lot of room for the Fed to maneuver,” Szakaly said. Maintaining low rates “is very, very good, of course, for motor-vehicle sales and the rest of the economy,” especially during the peak sales months of the spring and summer.
Source: Bloomberg
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FCA Squeaks Out 2% March Gain, Extends Streak to Full 5 Years

Hyundai up, Nissan down in tough month

Fiat Chrysler rode continued strong demand for Jeeps and Chryslers to a narrow 2 percent U.S. sales advance in March -- enough to extend its streak of monthly sales gains to a full five years. Jeep sales rose 23 percent from a year earlier, buoyed by the arrival of the subcompact Jeep Renegade, while Chrysler brand sales increased 15 percent, FCA US said in a statement. Nissan, meanwhile, said its sales fell 2.7 percent last month. A 3 percent decline at the Nissan Division offset a slight gain at Infiniti. In a tweet, Hyundai said it tallied a 12 percent increase. Other automakers will release their March results later today.
Source: Automotive News
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Ally to Relocate its Headquarters in Downtown Detroit

Ally Financial Inc., along with Detroit political and business leaders, said it plans to move its headquarters and 1,300 employees to a signature office building in downtown Detroit. Bedrock Real Estate Services LLC, owned by real estate magnate Dan Gilbert, purchased the One Detroit Center building at 500 Woodward Ave. in downtown Detroit, in a deal believed to be worth $100 million. Ally Detroit Center will be new name of One Detroit Center, which will house Ally Financial in a nearly 13-year lease, Ally said at a news conference. Build-out of the Ally space over 13 floors will cost about $55 million, Gilbert said.
Source: Crain's Detroit Business
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NADA Charitable Foundation Donates CPR Training Unit to Shreveport Fire Department EMS

On Tuesday March 31, 2015, the Shreveport-Bossier New Car Dealers Association in conjunction with the National Automobile Dealers Association Charitable Foundation (NADCF) donated a CPR training unit to the Shreveport Fire Department EMS. New-car dealers throughout the country have devoted much of their time and money to the development or projects that enrich the lives of people in their communities. In cities across the country, thousands of citizens have been taught how to provide CPR on training units donated by new-car dealers. In creating the NADA foundation, dealers sought to give back to the community and the nation. LADA representative Mark Hebert said, “We know that these CPR training units will help save lives and give comfort and security to those trained.”
Source: Bossier Press Tribune
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-- Warren Buffett, chairman and CEO of Berkshire Hathaway, at the NADA/J.D. Power Automotive Forum in New York, NADA, March 30

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