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Inside this issue
U.S. Wants Dealers to Do More to Fix Recalled Vehicles
Editorial: Relax CAFE Standards for Automakers
Don't Forget to Make Warranty Documents Available Prior to Sale
Blue Sky Surges for German Luxury Brands
VW in Full-Blown Crisis as Winterkorn Pledges to Fight for Job
Nuclear Deal May Unleash Big, Pent-Up Iran Market
Click here for more auto industry news at NADAFrontPage.com. .
Top Stories
U.S. Wants Dealers to Do More to Fix Recalled Vehicles

The head of the National Highway Traffic Safety Administration wants the nation’s automakers and more than 17,000 new car dealers to do more to ensure unsafe vehicles are repaired. In a speech Friday at the World Traffic Safety Symposium, NHTSA Administrator Mark Rosekind challenged auto dealers to do more. Under federal law, new-car dealers are only required to complete repairs for recalled new cars — but not for recalled used cars.
Source: The Detroit News

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Editorial: Relax CAFE Standards for Automakers

Federal government should set more realistic fuel economy regulations for auto industry

Government agencies reviewing regulations for the Corporate Average Fuel Economy (CAFE) standards should realign current regulations with realistic, marketable goals. The fuel economy standards are already a challenge for the auto industry — particularly Detroit automakers — to meet fully. And more stringent rules will only hamper auto companies' growth and increase vehicle prices for consumers. The fuel standards are undergoing a "midterm review," to be completed by 2018. The standards, set by the Environmental Protection Agency, the National Highway Traffic Safety Administration and other federal agencies, are meant to reduce greenhouse gas emissions by requiring auto manufacturers to make vehicles with more efficient fuel economy and other environmentally-conscious qualities. Rather than soften the standards, there's a good chance they'll toughen them.
Source: The Detroit News
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Don't Forget to Make Warranty Documents Available Prior to Sale

Dealers are reminded of their obligations under the FTC’s “Pre-Sale Availability Rule” which requires dealers to make written warranties available to consumers before they buy. Generally, dealers can meet this obligation either by: (1) displaying physical copies of the warranty document(s) in close proximity to the product or (2) providing prominent notice of the warranty document’s availability and furnishing the warranty document on request. You must do this with all written warranties on the products you sell with manufacturer warranties, as well as any written warranties you extend. If you engage in online sales the requirement to make warranties available at the point of purchase can be accomplished by, for example, using a clearly-labeled hyperlink, in close proximity to the description of the warranted product, such as “get warranty information here” to lead to the full text of the warranty. Dealers are encouraged to work with their manufacturers to ensure that they have ready access to such warranty documentation, and that any such hyperlinks provide consumers with access to the proper warranty documents.

For more details, click here for the FTC's Businessperson's Guide to Federal Warranty Law. Click here for the FTC's Compliance Warning.
Source: NADA Regulatory Affairs
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Blue Sky Surges for German Luxury Brands

Haig: I've 'never seen prices this high for dealerships'

In the busiest dealership buy-sell market in decades, luxury brands are red hot. The result: stratospheric prices for Mercedes-Benz, BMW and Porsche dealerships. Typical blue-sky multiples for those three brands range from 7 to as much as 10 times adjusted pretax profit, according to the 2014 Year End Haig Report released this week. After the third quarter of 2014, the report put the top end of those brands' blue-sky range at 7 or 7.5 times earnings.
Source: Automotive News
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VW in Full-Blown Crisis as Winterkorn Pledges to Fight for Job

CEO emboldened by state, labor support

Volkswagen has plunged into a full-blown leadership crisis after CEO Martin Winterkorn let it be known on Saturday he will fight for his job even though Ferdinand Piech, the carmaker's chairman, has reportedly withdrawn confidence in the CEO. Piech, who has spent almost 22 years at the helm of VW, nine as CEO, said he has "distanced" himself from Winterkorn, Der Spiegel reported on Friday, exposing unusual dissent between VW's two top leaders. Piech's remark is viewed by analysts as undermining the CEO's prospects of renewing his contract, which is due to expire in December 2016 and to become chairman himself when Piech retires. It comes as VW is seeking to cut billions of euros of costs to boost profitability at its troubled core division while struggling to forge a long-planned alliance of truck brands and to revive sales and momentum in the United States.
Source: Reuters

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Nuclear Deal May Unleash Big, Pent-Up Iran Market

The prospective nuclear agreement among Iran, the U.S. and four other nations could have major ramifications for the auto industry by opening up a new and significant emerging market. With its large, educated population, Iran is considered one of the most promising untapped automobile markets beyond the BRIC nations of Brazil, Russia, India and China. But development of the Iranian auto industry has been stunted by economic sanctions and years of political tension with the U.S. and elsewhere in the West. The successful completion of a definitive agreement to halt nuclear weapons development by Iran could represent the start of a new era for auto production and sales in the country.
Source: Automotive News
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Quotable

"... More stringent rules will only hamper auto companies' growth and increase vehicle prices for consumers."

   -- The Detroit News in an editorial on unrealistic CAFE standards for automakers, April 11

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