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Inside this issue
Commentary: Loans Are at a Healthy, Rational Level
VW Board Demanded Piech Go After Learning of Secret Plot
NADA Issues Call for Convention Workshop Proposals
Industry Revels in Good Times But Manages to Avoid Overdoing It
Ford's Sync 3 Debut, Vehicle Launches Are Out of Sync
Are Automakers Addicted to In-Car Features Overload?
Click here for more auto industry news at NADAFrontPage.com. .
Top Stories
Commentary: Loans Are at a Healthy, Rational Level
By Raj Sundaram, co-president of Dealertrack Inc.

There's been a lot of hand-wringing in the press and financial circles lately that subprime automotive lending may have rebounded too fast or too far in recent years. And while it's natural that all of us should remember key lessons from the 2008 financial crisis, today's conditions in automotive subprime bear virtually no resemblance to the mortgage issues that precipitated that fateful bubble. At Dealertrack, our view is that subprime lending today is at a healthy, rational level. We see this type of lending delivering a clear benefit to the economy in enabling more vehicles to be produced and sold and in giving borrowers an opportunity to rebuild their credit faster than nonborrowers. Some recent media articles reflect a generally negative tone about subprime lending, often criticizing the interest rates that subprime borrowers must pay to get credit.

While our industry has seen subprime automotive lending standards ease in recent years, it's in large part because the requirements were so restrictive in the aftermath of the financial crisis. Lenders today use far more rigorous underwriting standards than during the heyday of the credit boom a decade ago. Even the new entrants on the lending scene have access to more relevant data than before to help them make sound decisions. The reality is that subprime loans continue to perform well for lenders, and delinquencies today remain well below precrisis levels.
Source: Automotive News
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VW Board Demanded Piech Go After Learning of Secret Plot

Labor's big role in picking successor

Ferdinand Piech, who resigned as chairman of Volkswagen over the weekend, sowed the seeds of his own demise by reneging on a deal to support CEO Martin Winterkorn and secretly plotting to oust him instead, according to sources close to the VW board. When news leaked out that Piech had been lobbying family members behind the scenes to install Matthias Mueller, the CEO of Porsche, at the helm of VW, the company's powerful works council and its home state of Lower Saxony -- a top shareholder -- decided they had had enough. They demanded a meeting of senior board members -- the second emergency VW summit in a little over a week.
Source: Reuters

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NADA Issues Call for Convention Workshop Proposals

Workshop proposals can be submitted online beginning May 4.
 
The workshops are one of the main attractions at the annual NADA Convention and Expo. More than 17,200 participants, which included new-car dealers, dealership managers and industry professionals, attended the workshop sessions at the past convention. Workshop proposals for the 2016 NADA convention, which will be held in Las Vegas, can be submitted online from May 4 to June 26, 2015. For detailed instructions on how to submit a workshop proposal, visit www.nadaconvention.org.
Source: NADA

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Industry Revels in Good Times But Manages to Avoid Overdoing It

Jeff Williams feels pretty good about the future for the Audi, Volkswagen and Subaru stores he owns on two lots overlooking U.S. Highway 127 [in Lansing, Mich.]. But he can still hold up a hand and tick off reasons to worry. VW doesn't have the small crossovers so many buyers now favor, while Subaru and Audi supplies are tight. Interest rates are bound to edge up, pinching his finances and his customers' purchasing power. And he's convinced that the coming presidential election campaign will bring a lull in sales that will last through early 2017. "It always happens," he warns. "People wait to see the outcome, whichever way it goes, and they put off big purchases." There are many signs suggesting the U.S. auto industry is on a positive, sustainable track, but perhaps the most reassuring sign is the kind of caution Williams espouses. While he's investing generously in his operation to seize on the current boom, he's also thinking about the economic threats around the corner.
Source: Automotive News
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Ford's Sync 3 Debut, Vehicle Launches Are Out of Sync

Meantime, new-car buyers are stuck with old system

The 2015 Ford Edge has been on sale for only a month, but it's already about to be out-of-date. Ford Motor Co. plans to start rolling out Sync 3, its replacement for the MyFord Touch infotainment system, starting this summer. The Edge and many other nameplates will get Sync 3 for the 2016 model year, according to a product guide Ford recently distributed to fleet customers, with the rest of the lineup making the switch by the end of next year. In the meantime, though, Ford dealers are in the position of selling cars and trucks with the old system, which can't be swapped out later on. Shoppers who hold off on buying an Edge, Mustang or Escape just until the 2016s arrive get Sync 3, likely paying the same price they would now.
Source: Automotive News
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Are Automakers Addicted to In-Car Features Overload?

SAE World Congress panel urges a move to simplicity

Automakers are so obsessed with imitating smartphones and other gadgets that they have loaded vehicles with a bewildering array of infotainment features and apps that many customers never use. That was the conclusion of panelists discussing the "In-Car Experience -- What Does the Consumer Really Want?" last week here at the SAE World Congress. The industry must do better with its infotainment and communications controls and displays, they said. "Vehicles on the road today are overladen with tools," said David Lyon, a former General Motors designer who left the company in 2012 to form his own consultancy, Pocketsquare. "Most systems today are trying to look like the Apple iPhone. It doesn't work."
Source: Automotive News
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Quotable

"The reality is that subprime loans continue to perform well for lenders, and delinquencies today remain well below precrisis levels."

    -- Raj Sundaram, co-president of Dealertrack Inc., in a recent commentary in Automotive News, April 27

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