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Inside this issue
More FTC and Less Dodd-Frank for the Auto Lending Industry
Fiat Chrysler, Ford Report Modest Sales Gains in April
Mitsubishi is On a Roll in the U.S. Market
Buyers' Market For Off-Lease Cars and Trucks Right Around the Corner
VW Fills Vacant Board Seats with Ex-Chairman's Nieces
Restoring Old Cars is a Big New Business That is Short of New Blood
Click here for more auto industry news at NADAFrontPage.com. .
Top Stories
More FTC and Less Dodd-Frank for the Auto Lending Industry
By Joe Colangelo, contributor

Sen. Elizabeth Warren (D-Mass.) recently announced that she wants the Consumer Financial Protection Bureau (CFPB) to apply the Dodd-Frank Act to automotive dealers, who are issuing higher numbers of subprime loans in recent years for higher credit risk consumers. Although Warren's intentions to reign in the subprime vehicle market before it affects our slowly recovering economy, the unintended consequences could be as bad – or worse – than the current lending climate.

The auto-lending industry is not the same as the mortgage industry. Our country already has a world of regulations governing both. It is less likely that subprime loans will tank the U.S. economy, since they represent a smaller fraction of the lending market. The industry already has oversight through the Federal Trade Commission (FTC).... Using Dodd-Frank to oversee this small industry could create a variety of unintended consequences. Most likely and damaging would be stopping those consumers with worse credit from obtaining auto financing and obtaining an automobile and the freedom that comes with it. For the working poor, the ability to drive can mean the difference between keeping and losing a job.

There is no doubt that bad actors in the auto-loan industry need to be policed. But instead of putting the industry under the regulation of CFPB, the FTC needs to be held accountable for their job of holding auto-lenders accountable and enforcing existing statutes governing lending. The FTC has the teeth, financial ability and mandate to prosecute dealers who cheat their customers. When the FTC does its job, the vast regulatory framework already governing auto lending will do its job, too. The FTC doing its job will help avoid many of the unintended consequences of Dodd-Frank on the auto-lending industry. Although Warren's intention to protect the public and the economy from another subprime mess may be honorable, it is misguided and may be a case of the cure being worse than the disease.
Source: The Hill

Colangelo is the executive director of Consumers' Research. Consumers' Research was founded in 1929 as a product-testing and consumer advocacy organization and publishes a bimonthly magazine on consumer topics.

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Fiat Chrysler, Ford Report Modest Sales Gains in April

Fiat Chrysler Automobiles and Ford Motor Co. on Friday reported single-digit sales gains in April, led by truck and utility vehicle sales. FCA US reported sales last month were up 5.8 percent compared to April 2014. Ford sales were up 5.4 percent. Automakers are expected to have sold about 1.46 million new cars and trucks last month, up at least 5 percent from a year ago and the best four-month start for sales since 2001.
Source: The Detroit News
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Mitsubishi is On a Roll in the U.S. Market

A high-ranking Toyota executive from Japan visiting New York once told me years ago that what kept him up at night was the idea that Mitsubishi – a giant, formidable competitor in the rest of the world – might one day “get serious about selling cars in the United States.” Mitsubishi Motors might not be threatening Toyota in the U.S. market just yet, but the feisty Mitsubishi brand has got sales numbers moving in the right direction in the United States, plus a brand-new version of its former best-seller, the Outlander model. “We are well positioned to sustain our growth,” said Don Swearingen, Mitsubishi Motors North America Inc. executive vice president ... Mitsubishi sales have been a rollercoaster ride in the United States, but the most recent figures are on the upswing. For the first quarter, U.S. sales were 23,790, up 19.9 percent, according to AutoData Corp.
Source: Forbes
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Buyers' Market For Off-Lease Cars and Trucks Right Around the Corner

There’s a buyers’ market brewing in “nearly new” off-lease cars and trucks. Leasing tanked in the Great Recession, but leasing is back. Many auto lenders cut back or even quit leasing entirely in the recession, because they were reluctant to take a chance on how much cars and trucks would be worth when they came back at lease end. As the recession ended, lenders realized it was safe to get back in the leasing water. In fact, many lenders actually made money for a change reselling off-lease vehicles because scarcity made them more valuable. Lease volumes slowly started to recover in 2010. Growth was really substantial in 2012 and 2013, and today leasing is at or near record levels.
Source: Forbes
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VW Fills Vacant Board Seats with Ex-Chairman's Nieces

Volkswagen AG appointed two nieces of Ferdinand Piech to the supervisory board, maintaining the Porsche-Piech clan’s control of Europe’s largest automaker and all but ruling out that an outsider becomes the next chairman. Julia Kuhn-Piech, 34, and Louise Kiesling, 57, will fill the seats left open by Piech and his wife Ursula, who both resigned on Saturday after a power struggle. The appointments take effect immediately, the Wolfsburg-based company said Thursday in a statement. With the new board members, the family once again occupies half of the 10 seats on the investor side of the board, which will propose a successor to Ferdinand Piech as chairman.
Source: The Detroit News
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Restoring Old Cars is a Big New Business That is Short of New Blood

You might not think so, looking at glitzy, million-dollar auctions on cable TV, but classic car restoration is in danger of becoming a lost art, according to David Madeira, president and CEO of Tacoma, Washington-based America’s Car Museum. “The machines are incredibly hard to find, but the skills are even harder to find,” he said. “We hear from collectors all the time, ‘Who’s going to work on my car?’”  The [museum's] program is called the Hagerty Education Program at America’s Car Museum. It provides grants to fund educational programs, scholarships, paid internships and apprenticeships for 18- to 25-year olds.
Source: Forbes
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Quotable

"We are well positioned to sustain our growth." 

    -- Don Swearingen, Mitsubishi Motors North America Inc. executive vice president, commenting on the automaker's increase in sales in the U.S., Forbes, April 30

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