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Inside this issue
Warren's False Claim That 'Auto Dealer Markups Cost Consumers $26 Billion a Year'
5 Things We Learned From April Auto Sales
Barra Says GM Can Earn Better Returns on Its Own Without Merger
Munoz Says Nissan's 10% U.S. Share in Reach
How Auto Dealers Can Get Behind Safer Driving, 1 Teen at a Time
Click here for more auto industry news at NADAFrontPage.com. .
Top Stories
Warren's False Claim That 'Auto Dealer Markups Cost Consumers $26 Billion a Year'

In a recent speech, [Sen. Elizabeth Warren] indicated that she will push Congress to ... allow the CFPB to supervise loans made by car dealers ... We take no position on whether this is necessary — or whether auto dealers should be barred from arranging loans — but we did become curious about a statistic that Warren has frequently cited — that “auto dealer markups cost consumers $26 billion a year." ... How accurate is this $26 billion figure and is Warren describing it correctly?

The CRL report [Warren relies on] is based on 2009 data, in the depths of the financial crisis, and has not been updated. Although the report says that the “total rate markup volume” was $25.8 billion, it does not fully explain how that figure was calculated ... Christopher Kukla, CRL senior vice president, acknowledged that the data used in the report is incomplete. But there’s a bigger problem. The numbers in the CRL report do not match up with the numbers in the NAF survey [that CRL used calculate the “total rate markup volume.”]

But besides citing a faulty number, Warren misleadingly says it represents “auto dealer mark-ups.” The group that produced the report said that figure includes reasonable compensation owed to car dealers. She earns Four Pinocchios.
Source: The Washington Post

Editor’s note: NADA has consistently urged federal regulators to use accurate and transparent data to support policy decisions. NADA supports a bipartisan bill, H.R. 1737, that would rescind the CFPB’s flawed auto finance guidance since the guidance is based on misleading data. The bill would establish a fair process for the agency to issue a new auto finance guidance. NADA urges dealers to call their Democratic Member of Congress (202-225-3121) and request they cosponsor H.R. 1737. See www.nada.org/cfpb for more information.
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5 Things We Learned From April Auto Sales

Helping to drive sales — and lure buyers to spend more on the vehicles — were continued low interest rates. The average retail transaction through the first quarter this year was up more than 3% to $33,189, according to the National Automobile Dealers Association. And it has been low rates — along with record longer loan terms now averaging 67.8 months — that have kept monthly payments down. Good news for the auto industry is that the larger economic trends make low rates look likely for some time to come. Meanwhile, with the average age of vehicles on the road still at about 11 years, there continues to be pent-up demand for new vehicles. And automakers have filled showrooms with a flood of redesigned or refreshed models. "The historically strong spring and summer selling seasons will be driven by new and redesigned vehicles as well as competitive financing rates, which bode well for auto sales over the next several months," said NADA Chief Economist Steven Szakaly.
Source: USA Today
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Barra Says GM Can Earn Better Returns on Its Own Without Merger

General Motors Co. Chief Executive Officer Mary Barra would rather go it alone and prove that her company can make fat returns with its own cars rather than go after a big merger deal. Her plan is to invest in long-held brands such as Chevrolet and Cadillac and make a comeback in struggling markets like South America and Europe. Joining up in a big deal as has been suggested by Fiat Chrysler Automobiles NV CEO Sergio Marchionne? That would be a distraction, she said.
Source: Bloomberg

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Munoz Says Nissan's 10% U.S. Share in Reach

As Nissan Motor Corp.'s North American chairman, Jose Munoz has responsibility for sales, marketing, design, engineering and manufacturing in this region, where the automaker's market penetration is its highest in the world. Nissan has been racking up achievements, with increased sales, increased market share and rising dealer profitability. But Munoz, 49, faces a difficult assignment: He must take Nissan and Infiniti to a combined 10 percent U.S. market share by March 2017, up from 8.4 percent at the end of 2014. Click here to read his interview with Staff Reporter Lindsay Chappell.
Source: Automotive News
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How Auto Dealers Can Get Behind Safer Driving, 1 Teen at a Time

In every city of any size in North America are auto dealers who compete with each other like crazy for new-car sales. Yet these same women and men are quick to set aside any differences and work together for the good of their communities -- when the need arises. This weekend, I experienced a program, born out of tragedy, that is tailor-made for local dealer cooperation. Be Responsible and Keep Everyone Safe, or BRAKES, is a nonprofit and cost-free defensive driving school for teens that was founded by drag racer Doug Herbert. Herbert’s two sons, Jon and James, were killed in a horrific car accident in January 2008 while the teens were driving to a McDonald’s. BRAKES’ goal is one with which all dealers regardless of brand or size can agree: to make teens better drivers by teaching them not just the rules of the road, but vehicle dynamics as well.
Source: Automotive News
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Quotable

"There are enough warning flags in the CRL report — such as its lack of transparency on how the $26 billion number was calculated — that would have given a close reader pause ... But besides citing a faulty number, Warren misleadingly says it represents 'auto dealer mark-ups.' The group that produced the report said that figure includes reasonable compensation owed to car dealers. She earns Four Pinocchios."

    -- Glenn Kessler, in a Washington Post article highlighting Sen. Warren's false claim that auto dealer markups cost consumers $26 billion per year, May 5

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