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Inside this issue
National Review: Made-Up Mark-Ups
U.S. Auto Industry Develops a Weak Spot
CUV U.S. Sales Hurtling to 5 Million Units in 2015
VW Group to Be Revamped Into Four Holding Companies, Report Says
GM to Return to U.S. Medium-Truck Market
Buy-Sells Are Strong, But What's Ahead?
After Smooth 1st Year, Ford's Fields Faces 'Breakthrough' Challenge
Cox Automotive Buys Dealertrack for About $4 Billion in Cash
Click here for more auto industry news at NADAFrontPage.com. .
Top Stories
National Review: Made-Up Mark-Ups
by Ramesh Ponnuru

The New York Times editorializes in favor of a crackdown on auto loans (which I wrote about here): “A report by the Center for Responsible Lending estimated that dealer markups on loans made in 2009 would cost consumers an additional $25.8 billion over the lives of their loans.” Glenn Kessler, a Washington Post fact-checker, took a look at that figure a few weeks ago, after Senator Elizabeth Warren cited it. Turns out it’s completely worthless, a fake statistic. Kessler tweeted that he thought “nobody serious would use that stat” after his debunking. Nobody serious did.
Source: National Review

Editor's note: Ramesh Ponnuru is a senior editor for National Review, a columnist for Bloomberg View, and a visiting fellow at the American Enterprise Institute.
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U.S. Auto Industry Develops a Weak Spot

Demand for bread-and-butter cars softens as gas prices fall

The U.S. auto industry is on a roll by most accounts, with industry volume sizzling and profits riding high on a SUV and pickup-truck boom. There is a weak spot, however. Retail demand for bread-and-butter passenger cars, such as the Toyota Camry and Chevrolet Cruze, has softened amid lower gasoline prices. This is leading high-volume auto makers to send more of these types of cars to rental car fleets, a practice that keeps production lines humming but can dent resale values and clip margins.
Source: The Wall Street Journal

 
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CUV U.S. Sales Hurtling to 5 Million Units in 2015

Burgeoning demand for CUVs, plus the growing number of available models, is virtually turning the segment group into a third light-vehicle type along with cars and trucks. If current trends continue, U.S. CUV sales will top 5 million units this year, well above 2014’s 4.4 million, and more than double the volume of 10 years ago. CUV segments run the gamut: small, midsize and large, with a luxury sibling for each one of those sectors. Year-to-date demand for all six segments is running ahead of year-ago, with market share up for all except Large Luxury, which is flat. A continuation of relatively lower fuel prices, new products and overall growth in the market easily will carry the segment group to new records this year.
Source: WardsAuto
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VW Group to Be Revamped Into Four Holding Companies, Report Says

Volkswagen's corporate structure will be reorganized into a decentralized system with four holding companies for the group's 12 brands, a German paper said, citing company sources. Former BMW manager Herbert Diess will be in charge of the holding company that will include the VW, Skoda and Seat passenger car brands, the business daily Handelsblatt said in a report. The high costs of the German factories in VW's core business is an area with the biggest need for reform, the paper said. The reorganization would overturn former VW Chairman Ferdinand Piech's strategy of giving individual brands autonomy to encourage competition between them.
Source: Reuters
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GM to Return to U.S. Medium-Truck Market

U.S. auto maker will form joint venture with Japan’s Isuzu Motors

General Motors Co. is poised to re-enter the growing and potentially lucrative U.S. market for medium-duty work trucks, an area it abandoned during its restructuring last decade. The Detroit auto giant will team up with Japan’s Isuzu Motors Ltd. to procure work trucks to be sold in the U.S. under the Chevrolet brand. GM and Isuzu have worked together for decades. While Isuzu will build the vehicles, the No. 1 U.S. auto maker in terms of sales will rely on the GM dealer network and its reputation as a truck company to lay claim to a medium-duty market that has grown 3.5% in 2015. GM will begin taking the Isuzu-built N-series truck and putting a Chevrolet brand on it soon, according to dealers briefed on the plan. GM will unveil the partnership Monday in a move likely to be well-received by a U.S. dealer body clamoring for more work trucks to sell amid stronger economic conditions.
Source: The Wall Street Journal

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Buy-Sells Are Strong, But What's Ahead?

Forecasts are mixed for rest of the year

Expect dealership buy-sell activity to taper off this year, a report says. Or not, says another. Buyers are still paying high prices for certain brands and sellers are still coming to market, but buy-sell activity is slowing after three years of growth, said the Haig Report for the first quarter from Haig Partners, a dealership buy-sell advisory firm in Fort Lauderdale, Fla. "The buy-sell market remains robust, although it may begin to level off in 2015 from the rapid growth of the past few years," Alan Haig, president of Haig Partners, wrote.
Source: Automotive News
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After Smooth 1st Year, Ford's Fields Faces 'Breakthrough' Challenge

In his first year as CEO, Mark Fields has elevated Ford Motor Co.'s commitment to Lincoln, ensured successful launches of important vehicles and stressed the need to think long term in a rapidly changing industry. But Fields' most impressive accomplishment to date might just be that he replaced one of the most revered executives in automotive history, Alan Mulally, while generating barely a ripple among investors, dealers and employees. It's at this point, as the July 1 anniversary of the transition approaches, that Fields begins to face bigger challenges. Analysts are looking for Fields to make good on the "breakthrough year" he has promised, and Ford's performance will become more attributable to Fields' leadership than the plans Mulally had put in motion.
Source: Automotive News
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Cox Automotive Buys Dealertrack for About $4 Billion in Cash

Cox Automotive Inc., a unit of closely held Cox Enterprises, is buying Dealertrack Technologies Inc., which supplies software services for vehicle retailers, for $4 billion to add to businesses that include Kelley Blue Book, AutoTrader and auction company Manheim.
Source: Bloomberg
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More Articles
 
Quotable
"Eek, I thought no one serious would use that stat."

    -- Washington Post Fact Checker Glenn Kessler, on Twitter in response to a New York Times editorial citing a debunked statistic on "dealer mark-ups," National Review, June 15

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