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Inside this issue
Toyota Financial Resists CFPB
AFSA Questions Leak of Confidential Vehicle Finance Discussions
SUVs, Muscle Cars Help Auto Industry Maintain Momentum
Honda Chief: Product Development Needs More Time for Quality
Automakers Say They're Open to Outside Dealership Investors, Despite Skepticism
Detroit's Cars Rule the Heartland, But Not the Coasts
Click here for more auto industry news at NADAFrontPage.com. .
Top Stories
Toyota Financial Resists CFPB

Toyota Financial Services said it has no plans to change its use of dealer reserve despite scrutiny from the Consumer Financial Protection Bureau. The bureau plans to cite Toyota Motor Credit Corp. and its Toyota Financial Services arm, American Honda Finance Corp. and Nissan Motor Acceptance Corp. as early as this month for unintentional discrimination, according to documents obtained by American Banker. Investigations into all three lenders began in 2013. All three automakers confirmed that they have been in discussions with the CFPB and the Justice Department. Toyota Financial "currently has no plans to change our pricing model," the company told Automotive News. "We look forward to continuing to work with [regulators] in pursuit of an outcome that serves the best interests of consumers while preserving auto finance providers' ability to compete."
Source: Automotive News

Editor's note: To download NADA's Fair Credit Compliance Policy & Program, click here.
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AFSA Questions Leak of Confidential Vehicle Finance Discussions

On June 30, the American Banker reported that the Consumer Financial Protection Bureau (CFPB) was in the process of finalizing consent orders with American Honda Finance Corp., Toyota Motor Credit Corp., and Nissan Motor Acceptance Corp. for unintentional discrimination, otherwise known as disparate impact. As reported, the consent orders would require remuneration to some consumers, but would forego civil money penalties.

AFSA questions the validity of the details reported by American Banker as no consent orders have been finalized and the documents that the newspaper “obtained” are part of ongoing discussions.

More importantly, AFSA questions how the American Banker obtained confidential documents regarding sensitive business information that has in no way been finalized. Companies are assured – in writing – that any negotiations that are conducted with the CFPB are confidential. Yet a leak occurred somewhere as evidenced by the proposed settlement details making it to the press.

AFSA is disturbed by the egregious release of private information, quite possibly by a federal agency, and will press for an examination of this leak of confidential, market-moving information.
Source: AFSA
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SUVs, Muscle Cars Help Auto Industry Maintain Momentum

Americans again bought vehicles that sit up high and come loaded with features like backup cameras and smartphone capabilities in June. Horsepower was also in; gas-sipping not so much. SUVs of all size continued to fly off dealer lots. Sales of the larger Ford Explorer rose 30 percent, Nissan’s small SUV Rogue posted a 54 percent jump, and sales of the Jeep Cherokee gained 39 percent. Total sales rose 3.9 percent over last June to 1.48 million, according to Autodata Corp. For the first half of the year, sales gained 4.4 percent to 8.5 million. Buoyed by the momentum, the National Automobile Dealers Association last week raised its full-year sales forecast to 17.2 million vehicles from just under 17 million. The last time auto sales topped 17 million was in 2001.
Source: Associated Press

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Honda Chief: Product Development Needs More Time for Quality

To illustrate his vision for a turnaround at recall-slammed Honda, Takahiro Hachigo, the new chief executive, showed video footage set to a light-hearted 50s-style rock music of happy people with Honda products, like a lawn mower and the Asimo walking robot. But that kind of almost nostalgic look back was close to summarizing what he offered. "I believe in the power of Honda people," he told a packed news conference at Honda Motor Co.'s Tokyo headquarters Monday, after his appointment as CEO and president was approved by shareholders and the company board.
Source: Associated Press

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Automakers Say They're Open to Outside Dealership Investors, Despite Skepticism

Automakers historically have been loath to approve the sale of dealerships to investors from outside the industry, particularly to untested private equity groups with short-term financial horizons. But some automakers insist they are willing to take a chance on outside investors — provided they have a long-term focus and tap people with substantial dealership operation experience. Domestic-brand automakers are most receptive to outsiders, according to buyers and dealer advisers. But even the automakers considered to be resistant to newcomers say they are listening.
Source: Automotive News
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Detroit's Cars Rule the Heartland, But Not the Coasts

In the heartland, American cars rule, a new survey finds. On the coasts, it's import models. In fact, San Francisco and nearby San Jose have the strongest preference for both Asian and European car models, and the least interest in models from Detroit's Big 3, says the survey conducted by CarGurus.com, a Cambridge, Mass.-based online car shopping information site. At least metro Detroit is loyal to those Big 3. It's the town where where interest is highest in models from General Motors, Ford and Fiat Chrysler, followed by heartland bastions like Oklahoma City, St. Louis, Indianapolis and Pittsburgh. At the same time, Detroiters are also the least likely to drive Toyota, Nissan, Honda, Mazda, Subaru or Mitsubishi models, which account for 15% of the local market, the only out of 51 metro areas where Japanese automakers have less than 29%. CarGurus surveyed dealers over the past month, comparing share of interest by brand (American, European and Asian) in each metro area.
Source: Detroit Free Press
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Quotable
Toyota Financial "currently has no plans to change our pricing model. We look forward to continuing to work with [regulators] in pursuit of an outcome that serves the best interests of consumers while preserving auto finance providers' ability to compete."

    -- Toyota Financial in a statement on how it has no plans to change its use of dealer reserve despite scrutiny from the CFPB, Automotive News, July 6

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