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Inside this issue
Overtime Plan Might Impact Dealers
Fiat Chrysler CEO Sees Possible Merger Partners Other Than Reluctant General Motors
IRS Information Reporting Penalties Increased
Nissan Will Boost Rogue Production by 100K Units, Add Two Variants
With Hydrogen, High Pressure to Get It Right
Scion Aims for the 1-Hour Deal
Luxury Brands Have Great Cars and Great Salespeople
Minority Dealers Association Celebrates 35th Year
Click here for more auto industry news at NADAFrontPage.com. .
Top Stories
Overtime Plan Might Impact Dealers

White-collar workers such as managers are exempt from overtime pay if they make a salary-based compensation of more than $455 a week, or $23,660 a year. But President Obama wants to change the overtime rules. His proposal would more than double that salary floor to $970 a week, or $50,440 a year. Doing so would expand the number of workers eligible for overtime from about 8 percent of the salaried work force to about 40 percent, covering 5 million more workers in the first year of its implementation, according to the U.S. Department of Labor. The department explains the rationale behind the proposal on its website, at dol.gov/featured/overtime.

“We’ll take a look at who at dealerships fall between those two numbers and how the pay plans might be impacted,” said Douglas Greenhaus, chief regulatory counsel for environment, health and safety with the National Automobile Dealers Association in McLean, Va. “Both the dealer and the employees may be impacted in a negative way.” That’s because many dealership employees prefer that a certain percentage of their compensation be salary. The dealer might have to reduce that salary amount to achieve overtime exemption, he said.
Source: Automotive News

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Fiat Chrysler CEO Sees Possible Merger Partners Other Than Reluctant General Motors

But Sergio Marchionne says others would make for less-optimal automotive combinations

Fiat Chrysler Automobiles N.V. ’s Chief Executive Sergio Marchionne said on Friday that potential merger partners other than rival General Motors Co. exist as a way for the auto maker to lower costs by boosting production. But the executive wouldn’t say if his company is pursuing them. Fiat Chrysler has approached GM twice since 2012 about a possible partnership, believing this tie-up over any others would generate the biggest cost savings. GM has rebuffed each overture. Mr. Marchionne believes the auto sector needs to consolidate to absorb rising costs the industry faces from increased fuel-economy regulations, stringent automobile safety mandates and the prospect of new competition from technology giants such as Apple Inc. and Google Inc. But GM has argued it already has sufficient scale to absorb these costs and aims to achieve returns on invested capital of more than 20%.
Source: The Wall Street Journal

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IRS Information Reporting Penalties Increased

A little-noticed offset provision buried deep within the recently enacted “Trade Preferences Act of 2015” has doubled the IRS’s information reporting penalties from $100 to $250 per failure for each incorrect information return filed with the IRS and each copy sent to the payee or recipient. In addition, the new law doubles the annual maximum penalty that can be imposed on a filer (other than for cases of intentional disregard) from an annual limit of $1.5 million to an annual limit of $3 million for each penalty or $6 million total. The new penalty amounts apply to information returns filed after December 31, 2015.
Source: Miller & Chevalier Chartered
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Nissan Will Boost Rogue Production by 100K Units, Add Two Variants

Nissan moved last week to give U.S. dealers more of one of its hottest selling products by tapping Japan for 100,000 more Rogues a year, starting next year. That will give Nissan the potential to sell more than 300,000 a year of the compact crossovers in the U.S.; slightly more than half that number were sold just two years ago. At the same time, two sources familiar with Nissan's future product plans say Nissan plans other significant changes to the Rogue lineup.
Source: Automotive News
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With Hydrogen, High Pressure to Get It Right

Toyota, dealer handle the Mirai launch with an extra level of care

For the first time in his 39-year career in the car business, Mike Sullivan has a car he isn't trying to sell. Sullivan's Toyota Santa Monica dealership is one of just eight stores in California chosen by Toyota to sell the Mirai, a sedan that's powered by hydrogen fuel and promises a 312-mile range. But with the rare opportunity to sell such an innovative car comes the added pressure of not bungling a crucial new product for Toyota. Volume isn't the challenge. Toyota hopes to sell only about 3,000 Mirais nationally by the end of 2017. After the initial eight stores in California get the sales process up and running, additional stores in the Northeast could start selling the car as early as 2016. But as the first hydrogen-fueled production car available for purchase, the Mirai does put an extra burden on dealers: The people who buy one need to love the experience and essentially serve as ambassadors for a zero-emissions technology that's not well understood.
Source: Automotive News
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Scion Aims for the 1-Hour Deal

Buying a car in one hour is seen as the Holy Grail to some auto brands, impossible to others. Scion is on the former team. As the Toyota youth brand continues to set its sights on making the buying process more streamlined, it has a pilot program going dubbed Pure Process Plus that is targeting the 60-minute sale. “We know a lot of manufacturers are working on this, but we think we’re pretty close and we’ve got a pretty good solution on it,” Doug Murtha, Scion vice president, tells media at an event for the upcoming iA and iM small cars. The program, in a pilot phase at 16 of Scion’s 1,004 U.S. dealerships but which will roll out nationally early next year, “enables a customer to bring as much of the purchase process into their living room as they choose,” Murtha says.
Source: WardsAuto
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Luxury Brands Have Great Cars and Great Salespeople

Why do Mercedes-Benz, BMW and Lexus rank 1-2-3 in U.S. luxury-brand sales? Reasons vary. But one of them is that their dealership salespeople are real pros. And a reason for that is their staff retention rates are high, meaning good people stick around. And they do so because they’re earning a good living from healthy margins on premium cars. “It boils down to profitability,” says Fran O’Hagan, head of Piped Piper Management, a consulting company that works with automakers and dealers and issues an index that ranks dealership sales effectiveness by brand.
Source: WardsAuto
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Minority Dealers Association Celebrates 35th Year

The National Association of Minority Automobile Dealers celebrated its 35th birthday [last] week at its annual conference. Dealers -- 345 of them -- and 395 of their friends, family and associates showed up to conduct some business, pay homage to the group’s past and celebrate its future. Representatives of several manufacturers were on hand to publicly outline the state of their minority dealer efforts and to hold private one-on-one meetings with dealers, former dealers, aspiring dealers and dealership managers, all of whom want to acquire dealerships.
Source: Automotive News
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Quotable
"The important thing is to maintain as much as possible the flexibility for the employer and employee on how to compensate."

    -- Douglas Greenhaus, NADA chief regulatory counsel for environment, health and safety, commenting on a proposal that would change overtime pay rules, Automotive News, July 12

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