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Inside this issue
WSJ Editorial: The Washington War on Car Dealers
FCA Dealer Incentives at Risk
Mitsubishi Plans to Move Forward with U.S. Sales, But Experts Wonder
New Driven Management Guide on CRM Posted to NADA University Online
Luxury Titans: A Case of Too Much Variety?
Can Inventory Hubs Aid Small Caddy Stores?
California Has a Plan to End the Auto Industry as We Know It
Donor Gives CPR Equipment
Top Stories
WSJ Editorial: The Washington War on Car Dealers

Dodd-Frank’s new consumer bureau sparks a bipartisan backlash.

It’s been a tough few days for Washington’s least accountable regulator. First a unanimous federal appeals-court panel allowed a constitutional challenge to the Consumer Financial Protection Bureau. Then the House Financial Services Committee voted last week 47-10 to rein in one of the bureau’s misguided assaults on American business... Since this is the Obama Administration and since the bureau was staffed by Elizabeth Warren before her election to the Senate, the activists who run the place are also less concerned with legal niceties than with sticking it to business. So they skipped normal federal rule-making procedures, including allowing public comment on a draft regulation, before warning auto lenders that allowing dealers to exercise discretion presented “a significant risk” of “pricing disparities on the basis of race” and therefore potential legal violations.

All of this has proven too much even for many House Democrats. “A formal policy change should be done through the rule-making process,” says a spokeswoman for Rep. Ed Perlmutter (D., Colo.), one of 55 Democratic co-sponsors of a bill to nullify the 2013 bureau guidance.

The bill, which is now headed to the House floor, would require the bureau to allow public comment and publish its data and analysis online before issuing new rules on auto financing. It would also require the agency to study the costs of such guidance for consumers as well as for small businesses and other affected enterprises. All of this ought to be the bare minimum for any Washington regulator, but with the rogue consumer bureau it requires a new act of Congress. Behold the practical damage of Warrenism.
Source> The Wall Street Journal

Editor's note: The passage of H.R. 1737 was a major step forward for consumers and dealers and represents one of the first successful bipartisan efforts to push back against government overreach in the highly competitive auto lending market. Click here to see the committee vote. Please thank members of Congress who voted in favor of H.R. 1737.

NADA will continue its strong grassroots advocacy for CFPB reform on behalf of dealers and will press to have H.R. 1737 considered by the full House later this year. Dealers should keep building congressional support for this measure, particularly while Congress is home for the August recess. Click
here for a list of H.R. 1737 cosponsors. Click here for NADA's issue brief, and visit www.nada.org/cfpb for more information.

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FCA Dealer Incentives at Risk

Fiat Chrysler dealers stand to lose incentive dollars from the automaker if they sell used cars with open, unrepaired recalls under a new policy ordered by U.S. regulators. The policy is outlined in the 36-page consent agreement between Fiat Chrysler and the National Highway Traffic Safety Administration, imposed July 24 for violations of U.S. auto safety laws tied to 23 FCA recalls. According to the agreement, FCA US must "develop and implement a process to deter dealer sales of unremedied vehicles subject to a recall." That will include training to reinforce FCA's existing policy against selling cars with open recalls. It also calls for "imposing a financial penalty ... and/or prohibiting any dealer from receiving any incentive from FCA US, if the dealer sells an unremedied recalled vehicle regardless of whether new or used." It's illegal to sell new cars with open recalls, but no such law exists for used cars.

Dealer groups have opposed recent legislation introduced to ban the sale of used cars with unrepaired recalls. The National Automobile Dealers Association said one such bill recently proposed by U.S. Sen. Richard Blumenthal, D-Conn., would diminish the value of millions of used cars and ground vehicles recalled for minor compliance issues such as a typo in an owner's manual.

Details of how the policy will work are still unclear. A Fiat Chrysler spokesman said the automaker was still developing the policy in the days after the consent order with NHTSA was announced last week and said dealers would be briefed when it was finalized. 
Source: Automotive News
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Mitsubishi Plans to Move Forward with U.S. Sales, But Experts Wonder

Three years after assigning the task of building crossovers to its only North American assembly plant, the Japanese automaker closed up shop, deciding instead to import all of its U.S.-bound cars from across the Pacific. This might sound like Mitsubishi Motors Corp., which will end production in November at the Normal, Ill., factory that has built the Outlander Sport crossover since 2012. But in this case, the company was Suzuki Motor Co., which made a near-identical decision in 2009 with its XL7 crossover. Three years later, its product lineup decimated and its dealer body thinned by attrition, Suzuki abandoned the U.S. for four-wheelers. Mitsubishi's situation differs greatly from Suzuki's. Yet this history, fresh in the minds of auto industry veterans, led to skepticism last week as Mitsubishi President Tetsuro Aikawa insisted the company still sees the U.S. as a growth market.
Source: Automotive News
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New Driven Management Guide on CRM Posted to NADA University Online

Automotive Customer Relationship Management (CRM) systems connect the revenue-critical business functions of marketing, sales and fixed operations in your dealership. The new Dealer Guide to Automotive CRM contains basic information for use during vendor selection, system installation, training and maintenance. The guide discusses the goals and driving forces in the automotive CRM market, as well as CRM core functionality and some future CRM applications. Intended for dealers and general managers, this Driven guide is complimentary to members. Sign in to www.nadauniversity.com and search for CR8.
Source: NADA University Online
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Luxury Titans: A Case of Too Much Variety?

German brands add vehicles to pad profits

BMW is renowned for sporty rear-wheel-drive sedans. But its front-wheel-drive 2-series Gran Tourer seats seven and needs only a sliding door to be a full-blown minivan. Meanwhile, Mercedes-Benz may need to change its slogan to "engineered like no other [Japanese] truck in the world" when it begins building a luxury pickup based on a Nissan Frontier chassis before the end of the decade. In their quest to boost sales and achieve double-digit profit margins, Germany's premium carmakers are divvying segments into even — thinner slices. In the process, they are stretching their brands figuratively — and their cars literally — in ways previously unimaginable.
Source: Automotive News
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Can Inventory Hubs Aid Small Caddy Stores?

Brand mulls regional centers to help keep supplies fresh

A long effort to whack away at Cadillac's swollen vehicle inventory culminated last month with the brand's trimmest levels in four-and-a-half years. Cadillac chief Johan de Nysschen was pleased with the 77-day supply as of July 1, down from 113 days a year earlier. But he doubts he can get down to his preferred target of about 60 days, a level at which Cadillac's luxury rivals tend to stick. The reason: About 500 of the brand's 928 dealerships sell relatively few Cadillacs — just five to 10 a month on average, de Nysschen said. Those stores are focused on selling Chevrolets or Buicks, for example, and more likely to allow their Cadillac inventory to get stale, he says. De Nysschen said Cadillac is considering a solution: "Centralized regional inventory hubs," which those smaller dealerships could call on when needed.
Source: Automotive News
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California Has a Plan to End the Auto Industry as We Know It

Mary Nichols, the California regulator who showed the world how to clean up smog, is pushing for all cars to be electric. Sergio Marchionne had a funny thing to say about the $32,500 battery-powered Fiat 500e that his company markets in California as “eco-chic.” “I hope you don’t buy it,” he told his audience at a think tank in Washington in May 2014. He said he loses $14,000 on every 500e he sells and only produces the cars because state rules re­quire it. Marchionne, who took over the bailed-out Chrysler in 2009 to form Fiat Chrysler Automobiles, warned that if all he could sell were electric vehicles, he would be right back looking for another government rescue.

So who’s forcing Marchionne and all the other major automakers to sell mostly money-losing electric vehicles? More than any other person, it’s Mary Nichols. She’s run the California Air Resources Board since 2007, championing the state’s zero-emission-vehicle quotas and backing Pres­ident Barack Obama’s national mandate to double average fuel economy to 55 miles per gallon by 2025.
Source: Bloomberg
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Donor Gives CPR Equipment

A training program at O’Connor Hospital in Delhi [N.Y.] has been “greatly enhanced,” thanks to a contribution by Delhi Motor Co. Inc., local officials said. The Delhi Motor Co., in partnership with the National Automobile Dealers Charitable Foundation, presented the Bassett Healthcare Network hospital with four “Resusci Anne” CPR units, according to a media release. The cardiopulmonary resuscitation units were presented during the hospital’s O’Connor Hospital Board of Trustees meeting in July.
Source: The Daily Star (Oneonta, N.Y.)
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More Articles
 
Quotable
"A formal policy change should be done through the rule-making process."

   
-- Spokeswoman for Rep. Ed Perlmutter (D., Colo.) on his legislation to nullify the CFPB's 2013 guidance on auto financing, The Wall Street Journal, Aug. 2 

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