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September 9, 2015 FacebookTwitterFlickrRSSSEND TO A FRIENDPRINT
Inside this issue
Why U.S. Isn't Ready for a Law That Grounds Vehicles with Open Recalls
AutoNation Won't Sell Cars With Open Safety Recalls
NADA and J.D. Power to Host Automotive Conference in Los Angeles on Nov. 17
Chevy to Limit Availability of 2016 Volt
Carmakers Rapidly Adding Semi-Autonomous Features
GM, Ford Open Factories in China Just in Time for Slowing Growth
Cincinnati Auto Dealers Kick Off Child Passenger Safety Campaign
Top Stories
Why U.S. Isn't Ready for a Law That Grounds Vehicles with Open Recalls
By James B. Treece

AutoNation Inc.’s declaration, announced [September 8], that it won’t sell a vehicle that has an open recall may prompt renewed calls to make that policy the law of the land. Such a law would be a mistake, at least under our current system of government recalls. The idea of prohibiting the sale or rental of cars under recall has been bandied about by consumer advocates at both the federal and state level for some time. The most recent federal attempt, known as the Blumenthal Amendment for the Connecticut senator who sponsored it, was attached to a federal spending bill but didn’t get out of committee before Congress adjourned this summer.

The fundamental problem with the proposed prohibition is that all recalls are not created equal. Not selling a car because it has a defective airbag, or brakes that are known to fail, is one thing. Not selling a truck because it has has a typo in the owner’s manual, or a running board that’s not properly bolted on, is quite another. To insist that a car or SUV burdened by a typo should be parked until it can be fixed would be an outsized burden to place on both the industry and consumers. And how would the government enforce a rule banning private-party sales that don’t go through a dealership?

At the very least, we need a system that rates the severity of recalls, before we discuss whether to prohibit the sale of ones that are genuine safety risks. Only then should Washington try crafting regulations surrounding transactions that involve a vehicle with an unrepaired recall. There are a number of possible approaches to this issue. But until recalls are categorized by the level of safety issue each entails, all of those approaches are false starts.

News Editor James B. Treece oversees Automotive News' coverage of auto retailing and used cars.


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AutoNation Won't Sell Cars With Open Safety Recalls

AutoNation Inc., the largest dealer chain in the U.S. by revenue, said Tuesday it won’t sell or lease any new or used vehicle that has an open safety recall, a move that comes amid a surge in recalls and an unprecedented government crackdown on safety lapses. The National Automobile Dealers Association isn’t backing AutoNation’s move, saying the majority of government-required recalls don’t require or warrant the “drastic step of grounding.” “There is no evidence that a blanket grounding of all used vehicles with open recalls will make the roads or consumers any safer,” NADA said in a statement. “Unduly restricting the delivery of all used vehicles subject to safety recalls will, however, immediately and severely depress the value of consumer trades with unremedied safety recalls, especially when the dealer considering the value of the trade-in is unauthorized or unable to perform the recall remedy.”
Source: The Wall Street Journal

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NADA and J.D. Power to Host Automotive Conference in Los Angeles on Nov. 17



Toyota’s Bill Fay and Audi’s Scott Keogh are the industry keynote speakers at AutoConference LA. The half-day conference, which is hosted by J.D. Power and the National Automobile Dealers Association, begins at 12 p.m. PST on Tuesday, Nov. 17, 2015, at the JW Marriott Los Angeles at L.A. LIVE.

Fay, Toyota division group vice president and general manager at Toyota Motor Sales U.S.A., will discuss the future of mobility. Keogh, president of Audi of America, will discuss the era of disruption and rapid technological advancement in the auto industry, which Audi views as an opportunity rather than a threat.

Steven Szakaly, NADA chief economist, will provide an economic overview and sales forecast for 2016 and discuss the shift in consumer demographics from Baby Boomers to Millennials and its impact on the market. He will also discuss the findings of an NADA-commissioned McKinsey & Company study that can serve as a guide for dealers and automakers to achieve greater collaboration in improving online retailing performance and customer satisfaction in the digital age.

Now in its fourth year, this year’s conference also includes John Humphrey, senior vice president of the global automotive practice at J.D. Power, who will provide key insights into trends impacting the U.S. and California automotive markets.

Alexi Venneri, CEO of Digital Air Strike, will highlight the growing impact of social media on the car shopping experience; AutoNation’s Marc Cannon and Famous Rhodes will discuss the dealership group’s online car buying website, AutoNation Express; and Steve Lind, president of Kelley Blue Book, will participate in a panel session on consumer expectations in online retailing.

The conference precedes press days at the Los Angeles Auto Show and for the first time will be held in conjunction with the Connected Car Expo.

Other speakers include Bill Fox, NADA chairman; Bob Smith, executive director of the Greater Los Angeles Dealers Association; Finbarr O’Neill, J.D. Power president; and Peter Welch, NADA president.

Registration is now open. For more information or to register, visit www.autoconferencela.com.
Source: NADA / J.D. Power

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Chevy to Limit Availability of 2016 Volt

Enhanced 2017 model to launch nationwide in early spring

Chevrolet plans a limited rollout of the redesigned 2016 Volt, earmarking the next-generation plug-in hybrid for California and other green-car friendly markets before a national launch in early spring. The redesigned Volt will be offered for a shortened 2016 model year starting this fall in California, Oregon, parts of the Northeast and some other markets, GM spokesman Mike Albano said. The 2017 Volt will arrive by “early this spring” and will be sold nationally.
Source: Automotive News
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Carmakers Rapidly Adding Semi-Autonomous Features

Fully self-driving cars are a few years into the future. But some of the technology that will make them possible is already here. Automakers are rapidly adding radar- and camera-based systems that can keep a car in its lane, detect pedestrians and brake automatically to avoid a collision. For now, they work with a driver behind the wheel, but eventually, versions of these systems will likely power self-driving cars. Semi-autonomous features used to be confined to luxury cars, but they’re quickly migrating to mainstream brands as technology gets cheaper.
Source: Associated Press
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GM, Ford Open Factories in China Just in Time for Slowing Growth

Auto sales in China are slowing and may fall for the first time in more than a decade, undercutting one of the few growth markets for carmakers like General Motors Co. and Ford Motor Co., according to consulting firm Alix Partners. The U.S. automakers expanded last year to capitalize on long-term growth and are now wrestling with a softer market, AlixPartners said in a study released Wednesday. Carmakers won’t get much relief in China until sales rebound because, even if the market grows this year, prices are under pressure, according to the study. China has gone from being the auto industry’s gold rush to being just like any other market, with slowing growth, pricing battles and some newfound ups and downs.
Source: Bloomberg
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Cincinnati Auto Dealers Kick Off Child Passenger Safety Campaign


The Greater Cincinnati Auto Dealers Association recently launched its child passenger safety campaign at an event held at Planet Snoopy, a destination for children at Kings Island amusement and water park in Mason, Ohio.

The Greater Cincinnati Automobile Dealers Association launched its annual SAFE TRAVEL FOR KIDS!! Campaign, which promotes child passenger safety. For the third consecutive year, GCADA has partnered with Cincinnati Children’s Hospital Medical Center and Evenflo, to promote National Child Passenger Safety Month in September. This year, GCADA and its partners are reminding parents and caregivers to register their child’s car seat with its manufacturer. Although child restraint systems undergo rigorous testing and evaluation, it’s still possible that a car seat or booster seat could be recalled. The worst part? The manufacturer cannot contact a caregiver in the event of a recall if the child safety seat has not been registered.
Source: GCADA

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Quotable
“Unduly restricting the delivery of all used vehicles subject to safety recalls will, however, immediately and severely depress the value of consumer trades with unremedied safety recalls, especially when the dealer considering the value of the trade-in is unauthorized or unable to perform the recall remedy. Indeed, AutoNation’s own announcement confirms that grounding all recalled vehicles will entail significant costs."

   -- NADA in a statement on AutoNation's decision to stop the sale of any vehicle with an open safety recall, The Wall Street Journal, Sept. 8

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