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September 23, 2015 FacebookTwitterFlickrRSSSEND TO A FRIENDPRINT
Inside this issue
New CAR Study: Contribution of New-Car Dealerships to the Economies of All 50 States and the United States
Editorial: Obama Extorting Auto Lenders, CFPB Memos Prove
Volkswagen Offers U.S. Dealers Financial Assistance
FTC Urged to Investigate VW Diesel Advertising Claims
VW Emissions Cheating Affects 11 Million Cars Worldwide
Keyes Hyundai in Los Angeles Added to Growing Collection of Hyundai Tucson Fuel Cell Dealers
Top Stories
New CAR Study: Contribution of New-Car Dealerships to the Economies of All 50 States and the United States

For every worker employed at new-car dealerships, there are another 1.2 spin-off jobs in the U.S. economy, according to a newly-released study, from the Center for Automotive Research (CAR), an Ann Arbor-based research organization. The CAR study, Contribution of New-Car Dealerships to the Economies of All 50 States and the United States, highlights the economic impact of U.S. new-car dealerships—from employment data, taxes collected or generated by dealerships to taxes paid by employees—at the state and national level. Among the key findings, new-car dealerships directly provided and supported more than 2.2 million private-sector jobs in the United States totaling $144 billion in employee compensation in 2014. Click here for the study.
Source: Center for Automotive Research

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Editorial: Obama Extorting Auto Lenders, CFPB Memos Prove

Politics: If any doubts remain that the Obama administration is shaking down auto lenders, newly uncovered Consumer Financial Protection memos put them to rest. It's time for Congress to step in and stop this federal extortion. In a series of internal documents obtained by American Banker magazine, Consumer Financial Protection Bureau officials acknowledge that the "disparate impact" and "proxy" methodology used to investigate car lenders for racial bias hypes the evidence. Yet they say they prefer that to underestimating bias. The documents reveal that agency prosecutors overstated discrimination in probes of Ally Bank, Honda and other defendants in the $900 billion auto finance industry. The CFPB claims to have "statistical evidence" showing car lenders and dealers marking up loan prices for minorities vs. whites. But lenders and dealers insist that neutral factors such as credit history and rate-shopping explain any racial disparities in loan pricing.

But recently uncovered documents show that the assumptions that Obama's race bullies make while sifting through the limited auto loan data are even wilder than the ones they make against mortgage lenders, which already have forked over $100 billion to the government. However, the auto data don't even include the applicant's race. So investigators use surnames to identify their ethnicity. Such "proxies" are notoriously unreliable and lead to overcounting of "victims." Not only does CFPB guess about the qualifications of the applicants they're comparing, it also makes faulty assumptions about the actual race of those applicants. That's a lot of speculation for something as serious as racism. Lacking hard evidence to support their discrimination claims, they show no concern about charging people with something that they didn't necessarily do.
Source: Investor's Business Daily


Editor’s note:
This article highlights the need for the transparency that "public notice and comment" would provide if H.R. 1737 were enacted. That process, combined with the NADA-NAMAD-AIADA Fair Credit Compliance Policy & Program (based on a Justice Department approach), would identify the most effective tools to address fair credit concerns without increasing the cost of auto financing for consumers.  

In July, the House Financial Services Committee passed NADA-backed H.R. 1737 to rescind the CFPB’s flawed auto finance guidance that would limit or eliminate a customer’s ability to receive a discounted auto loan in the showroom. The bill, which passed by a bipartisan vote of 47-10, has increased momentum with 133 cosponsors (76 Republicans and 57 Democrats). H.R. 1737 will likely come up for a vote on the floor of the House of Representatives this fall. NADA is urging dealers to contact their Democratic House members and ask them to cosponsor H.R. 1737, and support H.R. 1737 when it comes to the floor for a vote. 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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Volkswagen Offers U.S. Dealers Financial Assistance

Volkswagen of America has rolled out a series of financial assistance programs to compensate its U.S. dealers amid the company’s diesel emissions scandal. According to a Sept. 21 memo to dealers from Volkswagen’s U.S. chief Michael Horn obtained by Automotive News, the company will guarantee bonus payments in September of $300 for each new car sold and $600 for each Passat. The company also will offer floorplan financing reimbursement for diesel vehicles on dealer lots that are grounded under the company’s stop-sale order that was issued following revelations that the automaker had sold some 482,000 VW and Audi diesel vehicles with emissions control software designed to produce false emissions testing data. The reimbursement plan will cover both new and certified-used TDI models affected by the stop-sale until repair instructions are released, according to the memo. Dealers also will receive guaranteed payouts under the VW brand’s customer experience bonus program equaling 1 percent of sticker for each vehicle sold in the third quarter and fourth quarter.
Source: Automotive News


NADA Statement: As to the diesel vehicles at issue, Volkswagen dealers care deeply about potential impacts on their customers and the environment. As soon as remedies are made available, the well-trained and equipped staffs of those dealerships will expeditiously work with Volkswagen to get those vehicles running right and keep customers satisfied.


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FTC Urged to Investigate VW Diesel Advertising Claims

In a widening of the U.S. government's pressure on Volkswagen, a top U.S. senator today called for the Federal Trade Commission to investigate Volkswagen's advertising of its diesel engines and explore possible recourse for consumers who purchased the vehicles. Sen. Bill Nelson, D-Fla., and chairman of the Commerce, Science and Transportation Committee, called on the FTC to probe whether VW's advertising of the environmental benefits of its "clean diesels" fell under laws prohibiting unfair or deceptive practices.
Source: Ad Age

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VW Emissions Cheating Affects 11 Million Cars Worldwide

The deception perpetrated by Volkswagen in the United States reaches around the globe, with about 11 million cars worldwide equipped with software designed to cheat emissions tests, the company said Tuesday. The automaker said it will set aside $7.3 billion to cover fixes and “other efforts to win back the trust of our customers.” Jack Fitzgerald, chief executive of Fitzgerald Auto Malls, a dealership chain that sells Volkswagens in Annapolis and Frederick, Md., said he is awaiting details from the company about exactly what is needed to fix the problem. “They haven’t given us any idea what the fix is,” Fitzgerald said. “All we know is that we have parked the cars that have not sold, and we can’t deliver them, and we’re waiting for further information from Volkswagen.”
Source: The Washington Post

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Keyes Hyundai in Los Angeles Added to Growing Collection of Hyundai Tucson Fuel Cell Dealers

Keyes Hyundai in Los Angeles became the fourth qualified dealer for Hyundai’s zero-emissions Tucson Fuel Cell hydrogen electric vehicle. Hyundai is the only manufacturer in the U.S. currently offering consumers the opportunity to lease a mass-produced fuel cell vehicle, the zero-emissions Tucson Fuel Cell CUV. Since its launch in June 2014, Tucson Fuel Cell drivers have accumulated nearly 700,000 zero-emissions miles on the streets of Southern California. Hyundai has delivered more than 75 Tucson Fuel Cells since its introduction as the first mass-produced fuel cell vehicle in the U.S. market in June 2014.
Source: Hyundai Motor America

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Quotable
"From the employment opportunities created to taxes paid and generated that support local governments, people do not realize how much new-car dealerships bring to their communities throughout the country."

    -- Debbie Menk, project lead and assistant director of economic development strategies at the Center for Automotive Research, referring to a new CAR study on the economic impact of new-car dealerships, Sept. 23

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