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September 24, 2015 FacebookTwitterFlickrRSSSEND TO A FRIENDPRINT
Inside this issue
Volkswagen CEO Resigns as Car Maker Races to Stem Emissions Scandal
Dealers, Owners Feel Frustrated and Betrayed by VW Scandal
Steering Dealership Ads Clear of Legal Pitfalls
Disparate Impact Use Continues to Frustrate Industry
Ford to Reveal Aluminum-Body Super Duty
Women Show Interest in Becoming Auto Technicians
Top Stories
Volkswagen CEO Resigns as Car Maker Races to Stem Emissions Scandal

Martin Winterkorn says he accepts responsibility for irregularities; company pledges to prosecute those involved

Volkswagen AG raced Wednesday to contain the widening scandal threatening Germany’s most important company, ousting its chief executive and pledging to prosecute those involved in a scheme to cheat U.S. auto-pollution tests. CEO Martin Winterkorn’s resignation follows a calamitous few days after Friday’s disclosure by the U.S. Environmental Protection Agency that Europe’s biggest auto maker employed software on some VW and Audi diesel-powered cars to manipulate the results of routine emissions tests. The crisis threatens to spill beyond the auto maker to the broader German economy. The company’s next CEO faces a daunting task of cleaning up the scandal—the scope of which remains unclear—and keeping its sales expansion on track. Volkswagen hasn’t yet said it knows who was responsible or how many employees were involved.
Source: The Wall Street Journal

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Dealers, Owners Feel Frustrated and Betrayed by VW Scandal

Bob Rand bought his Volkswagen Passat last year for its clean emissions and high gas mileage. He liked the car so much he convinced his son and a friend to buy one, too. Now, as Volkswagen comes clean about rigging diesel emissions to pass U.S. tests, Rand is desperately trying to sell the fully loaded model with white leather seats for $10,000 below what he paid. His sole bite has been from a man who offered $7,500 on speculation that he could resell it in Mexico. "Volkswagen was somebody that you could rely on for cutting-edge products and quality and all those things and now you find out that they're not above lying just flat out," said Rand, who plans to join a class-action lawsuit against VW. "That's probably about as bad a thing as a company can do is lie to your face when you're buying a $35,000 car." Rand's anger at the world's top-selling car company was echoed Wednesday by private dealers, auto wholesalers and owners across the U.S. as fallout from the smog test trickery mounted.
Source: Associated Press

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Steering Dealership Ads Clear of Legal Pitfalls

Experts offer keys to stay on the right side of regulators

Dealership ads can avoid regulators' cross hairs if advertisers know the rules, adjust the message and get legal approval, legal experts and F&I trainers say. The Federal Trade Commission is cracking down on what it considers deceptive dealership advertising, and often zeros in on the language of loan or lease terms, the experts and trainers say. Disclosing all the terms in fine print won't save dealers, said Paul Metrey, chief regulatory counsel for the National Automobile Dealers Association. "Dealers can't use fine print to back out of something that is prominently stated in the ad itself," he said. Hiring a specialized attorney to review dealership advertisements is one way to be sure ads are transparent. "Dealers cannot assume that advertisements provided by ad agencies are compliant. Dealers need to have ads checked by legal professionals familiar with the regulations," Metrey said.
Source: Automotive News

Editor's note: As a reminder, NADA recently issued A Dealer Guide to Federal Advertising Requirements to assist new-car dealers in complying with federal advertising requirements that apply to the sale, financing and leasing of automotive products and services. The guide provides examples of "bad" and "good" ads and includes chapters on 41 different federal advertising topics, including “sweepstakes/lotteries,” the use of discount claims, e-mail advertising, green marketing claims, Internet advertising, satisfaction guarantees and trigger terms.
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Disparate Impact Use Continues to Frustrate Industry

The reported acknowledgement by the Consumer Financial Protection Bureau that its use of disparate impact could over-count potential discrimination by indirect auto finance companies continues to churn the industry’s frustration with how the regulator operates. Paul Metrey, chief regulatory counsel at the National Automobile Dealers Association, reiterated his position after American Banker reviewed a series of private documents exchanged between CFPB officials. The report indicated bureau officials say they prefer using disparate impact to the alternative where bias is underestimated.

“In order to have an accurate measurement of potential consumer harm, you have to isolate out legitimate pricing factors that can cause a deviation in the results. There are business factors that the Justice Department has recognized as legitimate that the CFPB appears to be blatantly ignoring during investigations,” Metrey said. “There’s also an added reputational harm to the actors when the CFPB is basing damages off overestimated figures. If you look at the press releases of these enforcement actions, they are not holding back,” he went on to say.
Source: Auto Remarketing
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Ford to Reveal Aluminum-Body Super Duty

Ford Motor Co. on Thursday will introduce a completely redesigned Super Duty heavy-duty pickup that has an aluminum body, stronger steel frame and larger cabins. It’s the first major update since the Super Duty’s introduction in 1999, and Ford executives say it’s more revolutionary than the smaller F-150’s switch to aluminum in 2015. “It’s the leader in the market,” said Craig Schmatz, Super Duty’s chief engineer. “It was a huge opportunity to take a significant step forward.” The reveal is scheduled to take place at the State Fair of Texas. An unveiling will happen at the same time for employees in Dearborn [Mich.]
Source: The Detroit News
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Women Show Interest in Becoming Auto Technicians

She heads the General Motors Women’s Retail Network, an initiative that encourages women to seek dealership careers. Since 2011, the project has awarded about $100,000 in “Drive to Succeed” scholarships to women. Half of last year’s recipients wanted to work in service departments. “That surprised me,” Briggs says. They include Sara Landry of Bay City, Mich., a graduate of Northwood University in Midland, Mich., who now works as an assistant service manager at a Michigan store. Her ultimate goal is to become a GM dealer principal. Another scholarship went to Sheryl Sickels of Adrian, Mo., who spent 20 years in the U.S. Air Force. She now works as an auto technician for AutoNation, the country’s largest dealership chain.
Source: WardsAuto
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Quotable
"We want to change the culture of dealerships by attracting women to dealership jobs and all aspects of management. We want to get more women involved, from technicians to people on the sales floor. We’re doing what we can to attract women to auto careers."

    -- Celeste Briggs, leader of the GM Women's Retail Network initiative, WardsAuto, Sept. 21

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