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October 12, 2015 FacebookTwitterFlickrRSSSEND TO A FRIENDPRINT
Inside this issue
U.S. House Panel Seeks Data on Auto-Lending Discrimination Claims
As Crisis Grows, Volkswagen Dealers Fear Cash Won't Be Enough
Mercedes Looks to Cap Number of Stores Per Group
Do-Not-Call Rules Do Not Prohibit Dealers from Calling Consumers about Vehicle Recalls
GM Claims Victory Even as Its Market Share Slips
Fiat Chrysler to Move Forward With Ferrari I.P.O.
Caring About Community
Top Stories
U.S. House Panel Seeks Data on Auto-Lending Discrimination Claims

CFPB told to submit internal documents on regulator’s probe of auto lenders

The chairman of the House Financial Services Committee is turning up pressure on a major regulator to hand over internal documents pertaining to its investigations of auto lenders. Rep. Jeb Hensarling (R., Texas) sent a letter to Consumer Financial Protection Bureau Director Richard Cordray this week asking for emails and other records that address how the regulator has built cases against auto lenders that alleged minority borrowers were charged more than white borrowers. Mr. Hensarling also asked the bureau whether it will make Patrice Ficklin, the director of the CFPB’s Office of Fair Lending and Equal Opportunity, available for a transcribed interview. Ms. Ficklin is leading the regulator’s efforts to address discriminatory car-loan pricing. If the CFPB doesn’t provide the requested information or interviews, “the committee would be left with no choice but to consider subpoenas,” said Jeff Emerson, a spokesman for the House committee. The letter, signed by Mr. Hensarling and fellow committee member Rep. Sean Duffy (R., Wis.), asked for a response on Ms. Ficklin’s availability by Oct. 13 and on other requested documents by Oct. 20.
Source: The Wall Street Journal

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As Crisis Grows, Volkswagen Dealers Fear Cash Won't Be Enough

Volkswagen's U.S. dealerships are suddenly awash in cash. But they aren't sure it will be enough.

A package of special programs to help retailers cope with the diesel emissions scandal has infused large sums of money -- in the form of incentives, sales bonuses and floorplan subsidies -- into a dealership network that's struggling with sluggish sales, thin profits and, now, a stop-sale order on diesel vehicles, which have typically accounted for more than 20 percent of sales. On Oct. 1, Volkswagen of America wired additional "discretionary funds" to dealers' accounts, to be used as they wish, VW said. Dealers declined to say how much they received, but Automotive News has learned that the payments varied based on dealers' volumes and could have amounted to tens of thousands of dollars. But as dealers look ahead to a mushrooming crisis engulfing the VW brand and the prospect of going months without being able to sell diesels, some worry whether the added funds will be enough to keep them in the black.
Source: Automotive News

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Mercedes Looks to Cap Number of Stores Per Group

Limit would vary by group; retailers wary

Mercedes-Benz USA is talking to its retailers about putting a cap on the number of stores any single dealership group will be allowed to own. But it doesn't plan a uniform cap, applied equally to all groups, which makes some dealership groups wary. Mercedes-Benz USA chief Steve Cannon says he is looking out for the future of the brand and wants to protect it from having too much concentration with any single group, especially as dealership consolidation activity picks up and more outside investors look to get into auto retailing. Cannon confirmed the discussions with dealers to Automotive News in an interview at a press event [in Knoxville, Tenn.] last week.
Source: Automotive News

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Do-Not-Call Rules Do Not Prohibit Dealers from Calling Consumers about Vehicle Recalls

As a reminder to dealers, the National Do-Not-Call (DNC) rules do not prohibit dealers from calling consumers to alert them that their vehicles have been recalled because of a product safety or defect concern and to schedule appointments to correct the defect. The Federal Communications Commission granted a 2005 NADA petition clarifying the rules, and noted that the clarification applies when the defect repair work involves no cost to the consumer. Calls that encourage the purchase of other goods and services “will be deemed a prohibited telephone solicitation.”  However, please note that this clarification only applies to the National Do-Not-Call rules, and not the separate restrictions under the Telephone Consumer Protection Act (TCPA) for text messages, prerecorded calls, calls made to cell phones, or calls made using autodialers. Dealers should consult their counsel to ensure that any recall telephone calls also meet these and other TCPA requirements. Click here for the full text of the FCC ruling.
Source: NADA Regulatory Affairs

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GM Claims Victory Even as Its Market Share Slips

Retail gains deliver more profitable mix

General Motors' U.S. market share is on pace to decline again this year, just as it has nearly every year of the last 10. But GM CEO Mary Barra urges a closer look at the numbers, which she says offer proof that -- after years of talking about it -- GM is repressing that deeply ingrained instinct to chase market-share growth at the expense of the bottom line. GM's share of more-profitable retail sales this year has grown faster than for any of the other six largest automakers, figures from the Automotive News Data Center show. GM has dialed way back on sales to rental-car operators, long its favorite sales-goosing trick. Transaction prices are up, while incentive spending has remained below that of key competitors. In short, GM has been doing what people implored it to do for a few decades: Focus more on profits than market share.
Source: Automotive News
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Fiat Chrysler to Move Forward With Ferrari I.P.O.

The initial public offering market has jilted most new stocks in recent weeks, but Fiat Chrysler Automobiles is moving forward with its plan to spin off Ferrari at a valuation of about $9.4 billion, at the midpoint of the marketed range. Ferrari, which sells six-figure Italian luxury sports cars, set a price range on Friday that it will use to gauge investor demand for the I.P.O., which will be listed on the New York Stock Exchange.
Source: The New York Times

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Caring About Community

The Hibbing Fire Department [in Hibbing, Minn.] was recently presented with a Resusci Anne CPR Training Mannequin four pack from the Minnesota Auto Dealers and the National Auto Dealers Charitable Foundation. Don Hilligoss of Ford of Hibbing made this contribution possible. “We are pleased to be a part of this program which gives vital local volunteer organizations the basic tools they need to conduct CPR training classes,” stated Mike Olson of the Minnesota Auto Dealers Association. “The National Auto Dealers Charitable Foundation devotes a great deal of its resources to this emergency CPR training program. It is a terrific use of resources,” concluded Olson. Since 1987 MADA, in conjunction with the National Auto Dealers Charitable Foundation and local dealerships, has presented more than 200 CPR mannequins to volunteer rescue units across Minnesota. Resusci Annes retail for over $1,000.
Source: Hibbing Daily Tribune (Hibbing, Minn.)
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Quotable
"Consumers benefit tremendously from the discounts they get from dealers, and they have every right to demand that their voices be included in — not willfully excluded from — the debate about how to regulate the auto finance market."

   -- NADA President Peter Welch, commenting on the trade group's request for the CFPB to release internal documents linked to its investigations of auto lenders, SubPrime Auto Finance News, Oct. 9

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