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Inside this issue
Video: NADA Testifies at House Hearing on Vehicle Safety
VW Says its Recall will be Limited to Older Engines
Captives May Have Lending Edge as Rate Hike Looms
GM Financial's Global Lease Originations Surge 252%
GM, Ford Profits Have UAW Eyeing Richer Deals After Fiat Chrysler Approval
Ford to Release Limited Edition 727-Horsepower Mustangs
Top Stories
Video: NADA Testifies at House Hearing on Vehicle Safety

NADA President Peter Welch testified on October 21 at a hearing of the House Energy and Commerce Subcommittee on Commerce, Manufacturing and Trade, on motor vehicle safety legislation. Welch told members of the committee that new-car dealers are integral to the completion of vehicle safety recalls, and that NADA supports policies to increase recall completion rates to 100 percent.

Welch highlighted problems with proposals to ground all rental and used cars under open recall, pointing out that doing so would also ground recalled vehicles for minor compliance matters, which will drive down the price of trade-ins and hurt consumers. He also encouraged the committee to urge the improvement of NHTSA's recall database for wider commercial use.

Click here to watch a video interview with Welch, and his opening remarks at the hearing.

Click here for NADA's news release and Welch's written remarks.
Source: NADA
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VW Says its Recall will be Limited to Older Engines

Volkswagen Group said its current-generation diesel engine does not have software designed to cheat on emissions tests, meaning its global recall of as many as 11 million cars will not need to be even bigger. Diesel cars with EA 288 engines meet legal and environmental requirements, VW said [Thursday] in a statement. The EA 288 replaced the EA 189 class of engines implicated in the emissions scandal. VW had said earlier that it was examining whether other diesel engines have software that cheated emissions tests by turning on full pollution filters only when cars were being tested.
Source: Bloomberg
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Captives May Have Lending Edge as Rate Hike Looms

As federal interest rate hikes loom, banks are lending more conservatively out of fear that with higher interest rates, consumers’ lending risk will go up. Higher rates will also affect automakers’ captive finance arms, but the captives will likely have the ability to keep the rates they charge consumers down through support from their manufacturer parents, industry economists say. “Higher payments are more difficult for borrowers, so lending risk goes up,” said Charles Chesbrough, senior principal economist for IHS Automotive. Because of that “banks are lending less aggressively.” The economy is far along it its recovery from the downturn in 2008 and 2009, and banks are concerned about upcoming risk.
Source: Automotive News
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GM Financial's Global Lease Originations Surge 252%

Captive finance company GM Financial said today its worldwide lease originations soared 252 percent to $6.2 billion during the third quarter, up from $1.8 billion in the year earlier period. North America accounted for nearly all of the gains. The surge comes after General Motors began using its captive as its sole provider of subsidized leases earlier this year. The third quarter was the second full quarter of lease exclusivity for GM Financial.
Source: Automotive News
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GM, Ford Profits Have UAW Eyeing Richer Deals After Fiat Chrysler Approval

Revised contract will cost FCA an additional $2 billion, report says

When UAW members last month turned down the first labor contract negotiated between their union and Fiat Chrysler Automobiles, it looked like it might go badly for the union. It didn’t. After threatening to strike, union leaders got FCA to gradually increase hourly wages for more junior workers to more than $29 an hour, from a high of $19.28. The deal will cost the automaker close to $2 billion more over four years, including wages, improved 401(k) plans, bonuses and other benefits, two people familiar with the matter told Bloomberg. During the additional three weeks it took to get the enhanced accord, the UAW also saw General Motors -- its next target for contract talks -- post its most profitable quarter ever.
Source: Bloomberg
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Ford to Release Limited Edition 727-Horsepower Mustangs

Your move, Dodge. Ford Motor Co. will release an extremely limited number of special-edition Mustang GTs that get up to 727 horsepower — 20 more than Dodge’s popular Hellcat Charger and Challenger sports cars. The Dearborn automaker partnered with NASCAR legend Richard Petty to create three Mustang GT King Edition pony cars. Only 300 — 243 King models, 43 King Premier models and 14 King Premier convertibles — will be built. The Mustangs will range from $67,495 to $90,495 and customers can now order them through their local Ford dealerships.
Source: The Detroit News
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"The auto market is back."

   -- Charles Chesbrough, senior principal economist for IHS Automotive, commenting on the recovering U.S. economy, Automotive News, Oct. 21

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