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December 11, 2015 FacebookTwitterFlickrRSSSEND TO A FRIENDPRINT
Inside this issue
Fed Used Made-up Data to Sue for Racial Discrimination
Data Defense: Auto Dealers Make Case Against Recall Bill
US: The Upward Sales Trend is Likely to Keep Going
VW Discloses Origin of Diesel Deception: Meeting U.S. NOx Rules was Initially 'Impossible'
Fed Worries Auto Industry May Feel Most Heat From Rate Hike
Ford to Spend $4.5 Billion by 2020 on Electric Vehicles
Smithtown Acura and GNYADA Present CPR Training Units to Fire Department
Top Stories
Fed Used Made-up Data to Sue for Racial Discrimination

These will be some tough cases to prove, as the Consumer Financial Protection Bureau has been suing over “racist” lending practices but only guessing at the data to do so. The Bureau was supposed to ensure the companies that issued auto loans did so without racial discrimination. Under its mandate, the bureau accused companies associated with the auto sales business of engaging in racist business practices, ruining reputations and raking in millions of dollars for the federal government. Only one problem: The data the Consumer Financial Protection Bureau used was bad. Instead of verifying the race or ethnicity of the Americans who took out car loans, the bureau simply looked at their names, analyzed what neighborhoods they lived in … and then guessed. And they were even bad at that, as an analysis of the system showed that the bureau’s system was wrong 54% of the time when it guessed that a lender’s race was black. The Wall Street Journal editorial board wrote of the practice, “This illegal guessing game of name-that-race underscores how much antidiscrimination law has become a political shakedown, and how the consumer bureau is a lawless body that needs to be reined in if it can’t be eliminated.” And we can’t help but wonder if the system the bureau created was itself racist.
Source: The Patriot Post

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Data Defense: Auto Dealers Make Case Against Recall Bill

In an effort to counter legislation that would leave used cars on the lot until recalls are repaired, the National Automobile Dealers Association recently released a study it funded that claims such a law could significantly hurt trade-in values for consumers. Keeping a used car facing a recall off the lot might sound like a natural idea to some car buyers. Auto dealers, however, are less convinced—and they have a new study to make their case.

In recent months, Sen. Richard Blumenthal (D-Conn.) has pushed this issue in the Senate, launching a bill called the Used Car Safety Recall Repair Act back in April. Blumenthal was unsuccessful in getting the measure added as an amendment to the Fixing America’s Surface Transportation (FAST) Act that was signed into law, but he has repeatedly argued for such a measure as a way to protect consumers. The measure has been met with the cold shoulder from the auto industry in recent months, leading Blumenthal and Sen. Bill Nelson (D-Fla.) to ask the National Automobile Dealers Association (NADA) and the National Independent Automobile Dealers Association (NIADA) why they opposed the bill.

Last month, NADA offered its answer in the form of a new report it commissioned by J.D. Power and Associates. According to the report, “An Economic Assessment of Trade-In Value Reduction Caused by Preventing Auto Dealers From Selling Passenger Vehicles With any Open Recall,” requiring problems cited by recalls to be fixed before a vehicle is resold significantly hurts its resale value. In addition, the study argues that recalls that may only have a minor effect on the vehicle’s safety or performance are treated the same as vehicles with more serious issues. And part delays could mean that a vehicle could remain unsold for months under the policy change—and that, says J.D. Power, could significantly hurt its resale value by as much as $5,713.
Source: Associations Now

Editor's note: For more information on the report, click here.
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US: The Upward Sales Trend is Likely to Keep Going

The US auto market is close to an all-time sales record, but the projections are indicating two more years of strong figures.

The auto sales this year are on the right track to top the all-time record in the US, with November marking the 23rd consecutive month of record-setting revenue for the auto industry. And this direction will be maintained in the future, as the solid economy will keep the demand at high levels. The automakers are forecasting at least two more years of sales over 17 million cars and light trucks. “We think there’s another good, solid 22, 24 months at this level,” said Bob Carter, senior vice president of Toyota’s US auto operations. “The economics, the interest rates, the employment — everything pretty much says that we should remain at this level in 2016 and 2017”. But not only the auto companies are being optimistic, as the analysts are sharing the same opinion. A recent forecast made by the National Automobile Dealers Association indicates that 17.7 million new cars and light trucks are to be sold next year and 17.2 million units for 2017.
Source: INAUTONEWS
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VW Discloses Origin of Diesel Deception: Meeting U.S. NOx Rules was Initially 'Impossible'

Volkswagen said [Thursday] that engineers installed illegal emissions software in 2.0-liter diesels sold in the U.S. after finding it initially “impossible” to meet tough U.S. limits on nitrogen oxide emissions legally. The disclosure, made early today by VW Chairman Hans Dieter Poetsch in a press conference in Wolfsburg, Germany, marks the first time the company has explained the origins of the emissions crisis that has upended the company and prompted investigations by legal and regulatory authorities worldwide hundreds of U.S. lawsuits. Poetsch said the company still believes a “comparatively small” number of employees were directly responsible for the emissions conceit. In a statement, VW said it had suspended nine managers who “may” have been involved in the emissions manipulations. Poetch also blamed process failures and noted that some parts of the company tolerated rule violations that allowed the conceit to continue.
Source: Automotive News
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Fed Worries Auto Industry May Feel Most Heat From Rate Hike

One of the industries that will be most keyed in on what the Fed does with interest rates is the automobile sector, which has used seven years of cheap rates to rebound after nearly capsizing during the financial crisis. Outside of banks, autos are arguably the most rate-dependent business. Light vehicle sales have about doubled since the crisis lows, from just more than 9 million in February 2009 to just more than 18 million in November 2015. That's still well below the 21.7 million peak in October 2001, but still a strong rebound. The industry has the Fed to thank for that. In addition to the $80 billion government bailout for car companies, the U.S. central bank lowered its target funds rate to near zero in late 2008, resulting in bargain-basement lending rates that helped sales surge.
Source: CNBC
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Ford to Spend $4.5 Billion by 2020 on Electric Vehicles

Ford announced its largest five-year investment ever in electrified vehicles, with a pledge to spend $4.5 billion and introduce 13 new models by 2020, CEO Mark Fields announced [Thursday]. Fields said 40% of nameplates globally will be electrified by the end of the decade, up from 13% now. They will be a mix of hybrids, plug-in hybrids and full battery-powered electric vehicles. It's a move driven by customer demand as well as the need to meet fuel efficiency standards, Fields said.
Source: Detroit Free Press

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Smithtown Acura and GNYADA Present CPR Training Units to Fire Department


Smithtown Acura donates CPR units to the Setauket Fire Department. Pictured (l-r): Robert Certilman, dealership president; New York State Assemblyman Steve Englebright; Commissioner Jay Gardiner; and Allison Musante of Smithtown Acura. (Photo: Dominick Totino Photography)

Smithtown Acura and the Greater New York Automobile Dealers Association recently presented four CPR training units to the Setauket Fire Department through the National Automobile Dealers Charitable Foundation's Medical Grants program. To date, the NADA Foundation has donated more than 4,800 CPR training units to organizations across the county, valued at more than $3 million. For more information on the program, click here.
Source: NADA
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Quotable
“[The CFPB’s] largely fact-free prosecutorial method is the reason a bipartisan House supermajority recently voted to roll back the bureau’s auto-loan rules.”

    -- The Wall Street Journal editorial board, on the CFPB's methodology to challenge auto lending practices based on allegations of discrimination, Dec. 9 

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