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December 14, 2015 FacebookTwitterFlickrRSSSEND TO A FRIENDPRINT
Inside this issue
Elizabeth Warren’s Claim About Auto Dealers is One of the Biggest Pinocchios of 2015
CFPB Under Richard Cordray Tries to Cover Up Shameful Persecution of Auto Lenders
FCA Ends Dealer Spiffs That Lifted Chrysler 200
GM, Ford Cut Back on Rental Sales; Asians Pick Up the Slack
Dealerships Take the 20 Group In-House
Cleveland Auto Dealers Celebrate Centennial with George W. Bush
Top Stories
Elizabeth Warren’s Claim About Auto Dealers is One of the Biggest Pinocchios of 2015

Sen. Elizabeth Warren’s bogus claim that “auto dealer markups cost consumers $26 billion a year” made The Washington Post’s list of the Biggest Pinocchios of the year.

In a list that was dominated by Donald Trump and the 2016 presidential candidates, Washington Post Fact Checker Glenn Kessler wrote of Warren:

“Sen. Elizabeth Warren (D-Mass.), pushing for new regulations of loans made by car dealers, cited a figure based on a misleading and dated report from the Center for Responsible Lending, an advocacy group. But then she also wildly mischaracterized the number, as even the advocacy group conceded that figure includes reasonable compensation owed to car dealers.”

The 2015 Biggest Pinocchios list was compiled from claims that had earned Four Pinocchios during the year.
Source: The Washington Post
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CFPB Under Richard Cordray Tries to Cover Up Shameful Persecution of Auto Lenders

Much like using a ready, fire, aim approach to shooting at targets, the Consumer Financial Protection Bureau (CFPB) appears to have conducted in racial discrimination witch hunt against auto lenders in this same manner. The CFPB investigated and sought racial discrimination charges against auto lenders, as it turns out, on the basis of guessing the race and ethnicity of borrowers based on their last names, and using this “evidence” to prove their allegations. Only 54 percent of those identified as African-American by this “proxy methodology,” the Wall Street Journal reported, were actually African-Americans. The CFPB drafted rules to solve a problem they only believed existed, racial discrimination in auto lending. And instead of gathering real data that might prove the allegations, the CFPB appears to have made it up.
Source: Right Side News
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FCA Ends Dealer Spiffs That Lifted Chrysler 200

Some retailers bought cars to hit their stair-step targets

Fiat Chrysler has ended an aggressive stair-step incentive on the Chrysler 200 that boosted sales in a segment in which the brand has long been a laggard. The incentive, discontinued last month after running more than a year, pushed some dealers to buy 200s themselves to hit their monthly sales goals and reap a big reward. Through November this year, U.S. sales of the midsized sedan that was redesigned for the 2015 model year were up 67 percent to 169,310 vehicles. Chrysler's share of the segment climbed to 7.6 percent for the first 11 months from 4.5 percent in the same period last year.

In a presentation to investors this month, FCA touted the success of the 200 but said it was "re-evaluating" Chrysler's product portfolio "given reduction of volumes in sedan segments." Dealers say that the stair-step incentive on the Chrysler 200 has been shifted to the Jeep Cherokee, which is already Jeep's top-selling model in the U.S.
Source: Automotive News
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GM, Ford Cut Back on Rental Sales; Asians Pick Up the Slack

For decades, the rental-car market served as a security blanket for the Detroit 3. Weak sales month? Just dump some cars onto Enterprise or Avis lots to prop up the totals. But over the past few years, General Motors and Ford Motor Co. have become less reliant on that profit-eroding habit, according to a review of industrywide rental sales data by Automotive News. Picking up the slack has been a mix of Asian automakers -- most notably Hyundai-Kia, and to a lesser extent Nissan and Toyota. American Honda's fleet business is negligible.
Source: Automotive News
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Dealerships Take the 20 Group In-House

Finances, performance in sharper focus

In April, dealer Gregg Kunes bought a four-store dealership group in Sterling, Ill. The purchase gave his company a total of 12 dealerships, allowing Kunes to do something he'd wanted to do for a long time. "I finally had enough dealerships to have my own internal 20 Group," said Kunes, president of Kunes Country Auto Group, based in Delavan, Wis. Typically, external 20 Groups are composed of 20 dealers who meet to share best business practices and review their own performance against that of their peers.

NADA 20 Group consultancy has experienced a significant increase of multirooftop dealership groups engaging in internal 20 Group meetings in recent years. In 2009, NADA 20 Group worked with 93 such groups. This year, there have been 388, said Diane Carnovsky, NADA 20 Group director. The demand for internal 20 Groups is coming mostly from dealers who own groups with five to 15 dealerships, experts said.
Source: Automotive News
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Cleveland Auto Dealers Celebrate Centennial with George W. Bush


Former President George W. Bush (right) says car dealerships and entrepreneurs are a driving force in the U.S. economy in an interview with Jason Stein, publisher and editor of Automotive News. The event was part of the Greater Cleveland Auto Dealers Association’s centennial celebration, which was held in downtown Cleveland on December 4.

As part of its 100-year anniversary celebration, the Greater Cleveland Automobile Dealers Association invited former President George W. Bush to speak at a holiday event on December 4. During an hour-long discussion, Bush discussed a variety of topics, which included the economic impact of new-car dealerships, the upcoming presidential election and the world political climate. GCADA, founded in 1915, represents 250 new motor vehicle dealerships across northern Ohio.
Source: GCADA
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Quotable
"This is very deliberate because we want to build these brands. We want to build these residual values, and we're really focused on quality of sale."

    -- GM North America President Alan Batey, on the automaker's decision to cut back on rental sales, Automotive News, Dec. 14

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