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Inside this issue
How Fed Rate Hike Could Affect Housing, Autos
Germany to Retest VW Diesel Emissions After Engine Fixes, Paper Says
Hyundai Chairman Says Outlook for 2016 Global Auto Market 'Not Bright'
Ghosn Succession Clouds Future of Renault-Nissan Alliance
Ferrari Shares Start Trading on Jan. 4
Ford, FCA, Opel Benefit from European Sales Recovery as VW Left Behind
Ford-UAW Give Boxes of Love to Feed Needy at Christmas
Top Stories
How Fed Rate Hike Could Affect Housing, Autos

The Federal Reserve's expected hike in its benchmark short-term interest rate this week — combined with rate increases the next few years — is likely to ripple across the U.S. economy, nudging up rates on everything from mortgages to bank savings rates and corporate bonds. But Fed policymakers have stressed they intend to move gradually and in small increments, and will pull back if the economy falters, tempering the impact on consumers and businesses. The Fed is expected to boost rates only a quarter of a point Wednesday and move gradually after that.

Auto sales are likely to top 17 million this year for the first time since the Great Recession, juicing the economy. "(Low rates) definitely have been a factor in people's buying decisions," says Mark Scarpelli, president of Raymond Chevrolet and Kia, which owns three dealerships in the Antioch, Ill., area. Auto loans are cheap, with rates ranging from zero with manufacturers' incentives to 3% or so for typical five-year loans, Scarpelli says.

But he says the improving economy and job market, low gasoline prices, and consumers' need to replace aging vehicles are more significant. The typical car on the road is 11½ years old, a record high, according to IHS Automotive. Scarpelli says his sales are up 25% this year. "Consumers are responding to the need to replace their car or truck," he says.

Scarpelli says slightly higher rates "don't seem to make people walk away from a deal. ... It will have a measured impact," largely by prodding some consumers to buy less expensive vehicles. He expects higher rates to trim sales by less than 1% in a year and up to 2% in two years.
Source: USA Today
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Germany to Retest VW Diesel Emissions After Engine Fixes, Paper Says

German authorities will review emissions and fuel usage of Volkswagen Group diesel vehicles in a second testing round once the company has installed fixes in cars caught up in a cheating scandal, Die Welt, a German daily, reported. To guarantee transparency, the test results including raw data will be published in full, the newspaper quoted a spokesman for Transport Minister Alexander Dobrindt as saying. Die Welt's report did not indicate when the tests would be carried out. Transport ministry officials were not immediately available for comment. Volkswagen has said it expects to begin recalling affected vehicles in January.
Source: Reuters
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Hyundai Chairman Says Outlook for 2016 Global Auto Market 'Not Bright'

The outlook for the global auto market is "not bright" next year, Hyundai Motor Group Chairman Chung Mong-koo said, indicating 2016 will be another challenging year for the world's fifth-largest automaker. Speaking to the heads of the automaker's overseas units, Chung said growth this year was constrained by a weak global economy, the economic slowdown in the world's second-largest auto market China and a decline in emerging market demand.
Source: Reuters
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Ghosn Succession Clouds Future of Renault-Nissan Alliance

Renault-Nissan CEO Carlos Ghosn said the companies are unlikely to stick with one chief executive after him, complicating the future of the carmakers’ alliance structure. Ghosn, 61, will continue running Renault and Nissan as long as he has the trust of shareholders, he told reporters today in Yokohama, Japan. The 16-year alliance is being tested as the French government is set to double its voting power at Renault and has said it opposes a full merger between the two companies.
Source: Bloomberg
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Ferrari Shares Start Trading on Jan. 4

Fiat Chrysler Automobiles says shares of Ferrari stock have been approved to begin trading on the Milan stock exchange on Jan. 4. The listing on the Borsa Italiana, Italy's main stock exchange, will occur about three months after the exotic automaker's initial public offering and its listing on the New York Stock Exchange. FCA sold 18.89 million shares of Ferrari stock, or 9% of the company, in October at the initial public offering price of $52 per share, raising $982.4 million in capital. The IPO is part of FCA CEO Sergio Marchionne's plan to spin Ferrari off into a separate company and to use the transactions to raise capital to fund FCA's five-year, $53-billion strategic plan.
Source: Detroit Free Press
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Ford, FCA, Opel Benefit from European Sales Recovery as VW Left Behind

European new-car sales increased 13.7 percent in November, with Ford, Fiat Chrysler and Opel all gaining volume faster than the market growth. Registrations rose to 1.12 million last month in the European Union and European Free Trade Association markets, according to data released today by industry association ACEA. The increase marked the 27th straight month of growth, following a six-year slide that ended in 2013. Sales in the first 11 months rose 8.6 percent to 13 million, ACEA said. Volkswagen Group saw sales rise by just 4.2 percent as the automaker's emissions test-rigging scandal hit its showroom traffic.
Source: Automotive News
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Ford-UAW Give Boxes of Love to Feed Needy at Christmas

Food boxes to be given out at three metro Detroit locations on Saturday

UAW-Ford is donating more than 25,000 holiday meals again this year during the third year of its "Boxes of Love" program that helps feed the needy across the United States. The free meals, valued about $50 each, include a turkey and everything needed for stuffing, cranberry sauce, corn bread, macaroni and cheese, vegetables and cake. The UAW-Ford national community group sponsors the $500,000 worth of food distributed in 18 states where Ford has facilities.
Source: Detroit Free Press
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Quotable
"Consumers are responding to the need to replace their car or truck."

    -- Mark Scarpelli, president of Raymond Chevrolet and Kia in Antioch, Ill., says the improving economy and job market, low gasoline prices and consumers' need to replace aging vehicles will offset a modest increase in interest rates, USA Today, Dec. 15

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