View Web Version

SPONSORED BY
NADA.org
December 21, 2015 FacebookTwitterFlickrRSSSEND TO A FRIENDPRINT
Inside this issue
Tax Bill with Significant Provisions Affecting Dealers Passed by Congress
End of the 'Free Lunch on Interest Rates'
Nissan CEO Focuses on Toyota in Sales Race
Subaru Boss: More Sales, More Output
GM Seeks a Market Beyond the Snow Belt for AWD Models
Hollywood, Motown Collide for Detroit Auto Show Debuts
Top Stories
Tax Bill with Significant Provisions Affecting Dealers Passed by Congress

Action needed by December 31st to take advantage of key provisions.

Friday Congress passed a $622 billion tax bill that may allow dealers and their customers to expense a larger portion of certain business equipment purchases. The "Protecting Americans from Tax Hikes Act of 2015" lowers taxes and gives automobile and truck dealers and their customers certainty to make business decisions with respect to these important tax provisions.

These provisions will be of interest to those purchasing passenger automobiles and trucks for business purposes, but those vehicles are subject to limits on the amount that can be deducted under Sec. 179 expensing and  bonus depreciation allowances. 

This bonus depreciation is limited with respect to certain automobile and truck purchases, but the Act also includes an extension of an additional $8,000 in first year-depreciation for certain business vehicles purchased in 2015. This provision provides Extension and modification of increased expensing limitations and treatment of certain real property as section 179 property. The provision permanently extends the small business expensing limitation and phase-out amounts in effect from 2010 to 2014 ($500,000 and $2 million, respectively). These amounts currently are $25,000 and $200,000, respectively. The special rules that allow expensing for computer software and qualified real property (qualified leasehold improvement property, qualified restaurant property, and qualified retail improvement property) also are permanently extended. The provision modifies the expensing limitation by indexing both the $500,000 and $2 million limits for inflation beginning in 2016 and by treating air conditioning and heating units placed in service in tax years beginning after 2015 as eligible for expensing. The provision modifies the expensing limitation for qualified real property by eliminating the $250,000 cap beginning in 2016.

Extension and modification of bonus depreciation. The provision extends bonus depreciation for property acquired and placed in service during 2015 through 2019 (with an additional year for certain property with a longer production period). The bonus depreciation percentage is 50 percent for property placed in service during 2015, 2016 and 2017 and phases down to 40 percent in 2018 and 30 percent in 2019. The provision continues to allow taxpayers to elect to accelerate the use of AMT credits in lieu of bonus depreciation under special rules for property placed in service during 2015. The provision modifies the AMT rules beginning in 2016 by increasing the amount of unused AMT credits that may be claimed in lieu of bonus depreciation. The provision also modifies bonus depreciation to include qualified improvement property. 

There is also an extension of an additional $8,000 in first year-depreciation for certain business vehicles purchased in 2015. This provision provides substantial potential savings for a dealership's business customers, but in order to use the provision in 2015, they must purchase qualifying vehicles before December 31, 2015. (This $8,000 amount continues into 2016 and 2017, but is gradually phased out beginning in 2018.)

President Obama has signed this legislation. NADA and ATD strongly supported and advocated for the permanency and extension of these pro-dealer measures.

Dealers are encouraged to consult their tax advisor to determine how to best maximize their potential tax savings.  
Source: NADA
Share: LinkedIn Twitter Facebook

[back to top]

End of the 'Free Lunch on Interest Rates'

Fed's action likely to pinch profits without hurting sales

The Federal Reserve's interest-rate increase last week and its new long-term course toward further tightening probably won't slow consumer demand for new and used vehicles. But they will mean a more competitive environment and possibly slimmer profits for dealers, lenders and automakers as they absorb higher financing costs. And in the financing battle, captive lenders may gain an additional advantage over banks. The central bank last week raised its benchmark rate to a target range of 0.25 to 0.5 percent, ending a seven-year period when it held rates near zero to help the U.S. economy out of the financial crisis. The bank also indicated it is likely to push rates higher, in small increments, by one percentage point in 2016, and would probably do the same in 2017 and 2018.
Source: Automotive News
Share: LinkedIn Twitter Facebook

[back to top]

Nissan CEO Focuses on Toyota in Sales Race

Ghosn sets new goals in market share quest

Nissan Motor Co. CEO Carlos Ghosn, aiming to grab 10 percent of the U.S. market, is already looking past Honda Motor Co. to the next rival in his quest to conquest share. In his sights is Toyota Motor Corp. Ghosn said Nissan will be "closing the gap" with the world's No. 1 carmaker by 2020. This month's reshuffle of Nissan's U.S. management team will propel the company to its 10 percent market share goal over the next 15 months and set the stage for further growth, Ghosn said.
Source: Automotive News

Related Stories:


Share: LinkedIn Twitter Facebook

[back to top]

Subaru Boss: More Sales, More Output

Indiana likely for any capacity add

Years ahead of schedule in achieving his North America sales goal, Subaru's global boss said he will lift the company's sales target next spring as he races to boost supply. Subaru has plenty of room to expand capacity at its Lafayette, Ind., assembly plant if extra output is needed beyond the increases already planned for next year, said Yasuyuki Yoshinaga, president of Subaru-maker Fuji Heavy Industries Ltd. Any additional capacity expansion will likely happen there, the company's only plant outside Japan, rather than in Japan or in a new factory somewhere else, such as Mexico, he said.
Source: Automotive News
Share: LinkedIn Twitter Facebook

[back to top]

GM Seeks a Market Beyond the Snow Belt for AWD Models

Buick will give benefits of 'twin clutch' big play

All-wheel drive isn't just for the snow belt anymore. That's the gist of the pitch that will come from Buick when the redesigned 2017 LaCrosse sedan comes out next summer. It's one of several new General Motors models that will get a "twin clutch" awd system from British supplier GKN Driveline. They include the Cadillac XT5 midsize crossover that goes on sale this spring. Buick has offered awd on the current LaCrosse for years without much success. The take rate on the roughly $2,000 option is less than 10 percent. Buick hopes to drive that penetration higher by touting the virtues of the twin-clutch system, which is engineered to improve grip and handling across all conditions, including on dry pavement.
Source: Automotive News
Share: LinkedIn Twitter Facebook

[back to top]

Hollywood, Motown Collide for Detroit Auto Show Debuts

A herd of overly excited cattle, a Jeep smashing through a glass wall, Cirque du Soleil acrobats doing backflips: They’re just a few of the spectacles automakers stage when premiering new cars and trucks at the North American International Auto Show. And if any company has been king of over-the-top debuts, it’s been Chrysler, now known as Fiat Chrysler Automobiles. Click here for the top Detroit debuts over the years.
Source: The Detroit News
Share: LinkedIn Twitter Facebook

[back to top]

More Articles
 
Quotable
"The auto industry does not need a free lunch on interest rates. Auto sales in 2016 will be above 17 million, even with higher interest rates."

    -- AutoNation Inc. CEO Mike Jackson, on the fed's interest-rate increase last week, Automotive News, Dec. 20

Sponsored by

NADA Market Beat

Auto Sales in November Top 18 Million SAAR for Third Month in a Row 
Chairman's Message
Commentary: Grassroots Advocacy – Getting Involved Makes a Difference
Videos

Consumers Benefit When Dealers Discount Rates


Register Today for the 2016 NADA Convention in Las Vegas
  


Dealer Financing Benefits Car Buyers


NADA University Online: The Next Generation 
  


Get the Facts: The Benefits of Franchised Auto Dealers

NADA Webinars
All webinars will be held at 1 p.m. ET unless otherwise noted.

Jan. 13: Income Development Strategies for Dealers

NADA members can view past webinars on-demand at no charge at NADA University Online. Member must create NADA account before viewing.

NADA Foundation News
NADA Foundation Presents Grants to Wesley College

NADA Foundation Presents Grants to Wheeling Jesuit University

 
Search Back Issues | Unsubscribe | Subscribe | Manage your subscription | email us
NADA For more information on NADA, visit www.nada.org or contact NADA, 8400 Westpark Drive, McLean, VA 22102. This email may contain an advertisement of NADA products and services. Any opinions or statements contained herein do not necessarily reflect the views of NADA. Factual errors are the responsibility of the listed publication. If you are a franchised new-car or -truck dealer and would like to become a member of NADA, please visit the Join NADA section of www.nada.org. Questions or comments concerning NADA Headlines content may be directed to publicaffairs@nada.org .