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December 22, 2015 FacebookTwitterFlickrRSSSEND TO A FRIENDPRINT
Inside this issue
New Tax Bill: Action Needed by December 31 to Take Advantage of Renewed Expensing Provisions
M&A Sizzles for New-Car Dealers
Mercedes-Benz Switches CEOs in U.S.
Mazda's O'Sullivan to Retire as Head of N.A. Operations; Masahiro Moro to Take Helm Jan. 1
Ford Applies for Record Number of Patents as CEO Eyes Innovation
Texas Woman Breaking Barriers in Auto Industry Job
Top Stories
New Tax Bill: Action Needed by December 31 to Take Advantage of Renewed Expensing Provisions

NADA and ATD strongly supported and advocated for these pro-dealer measures.

On December 18, President Obama signed a $622 billion tax bill that may allow dealers and their customers to expense a larger portion of certain business equipment purchases. Included in the bill was a tax benefit to businesses that purchase certain passenger automobiles and trucks in 2015 for business purposes. The bill allows an additional $8,000 first year “bonus” depreciation allowance for these vehicles, but the consumer must purchase and place into service the vehicle by December 31, 2015. Dealers are encouraged to utilize this provision to spur more year-end sales. Dealers should be aware that this $8,000 amount continues into 2016 and 2017, but is gradually phased out beginning in 2018.
 
The legislation also permanently extends the small business expensing (Section 179) limitation and phase-out amounts in effect in 2014 ($500,000 and $2 million, respectively). The special rules that allow expensing for computer software and qualified real property (qualified leasehold improvement property and qualified retail improvement property) were also permanently extended.  The bill also extends bonus depreciation for property acquired and placed in service during 2015 through 2019. 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. 

Dealers and their customers are encouraged to consult their tax advisors to determine the exact amount of their potential tax savings.
Source: NADA
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M&A Sizzles for New-Car Dealers

Hot U.S. market is fueling an interest in buying dealerships by publicly traded firms

U.S. car dealerships changed hands at an accelerated pace this year boosted by robust new-car demand, strong dealer profits and an increased focus on the business following Warren Buffett’s purchase of a Phoenix-based chain. A total of 456 dealerships have been acquired thus far in 2015, a 40% increase over the prior year, according to The Banks Report, which tracks merger and acquisitions in car retailing. The gains comes as industry analysts expect U.S. vehicle sales to reach 17.5 million this year and expand again next year. Total dealerships in the U.S. has increased modestly to about 18,000 since the financial crisis and steady volume gains have stirred new interest in the business. “Warren Buffett and others have come to see dealerships as stable, slow predictable growth,” Banks Report founder Cliff Banks said in an interview.
Source: The Wall Street Journal
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Mercedes-Benz Switches CEOs in U.S.

Mercedes-Benz is replacing its North American chief.

The vice president for sales in the U.S., Dietmar Exler, is becoming the new CEO of Mercedes-Benz in the U.S. Canada and Mexico, replacing Steve Cannon. Mercedes says Cannon is leaving the company. The German luxury brand didn't cite a reason for the change, but it comes as Mercedes has seen mixed sales fortune during the year. In the most recent sales month, November, the German luxury brand was down 10.2% compared to the same month last year, Autodata reports. Arch-rival BMW was up 1.2%. But for the year, the story isn't as bad: Mercedes is up 4.2%, compared to 4.9% for BMW over the first 11 months of 2015.
Source: USA Today
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Mazda's O'Sullivan to Retire as Head of N.A. Operations; Masahiro Moro to Take Helm Jan. 1

Jim O’Sullivan, an auto industry veteran and current CEO of Mazda’s North American Operations, will retire at the end of the year, the automaker said [Monday]. Mazda has named Masahiro Moro as O’Sullivan’s successor. O’Sullivan, 62, has been at the helm of Mazda’s North American Operations since 2003 and has help guide the tiny Japanese brand out of the Ford era and into its own niche of efficient, sporty cars and crossovers. Under O’Sullivan’s watch, the company’s annual U.S. retail sales rose nearly 16 percent from 2004 -- his first full year in charge -- to 2014. They are up another 3.2 percent in 2015; Mazda is on pace for its best retail year in more than 20 years.
Source: Automotive News
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Ford Applies for Record Number of Patents as CEO Eyes Innovation

Ford Motor Co., the 112-year-old automaker, has sought a record number of patents in 2015 as Chief Executive Officer Mark Fields pushes the company toward Silicon Valley-style innovation. The company applied for 5,872 patents so far this year, a 36 percent increase from all of 2014, in areas including autonomous cars, wearable devices and ride-sharing, according to a statement Tuesday. Ford said its filings related to electrified vehicles have almost tripled in the past five years, including more than 400 last year.
Source: Bloomberg

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Texas Woman Breaking Barriers in Auto Industry Job

Clipboard in hand, Rocio Salazar greets customers in the service lanes at Fort Bend Toyota [in Richmond, Texas]. The Needville resident operates one of four computer kiosks along with her colleagues, other service advisors, all males. According to a National Automobile Dealers Association (NADA) Dealership Workforce Study, “Women comprised 18.59 percent of employees on new-car dealership payrolls in 2014, nearly a full percentage point more than in 2013. Among the key positions, F&I (Finance and Insurance) manager had the highest ratio of women followed by service advisor.”

Salazar began working as a Toyota service advisor in January 2015. “It will be one year next month,” she said. Service advisors, or writers, are the liaison between customers and mechanics. Salazar listens to customers, prepares orders describing work to be completed, estimates time needed to complete repairs or service, and approximates costs. “She’s a go-getter,” said General Manager Chris Anderson, Fort Bend Toyota. “It’s just her attitude. It’s great.”
Source: Fort Bend Sun
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Quotable
"Warren Buffett and others have come to see dealerships as stable, slow predictable growth."

    -- Cliff Banks, founder of The Banks Report, on a 40 percent increase in dealership aquisations in 2015, The Wall Street Journal, Dec. 21

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