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January 6, 2016 FacebookTwitterFlickrRSSSEND TO A FRIENDPRINT
Inside this issue
Opinion: Shaking Down Auto Lenders and Buyers the Washington Way
Auto Industry Sets All-Time Sales Record in 2015
FTC Seeks Comment on State Auto-Retailing Laws
VW Brand Chief Says Diesels Will Stay in U.S. Lineup
Automakers Turning CES into a High-Tech Car Show This Year
Top Stories
Opinion: Shaking Down Auto Lenders and Buyers the Washington Way
By U.S. Rep. Frank Guinta

Whether they meet with me at the capital in Washington, D.C., or a Granite State roundtable, members of the New Hampshire Auto Dealers Association usually have one thing on their minds: the Consumer Financial Protection Bureau (CFPB). Currently, auto dealers can negotiate lower rates and fees with lending companies, in order to offer customers the best possible deals. A competitive market benefits most buyers. However, the CFPB claims that dealers' flexibility to offer low financing rates disproportionately harms minorities. Sen. Elizabeth Warren's comments in support earned her four Pinocchios, its lowest rating on the Washington Post's truth meter. Even so, the agency issued a notice of liability to auto dealers. The Wall Street Journal estimates that the CFPB's efforts to restrict competition will raise the price of the average car loan by $586.

Federal interference could drive prices even higher, preventing millions of Americans from purchasing affordable, reliable transportation. Small businesses, including minority and women- owned, would likely lose customers, and in turn, employees. That's one reason Rep. David Scott, my colleague in the U.S. House of Representatives and a Democrat, joined me to introduce the Reforming CFPB Indirect Auto Financing Act of 2015, which would force the CFPB to reconsider its findings. The African-American member of the House Financial Services Committee, on which I also serve, understands the agency's potential impact on car buyers and dealers of every race and ethnicity. In November, our bill, H.R. 1737, passed the House by a super-majority of Republicans and Democrats, voting 332-96 in favor, despite a presidential veto threat.

Just days after the large, bipartisan vote, the Financial Services Committee released a report describing the many reasons, legal as well as economic, why legislation to rein in the CFPB is so necessary. The report explains that the agency's findings of auto lenders' liability is based on shaky legal ground. The report reveals that the CFPB relied on faulty data and scientific analysis to prove the theory, called "disparate impact," and concealed inconvenient facts, which undermine its argument, from public view.

H.R. 1737 calls on the CFPB to retract its findings and start over, taking into consideration up-to-date Census data, applying verifiable analysis, and factoring in the economic impact of new regulations, while doing so with full transparency and public input. Bipartisan members of Congress, representing diverse districts, have joined to protect our constituents' access to competitive financing, as well as small businesses and jobs in our communities. To expand access to consumer credit and grow the economy, we will continue to hold the CFPB to account.
Source: Investor's Business Daily
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Auto Industry Sets All-Time Sales Record in 2015

The U.S. auto industry sold more cars and trucks in 2015 than ever before, with Detroit automakers reporting their best sales since the mid-2000s and several foreign manufacturers posting all-time records. Led by sales of pickups, sport utility vehicles and crossovers, automakers sold 17.47 million vehicles last year — besting the previous record of 17.41 million set in 2000 and posting a 5.7 percent gain from 2014, according to Autodata Corp. The record was closer than many analysts expected, as December sales came in slightly less than many projected.

National Automobile Dealers Association chief economist Steven Szakaly expects automakers to increase buyer incentives on cars this year by at least 10 percent, as demand for pickups, crossovers and SUVs continues to rise. He expects sales of trucks to increase to 57 percent of the industry this year. Many industry analysts expect 2016 new-vehicle sales to top 2015, which would make for a second-consecutive year of record sales and a seventh-consecutive year of annual increases. Szakaly, whose Virginia-based NADA represents about 16,500 new-car and truck dealerships, expects sales to rise to 17.7 million or higher in 2016 before leveling off.
Source: The Detroit News

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FTC Seeks Comment on State Auto-Retailing Laws

Online workshop discussion will cover direct factory sales

The Federal Trade Commission is seeking public comment on state regulations covering auto retailing, including the issue of automakers’ direct sales to consumers. To that end, the FTC will hold a one-day workshop at its Washington, D.C., offices on Tuesday, Jan. 19, to discuss the topics of regulation of dealer location, laws relating to reimbursement for warranty services and restrictions on manufacturers’ ability to engage in direct sales to consumers. The agency will offer a live webcast of the workshop, which will include comments from experts such as Peter Welch, president of the National Automobile Dealers Association, that day starting at 9 a.m. EST. The workshop will look at how state laws and regulations governing car sales may affect consumers and competition and to what extent the needs for some of these laws continue to exist. It will also explore whether less restrictive alternatives to the current system might meet policy goals while promoting greater competition and innovation.

“Franchised dealers provide the most-efficient and pro-consumer way to sell and service new vehicles, and empirical research has demonstrated that price competition by dealers lowers new-car prices for consumers by hundreds of dollars or more,” NADA Spokesman Jared Allen said. “NADA looks forward to discussing the numerous benefits of America's franchised dealer network during the upcoming FTC workshop."
Source: Automotive News

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VW Brand Chief Says Diesels Will Stay in U.S. Lineup

Diess confident of finding solution to regulatory crisis

Volkswagen’s brand chief isn’t giving up on diesels in the U.S. market despite the company’s emissions scandal that has undermined the eco-friendly credentials of the niche powertrain. Herbert Diess says that diesels will continue to have a role in Volkswagen’s U.S. lineup because, with the latest emissions technologies, diesels can be clean. He also touted the long range and high torque of diesel engines. “I wouldn’t give up diesel, even in the U.S.,” Diess told reporters on the sidelines of VW’s CES keynote [in Las Vegas] Tuesday night. VW is scrambling to receive U.S. regulatory approval for fixes to nearly 500,000 diesels fitted with illegal emissions software designed to manipulate nitrogen oxide emissions measurements on government tests.
Source: Automotive News

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Automakers Turning CES into a High-Tech Car Show This Year

Ford, Chevrolet, BMW, Toyota, VW and others to make major announcements

You’ll be hearing plenty about the so-called “Internet of Things,” and there’ll be rooms full of next-generation TVs and digital cameras. But some of the biggest headlines to come out of the annual Consumer Electronics Show in Las Vegas this week will be made by automotive manufacturers. Ford is expected to announce a major alliance with Google; General Motors will reveal the production version of its long-range electric vehicle, the Chevrolet Bolt and, among other announcements to come from CES, Volkswagen will unveil a new battery-electric minivan.
Source: The Detroit Bureau
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Quotable
"Currently, auto dealers can negotiate lower rates and fees with lending companies, in order to offer customers the best possible deals. A competitive market benefits most buyers."

   
-- Rep. Frank Guinta, on the benefits of dealer-assisted financing, Investor's Business Daily, Jan. 4

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