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January 8, 2016 FacebookTwitterFlickrRSSSEND TO A FRIENDPRINT
Inside this issue
In a Record Year, What Was Hot (and Cold)
Volkswagen CEO to Hold High-Level Talks in Washington on Emissions Scandal
Washington Post: The Government Has Spent A Lot On Electric Cars, But Was It Worth It?
Mitsubishi Pegs Renewed U.S. Hopes On Hot CUV Market
Volvo Cars Sees 2016 Growth After Second Straight Sales Record
U.S. Average New-Vehicle Fuel Economy Drops Below 25 MPG
Body Shop Scrap Parts Are Tax Deductible; Donate Today
Duggan at Auto Show: Detroit 3 Comeback Boosting City
Top Stories
In a Record Year, What Was Hot (and Cold)

Last year’s record U.S. light-vehicle sales were powered by booming crossover, pickup and SUV demand while consumers gave a cold shoulder to most cars. Crossovers were 2015’s hottest wheels, with overall sales rising 17 percent year-over-year to 4,337,098 vehicles, according to Automotive News data. Premium crossover deliveries jumped 21 percent from 2014 to 834,505 vehicles, while pickups, SUVs and small and large vans also outpaced the market’s overall 5.7 percent gain. Subcompact crossovers were the hottest of the truck bunch, soaring 101 percent to nearly 400,000 in 2015. In all, light-truck sales jumped 13 percent to nearly 9.9 million last year, offsetting a 2.3 percent decline in car sales (7.6 million).

The wide gap between sizzling light trucks and weaker car demand can be explained in part by low U.S. gasoline prices and larger economic gains that make owning a truck feasible for more Americans. The largest vehicle segments in 2015 were compact crossovers, full-size pickups, midsize cars and compact cars, with each generating more than 2 million sales and combining for 53 percent of the U.S. market. No other car or light-truck segment came close to that sales volume last year, proving how fragmented nearly half the U.S. market remains.
Source: Automotive News
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Volkswagen CEO to Hold High-Level Talks in Washington on Emissions Scandal

Volkswagen Chief Executive Matthias Mueller will meet with the top U.S. environmental regulator next week for the highest-level talks since the German automaker admitted to using software to evade emissions requirements for 580,000 U.S. vehicles. Mueller will meet with U.S. Environmental Protection Agency chief Gina McCarthy on Wednesday in Washington, at the request of Volkswagen, agency spokeswoman Laura Allen said. McCarthy told reporters at a forum in Washington that EPA has been holding extensive technical discussions with VW, but declined to predict when a fix would be ready.
Source: Reuters

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Washington Post: The Government Has Spent A Lot On Electric Cars, But Was It Worth It?
By Charles Lane

In August 2010, I proposed this wager to a fellow journalist: President Obama’s declared goal was to get 1 million plug-in hybrid and all-electric cars on the road in the United States by 2015. I didn’t think that goal was reachable by 2018, even with the huge subsidies that Obama backed — but if I was wrong about that, I’d buy my colleague a new plug-in hybrid Chevy Volt. Now the 2015 car-sale data are in; time to review the bidding. Americans bought a record 17.5 million passenger vehicles in the United States, of which 116,548 — 0.67 percent — were either plug-in hybrids or all-electrics, according to insideevs.com. That was about 6,500 fewer than in 2014.

Charles Lane is a Post editorial writer, specializing in economic policy, federal fiscal issues and business, and a contributor to the PostPartisan blog.

Automakers have sold 407,136 electrics (EVs) since they hit the market in 2010. That is 0.16 percent of the 250 million-plus U.S. passenger vehicle fleet. Assuming all are still on the road, carmakers must sell 300,000 this year and next to reach 1 million, or 0.3 percent of the fleet, by 2018. I like my odds! The problem for EV enthusiasts is not the technology, though EVs still have not cured fundamental consumer concerns such as the fear that the battery will run out on a long trip and leave you stranded — “range anxiety.” Unless and until that’s solved, the raison d’etre of electric cars, and of federal policies to favor them — making a significant dent in carbon emissions — will be null and void.
Source: The Washington Post
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Mitsubishi Pegs Renewed U.S. Hopes On Hot CUV Market

Despite shuttering its sole U.S. assembly plant, Mitsubishi Motors Corp. expects to continue growing domestic sales this year to more than 100,000 vehicles for the first time since 2007. The Japanese automaker plans to do so by concentrating on crossover utility vehicles — the hottest segment in the U.S. — and vehicle electrification, according to Ken Konieczka, Mitsubishi Motors North America vice president of sales. “The plan is simple: It’s all about product,” he said during a media event Thursday night in Detroit. “That’s what’s going to get us to the next levels in the U.S. market.”
Source: The Detroit News
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Volvo Cars Sees 2016 Growth After Second Straight Sales Record

Volvo Car Group predicted its third consecutive record in annual auto sales in 2016 as the Swedish company adds to its lineup of premium vehicles targeting American consumers. Buoyed by the new XC90 sport utility vehicle, deliveries reached a new high last year, rising 8 percent to 503,127 vehicles, Gothenburg-based Volvo Cars said Friday in a statement. It was the first time the 89-year-old automaker has breached the half-million sales mark in one year.
Source: Bloomberg
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U.S. Average New-Vehicle Fuel Economy Drops Below 25 MPG

While the U.S. auto industry set a sales record in 2015, the average fuel economy of light vehicles purchased last year fell below 25 mpg for the first time in nearly two years, a University of Michigan Transportation Research Institute report said. The average window sticker rating of cars, SUVs, vans and pickups purchased in December was 24.9 mpg -- down from November’s revised 25.1 mpg. “This decline likely reflects the continuing drop in the price of gasoline in December, and the consequent increased sales of pickup trucks, SUVs and crossovers,” researchers Michael Sivak and Brandon Schoettle wrote in an email. December’s fuel economy was down 0.1 mpg from a year earlier. This was the first month since January 2014 in which fuel economy was not at or above 25 mpg.
Source: Automotive News
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Body Shop Scrap Parts Are Tax Deductible; Donate Today

The Collision Repair Education Foundation, a nationwide organization that works with high schools and colleges to prepare qualified, entry-level body shop technicians for careers in the industry, is urging dealerships to donate current model scrap parts, such as fenders, bumper covers, hoods and door skins to train students across the country.

“High schools and colleges that offer collision repair training programs are in desperate need of scrap parts from dealerships,” said Brandon Eckenrode, the foundation’s director of development. “School budgets have been severely reduced. These schools often can’t afford to purchase parts and are resorting to ‘dumpster diving’ at dealerships for scrap parts to bring back to their schools.”

The foundation, a 501(c)(3) charity that supports these programs, is working to connect dealerships with local collision school instructors. “Instead of throwing away scrap parts each month, donations to school collision programs are tax deductible,” Eckenrode added.

If your dealership would like to participate in the program and donate scrap parts to local collision schools, send an e-mail to info@ed-foundation.org and include your dealership name, address and contact and a list of available parts.

The foundation will connect dealerships with local high schools and/or college collision programs. Local instructors will either pick up the parts from the dealership or they can be delivered to the school. The foundation will send participating dealerships a one-page, basic in-kind form to note the monetary value of the parts donated and a tax receipt.

For more information, contact Brandon Eckenrode at (847) 463-5244 or brandon.eckenrode@ed-foundation.org or visit www.collisioneducationfoundation.org.
Source: NADA

Editor’s note: Dealers are encouraged to review this or any other tax-related issue with their professional tax advisor.
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Duggan at Auto Show: Detroit 3 Comeback Boosting City

Detroit mayor, auto show executives tour Cobo Center

Detroit Mayor Mike Duggan praised the auto industry's comeback and record-breaking sales, saying the benefits are showing up in lower unemployment rates in the city and more jobs in the factories of hometown automakers and suppliers. "It's been remarkable what's happening in the auto industry," Duggan said as he toured the glitzy displays being set up for the North American International Auto Show at Cobo Center in Detroit. The show runs Jan 11-24.
Source: Detroit Free Press
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Quotable
"Although interest rates will be rising in 2016, savings from low fuel costs coupled with improving economic conditions will keep the vehicle market on the road toward another sales record this year."

   
-- Charles Chesbrough, economist for IHS Automotive, commenting on U.S. auto sales in 2016, Automotive News, Jan. 7

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