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February 3, 2016 FacebookTwitterFlickrRSSSEND TO A FRIENDPRINT
Inside this issue
Automakers Overcome Storm to Post Best January Sales in a Decade
Toyota to Scrap Scion Brand, Keep the Cars
Toyota Motor Credit Corporation Reaches Voluntary Agreement with CFPB and DOJ
Toyota Recalls 320,000 Vehicles for Side Airbag Issue
Takata Must Change Culture to Prevent Another Safety Crisis, Panel Says
VW Group Sends Proposal to Fix Rigged 3.0-Liter Diesels to U.S., Calif. Regulators
ALERT: Be Aware of Misleading Email Solicitations
Top Stories
Automakers Overcome Storm to Post Best January Sales in a Decade

Automakers reported the strongest U.S. January sales in a decade, topping analysts’ estimates and showing that even thigh-deep snow couldn’t cool Americans’ demand for new trucks and sport utility vehicles. General Motors Co., Fiat Chrysler Automobiles NV and Nissan Motor Co. reported surprise sales gains instead of the predicted declines, while drops at Ford Motor Co., Toyota Motor Corp. and Honda Motor Co. were narrower than projected. The industry’s annual sales rate was 17.6 million, the highest January since 2006, researcher Autodata Corp. calculated. The uneven nature of January’s results -- some up, some down -- reinforced investors’ concerns that sales may be near a peak, and automakers’ shares fell. Industry executives and analysts took a more positive read, bolstering their forecasts that 2016 will be a record year, a bright spot amid an unsettled U.S. economic outlook and dour markets in recent months.
Source: Bloomberg

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Toyota to Scrap Scion Brand, Keep the Cars

Toyota is pulling the plug on Scion, the funky upstart brand it launched in 2002 to appeal to the finicky younger buyers it was struggling to connect with on its own. The reason, according to Toyota: It’s no longer struggling to connect with those buyers. The end will come quickly -- and just months after the launch of two vehicles that were seen as critical to reviving the brand. Scion will be discontinued in August, the automaker said [Wednesday], and its model lineup will be folded into the Toyota brand starting with the 2017 model year.
Source: Automotive News

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Toyota Motor Credit Corporation Reaches Voluntary Agreement with CFPB and DOJ

With a commitment to fostering a fair and competitive auto finance lending market, Toyota Motor Credit Corporation (TMCC) [Tuesday] announced a voluntary agreement with the Consumer Financial Protection Bureau (CFPB) and the U.S. Department of Justice (DOJ) that addresses discretionary dealer compensation practices. TMCC determined that a voluntary agreement was the preferred resolution of the agencies’ review, because it helps preserve consumer financing options while fairly compensating its dealer partners and upholding its commitment to fair lending practices. TMCC is the latest of several lenders to enter into such an agreement.
 
TMCC does not tolerate discrimination of any kind, even perceived or unintentional, from its employees or business partners – this principle extends to fair lending practices. While TMCC respectfully disagrees with the agencies’ methodologies to determine whether industry lending practices have been discriminatory, the company shares the agencies’ commitment to ensuring that consumers can count on competitive and fair auto financing options. The actions TMCC will take under this agreement are intended to further that commitment.
 
During their review the agencies did not contend that TMCC intentionally discriminated against its customers. Accordingly, TMCC denies any wrongdoing and notes that this voluntary agreement does not include an assessment of civil money penalties. As an indirect lender, TMCC has no visibility into the race or ethnicity of its customers or credit applicants, and these factors have no bearing on the company’s credit or pricing decisions. Specific terms of the agreement with the agencies include dealer participation caps will be limited to 125 basis points [1.25%] for contracts of 60 months or less and 100 basis points [1.00%] for contracts with longer terms.
Source: Toyota Motor Credit Corporation

Editor's note: NADA issued the following statement in response to the agreement announced Tuesday between the CFPB, DOJ, and Toyota Motor Credit:

"The CFPB's campaign to eliminate auto loan discounts has already cost consumers money and eroded the rights that every consumer has to negotiate and benefit from a competitive marketplace. As long as those rights are under assault, NADA will continue to urge the CFPB to adopt a solution, developed by the U.S. Department of Justice, that fully addresses fair credit risk in auto lending without needlessly harming consumers."


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Toyota Recalls 320,000 Vehicles for Side Airbag Issue

Toyota Motor Sales U.S.A. [Tuesday] said it is recalling about 320,000 vehicles from the 2003-06 model years for an airbag-related defect. The recall affects the 2003-06 Toyota Land Cruiser, 2004-06 4Runner, 2005-06 Tundra, 2005-06 Sequoia, 2003-06 Lexus LX 470 and 2004-06 Lexus GX 470. The vehicles come with side airbags that deploy from the roof during some crashes. Toyota said “improper programming in the airbag control modules” can lead to the airbags and seat belt pretensioners improperly activating in certain conditions after starting the vehicle, raising the risk of injury.
Source: Automotive News

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Takata Must Change Culture to Prevent Another Safety Crisis, Panel Says

Takata Corp. must make quality a part of company culture if it hopes to prevent future safety defects like the exploding airbags at the center of the largest automotive recall in U.S. history, a panel appointed by the Tokyo-based manufacturer to review its manufacturing process concluded. The auto parts maker needs to improve its monitoring of potential safety defects in its products, including establishing teams to track data from incident reports and giving quality-control personnel the ability to halt production when necessary, the independent panel of former government regulators and engineering experts said in a report issued [Tuesday]. “It is unlikely that even the most Herculean isolated efforts to improve quality at Takata will succeed unless there’s an accompanying shift in Takata’s culture,” the report said.
Source: Bloomberg

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VW Group Sends Proposal to Fix Rigged 3.0-Liter Diesels to U.S., Calif. Regulators

Under deadline Tuesday, Volkswagen Group of America submitted to U.S. and California regulators a draft plan to recall and repair thousands of 3.0-liter diesel vehicles containing illegal emissions software. Details of the proposal were not released. The proposal comes after the California Air Resources Board and the EPA said in early November that 3.0-liter diesel engines used in Audi, Porsche and Volkswagen models since 2009 contained three emissions control systems that weren’t disclosed as required by law. One of the systems was an illegal “defeat device” that masked nitrogen oxide emissions in lab tests that were up to nine times permissible levels in the real world, according to the agencies.
Source: Automotive News

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ALERT: Be Aware of Misleading Email Solicitations

Dealer Marketing Solutions, based in California, has sent advertising emails to some dealers with “NADA Digital Dealer Marketing” in the “From” section of the email header. NADA does not have any connection or relationship with this company, and there is no division or department of NADA by that name. NADA’s Legal Affairs department has asked the company to stop sending the mislabeled emails or any other advertising that suggests they have a connection with NADA.  
Source: NADA Legal Affairs

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    Quotable
    "On the heels of our highest volume sales year in Mercedes-Benz USA's history, January is continuing the momentum into 2016. Our new product offerings, including the new E-Class will continue to bring our customers the best in experience and innovation."

        -- CEO of Mercedes-Benz USA Dietmar Exler, commenting on January auto sales in the U.S., Automotive News, Feb. 2

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