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February 25, 2016 FacebookTwitterFlickrRSSSEND TO A FRIENDPRINT
Inside this issue
U.S. Senators Urge NHTSA to Accelerate Takata Airbag Recall
Study: Industry Needs to ‘Build Trust’ in Vehicle Technology
Lexus Tops J.D. Power Dependability Rankings for 5th Straight Year
Calif. Dealers, JLR Fight Over Exports
GM, Ford Have Underestimated Vulnerability to Recession, Analyst Warns
Forecast: February Sales Set to Reach 15-Year High
Millennials’ Growing Clout Shifts Buying Habits, Lending
Top Stories
U.S. Senators Urge NHTSA to Accelerate Takata Airbag Recall

U.S. Sens. Edward Markey and Richard Blumenthal today renewed their call for the National Highway Traffic Safety Administration to accelerate the recall of potentially defective Takata airbags. The lawmakers cited a report on Tuesday by the Senate Commerce Committee alleging Takata Corp. "falsified data to cover up problems" with its airbags, and said the Japanese supplier might have lied to safety regulators for years. [Wednesday], spokesman Gordon Trowbridge said NHTSA "has taken unprecedented efforts to address the Takata issue, including the first use of the agency's accelerated remedy authority," and that it will "continue to use every tool available to make sure every American vehicle has safe airbags."
Source: Reuters

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Study: Industry Needs to ‘Build Trust’ in Vehicle Technology

Although vehicle technology is progressing at a rapid rate — even self-driving cars are no longer just an idea — it seems some of this very same tech evolution is continuing to cause vehicle owners problems. According to the J.D. Power 2016 U.S. Vehicle Dependability Study released Wednesday, technology continues to affect vehicle reliability. The study, which found Lexus ranked the highest in vehicle dependability for the fifth year in a row, also showed the number of problems with infotainment, navigation and in-vehicle communication systems (which together are known as audio, communication, entertainment and navigation or ACEN) has spiked. These types of issues now account for 20 percent of all customer-reported problems in the study, making it the most problematic areas on most vehicles.
Source: Auto Remarketing

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Lexus Tops J.D. Power Dependability Rankings for 5th Straight Year

Buick again leads domestic, nonluxury brands

For the fifth year in a row, Lexus is the auto industry’s most dependable brand after three years of ownership, while Buick is the highest-ranking marque among domestic and nonluxury brands for the second consecutive year, according to J.D. Power. Lexus, Porsche, Buick, Toyota and GMC were the top five scorers in Power’s 2016 U.S. Vehicle Dependability Study released [Wednesday]. GMC (fifth place), Acura (tied for eighth) and Ram (tied for eighth) moved into the top 10 this year. Cadillac, Mercedes-Benz and Toyota’s soon-to-be-discontinued Scion brand dropped out of the top 10. Cadillac slipped 11 spots to 15th place, Mercedes dropped four to 12th place, and Scion tumbled 15 to 24th place -- the biggest dip in the rankings of any brand. Chevrolet, Honda, Acura, Ram and Lincoln rounded out the top 10, giving domestic brands five spots in the group. In 2015, four domestic brands made the top 10, while three did in 2014.
Source: Automotive News

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Calif. Dealers, JLR Fight Over Exports

Retailers say they can't police the illegal flow of vehicles overseas

A young man walks into a Jaguar Land Rover showroom in California and asks about a $120,000 long-wheelbase Range Rover SUV. He shows no interest in anything else, not even the Jaguar F-Type sports car across the showroom, and offers to pay cash. Suspicious? Maybe. It's not out of the question for a Californian to have access to that kind of cash. But in California, such deals have led to thousands of luxury vehicles being smuggled through West Coast ports and illegally exported to China. And the question of whether a dealer can be held responsible for those exports has ignited a legal battle between Jaguar Land Rover and its U.S. dealers. Illegally importing a car is a common way for foreign buyers to evade taxes that drive up prices for new vehicles overseas. But California dealers say they can't be held responsible for controlling the illegal flow of vehicles overseas.

"What is the dealer supposed to do if the guy who buys the car legally turns around and exports it?" Brian Maas, president of the California New Car Dealers Association, said in an interview. "There's an incredible incentive to buy a car in California and turn around and sell it overseas. The dealer can't control the outcome."

The California dealers association filed a formal protest this month with the state's New Motor Vehicle Board against a Jaguar Land Rover North America policy aimed at cracking down on illegal exports. Under the policy, last updated in December, no more than 3 percent of quarterly sales for dealers selling 250 vehicles or more per year may end up registered in another country. Dealers who violate the rules face financial penalties, reduced allocations and audits.
Source: Automotive News

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GM, Ford Have Underestimated Vulnerability to Recession, Analyst Warns

A Morgan Stanley analyst says profits at General Motors and Ford Motor Co. are more at risk in a recession than the automakers have estimated. The two companies would break even in a U.S. auto market of about 13 million or 14 million vehicles, analyst Adam Jonas said in a note. GM and Ford have said they can avoid losses even if U.S. sales fall to 11 million vehicles or lower. The level at which profits might evaporate is a vital point for the two automakers, which have been telling investors they can weather even a steep downturn like the financial crisis of 2009, when U.S. sales slid to 10.4 million. Investors will have more faith in the U.S. carmakers if they can show that they are able to stay in the black during a downturn, which Jonas has now called into question.
Source: Bloomberg

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Forecast: February Sales Set to Reach 15-Year High

A WardsAuto forecast calls for U.S. automakers to deliver 1.34 million light vehicles in February, a 15-year high for the month. The forecasted daily sales rate of 55,868 over 24 days represents a 7.1% improvement from like-2015 (also 24 days). The report puts the seasonally adjusted annual rate of sales for the month at 17.50 million units, compared with year-ago’s 16.32 million and January’s 17.45 million mark. The forecasted total includes 780,000 light trucks, up 12.3% from February 2015 to account for 58% of sales. Cars make the up the remaining 42% with 570,000 units, up just 0.5%. Gas prices continue to decline, falling below $1.90 for most of the month, resulting in the lowest monthly average in 10 years. Low fuel costs will continue to move shoppers from cars to light trucks.
Source: WardsAuto

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Millennials’ Growing Clout Shifts Buying Habits, Lending

Millennials have increased their share of auto loan originations in the past year. But as a demographic, millennials have different buying behaviors than older generations, and the industry has to adjust to their mindset. Millennials, defined as consumers aged 18 to 34, made up 35 percent of loan originations in 2015, and their share will continue to grow, said Jason Barrie, vice president of market performance and F&I solutions at Dealertrack. Overall, millennials represent over 83.1 million American consumers, or more than a quarter of the nation’s population.
Source: Automotive News

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    Quotable
    "The buying power is massive."

       --- Jason Barrie, vice president of market performance and F&I solutions at Dealertrack, on Millennials increased share of auto loan originations, Automotive News, Feb. 24


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