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April 11, 2016 FacebookTwitterFlickrRSSSEND TO A FRIENDPRINT
Inside this issue
Tough Competition for Talent Driving Wage Growth in Dealerships
Cordray Defends How CFPB Disperses Restitution
What to Make of VW's Big Make Meeting
Mercedes-Benz Working on More Trucks, Recall Aid for Dealers
Automotive News: Floor It: Get Up to Speed at NADA
PSA's Strategy to Tiptoe Back into U.S.
General Motors Planning For More Minority And Women Owned Dealerships
Top Stories
Tough Competition for Talent Driving Wage Growth in Dealerships

Dealerships are paying employees more as the labor market tightens, underscoring the pressure on dealers to come up with better ways to recruit and retain talent. In 2015, employment at U.S. dealerships reached 1.1 million people, up 4.3 percent. But the average dealership payroll was $3.8 million, up nearly 8 percent, according to NADA Data 2015, the National Automobile Dealers Association's annual financial profile of new-car dealerships. That shows it's not just higher head counts fueling payroll growth -- fatter paychecks are also a factor.
Source: Automotive News

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Cordray Defends How CFPB Disperses Restitution

The sparring between lawmakers and the Consumer Financial Protection Bureau’s Richard Cordray continued on Thursday when the director offered his semiannual report to the U.S. Senate Banking Committee. What has been a source of much consternation percolating from the upper chamber’s counterparts in the U.S. House germinated during the second of two Senate committee hearings this week that focused on the CFPB and its work, especially in auto finance. As first mentioned by the American Financial Services Association through its weekly Newsbriefs, an edgy exchange between Cordray and Sen. Tom Cotton began when the Arkansas Republican received his turn to question the bureau’s boss more than an hour into Thursday’s hearing. Cotton focused his attention on the CFPB’s 2013 settlement of fair lending claims against Ally Financial; an action that’s been questioned in multiple reports by the House Financial Service Committee.
Source: Auto Remarketing

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What to Make of VW's Big Make Meeting

More products are promised, but there's little info on the plan to rectify scandal damage

It was supposed to be the week's best show in Vegas. A fireworks display. The long-awaited confrontation between beleaguered U.S. Volks- wagen dealers and besieged factory representatives at the brand's make meeting during the NADA convention. Volkswagen rolled out its big gun. Global VW brand chief Herbert Diess was in town, and when was the last time such a high-ranking visitor from Wolfsburg showed up for an NADA make meeting? Outside Ballrooms A and B at the Westgate Las Vegas Resort & Casino, a large knot of reporters and others waited anxiously for news from behind those big stateroom doors. But alas, no fireworks.

After 90 minutes, VW dealers calmly filed out of their April 2 make meeting with promises of more cars to jump-start sales. But they had little new information about how VW planned to rectify the damage its emissions scandal has done to the brand and its retailers. Attendees said Diess and other executives offered no details about technical fixes for the diesel crisis or compensation for consumers, citing a government gag order. Neither did the executives discuss the prospect of settlement talks with dealers, who a day earlier formed a committee to lead negotiations with VW on compensation for losses incurred by retailers since the scandal erupted in September.
Source: Automotive News

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Mercedes-Benz Working on More Trucks, Recall Aid for Dealers

Mercedes-Benz USA executives are working with Daimler AG in Stuttgart to get more of the crossovers U.S. dealers are clamoring for. "We continue to get a little bit more here, a little bit more there," said Dietmar Exler, CEO of Mercedes-Benz USA, after the brand's make meeting during the NADA convention. Allocation should increase through year end, he said, without providing numbers. Dealers have complained about shortages of trucks. Exler noted that Mercedes will launch seven new, redesigned or freshened vehicles in the next three or four months. The brand's marketing spend will rise to support those launches, he said, but he declined to say by how much. Dealers at the meeting also praised the product pipeline while underscoring their need for additional truck inventory.
Source: Automotive News

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Automotive News: Floor It: Get Up to Speed at NADA
By James Treece

Welcome back from the graduate class that is the National Automobile Dealers Association Convention & Expo. Set aside the convention's impressive slate of workshops. The exposition hall alone has become a must-attend chance for dealers to get up to speed on technologies and profit opportunities. This is a constantly evolving business. You can't be doing business today the way you did it last year, much less last decade. The NADA convention offered a chance to learn about, compare, test drive and, for some, buy what dealers need to stay competitive.
Source: Automotive News

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PSA's Strategy to Tiptoe Back into U.S.

Tavares' plan initially calls for car sharing

PSA Group plans to test the U.S. waters with car-sharing and mobility services before possibly expanding to retail sales. In a presentation to financial analysts last week, CEO Carlos Tavares revealed a 10-year plan that includes a phased entry to the U.S. Tavares said that if mobility and car-sharing programs show positive results, PSA could "sell cars in the U.S. supported by regional sourcing when appropriate." He added that PSA has already put in place a team to study U.S. customer and regulatory requirements. Selling vehicles in the U.S. would be the third step in a three-step approach.
Source: Automotive News

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General Motors Planning For More Minority And Women Owned Dealerships

General Motors has plans to increase the amount of dealerships owned by women and minorities by an additional 10 dealerships for each this year. The plans come after a major gain of 12 minority-owned dealers and nine women-owned ones in 2015. GM explained to Automotive News that minorities in dealerships are often slightly more profitable than other dealerships. “I think it’s because of the quality of the candidates, whether it’s women or minorities,” Eric Peterson, vice president of diversity dealer relations, said. “We follow up with them, making sure they have the tools they need.” In all, minorities own 231 GM dealerships, and women own 234, about 11-percent of GM’s entire dealership network. Most of the new dealerships owned by minorities and women in 2015 came from growing dealer portfolios, or second- and third-generation dealers who have stepped in to take over a family business. GM will continue to encourage women and minorities to pursue opportunities with the automaker, whether it’s owning a dealership, working in the service department and more.
Source: GM Authority

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          "We are very much in a phase where talent is very, very valuable. We need to attract many, many more people into this industry in order to keep up with not only the work expansion that dealers have in terms of sales but also service." 

             ---  NADA Chief Economist Steven Szakaly, on dealership employment trends, Automotive News, April 11

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