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April 14, 2016 FacebookTwitterFlickrRSSSEND TO A FRIENDPRINT
Inside this issue
New Report: Employment at New-Car Dealerships Up 4.3% in 2015
U.S. Says 85 Million Takata Airbags May Still Face Recall
Automotive News: CFPB's Settlement Eligibility Letters Should Have a Perjury Clause
Appeals Court Panel Sharply Questions Structure of Consumer Watchdog Agency
Survey Finds Dealerships Haven't Conducted Compliance Training
Fiat Chrysler Chairman Renews Push for Merger With `Big Guys'
Ford Mulls New Russia Investment as Quarterly Sales Jump 93%
Toyota is Turning Ann Arbor into Global Test Site for Connected Cars
Top Stories
New Report: Employment at New-Car Dealerships Up 4.3% in 2015

 

As auto sales continue to rise, new-car dealerships across the country continue to hire, according a new report released by the National Automobile Dealers Association. Employment at new-car dealership in the U.S. reached 1,110,700 in 2015, up 4.3 percent from 1,064,000 employees in 2014, according to NADA Data 2015, the annual financial profile of new-car dealerships. On average, a new-car dealership employed 67 people in 2015, up 3.1 percent from 65 employees per dealership in 2014.

“For 2016, expect new-car dealership employment to reach an all-time high. The past six years have been the longest period of new-vehicle sales growth since the 1920s, and the outlook for 2016 is just as bright,” said NADA Chief Economist Steven Szakaly. “But what matters even more is that dealers continue to be drivers of economic development in their local communities. Last year, new-car dealers employed more than 1.1 million workers directly; in addition, hundreds of thousands of other local jobs across the country were dependent on dealerships.”

About NADA Data 2015

This year, NADA Data 2015 has been redesigned to include easier-to-read charts and graphs. Additionally, there are now two versions of NADA Data: The first version is a general overview of the retail-auto industry, with infographics that can be shared by print and broadcast news outlets, as well as on social media;

The second is a more detailed version that looks at each dealership department, as well as trends in dealership advertising; employment and payrolls; and the retail auto industry as a whole. NADA Data 2015 also includes an all-new section that focuses on the new- and used-vehicle consumer, with in-depth data provided by Experian. These stats include average monthly payment, average loan term, leasing and more.

To request a copy of the detailed version of NADA Data 2015, click here.
Source: NADA

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U.S. Says 85 Million Takata Airbags May Still Face Recall

U.S. auto safety regulators said on Wednesday there are about 85 million unrecalled Takata airbag inflators in U.S. vehicles that would eventually need to be recalled unless the company can prove they are safe. This is the first public accounting by the U.S. government of the total number of unrecalled Takata airbag inflators. So far 28.8 million inflators have been recalled by 14 automakers. A U.S. House panel is set to hold a hearing with the head of the National Highway Traffic Safety Administration and auto trade groups on Thursday, and the Takata recall and other safety issues are expected to be raised.
Source: Reuters

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Automotive News: CFPB's Settlement Eligibility Letters Should Have a Perjury Clause
By Hannah Lutz

When consumers who may have been overcharged on their Ally Financial auto loans receive letters from the feds about a possible payment from the settlement fund, some don’t have to identify their ethnicity. Others do. But in both cases, the forms do not include a penalty of perjury. In my opinion, they should. The Consumer Financial Protection Bureau has been using a two-tier method when distributing funds to potentially affected borrowers. That means if borrowers’ probability of being part of a protected class is higher than 95 percent, they don’t have to do anything to receive the payment. They are asked to opt out, however, if they are not part of one of the listed minority groups. Those with 50 to 95 percent probability have to opt in to receive payment, confirming that they are part of a protected class. To rightfully qualify for payment, the borrower or co-buyer must be African-American, Hispanic, Asian or Pacific Islander.

By December, of the 201,212 opt-out letters sent, only 0.46 percent had opted out. Of the 218,457 opt-in letters sent out by December, 47.92 percent of recipients opted in, according to a January report by the Republican staff of the House Financial Services Committee. The CFPB should add a penalty of perjury clause in settlement eligibility letters to warn borrowers about the repercussions that come with misrepresenting race. Doing so could deter unqualified auto loan borrowers from cashing in and could increase the likelihood that those who were potentially overcharged on auto loans receive the appropriate amount from the settlement fund.
Source: Automotive News

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Appeals Court Panel Sharply Questions Structure of Consumer Watchdog Agency

Consumer Financial Protection Bureau concentrates ‘huge power’ in director, judge says

A federal appeals court panel wrestled Tuesday with the question of the Consumer Financial Protection Bureau’s authority, with one judge persistently asking about the constitutionality of the watchdog agency’s structure, saying it concentrates “huge power” in its top official. At Tuesday’s hearing in a case involving a New Jersey mortgage company, Judge Brett Kavanaugh repeatedly questioned the CFPB’s single-director structure, calling it “very problematic” that such a powerful official was able to make a decision that aimed to overturn a practice long seen by companies as acceptable. “You are concentrating huge power in a single person and the president has no power over it,” Judge Kavanaugh said. The consumer bureau, he said, has a “very unusual structure” that has “few precedents.”
Source: The Wall Street Journal

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Survey Finds Dealerships Haven't Conducted Compliance Training

Consumers like seeing training certificates

Sixty-five percent of dealers think that they are under scrutiny by proactive regulators, a March survey found. But just 37 percent of dealers provide comprehensive compliance training to all of their employees, and only 23 percent employ a compliance officer, the survey found. Meanwhile, 73 percent of consumers are more comfortable dealing with dealership staff that has completed compliance training and has certificates on display, the same survey, by auditing firm Total Dealer Compliance, found. “For us, it’s important to survey dealerships and the general public and see what the general public thinks of compliance,” Max Zanan, president of TDC, told Automotive News. He plans to make it an annual survey.
Source: Automotive News

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Fiat Chrysler Chairman Renews Push for Merger With `Big Guys'

Fiat Chrysler Automobiles NV Chairman John Elkann renewed a push to merge the company with one of the auto industry’s “big guys,” saying savings could top $10 billion a year. Even with developments like car sharing and self-driving vehicles, Fiat Chrysler’s major competitors should consider the potential benefits of a merger because the bulk of their business through 2030 will remain selling cars to individuals, Elkann said in a letter to shareholders of Exor SpA, the investment company through which his family controls Fiat Chrysler. The savings figure from combining “starts to become very interesting” when looked at over the long term, Elkann wrote. "But you need two to tango, and most of our competitors are busy with the great opportunities that technological disruption has to offer." After calling off efforts to push General Motors Co. into a deal, Fiat Chrysler Chief Executive Officer Sergio Marchionne, 63, has made investment and restructuring through 2018 his final job at the company he’s run since 2004.
Source: Bloomberg

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Ford Mulls New Russia Investment as Quarterly Sales Jump 93%

Ford Motor Co., which spent more than $1.5 billion with a partner in the past five years to build cars and engine factories in Russia, is studying new investments in the country in a bet on economic recovery. The national car market could still become Europe’s biggest, and Ford wants to be prepared when demand recovers, said Mark Ovenden, chief executive officer at the U.S. company’s Russian joint venture, Ford Sollers. Russian consumers may be more resilient than their Western counterparts, he said.
Source: Bloomberg

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Toyota is Turning Ann Arbor into Global Test Site for Connected Cars

Toyota is going all in on Ann Arbor, Mich., as a global test site for connected cars to gather data for research into autonomous driving and safety applications. In partnership with the University of Michigan’s Transportation Research Institute, Toyota’s goal is to equip 5,000 cars with information-gathering boxes that communicate wirelessly with similar vehicles and infrastructure such as traffic signals, the company said in a statement. The effort does not include Google-style autonomous cars sometimes seen on the streets of California and the Southwest. Rather, regular drivers will be recruited to have a small box installed in the rear of their vehicles along with two small antennas on the trunk or the roof. The drivers will make their normal rounds.
Source: Automotive News

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          "For 2016, expect new-car dealership employment to reach an all-time high. The past six years have been the longest period of new-vehicle sales growth since the 1920s, and the outlook for 2016 is just as bright." 

             ---  NADA Chief Economist Steven Szakaly, on NADA Data 2015, April 14

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