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May 9, 2016 FacebookTwitterFlickrRSSSEND TO A FRIENDPRINT
Inside this issue
Automotive News: NADA President Peter Welch on Recalls
NHTSA Tests Just-in-Time Recalls
Dealer Wins Court Battle Against GM
New GM Tool Warns of Potential Part Failures
BMW Confronts Oversupply on Dealer Lots
Monster Month for Truck Sales
Off-Lease Impact: Not as Bad as Some Fear?
NADA Accepting 2017 Convention Workshop Proposals
Top Stories
Automotive News: NADA President Peter Welch on Recalls

Automotive News' Krishnan M. Anantharaman laid out an ambitious agenda for improving U.S. recall processes -- without once mentioning the word "automaker." ("Fixing the U.S. recall loophole is a job for "someone else,'" May 2) That is a material omission. The primary dysfunction in America's recall process is the automakers' failure to quickly provide parts after issuing recalls. If parts were available, consumer inaction would be the only obstacle to achieving our shared goal of a 100 percent recall completion rate. But recall-remedy parts are simply not available for many vehicles. And the lack of parts, coupled with an overly broad approach of banning the sale of all recalled vehicles, creates a logjam with huge costs that manufacturers are forcing consumers to bear. When recalled vehicles without parts available can't be sold -- even those that the engineering experts at the National Highway Traffic Safety Administration and the automakers have determined are acceptable for consumers to drive -- the market instantly devalues those vehicles, resulting in a massive tax for any consumer trying to trade in one.
Source: Automotive News

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NHTSA Tests Just-in-Time Recalls

A novel strategy to mitigate risk and manage parts supply

The 35 million-plus Takata airbag inflators added last week to the recall rolls haven't been linked to any injuries or deaths. They haven't ruptured in the field or failed in lab tests. The National Highway Traffic Safety Administration says they do not present an "unreasonable risk to safety." But eventually, NHTSA says, they will. And that's why the agency took the unusual, if not unprecedented, step of ordering a phased recall that stretches over the next three and a half years.
Source: Automotive News

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Dealer Wins Court Battle Against GM

N.Y. ruling strikes down broad metrics for sales performance

New York's highest court ruled this week that General Motors violated state law by trying to cancel a Chevrolet franchise for subpar sales, a ruling legal experts say could force automakers to alter how they measure retailers' sales performance. The legal victory by the owners of Beck Chevrolet in Yonkers, N.Y., centered on GM's use of a benchmark called the retail sales index, or RSI, its version of a commonly used metric that has become a flashpoint between dealers and automakers. Dealers believe the system is unfair because it measures them against a state average but fails to account for market nuances.
Source: Automotive News

Editor’s note: NADA supported this effort through the NADA Legal Defense Fund, and salutes Beck Chevrolet of Yonkers, New York, for its persistence in standing up against a flawed sales formula. The court’s decision reinforces what NADA has been saying about the importance of state franchise laws, like the one in New York State upon which this decision is based, in helping to ensure that a level playing field exists in the business relationship between all manufacturers and their dealers.

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New GM Tool Warns of Potential Part Failures

General Motors quietly rolled out a new connected-car technology last month that it says has the potential to dramatically reduce vehicle-stopping breakdowns. The technology, called Proactive Alerts, uses a combination of sensors and software to monitor the performance of three critical components -- the battery, starter and fuel pump -- each time the car is started. When the performance of those parts begins to deteriorate, General Motors can warn drivers via its OnStar telematics service that they need to take their vehicle in for service. The system, under development for about 10 years, is similar to what is used on some commercial jetliners.
Source: Automotive News

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BMW Confronts Oversupply on Dealer Lots

A scramble to clear inventory as 3 series sedans languish

BMW will likely spend the rest of the first half of this year liquidating inventories in the U.S. as it attempts to reduce a heavy stock overhang stemming from the end of last year, when it edged out Mercedes-Benz and Lexus for the U.S. luxury sales crown. Comments from BMW executives confirm bearish remarks made by major dealership groups that said cars such as the 3 series were sitting on showroom lots, declining in value with each day. "We are adjusting our production plans and reallocating more SUVs to the U.S.," CFO Friedrich Eichiner told analysts last week, repeating plans to lift the share of light trucks sold -- such as the X5 -- to 40 percent from last year's 33 percent.
Source: Automotive News

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Monster Month for Truck Sales

59.3% April market share leaves cars in the dust

Roomy and fuel-efficient crossovers, pickups, vans and SUVs ran car sales off U.S. roads in April. Trucks accounted for 59.3 percent of light vehicles sold in April -- the biggest trucks vs. cars spread this year and the highest level of truck sales ever for the month. Last April, trucks represented 55.2 percent of the market.
Source: Automotive News

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Off-Lease Impact: Not as Bad as Some Fear?

The impact from the upswing in off-lease volume isn’t likely to be nearly as dramatic as some have feared, says report released Friday by Scotiabank. And 2016 has started off with strong demand in both the new- and used-car markets. A summary of the Scotiabank Global Auto Report said there has been a 3-percent lift in new-car sales this year, and used-car demand is up 6 percent year-over-year through March, more or less keeping pace with the growth rates of recent years.
Source: Auto Remarketing

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NADA Accepting 2017 Convention Workshop Proposals

The deadline to submit a workshop proposal is May 16, 2016.

The workshops are one of the main attractions at the annual NADA Convention and Expo. Nearly 16,200 participants, which included new-car dealers, dealership managers and industry professionals, attended the workshop sessions at the past convention in Las Vegas. Workshop proposals for the 2017 NADA convention, which will be held in New Orleans, can be submitted online until 5 p.m. EDT on May 16, 2016. For detailed instructions on how to submit a workshop proposal, click here.
Source: NADA Dealership Operations

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          Quotable
          "America's new-car and -truck dealers fully support efforts to drive recall completion rates to 100 percent. Dealers fixed nearly 77 million warranty and recall claims last year and stand ready with trained technicians and service bay capacity to fix millions more this year. But they can't do it without parts." 

              -- NADA President Peter Welch, in an Automotive News op-ed on recalls, May 9

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