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May 27, 2016 FacebookTwitterFlickrRSSSEND TO A FRIENDPRINT
Inside this issue
Safety Recall Update and Reminder NEW REQUIREMENTS ARE TAKING EFFECT!
8 Automakers Recall 12M Vehicles for Takata Air Bags
May U.S. Sales Expected to Drop on Fewer Selling Days
Upper-Small Segment Slumping Despite Hot Civic
Autonomous Vehicles, Ride-Sharing Could Push Insurance Premiums Down 30%, Study Finds
Ford to Launch Pilot Program to Employ Adults with Autism
Top Stories
Safety Recall Update and Reminder NEW REQUIREMENTS ARE TAKING EFFECT!

On December 4, 2015, the President signed the Fixing America’s Surface Transportation (FAST) Act. As previously reported, the FAST Act imposes new requirements of which dealers need to be aware. 

Grounding of Rental Vehicles Under Recall: Effective June 1, 2016
Effective June 1, 2016, the FAST Act prohibits rental companies with an average of 35 or more vehicles in a rental fleet (in a calendar year) from renting any such vehicles if they have an unremedied safety recall. This requirement does not apply to vehicles over 10,000 lbs. (1)

While not required by the FAST Act, NADA also encourages dealers to: 

  • use the www.safercar.gov or manufacturer VIN-specific look-up tools to regularly check the recall status of all rental and loaner vehicles; 
  • refrain from renting or loaning any vehicle subject to an unremedied safety recall if the manufacturer has stated in the recall notice that the vehicle should not be driven; and
  • with respect to any other rental or loaner vehicle, disclose to the prospective renter or borrower the recall status of the vehicle.

Potential Sanction for Failing to Check for Open Recalls: Effective December 4, 2015
The FAST Act also provides that a dealer can lose its federal statutory entitlement to be fairly reimbursed for performing safety recall repairs if:

  • it fails to notify “in-brand” service customers of any unremedied safety recalls applicable to their vehicles; and 
  • a “franchise, operating, or other agreement between the dealer and the manufacturer” requires such a service lane notice. Note that franchise agreements often incorporate documents by reference (e.g., operating manuals) that may impose this obligation.

Since the law does not specify the manner in which such service customer notices should be made (e.g., oral, written, specific forms, etc.), manufacturer requirements, if any, control. (2)

While not mandated by this provision, NADA encourages dealers to: 

  • adopt a policy to check all in-brand service vehicles for open recalls and to notify service customers of any that are identified; and  
  • obtain an acknowledgement of receipt from customers to whom notices are provided stating:
- that they authorize the recall work to be done; or 
- that they are declining the recall work; or 
- that they will return to have the work done when the remedy becomes available.

Questions may be directed to regulatoryaffairs@nada.org or 703-821-7040.
Source: NADA

 


(1) The FAST Act does not state whether loaners are covered rental vehicles.  Dealers with should consult with their individual counsel concerning this latter issue.

(2) Dealers are advised to consult with legal counsel familiar with (1) relevant manufacturer documentation and (2) applicable state law to ascertain the manner and form of any recall notice obligations.

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8 Automakers Recall 12M Vehicles for Takata Air Bags

Eight automakers are recalling more than 12 million vehicles in the U.S. to replace Takata air bag inflators that can explode with too much force. Documents detailing recalls by Honda, Fiat Chrysler, Toyota, Mazda, Nissan, Subaru, Ferrari and Mitsubishi were posted Friday by the National Highway Traffic Safety Administration. They’re part of a massive expansion of Takata air bag recalls announced earlier this month. Seventeen automakers are adding 35 million-to-40 million inflators to what already was the largest auto recall in U.S. history.
Source: Associated Press

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May U.S. Sales Expected to Drop on Fewer Selling Days

U.S. new-vehicle sales are expected to be lower this month than in May 2015, as slower growth in the market combines with a calendar that gives dealerships one fewer weekend to draw in shoppers. It could mean the end of long-running streaks at Fiat Chrysler Automobiles and Subaru, but forecasters say 2016 remains on pace to beat last year’s record.The forecasts would result in a seasonally adjusted, annualized selling rate of 17.4 million to 17.8 million, compared to 17.4 million in April and 17.7 million in May 2015.
Source: Automotive News

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Upper-Small Segment Slumping Despite Hot Civic

Proving not everyone wants to drive a CUV, Honda’s redesigned Civic is selling like hotcakes, with sales up 29.0% through April, WardsAuto data shows. “The car is meeting-slash-exceeding our expectations. You build a better mouse trap and people come and it’s working,” Jeff Conrad, group vice president-Honda for American Honda says of the new ’16 sedan and ’17 coupe. Honda ended April with a 48 days’ supply of the Civic, down from 56 in March and 73 in April 2015.
Source: WardsAuto

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Autonomous Vehicles, Ride-Sharing Could Push Insurance Premiums Down 30%, Study Finds

Auto insurance premiums could decline by as much as 30 percent over the next 25 years as autonomous vehicles and sharing services become more prevalent, a study found. The technological changes threatening to undermine automakers’ traditional business models could do the same to the insurance industry, though Deloitte principal John Matley said there is plenty of opportunity for insurers to adjust and thrive in the decades ahead. “There’s room in this for the existing players as long as they adapt,” Matley said.
Source: Automotive News


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Ford to Launch Pilot Program to Employ Adults with Autism

Ford Motor Co. announced Wednesday it will launch a pilot program to hire adults with autism on June 1. Ford will create five positions in product development suited to the skills and capabilities of workers with autism for the program, called FordInclusiveWorks, the Dearborn-based automaker said in a news release. The program was developed with Autism Alliance of Michigan — a nonprofit founded by Dave Meador, vice chairman and chief administrative officer at DTE Energy Co. The alliance is funding the training program tied to the jobs. Ford's vehicle evaluation and verification test lab will participate in the program. There, workers will log and prep tires for test vehicles, the automaker said in the release.
Source: Crain's Detroit Business

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          Quotable
          "The car is meeting-slash-exceeding our expectations. You build a better mouse trap and people come." 

              -- Jeff Conrad, group vice president for American Honda, commenting on increased sales of the Civic sedan, WardsAuto, May 27

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