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July 7, 2016 FacebookTwitterFlickrRSSSEND TO A FRIENDPRINT
Inside this issue
S&P Cuts U.S. Auto Sales View on Slowing Demand, Brexit Effect
The Used Car Market: What's Driving Growth?
Affordability Drives Longer Loans
CFPB Accuses Some Lenders of Deceptive GAP, Payment Deferral Ads
Autonomous Cars Need Lidar to Be Safe, Says ZF Chief
U.S. Fuel Economy Fell in June
Vehicles Eligible for Car, Truck, SUV of the Year Named
Top Stories
S&P Cuts U.S. Auto Sales View on Slowing Demand, Brexit Effect

S&P Global Ratings cut its estimate for U.S. auto sales this year to 17.5 million vehicles from 17.8 million, citing slowing demand from individual buyers and the effect on the nation’s economy from U.K. voters’ decision to leave the European Union. The revision comes as deliveries last month were at a seasonally adjusted annual rate of 16.6 million, Nishit Madlani, an S&P credit analyst, said in a statement Wednesday. He also said there has been “softness in used car prices.” S&P trimmed its estimate for growth this year in the U.S. economy to 2 percent from 2.3 percent. “In our view, the growth rate of U.S. auto sales will likely slow for the remainder of this year and into 2017,” S&P said.
Source: Bloomberg

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The Used Car Market: What's Driving Growth?

The automotive industry is composed of a few top global multinational players and several retailers. The multinational players are mainly manufacturers by trade whereas the retail market features players who deal in both new and used vehicles. Over the last few years, the used car market has demonstrated a significant growth in value contributing the larger share of the overall market value in dollar terms. For instance, in the U.K., the used car market contributed 51% of the total sales in 2014 with GBP 45.1 billion. On the other hand, the U.S. auto industry has maintained a bullish run for six consecutive years with both the new and used car segments achieving a growth rate of about 6%.
Source: Forbes

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Affordability Drives Longer Loans

The average loan term has been on a continuous climb. In retrospect, based on vehicle affordability, the rise seems to have been inevitable. Every quarter for the last two years, new-vehicle loan terms have increased one month on a year-over-year basis. In the first quarter of 2015, the average new-vehicle loan term was 67 months, according to Experian. The average loan term climbed to 68 months in the first quarter of this year, an all-time high.
Source: Automotive News

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CFPB Accuses Some Lenders of Deceptive GAP, Payment Deferral Ads

One or more auto lenders have been deceptive in their advertisements for GAP coverage and disclosures of payment deferral terms, the Consumer Financial Protection Bureau said in its Summer Supervisory Highlights report. The lenders gave customers the impression that GAP would fully cover the remaining balance on a consumer’s loan in a total loss. But the product only covers below a certain loan-to-value ratio, the CFPB said last week.
Source: Automotive News

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Autonomous Cars Need Lidar to Be Safe, Says ZF Chief

Self-driving cars will need multiple detection systems including expensive infrared "lidar" technology if they are to be safe at high speeds, the CEO of German auto supplier ZF Friedrichshafen said [Wednesday]. "For autonomous driving, we will need three core technologies: picture processing camera technology, short and long-range radar and lidar," Sommer said. Laser or infrared-based lidar technology will help vehicle sensors pick up contours and contrasts of obstacles which normal cameras are unable to detect, particularly in low light situations, he added.
Source: Automotive News

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U.S. Fuel Economy Fell in June

The average fuel economy of light vehicles sold in June was 25.4 mpg, according to the WardsAuto Fuel Economy Index, down 0.1% from same-month 2015. The national average price per gallon of gasoline in June was $2.467. A 4.0% increase from May marked the fourth consecutive month-to-month gain, yet the price remained 14.5% below year-ago and 34.5% less than like-2014. Vehicle shoppers seemed unfazed by the rising gas prices, as the share of standard gasoline powertrains increased from May to June. Hybrid models fell below 2% of indexed sales.
Source: WardsAuto

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Vehicles Eligible for Car, Truck, SUV of the Year Named

The process of naming the next car, truck and SUV of the year has begun, as North American Car and Truck/Utility of the year jurors evaluate the first list of vehicles eligible for the awards. The winners will be announced Jan. 9 at the North American International Auto Show in Detroit. The award is one of the most coveted in the industry. It’s chosen by a large jury of journalists from a wide variety of outlets. The 2016 winners were the Honda Civic and Volvo XC90 SUV.
Source: Detroit Free Press

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              Quotable
              "For autonomous driving, we will need three core technologies: picture processing camera technology, short and long-range radar and lidar."

                  -- Stefan Sommer, CEO of German auto supplier ZF Friedrichshafen, on the technology needed to make self-driving cars safe, Automotive News, July 6

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