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December 2, 2016 FacebookTwitterFlickrRSSSEND TO A FRIENDPRINT
Inside this issue
Detroit News Op-Ed: The Curious Case of Tesla’s Lawsuit
U.S. Sales Rebound, Climb 3.6%; SAAR Remains Strong at 17.83 Million
N. America Output Off to Fast Start in Q1 2017
U.S. Economy Added 178,000 Jobs in November; Unemployment Rate Dropped to 4.6 Percent
Mexican Officials Hail NAFTA as Critical to U.S.
Ford, Industry Blast Obama on EPA's Greenhouse Regs
China Just Slapped a 10 Percent Tax on Supercars, Other Super-Luxury Vehicles
Top Stories
Detroit News Op-Ed: The Curious Case of Tesla’s Lawsuit
By Lawrence Spiwak

Last September, Tesla Motors sued the governor, attorney general and secretary of state, claiming that Michigan’s prohibition against direct manufacturer sales is unconstitutional because it lacks a rational means of achieving any legitimate government purpose. Unfortunately for Tesla, it faces an uphill legal battle. Over the years this argument has often come before the courts, and each time the constitutionality of such laws has been upheld.

But Tesla’s complaint begs an interesting policy question: do auto-franchise laws continue serve the public welfare in the 21st century, or do such laws serve just the private interest of dealers and existing manufacturers as Tesla alleges? If we look at the data — specifically, vehicle pricing — a strong argument can be made that state auto-franchise laws continue to promote the public interest by increasing competition and, by extension, lower prices for consumers.
...

It would appear, therefore, that state auto franchise laws do address supportable public policy considerations and do not exist (as Tesla argues) to promote the private interests of auto dealers. If independent dealers are replaced with direct sales, then Tesla (along with other auto manufacturers) will earn higher profits and the consumers will pay higher prices for new cars. Consumers will be greeted at the door for one of their most expensive purchases with Mr. Musk’s “no discount policy.” Now whose private interest does that serve?

Spiwak is president of the Phoenix Center for Advanced Legal & Economic Public Policy Studies.
Source: The Detroit News

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U.S. Sales Rebound, Climb 3.6%; SAAR Remains Strong at 17.83 Million

GM, Nissan lead gains; FCA tumbles as industry sets Nov. record

After three straight monthly dips, U.S. light-vehicle sales in November rose 3.6 percent from a year earlier, helped by more generous deals and strong truck demand. Ford, Honda, Nissan, Toyota and General Motors posted increases in November as a rise in incentive spending helped put the industry back on a winning track.

Industrywide sales hit a record for the month -- 1.378 million -- easily topping the 1.328 million mark in Nov. 2001. Light-truck deliveries, behind double-digit increases in sales of crossovers and pickups, jumped 8.6 percent last month, while the car market continued to slump, with demand off 3.9 percent.

The seasonally adjusted, annualized sales rate remained strong but dropped to 17.83 million from this year’s highest rate -- October’s 17.98 million -- and the 18.07 million pace in November 2015, the second-strongest month of last year.
Source: Automotive News

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N. America Output Off to Fast Start in Q1 2017

Automakers are planning to open 2017 with a robust 4,678,300 vehicles scheduled for completion in January-March, the second-highest total for the quarter since a record 4,811,021 units were built in like-2000. But, while the Q1 program represents a 3.0% gain on the 4,542,700 vehicles built in like-2016, nearly all of it, 134,000 units, is due to vehicles built on production lines that were not in operation a year ago.

Without the new lines, the industry's Q1 tally would have bested that of the like-2016 by just 1,300 units. Of the new-model volume, 75.4% of it is being accommodated by Kia car and Volkswagen light-truck lines in Mexico, the remainder being Hyundai and VW truck assembly in the U.S.
Source: WardsAuto

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U.S. Economy Added 178,000 Jobs in November; Unemployment Rate Dropped to 4.6 Percent

The first release after a contentious election in which the candidates disputed the health and direction of the economy, the data showed a job market that is continuing to steadily strengthen from the recession. The data release was the final one to come before the Federal Reserve's Dec. 13-14 meeting, where the central bank may announce its first rate increase in a year.

The unemployment rate fell to levels not seen since August 2007, before a bubble in the U.S. housing market began to burst. The fall was driven partly by the creation of new jobs, and partly by people retiring and otherwise leaving the labor force. The labor force participation rate ticked down to 62.7 percent.

Average hourly earnings declined by 3 cents to $25.89. The decrease pared back large gains seen in October, but over the year average hourly earnings are still up 2.5 percent, the Bureau of Labor Statistics said.
Source: Washington Post

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Mexican Officials Hail NAFTA as Critical to U.S.

Mexican auto industry officials vigorously defended the North American Free Trade Agreement as critical to U.S. economic competitiveness as they braced for talks between the Mexican government and Donald Trump’s incoming administration over the accord’s future. Guillermo Prieto, president of the Mexican Automobile Distributors Association, said that there is nervousness in the industry over the future of NAFTA but that it’s tempered by the notion that a U.S. exit would have terrible consequences for its own economy. That understanding, he argued, should prevent U.S. officials from overreacting.
Source: Automotive News

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Ford, Industry Blast Obama on EPA's Greenhouse Regs

Ford on Wednesday accused the Obama administration of playing "eleventh-hour politics" after the U.S. Environmental Protection Agency said it would recommend keeping strict greenhouse emission standards in place through 2025, despite a major industry lobbying effort aimed at relaxing those standards. Ford signaled that it hopes that President-elect Donald Trump will roll back the regulations.
Source: Detroit Free Press

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China Just Slapped a 10 Percent Tax on Supercars, Other Super-Luxury Vehicles

Life just got infinitesimally harder for Asian zillionaires. Starting today, China is charging a 10 percent tax on all supercars and luxury cars that cost 1.3 million yuan or more-about $189,000 at current exchange rates. The new tax comes during a series of moves by the administration of Chinese president Xi Jinping to bring down levels of conspicuous consumption among the country's wealthiest citizens.
Source: The Drive

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Past Articles
       
      Quotable

      "If independent dealers are replaced with direct sales, then Tesla (along with other auto manufacturers) will earn higher profits and the consumers will pay higher prices for new cars. Consumers will be greeted at the door for one of their most expensive purchases with Mr. Musk’s 'no discount policy.' Now whose private interest does that serve?"


          -- Lawrence Spiwak, president of the Phoenix Center for Advanced Legal & Economic Public Policy Studies, Detroit Free Press Op-Ed, Dec. 1

       
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