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Inside this issue
The Economy’s Hidden Problem: We’re Out of Big Ideas
The Tragic Downfall of the Consumer Financial Protection Bureau
Excess Inventory Could Lower Auto Sales in 2017
Volkswagen Deal Gives Some Diesel Car Owners Buyback Option
The Five Biggest Auto Stories of 2016
Webinar: Internet Sales Department Best Practices
NADA Convention Launches Mobile App
Top Stories
The Economy’s Hidden Problem: We’re Out of Big Ideas
Dwindling gains in science, medicine and technology hold back growth; is America too risk-averse?

Undoing the damage that past innovations—the burning of fossil fuels, for example—have done to the environment and human health is also gobbling up more innovative effort. This directly eats into the consumer’s pocketbook. The portion of a car’s price that pays to meet federal safety and fuel efficiency mandates has gone from zero in 1967 to 22% now, or $5,500 on a $25,000 car, according to Sean McAlinden, an economist at the Center for Automotive Research, an industry-supported think tank. 

A California mandate first introduced in 1990 now aims to make one in seven cars in the state emit zero emissions, which means powered by hydrogen or electricity. ​So while the purpose of the mandate, less pollution, is broadly shared, it achieves it by forcing car makers to favor certain technologies ​over others that may be commercially more viable.

Electric cars, for example, cost more and perform worse than equivalent gasoline cars; the batteries subtract space and add weight, and mileage is limited especially in extreme temperatures. Even with significant federal subsidies, sales have been hammered by low gasoline prices. Electric and hybrid vehicles together made up 2.7% of national auto sales this year through October, the lowest since 2011, according to Edmunds.com.

Electric cars don’t yet offer a “value proposition that resonates with the mainstream customer,” says John Viera, head of sustainability at Ford Motor Co. He contrasts that with EcoBoost, a Ford-developed gasoline injection technology that achieves the same power with fewer cylinders. “The beauty is you get the fuel economy improvement with no loss in performance,” he says. “It does add cost, but the customer is willing to pay for that technology unlike with the electrified vehicle.”
Source: WSJ

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The Tragic Downfall of the Consumer Financial Protection Bureau

Conceived as a government watchdog with noble aims, the CFPB was doomed by a structure that made it an inherently political agency.

...

Car dealers were the highest-hanging fruit — the Dodd-Frank Act explicitly exempted them from the CFPB’s jurisdiction. A month after his recess appointment, Cordray approved a resource-intensive campaign to stop dealers from negotiating interest rates on car loans, a critical profit source. The comically aggressive plan involved guessing car buyers’ races from their names and addresses, using manipulated statistics and the controversial disparate-impact legal doctrine to label dealer lending discriminatory, and accusing finance companies of discrimination for purchasing dealers’ loans at competitive market prices.
Source: National Review

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Excess Inventory Could Lower Auto Sales in 2017

The U.S. auto industry is likely to set a record for industry sales in 2016, before declining slightly next year in part due to bloated inventory that is already beginning to impact Detroit Three production, according to one forecasting firm.

IHS Markit predicts the U.S. auto industry will sell a record number of vehicles this year, surpassing 2015’s record of 17.47 million sold. For 2017, it is lowering forecasts to 17.37 million from an earlier predicted 17.5 million in part because of rising inventories and automakers’ use of incentives.
Source: The Detroit News

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Volkswagen Deal Gives Some Diesel Car Owners Buyback Option

Volkswagen reached a deal that will give at least some owners of the remaining 80,000 diesel vehicles caught in the company's emissions cheating scandal the option of a buyback and provide compensation to all of them on top of any repurchase or repairs, U.S. regulators and a federal judge said Tuesday.

The $1 billion settlement with the U.S. Environmental Protection Agency will give owners of 20,000 3-liter diesel cars the choice of a buyback. The figure does not include additional payments to owners. Volkswagen believes it can bring the other 60,000 vehicles into compliance with pollution regulations and will not offer a buyback if that's the case, U.S. District Judge Charles Breyer said in San Francisco.
Source: AP

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The Five Biggest Auto Stories of 2016

The auto industry is a prime mover of the U.S. economy. According to the Center for Auto Research, Ann Arbor, the industry provides some seven million private sector jobs, and $500 billion in salaries. Each auto manufacturer job creates eleven other jobs in related industries (dealers and suppliers) as well as indirect jobs (businesses that are otherwise dependent on auto plants, corporate offices, supplier parks, etc.).

On the whole, the auto sector is responsible for almost 4% of the U.S. economy. So, it is worthwhile taking a look at the biggest stories impacting the industry in 2016.
Source: Forbes

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Webinar: Internet Sales Department Best Practices
Presented by: Tim Gavin, NADA 20 Group Consultant

Explore effective sales strategies to reach today's internet shoppers. Gavin will review twelve best practices to improve your sales presentation and make the best first impression.

 
Register for this webinar and discover new ways to approach phone calls, response letters and online inquiries.
 
Date:  Wednesday, December 21, 2016
Time: 12:00 p.m. ET
Duration: 30 minutes
Source: NADA

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NADA Convention Launches Mobile App


 

The new NADA100 mobile app for the 2017 NADA Convention and Expo in New Orleans is now available in the App Store and Google Play. Search for NADA100.

Key features include:

  • Real-time alerts;
  • Workshop and event schedules; 
  • The option to download and email workshop handouts;
  • Locate and schedule meetings with exhibitors; and
  • Rating the workshop sessions.

The NADA convention runs from Thursday, Jan. 26, to Sunday, Jan. 29. The advance online registration discount of $75 for NADA member dealers and their managers ends Jan. 20. For more information or to register, visit www.nadaconvention.org.  
Source: NADA Convention & Expo

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Past Articles
       
      Quotable

      “Conceived as a government watchdog with noble aims, the CFPB was doomed by a structure that made it an inherently political agency.”

       
      -- Ronald L. Rubin was an enforcement attorney at the Consumer Financial Protection Bureau and the chief advisor on regulatory policy at the House Financial Services Committee
       
      Sponsored by

      NADA Convention


      NADA Videos
      Dealers Help Consumers Secure Competitive Financing


      Introducing NADA Academy Plus

      NADA Webinars

      Dec. 21--Internet Sales Department Best Practices (12:00 p.m. ET)

      NADA members can view past webinars on-demand at no charge at NADA University Online. Members must create an NADA account before viewing.

      NADA Chairman's Commentary
      The Year at a Glance: A Final Message From Your 2016 Chairman
       
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