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April 12, 2017 FacebookTwitterFlickrRSSSEND TO A FRIENDPRINT
Inside this issue
Trump's Border Tax Loses Momentum -- Maybe
Auto Industry: Trump Will Mend, Not End, MPG Mandate
USA Today Commentary: Local Dealerships Benefit Consumers -- Opposing View
Toyota Says the U.S. Auto Market Has Peaked
Five Key Indicators That Worry the Auto Industry
Top Stories
Trump's Border Tax Loses Momentum -- Maybe


Mike Allen, executive editor of Axios, moderates a panel discussion with Peter Welch, NADA president/CEO; Mitch Bainwol, president/CEO of the Alliance of Automobile Manufacturers; and John Bozzella, president/CEO of Global Automakers in New York on April 11, 2017.

NEW YORK -- Trade barriers seem to be off the front burner for the Trump administration lately, but analysts and industry executives at the NADA/J.D. Power Automotive Forum here Tuesday warned against getting complacent. “I’m from the school of politics that it’s never dead until it’s actually dead,” said John Bozzella, president of the Association of Global Automakers, talking about proposals for a border adjustment tax on goods crossing the border from Mexico. “I do agree that we need tax reform,” he said, but a border adjustment tax “raises the price of every single car every dealer in this room sells.” Peter Welch, president of the National Automobile Dealers Association, said customers would “revolt” if dealers tried to pass along price increases related to a border tax. “Our customers are incredibly price sensitive -- $1,700 is one number I’ve read. If that actually trickles down to the hood of a car, we would see an economic calamity the likes of which we’ve never seen before,” he said.
Source: Automotive News

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Auto Industry: Trump Will Mend, Not End, MPG Mandate

NEW YORK – The Trump administration may have been elected to drain the Washington swamp, but it will not drain federal fuel economy laws. That was the consensus of a panel of auto industry representatives convened before the New York Auto Show on Tuesday to discuss regulations. “The talk of a rollback is fallacious,” said Mitch Bainwol, president of the Alliance of Automobile Manufacturers, in reference to the Environmental Protection Agency’s goal that all vehicles average 54.5 miles per gallon. “The pressures to meet fuel economy goals are global. The question is whether the slope is consistent with consumer demand.”
Source: The Detroit News

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USA Today Commentary: Local Dealerships Benefit Consumers -- Opposing View

Companies offer competition, services that manufacturers may not

In 2012, Suzuki stopped selling cars and trucks in the United States after decades in the American market. Fortunately for Suzuki customers, they could still get those cars serviced by local dealership groups that owned franchises of the disappearing company.

This is one of the many reasons that local dealerships are good for consumers and communities alike. Consumers have access to servicing on their cars and trucks virtually anywhere in America, at any time, and even if the manufacturer goes out of business.

Consumers benefit from price competition from local same-brand dealers, which has been shown to lower prices significantly. And communities benefit from the presence of locally owned businesses and the million-plus good paying jobs they create. Local dealerships are in fact one of the last fields in America where a worker without a college degree has great job opportunities with paths to advancement in sales, service or management.

George Landrith is president of Frontiers of Freedom, a group that supports limited government.

Source: USA Today


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Toyota Says the U.S. Auto Market Has Peaked

The U.S. auto market has peaked and will shrink this year, with manufacturers using unprecedented incentives to support passenger cars through slumping demand, a Toyota Motor Corp. executive said. Industrywide deliveries may decline to as low as 17 million vehicles from last year’s record of about 17.5 million, according to Bob Carter, president of Toyota’s U.S. sales unit. A rapid shift in demand toward sport utility vehicles at the expense of sedans is the main factor driving automakers’ heavy discounts, he said. “Once the industry starts to get their pipelines lined up to where the consumer demand is, perhaps we’ll see a little bit of relaxing on some of these high incentives,” Carter said Tuesday at a conference in New York hosted by the National Automobile Dealers Association and J.D. Power. Toyota’s discounts are “higher than we’ve ever experienced,” driven by light trucks reaching about 65 percent of industry sales, up from roughly half.
Source: Bloomberg

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Five Key Indicators That Worry the Auto Industry

NEW YORK — If all goes according to at least one forecast, the auto industry will see its third straight year of record-setting sales. But there's every reason to be worried. Despite J.D. Power and LMC Automotive's rosy sales prediction, all is not rosy in the automotive world as press and executives gather for the New York Auto Show here. Competition is intensifying, and that’s undermining profitability, analysts said at the National Automobile Dealers Association/J.D. Power Automotive Forum in New York. "We see a fairly solid foundation for this industry, but it’s not going to be growing by gangbusters," IHS Markit chief economist Nariman Behravesh said.
Source: USA Today

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Quotable
"We do believe the industry is over the top, but that doesn't mean we're on a sled ride down from here. After what we all collectively went through in 2009 and 2010, it’s going to be fine."

    -- Bob Carter, president of Toyota’s U.S. sales unit, said Tuesday at a conference in New York hosted by NADA and J.D. Power, Bloomberg, April 11

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