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May 5, 2017 FacebookTwitterFlickrRSSSEND TO A FRIENDPRINT
Inside this issue
Average Fuel Economy for Vehicles Sold in April Edges Up
Provision to Preserve Dealer Discounts Passes Key House Committee
Plunging Auto Sales Put Industry Jobs, Broader Economy, at Risk
Toyota Unveils $126M Expansion in York Township, $28M Near Ann Arbor
Ford Lays off 130 Workers at Key Ohio Truck Plant
2017 Could Prove to Be a Turning Point for Plug-In Hybrids
Auto Dealers’ Pay Plans Slowly Changing
Top Stories
Average Fuel Economy for Vehicles Sold in April Edges Up

The average fuel economy of new light vehicles sold in the U.S. in April rose to 25.3 mpg, up 0.1 mpg from March's level, the University of Michigan Transportation Research Institute said Thursday. Average fuel economy for new light vehicles sold in the U.S. has risen by 5.2 mpg since October 2007, when the study began.

The institute's greenhouse gas emissions index for U.S. drivers rose to 0.85 in February, from 0.86 in January and the baseline figure of 1 in October 2007. That means the average new-vehicle driver generated 15 percent fewer emissions in February than in October 2007.
Source: Automotive News

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Provision to Preserve Dealer Discounts Passes Key House Committee

Yesterday the House Financial Services Committee passed the Financial CHOICE Act (H.R.10) in a party-line vote with significant provisions to rein in and overhaul the CFPB. H.R. 10, Chairman Jeb Hensarling's (R-Tx.) bill, includes nearly identical language to the NADA-backed H.R. 1737 which passed the House overwhelmingly last Congress. This provision in H.R. 10 (Sec. 734) would rescind the CFPB's flawed 2013 auto finance guidance and require any new guidance to go through an open and public process. 

On May 1, NADA sent a letter to Chairman Hensarling in support of Sec. 734 and provisions in the bill that bring accountability to the CFPB. As NADA President Peter K. Welch wrote Chairman Jeb Hensarling “H.R. 10 makes much-needed and long overdue reforms to the Consumer Financial Protection Bureau (CFPB). NADA strongly supports these reforms and urges the House Financial Services Committee to favorably consider H.R. 10.” Click here to view NADA's support letter for H.R. 10.

During the committee markup of H.R. 10, Democrats stayed united defending the CFPB and offering several unsuccessful amendments to retain its powers and independent funding. Rep. Al Green (D-Texas) considered filing an amendment to preserve the flawed guidance by striking Sec. 734 of the bill but ultimately did not. 

Chairman Hensarling continues to focus on reigning in the CFPB through oversight hearings as well.  The House Financial Services Committee and the House Financial Institutions and Consumer Credit Subcommittee, held two hearings on the CFPB in April. During the hearings, the CFPB’s attempt to limit or eliminate dealer reserve and thus limiting consumer discounts by pressuring auto lenders was brought up repeatedly by several Members of Congress.

H.R. 10 is expected to be considered by the full House later this month. 
Source: NADA Legislative Affairs

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Plunging Auto Sales Put Industry Jobs, Broader Economy, at Risk

U.S. auto sales plunged by 4.7 percent in April, a significantly greater decline than industry analysts had expected, and the fourth consecutive month that demand has fallen for new cars, trucks and autos.

The news appears to signal that, after seven years of steady growth — including three consecutive years of record sales — the American motor vehicle market has hit the top of its game.

So just how far will the market drop in 2017 and beyond? That could determine not only whether industry earnings have also peaked, but whether manufacturers will ramp up the pace of production cuts and layoffs they've ordered in recent months.
Source: CNBC

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Toyota Unveils $126M Expansion in York Township, $28M Near Ann Arbor

After 40 years, Toyota is still growing in Michigan. The Japanese automaker unveiled a 135,000-square-foot expansion of its research and development center in York Township on Thursday and celebrated the 40th anniversary of its research and development operations in Michigan.

"We are very proud of being an integral part of Michigan's cultural fabric," said Jim Lentz, CEO of Toyota North America. "We are recruiting some of our brightest minds who want to join our efforts here in Michigan."
Source: Detroit Free Press

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Ford Lays off 130 Workers at Key Ohio Truck Plant

Ford Motor Co. is temporarily laying off 130 hourly workers and eliminating a shift at its politically important Ohio Truck Plant as demand lags for the F-650 and F-750 medium-duty trucks built there.

The layoffs will last more than four months, from May 8 until the end of September. The automaker said most of the layoffs will be voluntary. Effected employees, if they have at least one year seniority, will receive roughly 75 percent of their pay while on leave.
Source: Automotive News

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2017 Could Prove to Be a Turning Point for Plug-In Hybrids

Until recently, if you wanted to ditch your gas guzzler and go electric, there were few choices. You could take the high road and opt for a $70,000 luxury vehicle, like the Tesla Model S, or take the low road and choose a more modest commuter, like the $31,000 Nissan Leaf.

But this year, all that appears to be changing. Over 40 new electrified vehicles are coming out this year in the United States, according to Baum & Associates, a research firm. Models include the Honda Clarity electric sedan and a Chrysler Pacifica minivan. Even the tiny Smart Fortwo line will abandon gas entirely in the United States in favor of all-electric powertrains.

More important, say automakers, there promises to be a proliferation of plug-in hybrids similar to the Chevrolet Volt. Plug-in hybrids can drive in electric mode or use gas when the battery runs down. This technology is proving flexible enough for a variety of vehicles from sports cars to compacts — and it eases the consumer fear that a driver will run out of power before finding a charging station.
Source: The New York Times

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Auto Dealers’ Pay Plans Slowly Changing

According to the National Automobile Dealers Assn.’s 2016 Workforce study, virtually all U.S. dealerships offered standard employee benefits across these three specific perks: Health Insurance. Paid Time Off. Retirement Planning.

Although these are the only standard three perks across the industry, there are factors currently at play that will significantly shape the landscape in the immediate future. 

The Rise of Millennials. They are bringing about a major change in the automotive industry and its standard for benefits. Historically, they have been a group that has avoided working in dealerships for multiple reasons.

Attracting and Retaining Millennials. With Gen Y now making up 60% of dealership hires, and with the turnover rate for salespeople at a whopping 67%, dealerships should focus on attracting and maintaining Millennials by offering them a meaningful career path, manageable work-life balance and proper compensation.
Source: WardsAuto

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Quotable
“H.R. 10 makes much-needed and long overdue reforms to the Consumer Financial Protection Bureau (CFPB). NADA strongly supports these reforms and urges the House Financial Services Committee to favorably consider H.R. 10.” 

    -- NADA President and CEO Peter Welch, commenting on the introduction of the Financial CHOICE Act, H.R. 10, a comprehensive financial reform bill, NADA Headlines, April 28
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