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June 7, 2017 FacebookTwitterFlickrRSSSEND TO A FRIENDPRINT
Inside this issue
Light Trucks Account for 63% of New-Vehicle Sales through May
Trump Bump Unclear As Presidency Retrenches
Einhorn's GM Stock Split Fails as Holders Side With Barra
Hyundai U.S. Sales Chief Quits in Management Shake-Up Amid Poor Sales
Renault-Nissan Seeks Ghosn Heir to Drive Integration
Electric Car Sales Are Surging, IEA Reports
Top Stories
Light Trucks Account for 63% of New-Vehicle Sales through May

Sales of new crossovers, SUVs and pickup trucks continued to gain market share through the first five months of 2017, NADA reports in the May edition of Market Beat.

“While May traditionally is a good month for selling cars, light-vehicle sales came in below expectations,” said NADA Chief Economist Steven Szakaly. “The bright spot is the light-truck segment, which continues to grow market share and has comprised 62.7% of sales so far this year.”

Incentives offered during the Memorial Day weekend did not boost demand, which resulted in a seasonally adjusted annual rate (SAAR) of 16.58 million units in May. Year-to-date, the SAAR is just shy of 17 million units, he added.

“The industry remains saddled with higher-than-normal inventory, particularly in the small- and mid-size car segments,” Szakaly added. “We expect incentives to continue rising the rest of the year, as manufacturers battle for market share against a backdrop of declining overall volume.”

Overall, NADA’s sales forecast remains unchanged at 17.1 million new cars and light trucks in 2017.

Click here for the May edition of NADA Market Beat.
Source: NADA

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Trump Bump Unclear As Presidency Retrenches

Friend or foe? From the manufacturing floor to the dealer showroom, the automotive industry has nervously pondered that question since the surprise election last fall of President Donald Trump. Trump’s campaign was run on a pro-business platform, pledging to rewrite overly onerous regulations and complex corporate-tax codes, as well as tear apart international trade agreements considered unfair to national interests and, perhaps most controversially, penalize manufacturers choosing to build products overseas cheaply and sell them back home for bigger profit.

Most notably among those anxiety-raising policies is a renegotiation of the 23-year-old North American Free Trade Agreement between the U.S., Mexico and Canada. Proponents say the tariff-free zone has created billions of dollars in new investments on the continent from local and foreign auto companies by opening up best-cost options for manufacturing.

U.S. dealers also have enjoyed a windfall from record new-vehicle sales in the NAFTA era, thanks specifically to the pricing and product-mix flexibility NAFTA affords. According to the National Automobile Dealers Assn., dealer new-vehicle sales topped $995 billion in 2016 and store owners have been on a hiring hot streak, employing 1.1 million people last year. Wages of the employees are stronger than ever, as well, NADA says. NADA President Peter Welch suggests the cost of stripping NAFTA would be too high. “The auto industry truly is a global business,” he told a conference in New York earlier this year.

Source: WardsAuto

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Einhorn's GM Stock Split Fails as Holders Side With Barra

General Motors Co. shareholders sided with management and rejected billionaire David Einhorn’s bid to split the company’s stock, ending a months-long battle with the activist investor. More than 91 percent of votes were cast against the proposal from Einhorn’s Greenlight Capital, which sought to divide GM shares into two classes -- one collecting on the dividend and the other on the value of earnings.
Source: Bloomberg

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Hyundai U.S. Sales Chief Quits in Management Shake-Up Amid Poor Sales

Hyundai Motor's U.S. sales chief Derrick Hatami has resigned for "personal reasons", a company spokeswoman said on Wednesday, the second departure of a top U.S. executive in the past six months as the South Korean automaker grapples with slumping sales. The exit came shortly after Hyundai reported that its U.S. sales dropped 15.5 percent in May versus a 1 percent drop in the overall market, making it the worst performer among auto sellers in the United States.
Source: Reuters

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Renault-Nissan Seeks Ghosn Heir to Drive Integration

Renault-Nissan boss Carlos Ghosn is recruiting a new operational second-in-command for the carmaking alliance, company sources told Reuters, in a move designed to prepare his own succession and advance the companies' integration. Under the plan, the currently separate chief competitive officer (CCO) roles at Renault and Nissan would be fused into a single position at the 18-year-old alliance's helm, the sources said. Nissan Chief Performance Officer Jose Munoz and CCO Yasuhiro Yamauchi are seen internally as strong contenders, they said, along with Stefan Mueller, Munoz's counterpart at Renault.
Source: Reuters

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Electric Car Sales Are Surging, IEA Reports

The number of electric vehicles on the road rocketed to 2 million in 2016 after being virtually non-existent just five years ago, according to the International Energy Agency. Registered plug-in and battery-powered vehicles on roads worldwide rose 60 percent from the year before, according to the Global EV Outlook 2017 report from the Paris-based IEA. Despite the rapid growth, electric vehicles still represent just 0.2 percent of total light-duty vehicles.
Source: Bloomberg

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Quotable
"It is undeniable that the current electric car market uptake is largely influenced by the policy environment."

    -- The International Energy Agency wrote in its the Global EV Outlook 2017 report, Bloomberg, June 7

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