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June 27, 2017 FacebookTwitterFlickrRSSSEND TO A FRIENDPRINT
Inside this issue
NADA Visits White House to Discuss Tax Reform
With 54 Million to Go, This Airbag Recall Is Never Going To End
GM Lowers Outlook for U.S. 2017 New Vehicle Sales
Auto Lenders Get A Bit Stingy In Subprime Credit
BMW Adding 1,000 Jobs at South Carolina Plant
Top Stories
NADA Visits White House to Discuss Tax Reform
By Mark Scarpelli

I recently had the profound privilege of joining fellow NADA leadership at the White House to meet with some of the officials who write the rules and regulations that impact our great industry.

Along with NADA President and CEO Peter Welch and others, I presented the viewpoint of America’s franchised auto dealers directly to Gary Cohn, director of the National Economic Council, and other senior staffers from the White House and the U.S. Treasury Department. We also had the distinguished privilege to meet briefly with Vice President Mike Pence. Presenting a united front, NADA had productive discussions with people who are working closely with the House and Senate leadership to draft a tax bill that will preserve the benefits of America’s auto dealerships.

I’m happy to report that individuals at the highest levels of this administration are reaching out to the business community, and they are listening to those of us in the auto industry.

Based on our conversations, it’s clear that tax reform remains at the top of the agenda in Washington. And this will, we hope, give American businesses new opportunities that we haven’t seen in the past few years. NADA is analyzing tax reform though the eyes of both consumers and dealers. We are asking two pivotal questions:

1. Will tax reform stimulate consumer demand in the market?
2. Will tax reform reduce the cost of dealer capital so you can continue to drive your local economy?

It’s important to note that it’s still early in the tax writing process. The White House and Republican congressional leaders are trying to reach consensus on specific bill language over the summer. We’ve already seen some big issues emerge in the past few months, and NADA continues to tell the government that no matter what reform is set forth, American consumers should not be subjected to additional costs. Overall the discussions have been healthy and we’ve covered the topics that matter most to you, including repealing the death tax; creating a lower rate for business income from pass-through entities; lowering overall rates; accelerating cost recovery; eliminating the AMT; and repealing the 12-percent federal excise tax on heavy-duty trucks.

The NADA leadership and I were proud to promote the benefits of the retail auto business and the fact that America’s dealerships are local, diverse and modern, and that they save people money and create jobs. We reminded leaders in Washington that the majority of us are small businesses, but together we are an economic powerhouse, with more than 18,000 stores across the nation. Our local businesses are planted firmly in our communities, so we provide career opportunities on Main Street, and contribute mightily to our local tax bases.

Our White House visit is testimony to the larger public discussion and NADA’s movement to educate others about the dealer business—whether the general public, policymakers, opinion leaders, journalists, OEM executives or other stakeholders throughout the auto industry.

During NADA’s 100th anniversary convention in January, I told thousands of attendees in New Orleans that I would serve as the gatekeeper for this industry. Above all, that means being the gatekeeper between Washington’s policies—well-intentioned or not—and your doors. I’m happy to report that there are great opportunities knocking for us all.

Scarpelli is 2017 NADA chairman and president of Raymond Chevrolet and Raymond Kia in Antioch, Ill., and co-owner of Ray Chevrolet and Ray Chrysler-Jeep-Dodge-Ram in Fox Lake, Ill.

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With 54 Million to Go, This Airbag Recall Is Never Going To End

Takata may have sought bankruptcy protection, but it has plenty of work to do

Takata Corp.’s bankruptcy filing spells the end of a eight-decade-old auto-parts maker, but the company could limp on for years supplying parts for the approximately 54 million defective air bags that still need to be replaced in the U.S. alone. The unprecedented recall affects roughly 16% of the 260 million vehicles currently on American roads. The recall—the largest-ever automotive-safety campaign in the U.S.—affects cars from 19 manufacturers, from luxury makers like BMW AG and Tesla Inc. to Ford Motor Co. and Honda Motor Co.

Betty Niver had two vehicles equipped with recalled Takata air bags. “My 2013 Acura RDX was the first to get a recall notice,” said Mrs. Niver, a 62-year-old retired librarian living in Tulsa, Okla. Faced with the prospect of having what some officials have called “ticking timebombs” sitting in her driveway while their local dealership awaited parts needed for repairs, the grandmother of three opted to trade it in for a new car. The dealership offered her substantial discounts on a 2016 Acura. “They bent over backward to get it resolved to make sure she was not driving a car around, with grandchildren in it, that was defective,” said her husband, Dennis Niver, 69.
Source: The Wall Street Journal

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GM Lowers Outlook for U.S. 2017 New Vehicle Sales

General Motors Co. now expects U.S. new vehicle sales in 2017 will be in the "low 17 million" unit range, reflecting a widespread expectation that the industry is headed for a moderate downturn, a top executive said on Monday. "The market is definitely slowing ... it’s something we are going to monitor month to month," Chief Financial Officer Chuck Stevens told analysts on a conference call. "Pricing is more challenging."
Source: Reuters

Related article:

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Auto Lenders Get A Bit Stingy In Subprime Credit

Wall Street analysts have expressed concern in recent quarters about a possible increase in auto loans to customers with subprime credit, but that trend is already in the rearview mirror and subprime share was at a 10-year low in the first quarter, according to Experian Automotive. “The truth is, lenders are making rational decisions based on shifts in the market,” [Melinda Zabritski, senior director, financial solutions for Experian] said in a blog earlier this month. “When delinquencies started to go up, the lending industry shifted to more creditworthy customers.”
Source: Forbes

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BMW Adding 1,000 Jobs at South Carolina Plant

BMW's biggest plant in the world is about to get a little bigger. The German automaker said Monday it will add another 1,000 jobs and invest $600 million in the plant as part of a plan to boost annual production to as many 450,000 vehicles. "It's a great day for us here in Spartanburg and South Carolina and for the BMW group," said Harald Krueger, chairman of BMW. "The workforce will be well above 10,000 people, which is, in my view, clearly a symbol of success."
Source: CNBC

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"The NADA leadership and I were proud to promote the benefits of the retail auto business and the fact that America's dealerships are local, diverse and modern, and that they save people money and create jobs."

    -- NADA Chairman Mark Scarpelli, commenting on a recent visit to the White House to discuss tax reform, NADA, June 26

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