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July 17, 2017 FacebookTwitterFlickrRSSSEND TO A FRIENDPRINT
Inside this issue
Dealership Performance Ratings Under Siege
As Lending Goes, So Goes the Auto Industry
Led by GM, Inventories Near Records
Consulting Firm Discusses 'Used-Car Time Bomb'
Electric Vehicles: Imminent Breakout or Breakdown?
Lithia, Lam Recruit Minorities to be Dealers
Top Stories
Dealership Performance Ratings Under Siege

States join N.Y. to require local factors be considered

A year after a New York dealership won a court battle over General Motors' use of generic sales-effectiveness ratings, the ruling's impact has spread across the country. Courts, state agencies and state legislatures have repeatedly decided automakers can't evaluate a dealership's performance without taking local factors into account. California, Florida, Illinois, Ohio and Maryland are among the states that have joined New York in rejecting the use of generic sales-effectiveness ratings, and the practice is under review elsewhere.
Source: Automotive News

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As Lending Goes, So Goes the Auto Industry

Consumer access to affordable credit spurs auto sales, as the industry has seen in the last two years of record deliveries. But the auto-loan growth rate is ebbing. It was about 5% year-over-year in 2016 as opposed to 10% in 2015. “It hasn’t gone negative; it’s still in positive territory, but the pace is starting to slow,” says Charlie Chesbrough, senior economist and senior director-industry insights for Cox Automotive, owners of Autotrader, Kelley Blue Book, Dealertrack, Manheim Auctions and other industry entities.
Source: WardsAuto

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Led by GM, Inventories Near Records

General Motors' inventory jumped 39 percent from a year ago to almost a million unsold light vehicles on July 1 as U.S. stocks reached near-record levels. Of the industry's total inventory growth of 354,200 units in the past year, GM has added 272,700 units. All other carmakers added 81,500, up 2.6 percent.
Source: Automotive News

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Consulting Firm Discusses 'Used-Car Time Bomb'

The newest report from AlixPartners — whose client roster includes corporate boards and management, law firms, investment banks and other kinds of investors — cautioned the industry that a “used-car time bomb” is about to explode. AlixPartners explained that it arrived at that dire assertion through a project that began two years ago through what the firm identified as the “CASE” trends that are “completely revolutionizing” the automotive industry — the connected, autonomous, shared and electric vehicles of the not-too-distant future.
Source: Auto Remarketing

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Electric Vehicles: Imminent Breakout or Breakdown?

The media flavor of the day is “Peak Oil Demand.” It's being predicted due to plummeting battery costs for electric vehicles, which are on the verge of reaching a point where electric vehicles become competitive with internal combustion vehicles, resulting in a drop in oil consumption.  Bloomberg New Energy Finance believes they will be as cheap as gasoline cars by 2025, and the New York Times says “Electric Cars’ Breakout Could Be Near.”
Source: Forbes

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Lithia, Lam Recruit Minorities to be Dealers

Shau-wai Lam is hunting for the next generation of minority auto dealers. Lam, former chairman of DCH Auto Group, was at the National Association of Minority Automobile Dealers' annual conference [in Miami Beach, Fla.] last week interviewing candidates for the Automotive Minority Dealer Academy — a program he is spearheading in a partnership with Lithia Motors Inc.
Source: Automotive News

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Quotable
"It's not like a bad letter grade. It has serious consequences. It can affect allocation. It can affect [dealers'] ability to transfer their dealership to a successor. It can affect their incentive programs."

    -- Zach Doran, president of the Ohio Automobile Dealers Association, commenting on automakers use of generic sales-effectiveness ratings to see how a dealership's local market share compares with the brand's state average, Automotive News, July 17

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