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July 31, 2017 FacebookTwitterFlickrRSSSEND TO A FRIENDPRINT
Inside this issue
July U.S. Sales Expected to Fall for 7th Straight Month
Automakers Cut Q3 Output Plans
Why It's a Good Thing When Automakers Push the Stop Button to Slow Production
Used-Car Market Weathers the Storm
Ethnicity Counts at U.S. Minority-Owned Dealerships
New Employment Eligibility Verification Form Available
Global Marketsí Mid-Year Momentum, as Reported by CAPTRUST, NADA Retirementís 3(38) Investment Manager
Top Stories
July U.S. Sales Expected to Fall for 7th Straight Month

U.S. auto sales are forecast to fall for a seventh straight month in July from 2016’s record pace despite continued high incentives from manufacturers. J.D. Power and LMC Automotive jointly estimate July sales of 1.44 million light vehicles, 5.4 percent lower than a year earlier, when July had one less selling day. Barclay’s puts the slide at 5.6 percent. Automakers are due to report the results on Tuesday.
Source: Automotive News

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Automakers Cut Q3 Output Plans

Recognizing that the light-vehicle sales outlook for the second half of the year may not be as rosy as once thought, automakers took a hard look at short-term output plans and eliminated some 33,400 units from the July-September slate. Following the industry’s latest round of production revisions, third-quarter output now is scheduled at 4,248,300 cars and trucks, down from 4,281,700 a month ago and 5.1% less than the 4,477,600 vehicles built in like-2016.
Source: WardsAuto

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Why It's a Good Thing When Automakers Push the Stop Button to Slow Production

This sounds kind of basic, but General Motors and its rivals are showing they will push the button to slow down production for slow-selling models, instead of simply upping incentives to make inventories of unsold cars disappear. Aligning supply and demand is something the U.S. auto industry has had a hard time doing, historically. Before the Great Recession, the usual pattern to try and offset a downturn was to over-produce and just keep on cutting prices.
Source: Forbes

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Used-Car Market Weathers the Storm

Influx of crossovers, SUVs could provide sustained relief

Analysts say the industry has absorbed the growing glut of returning off-lease vehicles well, even as used-vehicle prices soften. Whether the industry is able to sustain that through the rest of the year remains to be seen. Jonathan Smoke, chief economist at Cox Automotive, said in a note accompanying the release of the latest Manheim index report that "strong" demand for used vehicles has kept prices higher than what many had anticipated. His comments echo those of NADA Chief Economist Steven Szakaly, who said during a July briefing he anticipates 200,000 new-vehicle buyers moving into the used-vehicle market over the remainder of the year.

Still, the used-vehicle market faces significant challenges throughout the remainder of the year and heading into 2018. For starters, the number of off-lease vehicles returning to market will continue to rise, putting more downward pressure on pricing. Szakaly said he anticipates an acceleration in vehicle-price depreciation throughout the second half of the year and into early 2018, when large numbers of fleet vehicles will enter the market. "As we move on through the rest of this year, used cars will be increasingly challenging," he said.
Source: Automotive News

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Ethnicity Counts at U.S. Minority-Owned Dealerships

Minority-owned dealerships sell a higher percentage of their inventory to minority customers than the average U.S. dealership, according to IHS Markit. They also sell a higher proportion of new vehicles to customers of the same ethnicity. While minority consumers accounted for 28 percent of new-vehicle sales in the U.S. through April, they made up 40 percent of sales for minority dealers, says Marc Bland, IHS Markit's vice president of diversity and inclusion.
Source: Automotive News

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New Employment Eligibility Verification Form Available

The U.S. Citizenship and Immigration Services has issued a revised Form I-9, Employment Eligibility Verification. Until Sept. 18, 2017, dealers may use either the new Form I-9 (7/17/17) or the one marked "11/14/16N" when establishing a new hire's eligibility to work in the U.S. See NADA's Driven Guide to Employment Eligibility Verification. Contact NADA Regulatory Affairs with questions.
Source: NADA

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Global Marketsí Mid-Year Momentum, as Reported by CAPTRUST, NADA Retirementís 3(38) Investment Manager

Per CAPTRUST, NADA Retirement’s 3(38) Investment Manager: “At last, both the U.S. and the rest of the world are growing steadily and exceeding expectations. This long-awaited synchronized surge and better-than-expected corporate earnings helped push U.S. stocks to higher-than-average valuations. International stocks followed suit. But can they go higher with the U.S. Federal Reserve raising short-term interest rates? What other risks should investors consider in the second half of 2017?” Access their full investment market article, "Global Markets’ Mid-Year Momentum." For more information about your association’s retirement program, visit www.nadaretirement.com or contact us at 877.630.4015.
Source: NADA Retirement

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Quotable
"The second half of the year will continue to present challenges to manufacturers as they navigate a hyper competitive and dynamic marketplace, while working to find the optimal mix of production cuts and discounting necessary to align supply, demand and inventory levels."

    -- Thomas King, a J.D. Power vice president, Automotive News, July 28

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