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October 10, 2017 FacebookTwitterFlickrRSSSEND TO A FRIENDPRINT
Inside this issue
NADA Chairman to Discuss Unintended Consequences of Stairstep Incentive Programs
CFPB Excludes Most Vehicle Credit Contracts from Its Final 'Ability to Repay' Requirements
GMs Conundrum: Too Many Factories Making Slow-Selling Cars
Wall Street Warms to Detroit's EV Vision
NADA Show 2018: Registration Now Open
Top Stories
NADA Chairman to Discuss Unintended Consequences of Stairstep Incentive Programs


To view the livestream at 12:30 p.m. ET , go to facebook.com/NADAUpdate 

In remarks to the Automotive Press Association in Detroit on Tuesday, Oct. 10, NADA Chairman Mark Scarpelli will discuss the unintended consequences of certain manufacturer incentive programs – including, in particular, the adverse effects that those programs often have on the value of brands to consumers. Scarpelli represents Metro Chicago’s new-car and -truck dealers on NADA’s board of directors. NADA represents nearly 16,500 new-car and -truck dealerships, with both domestic and international franchises.
Source: NADA

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CFPB Excludes Most Vehicle Credit Contracts from Its Final 'Ability to Repay' Requirements

On Oct. 5, 2017, the Consumer Financial Protection Bureau (CFPB) finalized its long anticipated rule that, among other features, requires lenders to make “ability to repay” determinations when extending certain payday, vehicle title, and other loans to consumers.  Although the proposed rule would have covered certain “high cost” vehicle finance contracts, the final rule generally excludes those contracts unless they have a balloon payment feature.  A balloon payment is defined as at least one payment that is more than twice as large as any other payment.

The changes that the CFPB made between the proposed rule and the final rule are significant.  Although the CFPB generally lacks authority over franchised dealers who engage in indirect vehicle financing, the CFPB still possesses authority over the dealers’ finance sources. Had the CFPB imposed the ability to repay requirements on those finance sources, they were expected to pass them along to dealers in the form of new contractual duties.  For this reason, NADA and other trade associations filed written comments with the CFPB in October 2016 urging it to exclude standard vehicle credit contracts from the final rule, which the CFPB ultimately acted upon.
Source: NADA Regulatory Affairs

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GMs Conundrum: Too Many Factories Making Slow-Selling Cars

General Motors has too many plants for cars, while its SUV and truck lines work round the clock

Despite its drastic downsizing a decade ago under a federally funded bailout and bankruptcy restructuring, General Motors Co. again finds itself with too many U.S. factories that can turn out too many vehicles. But as GM considers how to trim the excess capacity, which saddles the company with higher fixed costs, it faces a tricky political factor: President Donald Trump’s insistence that auto makers assemble more of their vehicles in America and not in lower-cost plants elsewhere.
Source: The Wall Street Journal

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Wall Street Warms to Detroit's EV Vision

GM electric goal jolts stock; Ford rethinks its spending

Detroit's vision for how it can compete against Silicon Valley is starting to come into focus — and Wall Street finally may be taking notice. General Motors last week revealed plans to launch 20 new electric or fuel cell vehicles by 2023 as part of CEO Mary Barra's push toward an autonomous, zero-emission future. Ford Motor Co. CEO Jim Hackett, meanwhile, spelled out drastic cost-cutting measures to improve the automaker's ability to compete now and in an uncertain future for the industry.
Source: Automotive News

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NADA Show News
NADA Show 2018: Registration Now Open

 

Don't miss this opportunity to build on the proud history of America's auto dealers

Online registration and hotel selection for NADA Show 2018 in Las Vegas is now open. NADA member dealers and their managers who register by Nov. 17 will receive an early-bird discount of $100 from the onsite registration rate.

The NADA Show runs from Thursday, March 22, to Sunday, March 25. Keynote speakers are Mark Scarpelli, 2017 NADA chairman, and Nick Saban, head football coach at the University of Alabama (Friday’s general session); Wes Lutz, 2018 chairman-elect, and John Krafcik, CEO of Waymo Inc. (Saturday’s general session); and Robert O’Neill, former SEAL Team Six Leader (Sunday’s inspirational session).

The show also includes educational programs, dealer-franchise meetings, an expo and numerous networking opportunities.

For more information and to register, visit www.nadashow.org.
Source: NADA Public Affairs

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Quotable
"I would expect to see GM make some bold moves on their car lineup."

     -- Jeff Schuster, an analyst at research firm LMC Automotive, The Wall Street Journal, Oct. 9

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