View Web Version

SPONSORED BY
NADA.org
November 16, 2017 FacebookTwitterFlickrRSSSEND TO A FRIENDPRINT
Inside this issue
Senate Tax Plan Update: Calls to Republican Senators Urgently Needed
Cordray to Resign from CFPB, May Run for Ohio Governor
Early-Bird $100 Registration Discount for NADA Show Ends Tomorrow; Six Hotels Sold Out
GM Challenges Tesla with Promise of Profitable Electric Cars
Ford Brand Will Carry Company in Future
FCA: Skepticism, Then a Mad Scramble
Hyundai Plots SUV Push in Belated Shift to Sate U.S. Buyers
House Members Oppose Trump Administration Auto Trade Rules Proposal
Dealer Interactions with Car Buyers Drive Highest Sales Satisfaction
Empower Retirement Provides Investment Market Insight
NADA and J.D. Power to Host AutoConference LA on Tuesday, Nov. 28
Top Stories
Senate Tax Plan Update: Calls to Republican Senators Urgently Needed

Senate Tax Plan Limits on Interest Deductibility May Result in Dealers Paying Increased Taxes

The Senate Finance Committee is debating its tax reform bill, which puts floor plan lending at risk.  The plan would limit the deductibility of business interest, including floor plan interest, to 30 percent of adjustable taxable income.  As interest rates increase, this proposal may result in dealers paying higher taxes even when a dealership does not show a profit.  As the auto economy is very cyclical, in an economic downturn this tax policy could create a downward spiral that could be devastating for many small businesses dealers.  If this policy had been in place during the Great Recession, it is likely many more small business dealers would have gone out of business.

Time is of the essence. The Senate tax reform bill could be voted on in Committee as early as today.  Please call ASAP; Senators need to hear directly from you about how limiting the deductibility of floor plan financing would result in a tax increase for your business.

NADA has been urging the Senate Finance Committee to adopt the House tax bill language, H.R. 1, which preserves floor plan interest deductibility.  Floor plan financing should remain fully deductible in the Senate tax bill because:

  • The business interest provision unfairly puts small businesses with high cost inventory at serious risk of dealers paying higher taxes even when the dealership does not show a profit.  Floor plan financing is a specialized loan that helps provide affordable vehicle funding, and limiting its deductibility would disproportionately harm small-business dealers by substantially raising financing costs.

  • The bill treats dealers, generally closely held small businesses, the same as large corporations that choose debt over equity for tax purposes.  Franchised automobile dealers do not have access to equity markets and floor plan financing is a necessity, not a choice.

  • The bill as written is extremely damaging to small businesses and needs to be corrected to allow full deductibility of specialized loans such as floor plan loans.  The House tax reform bill (H.R. 1), recognizing that floor plan loans are different, limits business interest deductibility, but preserves full deductibility of floor plan financing for high cost inventory such as vehicles, farm equipment, etc.

Action Needed Now

Call your Republican Senator(s) in Washington or their state office to ask them to urge Senate Finance Chairman Orrin Hatch (R-Utah) to ensure floor plan interest remains fully deductible in the tax bill during Committee consideration.

To find your Senator, click here.

Dealers are also encouraged to follow up with their accountant to discuss how the proposed changes to limit the deductibility of business interest, including floor plan interest, to 30 percent of adjustable taxable income would impact your dealership.  To view the Senate’s tax proposal, click here.

For more information or to provide Senate feedback, contact Patrick Calpin, NADA Legislative Affairs, at 202.547.5500.
Source: NADA

[back to top]

Cordray to Resign from CFPB, May Run for Ohio Governor

WASHINGTON -- Richard Cordray plans to step down as the head of the Consumer Financial Protection Bureau, the controversial consumer watchdog created by President Barack Obama following the 2008-09 financial crisis, amid growing speculation that he will run for governor of Ohio as a Democrat.

His decision to leave at the end of the month means President Donald Trump should soon get to install his own director atop the bureau, a regulator set up to police mortgages, credit cards and other financial products.

Cordray's decision to step down early was welcomed by some of his most vocal critics in the private sector, including the National Automobile Dealers Association.  

"Corday’s tenure as CFPB director has been marked by a number of ill-fated attempts to stymie consumer benefits of free-market competition, including the CFPB’s attempt to eliminate the ability of auto dealers to discount interest rates for the benefit of their customers," said Peter Welch, president and CEO of the National Automobile Dealers Association.

Welch urged Trump to appoint a director "who will work with consumers, financial service providers and Congress to ensure that consumers have access to fair and competitive financial products and services.”
Source: Bloomberg/Automotive News

[back to top]

Early-Bird $100 Registration Discount for NADA Show Ends Tomorrow; Six Hotels Sold Out

The upcoming NADA Show in Las Vegas is an experience you can't get anywhere else.



The four-day NADA Show 2018 (formerly the NADA Convention & Expo) runs from Thursday, March 22, to Sunday, March 25, in Las Vegas. NADA member dealers and managers who register by Friday, Nov. 17 will receive a $100 early-bird registration discount from the onsite rate.

Here's what you'll experience at NADA Show 2018:

It's the final week for dealers and managers to receive the early-bird $100 registration discount. Rooms at the most popular hotels are filling up quickly. Six hotels in Las Vegas are already sold out. For more details or to register, click here.
Source: NADA

[back to top]

GM Challenges Tesla with Promise of Profitable Electric Cars

General Motors Co. plans to launch a new family of electric vehicles in 2021 that will cost less to build and make a profit for the U.S. No. 1 automaker, Chief Executive Mary Barra told investors on Wednesday. Her plans represent a direct challenge to money-losing electric vehicle specialist Tesla Inc., which is struggling to get its more affordable, high-volume Model 3 launched and recently reported its largest-ever quarterly loss.
Source: Reuters

[back to top]

Ford Brand Will Carry Company in Future

Ford Motor Co. is leaning on experience amid calls for a clear path to the future of the auto industry. Joe Hinrichs, Ford president of global operations, told Goldman Sachs analysts Tuesday in Boston that the Blue Oval’s history will drive the company forward as it expands into electrification, autonomous vehicles and other new mobility fields.
Source: The Detroit News

[back to top]

FCA: Skepticism, Then a Mad Scramble

Wait and see. For years, that was Fiat Chrysler Automobiles' approach to autonomous technologies and electrified vehicles. But the demands of a rapidly changing industry — and a failure to find a merger partner — appear to have [Fiat Chrysler Automobiles' CEO Sergio] Marchionne reluctantly reassessing those plans, though it's still taking few risks. "We have to electrify," Marchionne said in October regarding the challenge of meeting European regulations. As for whether that represents the future of automaking, "the answer is 'no,'" he says. "I think it's too early to assume that by itself electrification will solve the [industry's] problems."
Source: Automotive News

[back to top]

Hyundai Plots SUV Push in Belated Shift to Sate U.S. Buyers

Hyundai Motor Co. is finally going to give America what it wants: more sport utility vehicles. The South Korean automaker mired in a U.S. sales slump said Wednesday it will bring eight new or redesigned crossovers or SUVs to the market by 2020. The plans are a belated effort to recapture buyers who’ve been shunning sedans and compact cars -- segments where Hyundai’s lineup is strongest.
Source: Bloomberg

[back to top]

House Members Oppose Trump Administration Auto Trade Rules Proposal

A bipartisan group of more than 70 members of the U.S. House of Representatives urged the Trump administration on Wednesday not to boost current production requirements on vehicle content for autos produced in the region under the North American Free Trade Agreement. Under the trade deal, at least 62.5 percent of the material in a car or light truck made in the region must be from North America to be able to enter the marketplace tariff-free.
Source: Reuters

[back to top]

Dealer Interactions with Car Buyers Drive Highest Sales Satisfaction

Despite an array of online resources available to car shoppers today, interactions with dealership sales staff just before purchasing leads to high sales satisfaction, says J.D. Power. As vehicle technology features become more advanced, shoppers largely depend on dealership experts to instruct them on how to use new technology, according to the latest U.S. Sales Satisfaction Index Study by J.D. Power.
Source: Auto Remarketing

[back to top]

Empower Retirement Provides Investment Market Insight

The third-quarter market commentary, courtesy of the NADA Retirement program from Empower Retirement, provides valuable insight into current market trends and general fund performance. Read the market commentary here. Learn more about the NADA Retirement program from Empower at nadaretirement.com.
Source: NADA

[back to top]

AutoConference LA -- Nov. 28
NADA and J.D. Power to Host AutoConference LA on Tuesday, Nov. 28

Tom Doll, president and chief operating officer for Subaru of America, Anders Gustafsson, Volvo Cars USA’s new president and CEO and senior vice president for the Americas, and Jeremy Tucker, vice president of marketing communications and media for Nissan North America, are among the industry speakers at AutoConference LA on Tuesday, Nov. 28, 2017.

AutoConference LA, hosted by NADA and J.D. Power, will be held at the InterContinental Los Angeles Downtown, the tallest U.S. building west of Chicago. The half-day conference precedes media days at the Los Angeles Auto Show.

Other speakers include Mark Scarpelli, NADA chairman, Finbarr O’Neill, CEO and president of J.D. Power, as well as a panel discussion the future of autonomous vehicles and an analysis on auto retailing in the California market.

The conference starts with a noon luncheon and ends with a networking reception on the 73rd floor of the hotel, which offers unparalleled views of the cityscape and skyline of downtown Los Angeles. For the complete agenda or to register, visit www.autoconferencela.com.
Source: NADA

[back to top]

 
Quotable
"Corday's tenure as CFPB director has been marked by a number of ill-fated attempts to stymie consumer benefits of free-market competition, including the CFPB’s attempt to eliminate the ability of auto dealers to discount interest rates for the benefit of their customers."

    -- Peter Welch, NADA president and CEO, commenting on Richard Cordray's announcement to step down as the head of the Consumer Financial Protection Bureau, Bloomberg/Automotive News, Nov. 15

Sponsored by



MyDealership.org Videos




 
 
NADA Webinars
NADA members can view past webinars on-demand at no charge at NADA University Online. Members must create an NADA account before viewing.
Search Back Issues | Unsubscribe | Subscribe | Manage your subscription | email us
NADA For more info, visit nada.org. Any opinions or statements contained herein do not necessarily reflect the views of NADA. Factual errors are the responsibility of the listed publication. This email may contain an advertisement of NADA products and services. Questions or comments concerning NADA Headlines content may be directed to publicaffairs@nada.org. To unsubscribe from future editions of NADA Headlines, click here or contact NADA, 8400 Westpark Drive, Tysons, VA 22102.