NADA Headlines - Tuesday, Sept. 1, 2009 (Plain Text Version)

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Dealers Still Waiting For Clunker Cash

Auto makers will release their monthly sales reports [today] and they're expected to show the first year-to-year increase since 2007. While the Cash for Clunkers program is getting all the credit, local car dealers are still waiting for their cash. During the month long program, Billion Automotive sold close to a thousand vehicles but has only been reimbursed for 272 of them. Vern Eide sold over 200 cars and has only been paid for 27 of them, and that's fueling lots of concerns in the auto industry. Billion Automotive cashed in during Cash for Clunkers, but owner Dave Billion is still waiting for the rest of his money from the government run program, $3.2 million. "I wonder how long they'd wait if I owed them $3.2 million. I think they'd be at my door or at least my banker's door," Billion said. Plus, he's had problems getting some vehicles qualified. "We had a situation where we had a submission, they rejected it for multiple reasons. We didn't see anything wrong with it, so we resubmitted it. They rejected, we resubmitted it. They rejected it, seven times and finally they paid it, and we never changed a single thing on it," Billion said. But Billion thinks he'll get his money eventually, it just may take longer than what the government first said.
Source: KELO-TV (Sioux Falls, S.D.)

Editor's Note: NADA is in constant contact with the Department of Transportation (DOT), the White House and Members of Congress regarding the problems related to the slow application review, approval and payment process. The association is pushing DOT to improve the claims review process, since currently a rejected clunker claim with a corrected error must still go through another complete review with a new examiner. Simply adding more personnel will not change the fundamental problems with the review process. To expedite claims, DOT reminds dealers to review resubmitted applications carefully, provide as much information and documentation as possible, and clearly spell out any unclear information to the examiners.

U.S. Auto-Sales Rate May Be Highest Since April 2008

U.S. auto sales in August probably will run at the highest rate since April 2008 after the federal government’s “cash for clunkers” rebates fueled demand. The so-called seasonally adjusted annual rate for this month will be 14.3 million, the average estimate of 10 analysts surveyed by Bloomberg. The figure, an industry benchmark, hadn’t exceeded 10 million in 2009 until the incentive program began in July. A slump in sales after the clunkers rebates ended showed how hard it will be for the industry to replicate its August results. Even with that decline, second-half sales will exceed those in the first six months of 2009, [said Michelle Krebs, a senior analyst at Santa Monica, California-based]
Source: Bloomberg
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Cash for Clunkers Vaulted Ford Sales in August, Analysts Say

The cash-for-clunkers program pushed Ford Motor Co.'s U.S. light-vehicle sales to the company's second-straight year-over-year increase in August while lessening sales declines for Chrysler Group and General Motors Co., analysts say. Ford's August sales were expected to grow 34.4 percent, according to an average of five analysts' predictions gathered by Automotive News. That would be Ford's largest year-over-year monthly lift since October 2001.
Source: Automotive News
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Downturn Has Paid Dividends For Hyundai

Once-Maligned Carmaker Sells Value as Rivals Falter
The recession precipitated one of the most tumultuous years ever for the U.S. auto business, but to Hyundai, it may have presented the perfect opportunity. [Today], when car companies announce their latest sales figures, the South Korean automaker that was once an industry laughingstock will announce its best retail month ever and that, despite the vast shrinkage of the U.S. market, it expects this year's sales to exceed last year's. "Value-focused brands tend to do better than premium brands during difficult economic times, and that's played to our natural strength," said John Krafcik, Hyundai's president in North America. While the company is far from dominating the American market, the U.S. share of Hyundai-branded vehicles climbed from 3.6 percent last July to 4.6 percent this July. Globally, the Hyundai-Kia Automotive Group has jumped to fourth in sales, climbing ahead of Ford this year...
Source: The Washington Post [return to top]

Opinion: So What Comes After Clunkers?

Cash for clunkers may just be the most successful program that the government has come up with to stimulate the economy. For all its plentiful problems, it helped sell nearly 700,000 new cars and trucks, which certainly created a stimulus for tens of thousands of jobs in supplier plants, manufacturing plants and dealerships all over the country. Thousands of Americans went to their dealerships to buy cars or trucks, and most were successful. Like many promotions that come to an end, it worked. It moved the iron. Now it's back to normal or close to it. It will take another promotion -- individually this time, by manufacturers -- to get folks into the showrooms and buying cars and trucks. Cash for clunkers was a great success. It wasn't all it was supposed to be, but it worked well for many companies and most dealers. The auto industry is back on its own. This time, automakers need to come up with their own sales idea. Let's hope it's not a clunker.
Source: Automotive News

Editor's Note: Keith Crain is publisher and editorial director of Automotive News. [return to top]

Manufacturing in U.S. Probably Grew for First Time in 19 Months

Manufacturing in the U.S. probably expanded in August for the first time in 19 months, helping lead the economy out of the worst recession since the 1930s. The gains indicate Federal Reserve efforts to thaw credit markets together with the Obama administration’s “cash-for-clunkers” program and tax credits for first-time homebuyers are reviving demand. Factories and builders, which have accounted for half of all the jobs lost since the recession began in December 2007, may keep growing in coming months as sales rise.
Source: Bloomberg
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Ram Pickup is Only New Chrysler for '10

The single new offering is the heavy-duty Dodge Ram full-size pickup. Details of Chrysler's 2010 model offerings, released today, pale against those of crosstown competitors. But consumers may not notice, said Jim Hall, with 2953 Analytics LLP in Birmingham. Jim Arrigo, a Florida dealer and co-chairman of the Chrysler Dealer Council, said promises of better marketing will make the difference. And dealers appreciate having more say in how vehicles are equipped as well as not having a glut of vehicles pushed on them that the company made on spec and often didn't match what consumers wanted.
Source: The Detroit News
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Reminder: Today (Sept. 1) is the Compliance Deadline for New FTC Rule Governing Automated Telemarketing Calls

In 2008, the FTC adopted an amendment to the Telemarketing Sales Rule (TSR) that, among other things, prohibits pre-recorded telemarketing calls without a consumer’s express written agreement to receive such calls. Beginning today, Sept. 1, sellers and telemarketers may not make pre-recorded commercial calls to consumers unless they have a prior express written agreement from the recipient to receive such calls. That written agreement: (1) cannot be required (directly or indirectly) of customers as a condition of purchasing any good or service; (2) must “evidence the willingness” of the recipient to receive such calls; and (3) must include the recipient’s telephone number and signature (although such signature may be electronic in compliance with ESIGN). Click here for NADA's previous alert about these amendments. Click here for the full text of the amendment to the TSR.
Source: NADA Newswire
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FTC Increases Fees for Access to National Do-Not-Call Registry

The FTC has announced an increase in fees starting on Oct. 1 for telemarketers accessing phone numbers on the National Do-Not-Call Registry. The first five area codes continue to be available without charge. However, fees for access to more than five area codes will increase.  Beginning Oct. 1, the annual fee for access to each area code of data will be $55 per year (increased from $54), or $27 per area code of data during the second six months of an entity’s annual subscription period, up to a maximum charge of $15,058 for all area codes nationwide (increased from $14,850). Click here for a copy of the notice.
Source: NADA Newswire [return to top]