NADA Headlines - 09/04/2013 (Plain Text Version)

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FTC Announces Advertising Enforcement Actions Against Dealers

The FTC issued a press release Monday stating that it has entered into proposed consent orders with a Cleveland dealership and a Baltimore area dealership for alleged advertising violations that appeared on their respective websites. In the former case, the FTC alleged that the dealer advertised that particular Ford models are available at a specific dealer discount when “in fact, once consumers reach the dealership, they find out that [the dealership] has failed to disclose that the specific discounts are available for some, but not all, of the Ford models advertised.”

In the latter case, the FTC alleged that the dealer advertised specific dealer discounts and prices as being generally available to consumers when “in fact, once consumers reach the dealership, they find out that there are significant restrictions on obtaining the advertised discounts or that the advertised discounts are not available in full.” In particular, the FTC alleged: “In numerous instances, the advertised discount and price are subject to various qualifications and restrictions … for example, being a member of the military, being a recent college graduate, possessing a bank account at a particular bank, or owning a vehicle that has a lien on it. In numerous instances, even if consumers meet all of these qualifications or restrictions, they cannot obtain the advertised discount and price.”

The FTC alleged that these are deceptive practices which violate Section 5 of the FTC Act. In the proposed consent orders, the dealerships (which neither admit nor deny the alleged violations) agree to several provisions such as avoiding certain advertising representations, retaining their ads and promotional material for 5 years, and filing compliance reports with the FTC. Click here for the FTC's press release, which contains links to its complaints, the proposed consent orders and the ads that gave rise to these actions.
Source: FTC

Prices On Rise, But at What Cost?

Today's longer loans may dent future sales

Expect another frothy sales month when automakers report August results this week. And if the pattern holds, average transaction prices will have risen in lockstep, flirting with yet another record. Stout pricing has been a hallmark of the four-year sales rebound. Consumers aren't just buying a lot of vehicles. They're springing for pricier ones too, with more features, advanced powertrains and nicer interiors -- stagnant wages and weak job market be damned. But they're also stretching themselves further to be able to afford those nicer rides. Even with rock-bottom interest rates, new-car buyers are taking on more debt and dragging their payments across longer periods than ever before, according to Experian Automotive. Some industry watchers see the price issue as a potential stumbling block in an otherwise clear glide path back to the halcyon days of 17 million-plus U.S. light-vehicle sales. They worry that escalating prices, when coupled with an uptick in interest rates, will put a new car out of reach for a swath of prospective buyers. "I think it's going to dramatically affect sales," Peter Welch, president of the National Automobile Dealers Association, says of the price spiral. He says many consumers "are still struggling" and won't be able to work a new-car payment into their budgets in light of the rising prices, which he ascribes mainly to automakers adding powertrain technology to meet toughening fuel-economy standards. "Being able to put people into cars is going to be a real challenge," Welch told Automotive News this month.
Source: Automotive News [return to top]

NADA Convention: Early Bird Registration Ends Sept. 13

Registration for the 2014 NADA Convention & Expo in New Orleans remains steady, which has resulted in several hotels filling up quickly. Previously reported as sold out, a limited number of rooms have been added to several popular hotels, which include the Hilton Riverside, J.W. Marriott, Marriott Convention Center, Renaissance Arts and W New Orleans. Attendees are encouraged to register early and book their hotels of choice. “The convention theme is Accelerate—something the auto industry and New Orleans have in common with both rebuilding our roads to recovery,” said NADA Chairman David Westcott. “The NADA convention offers all attendees—dealers and their managers, manufacturer execs and exhibitors—an opportunity to learn new ways to accelerate business success.” Dealers and their managers who register by Sept. 13 will receive a $100 discount from the onsite rate. “We're working hard to deliver a convention experience that lives up to the billing as the Automotive Industry Event of the Year,” Westcott added. The NADA convention runs Jan. 24-27. For more information or to register, visit
Source: [return to top]

Ford Accelerating Plans to Make India an Export Hub

Auto sales in India are falling for a second straight year, but the appetite for small cars and utility vehicles throughout Asia has accelerated Ford's plan to make India an export hub. By 2018, Ford India will be able to export half the vehicles it makes in India, according to Dave Schoch, president of Ford Asia Pacific, who was in New Delhi today to address the Society of Indian Automobile Manufacturers' annual convention. “Despite current macroeconomic factors and ongoing market challenges, India is a key part of our global strategy,” Schoch said. “Exports from India will help us to stay on track for turbocharged growth in the region.” The Dearborn-based automaker is undergoing its biggest industrial expansion in 50 years, building plants in China, India and Thailand.
Source: Detroit Free Press [return to top]

Automakers Build Showroom in an App

Automakers trying to reach young buyers face a conundrum: How do they sell a car to people who stay away from a showroom? “They won't come into the stores to educate themselves,” said Peter Chung, general manager of Magic Toyota and Scion in Edmonds, Wash. “They'll do that online.” In response, automakers like Cadillac and Toyota are starting to embrace technology that tries to take the showroom to the buyer. Known as augmented reality, it embeds images and videos in a picture on the user's smartphone or tablet. The result is a far more detailed view of the image, often in three dimensions with added layers of information.
Source: The New York Times [return to top]