NADA Headlines - 10/16/2013 (Plain Text Version)

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NADA Chairman Warns CFPB's Lack of Transparency Could Hurt Consumers

David Westcott, chairman of the National Automobile Dealers Association, today warned that the Consumer Financial Protection Bureau's lack of transparency and unresponsiveness to Congress could end up hurting consumers by increasing the cost of auto loans. “The CFPB is pursuing a policy that could weaken competition in auto lending and result in higher credit costs for millions of consumers,” said Westcott, in remarks to the Automotive Press Association in Detroit, where he also called the dealer franchise network the “most efficient, cost effective and competitive way of selling and servicing vehicles anywhere in the world.”
“More and more members of Congress are questioning the CFPB's so-called ‘fair lending guidance’ that seeks to eliminate dealer-negotiated financing and replace it with a flat fee method of compensation, where dealers are not allowed to discount the financing they offer,” he added. Westcott said pressure from the CFPB to force finance sources into adopting flat fees would eliminate a dealer's ability to “meet or beat” a given rate, and could increase the cost of credit for millions of consumers. “When it comes to indirect lending, dealers are ‘price discounters.’ We don't understand how removing 17,546 price discounters from the marketplace is a good thing for consumers,” he added. “And we don't see how tampering with a $783 billion auto lending market—that's working effectively and efficiently—is a good thing for consumers either.” Click here for Westcott's full remarks.

House Praises Japanese Carmakers

Nearly 80 House members sent a letter to President Barack Obama touting the importance of Japanese automakers and dealers to the U.S. economy as the administration works to negotiate a 12-nation free trade agreement. Reps. Pete P. Gallego, D-Texas, and Alan Nunnelee, R-Miss., wrote the letter, which said, “Congress and the administration must continue to foster a business climate that promotes the United States as a premier location for global companies to build, sell and export their products.” It was signed by 79 House members.
Source: The Detroit News [return to top]

First U.S.-Bound Vehicle Exports Highlight Thailand's Growth as Production Site

At this gleaming, barely year-old Mitsubishi assembly plant, it's the little things that say you're in Thailand and not Toyota City or Tennessee. There's the errant sparrow inside the new cafeteria, apparently trying to nest in an air duct. There are the conspicuous loose and wobbly faucets in the new worker washroom. Don't forget the copious curtains of sparks showering clear across the factory aisles. The dearth of robots. Or the legions of workers swarming the line, especially in quality control. Mitsubishi Motors Corp.'s newest factory may be a little rough around the edges. But it is doing something never done before. It just started exporting vehicles from this hot, humid, sometimes chaotic Southeast Asian emerging market to the United States.
Source: Automotive News [return to top]

GM to Open Stamping Plant in Texas

Large cost savings expected as it cuts down on transporting parts

For years, General Motors Co. pounded out hoods, fenders and doors for its Tahoe and Yukon sport-utility vehicles at plants in Ohio and Michigan and shipped them to its assembly plant in Arlington, Texas. On Monday, the auto maker officially opened a $200 million metal-stamping plant adjacent to the Arlington factory that reduces that travel to about 20 feet from machine to welder. Estimated savings: about $40 million a year in shipping costs. The new plant, is part of a broader rethinking of logistics by GM Chief Executive Dan Akerson, who is anxious to close the company's profit margin gap with rival Ford Motor Co. His aim is to lift GM's North American margins to 10% from about 8% now, a feat that would generate hundreds of million of dollars in new profit.
Source: The Wall Street Journal [return to top]

Europe Car Sales Rise Most Since 2011 on Spain Incentives

European monthly car sales rose the most in more than two years as the end of a recession in the region, price cutting and a government incentive program in Spain helped lift demand. Registrations in September jumped 5.5 percent to 1.19 million vehicles, the Brussels-based European Automobile Manufacturers Association, or ACEA, said in a statement. That narrowed the decline this year to 4 percent, for total deliveries of 9.34 million cars. Renault SA and Daimler AG posted the biggest gains last month as an economic recovery in the region spurred consumer spending. Demand surged 29 percent in Spain because of government-backed discounts of as much as 2,000 euros ($2,700) on vehicle trade-ins. Dealer rebates in Germany were the highest in three months.
Source: Bloomberg [return to top]

REMINDER: New Consent Requirements for Telephone Calls and Text Messages Effective Oct. 16

New consent requirements from the Federal Communication Commission for phone calls and text messages go into effect on Oct. 16, 2013. Dealers should review the rules and work with their counsel and any third party vendors to ensure that all phone calls and text messages they make or send (or that are made or sent on their behalf) meet these new requirements. Click here for further details on the new requirements.
Source: NADA Regulatory Affairs [return to top]

Facebook's Pitch to Automakers: We Have Reach -- and the Data to Prove It

Facebook revved up its charm offensive for the auto industry last month, holding its first "summits" in Detroit and Los Angeles for executives from Team Detroit, Carat, GM, Ford and Toyota. The social network has good reason to go the extra mile when wooing carmakers. Just days before going public last year, Facebook's ad business faced a major crisis when General Motors Co. announced it would pull its ads from the site because it wasn't sure if they were having an impact on sales. GM came back to the fold in April, and Facebook has been trying over the last six months to be more strategic about the overtures it makes to automakers. Now it's taking what it believes is a tantalizing pitch for automakers to this fall's digital upfronts: In addition to its reach, Facebook can deliver an audience of people actually in the market to buy a car. Through its data partners, the social network can show automakers how many people exposed to their ads ended up buying their car after at least two months have passed.
Source: Automotive News [return to top]