NADA Headlines - 10/17/2013 (Plain Text Version)
Replacing dealer-assisted financing with flat fee compensation, as advocated by the Consumer Financial Protection Bureau, poses “a huge threat to the consumer,” the head of the National Automobile Dealers Association warned again. David Westcott, NADA chairman, says dealers are “price discounters” and eliminating their ability to negotiate a finance rate for buyers could increase the cost of consumer loans. Dealers are exempt from CFPB oversight but the federal bureau is putting pressure on finance companies to change how they compensate dealers for arranging auto financing for consumers. Without answers from the CFPB “there is no way to know whether there may be unintentional discrimination in the auto lending market, as the CFPB, claims,” Westcott said during remarks at the APA in Detroit on Wednesday.
Editor's note: Click here for Westcott's speech to the Automotive Press Association.
The budget battle in Washington, D.C. may be headed toward a temporary resolution, but not before putting a chill in mid-month new car sales, auto industry executives and dealers said this week. It isn't clear how broad the impact of the budget clash was, or whether sales will rebound if lawmakers can approve a deal that lifts the uncertainty over a potential federal debt default and ends the partial government shutdown. Some industry executives said the effects so far were limited. David Westcott, chairman of the National Automobile Dealers Association said Wednesday the uncertainty in Washington effects the auto business "in a consumer confidence way." Typically when there is a period of uncertainty, whether that be before an election or because of rising gas prices, there is a dip in sales, Mr. Westcott said. His dealership's showroom traffic has been down for between the last 30 or 40 days. Some of that, he said, reflects consumer concerns and some a lack of the vehicles that other customers want.
Fears about capacity constraints have been at the forefront in North America since the industry started rebounding from the recession, but that won't stop assembly plants from pumping out a 14-year high in production in the fourth quarter. A WardsAuto/AutomotiveCompass production forecast projects light-vehicle output will total 4.02 million units in October-December, highest for the period since 4.28 million in 1999. It's also the fourth best ever for the quarter.
Standard & Poor's initiated coverage of Tesla Motors Inc. with a "sell" rating, citing caution over the electric carmaker's stock price. "We are positive on Tesla's fundamental growth story, but are concerned by its valuation," S&P analyst Efraim Levy said in a research note. "We believe there is execution risk for Tesla as well as opportunity. We expect these volatile shares to be impacted by news flow and investor sentiment shifts," he added.
General Motors will offer a Chevrolet Impala powered by gasoline or compressed natural gas. The move fulfills CEO Dan Akerson's directive to place a greater emphasis on natural gas-powered products. The automaker said it would offer the bi-fuel 2015 Impala starting next summer to consumers and fleet buyers, with the latter expected to account for most sales. GM said the natural gas-fueled Impala will be able to travel 150 miles on natural gas and 350 miles on gasoline.
Ford Motor Co., the U.S. pickup leader for more than three decades, will expand its F-Series truck line for the 2014 model year to protect a widening lead over Detroit rivals. Eight new F-Series iterations, including an F-150 Tremor half-ton sport truck, will stretch Ford's pickup portfolio to the widest it's ever been, the Dearborn, Michigan-based company said. The No. 2 U.S. automaker's lead over General Motors Co. and Chrysler Group LLC expanded even as the duo introduced new trucks within the past year. Ford redesigned the front end of its trucks with flashier headlamps last year and made extensive upgrades to their powertrains two years earlier. While Doug Scott, Ford's truck marketing manager, declined to discuss next-generation pickups, he confirmed company efforts to reduce vehicle weight that one metals industry analyst said could mark the start of the biggest shift in demand since the introduction of the aluminum can.
As car sales crept higher, Colin Wickstrom wagered that even better days were ahead. The president of Wickstrom Auto Group spent more than $10 million over the past year to transform a tired 12,000-square-foot Mercury showroom in Barrington [Ill.] into a gleaming 40,000-square-foot showcase for his Wickstrom Chrysler Jeep Dodge Ram dealership.