NADA Headlines - 04/25/2014 (Plain Text Version)
Three staffers from the Federal Trade Commission on Thursday posted a blog on the agency’s website expressing their own opinions—not the opinion of the FTC or any individual commissioner—about how new cars should be retailed in the U.S. The FTC staff bloggers, however, failed to acknowledge how the franchised dealer network actually benefits car buyers through price competition and safety, and provides enormous economic benefits to local communities.
The U.S. Securities and Exchange Commission and a federal grand jury are investigating General Motors Co. over its handling of the massive recall, as the government probes into the ignition switch crisis widens. The SEC probe, revealed Thursday in a financial disclosure document filed with the government by GM itself, seeks to determine why it took GM a decade to recall some 2.6 million cars with faulty ignition switches that were linked to at least 13 deaths and 32 crashes. Already, Congress and the National Highway Traffic Safety Administration have launched investigations into the automaker's actions. The SEC likely wants to know if GM executives knew of the problems and failed to disclose it to investors. If so, they could face civil fines or even be barred as serving as a director or officer of a publicly traded company.
Ford reported a $989 million profit in the first quarter, down 39% from a year ago as the automaker kicks off its most aggressive year of product launches in 50 years. It is the 19th consecutive profitable quarter for Ford but was below investors' expectations and far below last year's $1.6 billion. Ford Chief Financial Officer Bob Shanks had warned of higher costs associated with the 23 global vehicle launches planned for this year, including 16 in North America. Each new model introduction comes with greater development, manufacturing and marketing costs. Ford posted a pre-tax profit of $1.4 billion, down $765 million or 36% lower than a year ago on revenue of $36 billion. For the full year, the automaker still expects pre-tax profit of $7 billion-$8 billion.
Honda Motor Co. on Friday forecast a 3.6 percent rise in net profit for the year ending March 31, a sharp slowdown from the previous year, as foreign exchange rates stabilize after a steep decline in the yen boosted earnings. The company also said that its high level of capital spending will decline slightly this year as it continues an ambitious expansion plan, and that the start of operations could be delayed at a plant in Thailand, a key market that has been hit by political uncertainty. In the just-ended business year, Honda's net profit jumped more than 50 percent as new models including a redesigned Fit compact offset the impact of a missed sales target in the United States, its biggest market, where severe winter weather deterred showroom traffic and sales.
Foreign car makers keep building more factories, models and dealerships
China's economic growth may be slowing, but for global auto makers, the Middle Kingdom is still the land of opportunity. Top executives of the world's largest auto makers spent Easter weekend at Beijing's big auto show pledging allegiance to the world's largest car market, outlining billions in new investments for factories and technical centers, and hawking new models tailored for the country's affluent young. This year's Beijing show marked the official end of China's days as a developing market and the beginning of a new era in the world's largest car market.
NADA's Chief Regulatory Counsel Paul Metrey recently conducted a NADA University Online webinar on the optional NADA Fair Credit Compliance Program that NADA, AIADA and NAMAD recently released to their members. The webinar provided a general overview of the purpose and scope of the NADA program, as well as general and specific instructions for developing the program.
The webinar is now available to NADA and ATD members through NADA University Online (all NADA and ATD members have complimentary access). To access the webinar, members can log in at www.NADAuniversity.com and enter the keyword “MI91” in the search box in the upper right corner of the page. For assistance with login or password information, contact NADA’s customer service team at 800.557.6263 or NADAuniversity@nada.org.