NADA Headlines - 07/07/2017 (Plain Text Version)

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Let's Make a Deal: Automakers, U.S. Auctions Align to Prop Up Used Car Prices

Two lanes apart at a noisy, fast-paced auto auction near Detroit, two vehicles show why major U.S. automakers have a problem with used cars. In one lane of the Manheim auction facility, a black 2015 Chevy Malibu sedan with barely 20,000 miles on it sold for just over $13,000, less than half its original sticker price. In the other lane, a white 2013 Chevy Silverado pick-up truck sold for $11,500 - despite having 200,000 miles on the odometer.

America's renewed lust for new SUVs and trucks instead of smaller cars is already hurting major auto companies, which posted their fourth consecutive month of declining new vehicle sales. But millions cars that were leased two or three years ago, many of them used compact and midsized cars with low mileage, are heading toward auction lots and used car dealerships. That surge in supply threatens to depress prices for new and used vehicles, raising the risk of losses for automakers and finance companies on lease deals. It also undercuts the value of cars customers want to trade in for a new vehicle.

So major carmakers, including General Motors Co and Ford Motor Co, are aligning with auto auction houses with aggressive moves to make sure they are getting the best prices for their vehicles. Such maneuvers include transporting the automobiles to where the greater demand is based on real-time pricing data, spending more to spruce up used cars and slowing the pace which leased cars get moved to used car lots or auction houses.

"With off-lease vehicles we are not seeing all of them coming to market, some of them are being held back," National Automobile Dealers Association chief economist Steven Szakaly told reporters on a conference call on Thursday.
Source: Reuters

Sales Down, Incentives Up and Credit Scores Fall, But Not to Worry

Vehicle sales are down, automaker incentive spending is up and some consumer credit scores have fallen. But no need for handwringing, say Mark Scarpelli and Steven Szakaly, chairman and chief economist, respectively, for the National Automobile Dealers Assn. That trio of apparent negatives needs perspective, they say during an economic briefing with journalists. NADA predicts light-vehicle sales of 17.1 million this year, following dealer deliveries of about 17.4 million in both 2016 and 2015.
Source: WardsAuto
 [return to top]

Toyota Turns to Rental Cars for Boost in Slowing U.S. Market

As automakers in the U.S. struggle to keep selling new cars to American consumers at a record clip, Toyota Motor Corp. plans to turn to rental car companies and other fleet operators for a boost. Toyota will nearly match last year’s total sales to fleet customers, which means the company has some catching up to do. Deliveries to rental car companies and other fleets were down by about 20 percent during the first six months of the year, according to Jim Lentz, chief executive officer of Toyota’s North American operations.
Source: Bloomberg [return to top]

Self-Driving Cars Can Learn from Planes and Trains

Supporters and critics of self-driving cars agree there are lessons to be gained from automation in transportation sectors like aviation and rail. They disagree on whether the lessons are good or bad. Advocates note that the U.S. aviation industry has used autopilot to fly jetliners for years with few problems. Train systems have been automated in parts of the country where transit is heavily used as well, which advocates say reduces the likelihood of deadly crashes on Amtrak and popular commuter railways.
Source: The Detroit News [return to top]

US Employers Add Strong 222K Jobs; Jobless Rate at 4.4 Percent

U.S. employers added a robust 222,000 jobs in June, the most in four months, a reassuring sign that businesses may be confident enough to keep hiring despite a slow-growing economy. The Labor Department says the unemployment rate ticked up to 4.4 percent from 4.3 percent in May, which was a 16-year low. The rate rose because more Americans began looking for work and not all of them found jobs.
Source: The Associated Press [return to top]

Audi Exec Charged with Fraud over Polluting Diesels

A former Audi executive has been charged in federal court with conspiracy to defraud the United States and wire fraud for his role in parent company Volkswagen AG's efforts to rig hundreds of thousands of diesel vehicles to cheat U.S. emission standards. The U.S. District Court in Detroit said Thursday that Zaccheo Giovanni Pamio, who is Audi’s former department manager of thermodynamics and exhaust gas aftertreatment in Germany,  is being charged with those offenses, and with making false statements about U.S. Clean Air Act.
Source: The Detroit News  [return to top]

Electric Cars Need More Than Fans

Electric vehicles threaten oil’s future but they must keep improving to overcome the advantage of conventional cars

Last year, the Organization of the Petroleum Exporting Countries conveniently predicted that in 2040, electric vehicles would make up just 6.7% of the car fleet. The owners of four-fifths of proven oil reserves also said the number of cars on the road would double. Right now, electric cars make up about 1% of sales in the U.S., Europe and China, though growing rapidly. But this week brought news from two quarters with the ability to shape that future in a way that OPEC can’t: a mainstream auto manufacturer and a major government. Volvo says it will drop purely conventional engines by 2019 and France wants to ban the sale of conventionally-fueled vehicles by 2040.
Source: The Wall Street Journal  [return to top]