Industry News

NADA’s Chairman Tackles Legislative Priorities in Nation’s Capital

NADA Chairman, Ed Tonkin, was recently in Washington to talk to his senators about NADA’s legislative priorities and to attend the Senate Commerce Committee hearing on the Toyota recall. After the hearing, he had the opportunity to meet with Sen. Jay Rockefeller to reiterate that NADA will work with the committee as it considers legislation to address the recall issue.

Tonkin met with senators from his home state, Ron Wyden, D-Ore., and Jeff Merkley, D-Ore., to discuss the recall issue and the need to expand dealer access to floorplan financing. He also asked both senators to support legislation that would create greater availability of wholesale lines of credit for dealers. Tonkin told Sen. Merkley (who serves on the Senate Banking Committee) that credit for his customers is stronger, but funding for dealers to purchase vehicle inventory is still in short supply.

Tonkin also delivered a letter to his senators expressing NADA’s support for legislation that would prevent the Environmental Protection Agency (EPA) from establishing its own separate fuel economy standards for cars and trucks. NADA supports a single, national fuel economy standard. Tonkin’s letter rebuts the Administration’s claim that it is better to have three separate agencies – U.S. Department of Transportation, EPA and a patchwork of state-based programs led by California – regulating fuel economy rather than a single, national standard. Source NADAFrontPage.com

Hyundai to Include iPad in New Luxury Car

Hyundai Motor America will include an iPad with the luxury sedan it plans to launch this fall.  The iPad pitch is aimed to tap into the hype over Apple Inc.'s sleek tablet computer and will be included as part of the package for consumers who drive off with Hyundai's Equus luxury sedan.

People who purchase the South Korean automaker's first venture into the super-premium auto market will also be able to use one of the tablet's preloaded applications to make service appointments.

Known for budget cars such as the $9,970 Accent and the $14,145 Elantra, Hyundai is trying to break into the high-end market with the Equus. The three vehicles are similar in size and are equipped with engines that have about the same power (380 horsepower range). The Equus will sell for $50,000 to $60,000 with the exact price to be announced closer to the sales launch. And, reasoned the auto manufacturer, customers who would be inclined to spend more on their cars were the same people who would be drawn to trendy technological gadgets. Source: Los Angeles Times

Obstacles Remain for the New GM

The new start at General Motors isn’t as fresh as it looks. Last year’s quick-rinse bankruptcy washed away almost $90 billion of debt and other obligations. But there are still wrenches in the Detroit automaker’s gears that its Chapter 11 restructuring was supposed to remove more cleanly.

In the six months after emerging from bankruptcy last July, and after stripping out a couple of big onetime items, GM almost eked out a profit before interest and taxes. As the economy improves, GM should have a good shot at climbing into the black.

GM also still has pension problems. Retiree funds are currently short by about $27.5 billion, three-fifths of which is in the U.S. GM will contribute $43 billion to its U.S. pensions over the next five years. The company is also still on the hook for $9.5 billion of non-pension costs. Source: The New York Times

U.S. Consumer Credit Fell the Most in Three Months

Consumer credit in the U.S. declined in February more than anticipated, indicating Americans are reluctant to take on more debt without further improvement in the labor market.   Borrowing fell $11.5 billion, the most in three months, after a revised $10.6 billion January gain that was twice as much as initially estimated, stated the Federal Reserve. The decline in the February measure of credit card debt and non-revolving loans was worse than the lowest estimate in a Bloomberg News survey of 34 economists.

Revolving debt, such as credit cards, also declined by $9.4 billion in February, according to the Fed’s statistics. Non-revolving debt, including loans for cars and mobile homes, dropped by $2.1 billion. The pace of car sales jumped to 11.77 million in March, after Toyota Motor Corp. offered incentives to win back buyers following record vehicle recalls.  Source: Bloomberg.com

U.S. Needs Holistic Energy Policy, Panel Says

Panelists in a session on energy policy at the SAE World Congress have formed a consensus: If America is going to wean itself off oil dependency; we need to produce more environmentally friendly vehicles.  In addition to fuel economy standards and research funding, the government needs to adopt other measures to discourage fuel consumption.

The panelists agreed that policy makers should provide tax breaks on purchases of electrified and other advanced technology vehicles, some of which is available already. “Price signals are critical to this,” says Michael Webber, co-director of the University of Texas Clean Energy Incubator. He says history shows if gasoline remains inexpensive, people feel free to drive their more fuel efficient vehicles greater distances.

Panelists cautioned that a more holistic view to policy making is needed.  Webber points out the effect a government push toward alternative fuels and electric vehicles could have on the world’s already dwindling fresh water supply.  Electricity generation requires two to three times the amount of water needed to produce gasoline, while natural gas requires one to 24 times. Hydrogen fuel creation is one to 500 times as water needy, while biofuels can multiply water use by up to 1,000. “Maybe we need to look at gallons of water per mile,” Webber suggests. Source: WardsAuto.com

Are You Covered by the Red Flags Rule?

Are you complying with the Red Flags Rule?  The Red Flags Rule requires many businesses and organizations to implement a written Identity Theft Prevention Program designed to detect the warning signs — or "red flags" — of identity theft in their day-to-day operations. Are you covered by the Red Flags Rule? Read Fighting Fraud with the Red Flags Rule: A How-To Guide for Business to:

  • Find out if the rule applies to your business or organization.
  • Get practical tips on spotting the red flags of identity theft, taking steps to prevent the crime and mitigating the damage it inflicts.
  • Learn how to put in place your written Identity Theft Prevention Program.

By identifying red flags in advance, you'll be better equipped to spot suspicious patterns when they arise and take steps to prevent a red flag from escalating into a costly episode of identity theft.

March Sales Summary

The U.S. auto industry sold 1,063,872 units in March, up 36.7% from February. This equated to a SAAR* of 11.7 million.

  • March sales improved 9.9% compared to February sales results.
  • Calendar year-to-date sales of 2.5 million are up 15.6% versus a year ago. 
  • Toyota captured 17.8% market share in March, up 4.5 points from February, but its sales were up 40% over the year before.
  • In a bright sign for full-size pickups, the segment grew 9.5% compared to the first quarter of 2009.
  • F-Series and Silverado sales have grown 26.3% and 7.7%, respectively, this year.

 * SAAR (Seasonally Adjusted Annual Rate) is a term used in the industry to depict the selling rate of vehicles for a particular month. In the case of January, the 10.5 million rate indicates that the industry was on pace to sell 10.5 million vehicles on an annual basis. Source: NADA Sales Data