NADA Headlines (Sept. 17, 2010)
Dealers to Receive Up to $5M in SBA-Guaranteed Loans Under Senate Bill
WASHINGTON -- Small auto dealers would be able to receive federally guaranteed loans of as much as $5 million - up from $2 million - under an Obama administration-backed bill that passed the Senate (Thursday). The provision is part of a small-business jobs bill that seeks to increase lending and would provide $12 billion in tax cuts to small businesses. The dealer portion of the legislation seeks to loosen credit by increasing the maximum size of a federally guaranteed loan that can be extended by the Small Business Administration. “Dealers strongly urge the House to take up and quickly pass the Senate bill unamended,” Bailey Wood, a National Automobile Dealers Association spokesman, said (Thursday). The vote (Thursday) was 61-38, with two Republican senators - George Voinovich of Ohio and George LeMieux of Florida - joining the Democratic majority. Read more from Automotive News.
Chrysler Group LLC Chief Executive Officer Sergio Marchionne said the U.S. carmaker will probably sell shares publicly in the second half of 2011 after investors approved Fiat SpA’s plan to spin off its industrial business. “I don’t think it’s the first part; I think it’s a second- half year event,” Marchionne, who is CEO of both companies, told reporters in Turin, Italy, (Thursday) when asked when in 2011 a Chrysler share sale could take place. Marchionne, 58, said today that Fiat, which acquired a 20 percent stake in Chrysler in June last year, will raise the holding to 25 percent as soon as December. The CEO said today there are signs that demand is picking up in the U.S. after “two crappy weeks” at the beginning of September. “I saw a large positive mood in the dealer body,” said Marchionne, who met with Chrysler dealers this week and returned to Italy this morning from Florida. “I think there’s a commitment to continue to back the house.” Read more from Bloomberg.
Hyundai Motor Co., South Korea’s largest automaker, may set an “all-time record” for U.S. sales in September owing to demand for its Sonata sedan, the company’s U.S. chief executive officer said. The month “looks fantastic for us,” John Krafcik, CEO of the Seoul-based company’s U.S. unit, said yesterday in a Bloomberg Television interview. “The industry looks decent -- I wouldn’t say great -- but I think we’re going to be fine.” Hyundai’s U.S. sales rose 17 percent in the first eight months of the year, led by demand for the revamped midsize Sonata and new Tucson crossover vehicle. The company’s growth pace is more than double the 8.4 percent rise in industrywide deliveries through August, according to Autodata Corp. in Woodcliff Lake, New Jersey. Krafcik has said Hyundai’s full-year U.S. sales in 2010 should finally surpass its long-time target of 500,000 units. Read more from Reuters.
Wall Street critic Elizabeth Warren said on Friday she accepted the job of setting up a consumer financial protection agency for U.S. President Barack Obama and declared that the time for financial "tricks and traps" was over. Obama was expected to announce his appointment of Warren, a Harvard University professor and hero to liberal activists, at 1:30 pm EDT, taking a step forward in enacting the financial reform that is a signature achievement of his presidency. Warren is reviled by many on Wall Street for her calls to crack down on abusive lending practices by financial firms. Warren will not be in charge of directing the agency once it is formally set up. By selecting her as an adviser rather than as the agency head, Obama sidestepped the congressional confirmation process, which Republicans could have used to thwart Warren's nomination. Warren said in a blog post on the White House website that she had "enthusiastically agreed" to take on the role. "The president and I are committed to the same vision on CFPB and I am confident that I will have the tools I need to get the job done," she said. "The new law creates a chance to put a tough cop on the beat and provide real accountability and oversight of the consumer credit market. The time for hiding tricks and traps in the fine print is over." Read more from Reuters.
General Motors Co is determined to pay back taxpayers as quickly as possible, but the process could take "several years," GM Chief Executive Dan Akerson said on Thursday. Paying back the government all at once would be "unrealistic," Akerson said in his first meeting with reporters since becoming CEO two weeks ago. The IPO could come within about two months, people involved in the process have said, and would allow the U.S. government to begin to reduce its stake in the automaker and allow GM to start to shed the stigma of a government bailout. "We need to have an attacking culture, not a defending culture," said Akerson, a graduate of the U.S. Naval Academy and former Navy officer. The government's ownership of GM has not changed the way it does business, Akerson said, adding that he updates Ron Bloom -- the Obama administration official in charge of the auto bailout -- every few weeks by telephone. "We keep them informed, I do it personally," he said. Read more from Reuters.
Foreign Companies Fear New Rules on Electric Cars Will Erode Intellectual Property
BEIJING—China's government is considering plans that could force foreign auto makers to hand over cutting-edge electric-vehicle technology to Chinese companies in exchange for access to the nation's huge market, international auto executives say. The plan is "tantamount to China strong-arming foreign auto makers to give up battery, electric-motor, and control technology in exchange for market access," says a senior executive at one foreign car maker. "We don't like it." The car executives are joining a chorus of companies criticizing China's industrial policies. Business people and government officials say Beijing's so-called indigenous-innovation efforts discriminate against them and are aimed at gaining control of foreign intellectual property. One foreign auto executive said the Industry Ministry's draft "unnecessarily raises the hurdle for our plans for producing an electric car in China." Since China is likely to be a major market for electric cars and plug-in hybrids by 2020, multinational car companies will need to manufacture such vehicles in China, he says. "But the new pending policy would make the process unnecessarily more cumbersome and complicated." Toyota has postponed the rollout of the latest version of its Prius hybrid—which has been on sale in Japan and the U.S. since 2009—in China until the government's policies become clearer, people close to Toyota said. Read more from The Wall Street Journal.
TOKYO -- Toyota is in talks with Daimler AG about sharing its gas-electric hybrid technology with the German automaker, Japanese media reports said Friday. Toyota Motor Corp., the world's top automaker, said it has a policy of sharing its hybrid technology with other automakers to help make it widespread but declined to comment on any specific talks with other automakers. Toyota, the No. 1 maker of hybrids in the world with its hit Prius model, already shares its hybrid technology with Japanese rivals Nissan Motor Co. and Mazda Motor Corp. as well as with U.S. automaker Ford Motor Co. Toyota is also partnering with U.S. electric car maker Tesla Motors Inc. to develop an electric version of Toyota's RAV4 small crossover vehicle that it plans to begin selling in the U.S. in 2012. Read more from The Associated Press.
Jack Caldwell's unlikely path to pioneering his environmentally sound Arkansas dealership began with a call from Toyota. Caldwell and his son, Jay, were planning to build a much larger Toyota store than the one they had. The automaker suggested they make it a "green" building. "Green was not really a thing in 2007," said Caldwell, 65. "But they tweaked our interest." Now the Caldwells are glad they got the call from Toyota -- and just as glad they did the legwork needed to bring the idea to fruition. Building a green dealership came to feel right -- and saved them money. Whenever a dealer considers building or renovating a store, Toyota talks with the dealer about the benefits of getting Leadership in Energy and Environmental Design certification from the Green Building Council, said Terry Sell, a Toyota national market planning manager. "It's the right thing to do for the community," he said. The Caldwell dealership was the third Toyota store to gain LEED recognition, Sell said, adding that Toyota now has nine LEED dealerships. Nineteen U.S. dealerships now have the certification, a U.S. Green Building Council spokeswoman said. Read more from Automotive News .