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NADA Headlines (Oct. 1, 2010)

Administration's Fuel Economy Announcement Raises NADA's Concern about Vehicle Affordability for Consumers

WASHINGTON – In response to the Obama administration’s announcement today on setting new fuel economy mandates for the 2017-2025 Model Year, the National Automobile Dealers Association (NADA) issued the following statement:

“America’s franchised auto dealers have long supported fuel economy improvements.

“Less than five months ago, the administration issued the most expensive fuel economy mandates ever, estimated to cost industry and consumers over $50 billion. Now, before the ink has barely dried on those as yet unimplemented rules, the U.S. Department of Transportation, Environmental Protection Agency and the State of California have decided to launch a new and far more costly set of fuel economy mandates that would require light-duty cars and trucks to achieve up to 62 mpg on average by 2025. Why the rush? Apparently, California regulators are once again threatening the administration with an unworkable patchwork of state-by-state standards at the expense of one national standard premised on sound analysis.

“For many Americans, the prospect of being priced out of the car market means being driven out of the job market, so a primary concern for our members is the affordability of basic transportation for Americans. Preventing further job loss, preserving consumer choice and affordability, and improving safety should be primary factors in setting any fuel economy standard.” Read more from NADAFrontPage.com.

Paris Motor Show a Key Test for Detroit's Big 3

Detroit automakers hope to gain bigger share in Europe while testing brands for U.S.

Detroit's carmakers hope what plays in Paris, France, also sells in Paris, Texas. As the Paris Motor Show kicks off [Thursday] with a media preview, Ford Motor Co., General Motors Co. and Chrysler Group LLC will roll out a variety of vehicles, including some that will play important roles back home in North America. Europe has become a land of opportunity for some carmakers and a proving ground for others. Detroit's Big Three want to sell more vehicles in Europe to boost revenue and their bottom lines, but Ford and GM also have an eye on bringing models to the United States that have been successful in Europe. "As we see Americans look at smaller cars and more fuel-efficient vehicles, we're going to see more vehicles coming from there," said Aaron Bragman, an automotive analyst for Southfield-based IHS Automotive. "Paris has never been more important for American consumers." With Washington considering new fuel economy standards and consumers likely demanding more eco-friendly vehicles in the future, U.S. carmakers need to weigh their overseas offerings against the models they sell in North America, Bragman said. "Europe has had a long slow movement toward more eco-friendly cars," he said. "It only makes sense for Detroit to use those vehicles in the U.S." Read more from The Detroit News.

Fiat Picks Ally Financial for U.S. Dealer Loans

Ally Financial has been chosen as the preferred financing company for the purchase of Fiat vehicles in the United States, Chrysler Group LLC announced (Thursday). Ally, formerly GMAC, is the main financial source for Chrysler. The Auburn Hills automaker ended its relationship with Chrysler Financial as part of its bankruptcy restructuring in 2009. Chrysler is in the process of choosing dealers to sell the Fiat brand, starting with the Fiat 500 in December. The automaker is expected to name the first 165 dealers this month. Interested dealers submitted proposals earlier this month. Ally will offer retail financing and leasing as well as wholesale financing for dealers to finance their inventories and facility loans and working capital. Read more from The Detroit News.

New-Model-Year Kickoff May Bruise Used-Car Prices

Beefed-up used-car values of late are expected to lose a little muscle, as the start of the '11 model year brings new cars to the center of the ring. Expect a slight depreciation in used-car values as the auto industry heads into the new-model year, says Jonathan Banks, executive automotive analyst with the NADA Used Car Guide. "Historically, this is when the used market begins its steep seasonal decline, which lasts for the remainder of the year," he says. "However, 2010 will be slightly different in that the depreciation will be flatter than traditional trends due, in some part, to tighter inventory on the new-vehicle side." Those lean inventories this year have allowed auto makers to avoid aggressive sell-down incentives on '10 models. Still, used-car demand and prices remain strong in general. With a tight used-vehicle supply, especially on lease returns, the market has seen prices rise for high-quality late model vehicles. Many of those in-demand models are sold through auto makers' certified pre-owned programs. Dealers are scrambling for high-quality used cars, "and prices are validating this," Banks says. Read more from WardsAuto.com.

NADA Used Car Guide's Online Product Optimized for Smartphone

"NADA Online," the premier 24/7 online product for valuations of used cars and trucks from NADA Used Car Guide, has been optimized to work on Smartphones, including iPhones, iPads, Androids and Palm Pre/Pixies, at no extra cost to subscribers. “This new feature gives dealers and auction-goers quick, easy and clear mobile access to all the key information they need to make well-informed buying and selling decisions on the go,” said Mike Stanton, vice president and chief operating officer of NADA Used Car Guide. While NADA Online customers have previously enjoyed Smartphone access to NADA’s eight used-vehicle values – auction (low, average, high), trade-in (rough, average, clean) clean loan and clean retail – this marks the first time the product has been optimized to specifically match the screen sizes and functionality of Smartphones. NADA Online Mobile also provides quick access to vehicle history reports through AutoCheck. Subscribers can book out a vehicle by VIN or make/model and automatically calculate accessory and mileage options. Mobile access to NADA Online also includes historical valuations, as well as look ups to commercial truck values. “In any market environment, it would be important to have the kind of reliable information and competitive edge that NADA Online gives you; but in today’s struggling economy, it could be a matter of survival,” Stanton added. NADA Online subscribers simply use their mobile browser to go to http://mobile.nada.com/MobileWeb, log in to their NADA Online account and use the same credentials as always. Read more from NADAFrontPage.com.

Saab CEO Sees Long Road Ahead to Win Back U.S. Buyers

PARIS -- Saab Automobile CEO Jan Ake Jonsson says it will take longer than anticipated to gain the hearts, minds and eventually the wallets of U.S. car buyers. The automaker has reduced its U.S. sales target this year by at least 33 percent to below 10,000 units. “The U.S. is a huge country,” Jonsson said. “There are many areas where they still believe we are gone. It will take time.” The redesigned 9-5 sedan arrived in the United States in late August, a month later than originally planned, hurting sales, and 2011 Saab 9-3 models will not reach dealers until mid-October. Saab will expand its model lineup next year with the addition of the 2012 9-4X crossover in April and the 9-5 wagon later in the year. The 9-4X shares a platform and mechanicals with the Cadillac SRX. “I hope that when we are at the point to deliver the 9-4X that awareness is significantly higher,” Jonsson said. “That people, really at that time, judge that Saab is here to stay and they can rely upon Saab being a player in the future. “But I think it will take until the middle of 2011 in the U.S. until we really see that people are really comfortable” with Saab. Read more from Automotive News.

Opinion: Why We Could Be Driving Fiestas

By Joseph B. White

The new Ford Fiesta is a perky subcompact four-cylinder car that with the right transmission option can get an impressive 40 miles to the gallon on the highway. It also might represent the future of the American car, particularly if California succeeds in its push to make cars two to three times more fuel efficient by 2025 than they were in 2009. The Obama administration is expected to start soon the process of setting the fuel efficiency targets auto makers must meet in the U.S. market for the years 2017 to 2025. The state of California — which last year struck an agreement with the federal government that Washington's rules will match the state's aggressive agenda to cut automotive greenhouse gas emissions — has put its bid on the table. It wants auto makers to boost their fleets' average fuel economy by 3% to 6% a year from the 35.5 miles per gallon target already set for 2016. The Ford Fiesta is an entirely different kind of small car. The top of the line SES model I tested recently is chock full of big car features — front airbags, side curtain airbags, and even knee airbags. It has stability control, anti-lock brakes, automatic dimming mirrors, and even a voice-activated sound system that can synchronize with your phone or music player. To make a profit on small cars in the U.S. today, auto makers have to offer a car that is stylish, safe and fun to drive so people won't mind paying a comparatively high price per pound to cover the cost of the fuel-saving and safety technology. If Fiesta sales boom, it will give a boost to those who say the mainstream U.S. market is ready to embrace high-tech, highly efficient, small cars. If not, that's a sign that it really is all about the pump price. Read more from The Wall Street Journal.

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