Tag Archive | "NADA"

Illinois Auto Dealers Association Selects NADART as its Preferred Retirement Plan Provider

McLEAN, Va. – NADART and the Illinois Automobile Dealers Association (IADA) announced today a new strategic partnership. As IADA’s preferred retirement plan provider, NADART will provide customized retirement plans to its member dealers and dealership employees, according to NADA.

“We are excited to partner with NADART,” said IADA President Peter Sander. “Together we share a commitment to all franchised car and truck dealers in Illinois. NADART will provide the services and support needed to and help employees save for a successful retirement.”

NADART, the retirement plan and financial services division of the National Automobile Dealers Association, delivers a selection of investment and employee benefit options specifically designed for dealer businesses.

“We look forward to providing our core retirement plan offerings to support IADA and its member dealers. NADART’s retirement plan offerings are unique to the marketplace,” said Betsy Piper/Bach, NADART vice president and chief operating officer.

Illinois joins 11 other state dealer associations, which include Alabama, California, Colorado, Georgia, Louisiana, New York, North Carolina, Ohio, Oregon, Pennsylvania and South Carolina that have recently selected NADART as their preferred retirement plan provider.

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NADA: New-Car Sales Gain from Low Interest Rates, Stronger Housing Market and Rising Employment

McLEAN, Va. – Low financing rates for auto loans, rising home values and an improving employment outlook are key factors contributing to a resurgence in new-car and light-truck sales through the first seven months of the year, says Steven Szakaly, chief economist for the National Automobile Dealers Association, reported The NADA.

“Looking ahead, there is no sign that these fundamental drivers will change this year,” Szakaly said. “Many consumers have delayed making a new-car purchase, and with the improving economy, they are now looking at trading up their cars for something newer.”

Szakaly added that there is a lot of upside potential for new-vehicle sales during the final five months of the year. Earlier this year, he forecasted 16.4 million new-vehicle sales for 2014, a 5.8 percent increase from 2013. Szakaly is predicting a rise in sales to 16.77 million new vehicles in 2015.

“We’ve had an agonizingly slow recovery that has in many ways been led by the automotive sector, but the overall economy is finally picking up,” he said. “The housing market is stronger, gasoline prices have been relatively stable and interest rates – while rising recently – are still low compared to historical levels.”

“Five years since the recession, consumers are finally starting to believe the worst is over and are spending again.”

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NADA Releases New Video on Dealer Franchise Laws

McLEAN, Va. — New-car dealer franchise laws protect consumers during safety recall and warranty claims, create price competition and benefit automakers, says the National Automobile Dealers Association in a new animated video released Wednesday as part of its “Get The Facts” initiative.

“Buying a car is a … complicated purchase with financing, titling, registration, insurance and trade-ins. Because cars are expensive and car buying is complex, governments set up dealer franchise laws to protect consumers, and dealers make this complex process simple,” the video explains. “But recently, some have suggested weakening these laws or eliminating them to bypass dealers completely — a bad idea and nowhere simple as it sounds.”

The new video explains the central reason why states adopt dealer franchise laws: to protect consumers and provide a competitive business environment.

The dealer franchise network is also supported by automakers as the best and most efficient way to buy, sell and service cars in the marketplace, and “dealer franchise laws just make good business sense,” according to the NADA.

“Factories get to focus on design and building great cars, while dealers invest billions in showrooms and websites to compete for local business and sell cars at a great price,” the NADA said in a statement. “And locally owned dealers have a huge positive impact on local communities—local businesses that create more than 1 million jobs nationwide, and provide more than 15 percent of local tax revenue.”

NADA’s “Get The Facts” initiative is designed to inform the media, opinion leaders and policymakers about the numerous benefits of America’s franchised new-car dealers through a new webpage and variety of multimedia resources available here.

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AutoNation Discusses CFPB, Digital Push

FORD LAUDERDALE, Fla. — In a quarter in which it posted record second-quarter earnings per share (EPS) from continuing operations, AutoNation’s F&I operations realized an 11.5% increase in revenue from a year ago and a $9 million, or 5%, increase in total gross profit.

Average gross profit per vehicle retailed for the nation’s largest auto group rose $23, or 2%, from a year ago to $1,398. For the first six months of 2014, PVR rose $45, or 3.3%, from a year ago to $1,395. The group achieved this during a quarter in which it installed in nine stores the National Automobile Dealers Association (NADA)’s Fair Credit Compliance Program in response to the Consumer Financial Protection Bureau (CFPB)’s scrutiny of rate markups.

“It’s been successfully implemented without much disruption and no impact on results,” Mike Jackson, Chairman and CEO, said of the NADA’s program, which calls on dealers to document variations in rate markups on retail finance contracts. “We will now take it to additional stores on a gradual basis.”

Jackson added that he believes banks, dealers and the CFPB will eventually come to some sort of agreement regarding how finances sources compensate dealers in the indirect financing channel.

“And that will unfold over the course of the year, but my expectation will be some sort of agreement and some sort of common ground,” said Jackson, who also responded to a question about reports that the CFPB is turning its attention to F&I product sales.

“We have seen zero real activity in that area,” he said. “All the focus is on the reserve amount.”

In the second quarter, AutoNation posted second quarter net income from continuing operations of $101 million, or a second-quarter record of $0.83 per share, compared to $90 million, or $0.73 per share, in the year-ago period.

The dealer group also reported revenue of $4.8 billion, up from $4.4 billion in the year-ago quarter. That 8% increase was driven by stronger performance in new vehicles, parts and service, and finance and insurance.

Total gross profit for variable operations on a same-store basis was $3,279 per vehicle, a $67, or 2%, increase. Same-store new-vehicle revenue increased $200 million, or 8%, from a year ago to $2.7 billion on the sale of 79,000 units, a 6% increase. The dealer group also posted new-vehicle gross profit of $159 million, up 10 million, or 7%, from a year ago. New-vehicle gross profit per vehicle retailed was $2,008.

Retail revenue for used-vehicle sale was $976 million, an increase of $23 million, or 2%, on 52,000 used vehicles retailed, which was flat with a year ago. Revenue per used vehicle retailed increased $527, or 3%, to $18,836. Retail used-vehicle gross profit was $87 million, up $4 million, or 5%, from a year ago, while gross profit per used-vehicle retailed was $1,687, an increase of $91 per vehicle, or 6%.

Parts and service recorded a posted record revenue and gross profit, with revenue increasing $41 million to $696 million. Total gross profit grew 6%, or $17 million, to $297 million.

Jackson also provided an update on the company’s digital retailing drive, saying the group is ahead of expectations in terms of acceptance of the brand and the amount of traffic being generated by the group’s digital sites. He also announced the group is moving into the next phase of its digital push.

“So we’ve decided to accelerate the new phase, which is increasing our marketing around the brand AutoNation to drive even more customers to our digital sites and, of course, a big investment in the capabilities of the site itself, which the next step would be that the site goes transactional at the end of the year …,” Jackson said, noting that customers will be able to select a vehicle, get a committed price and submit a deposit without ever entering one of the group’s stores.

Jackson said digital sites will be expanded next year to allow the group to appraise and purchase customer trade-ins. They will also be able to provide customers with quotes on financing. “This is our strategic vision, if you will, that we believe today’s customer and future customers want one experience, not an online experience and an in-store experience, but one seamless experience where they can interact and transact both digitally and in the store,” he said, noting that the AutoNation will invest an additional $100 million over the next two years to solidify the brands, increase site traffic and add transaction capabilities to its digital sites.

Jackson, however, stopped short of providing a timetable on how things will play out. “So it’s certainly not the end of the story over the next two years,” he said. “There will be more chapters, but we’re in a very ambitious and exciting phase. I call it an investment phase.”

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Jeb Bush, Jay Leno and Beck Weathers to Keynote 2015 NADA Convention in San Francisco

McLEAN, Va. – San Francisco will host the 2015 National Automobile Dealers Association (NADA) Convention & Expo from Thursday, Jan. 22, to Sunday, Jan. 25. This will be the 16th time that the NADA convention has been held in San Francisco since 1948.

The keynote speakers include former Florida Governor Jeb Bush and NADA Chairman Forrest McConnell, III, on Friday, Jan. 23; Jay Leno and NADA Vice Chairman Bill Fox on Saturday, Jan. 24; and inspirational speaker Beck Weathers on Sunday, Jan. 25.

Jeb Bush
Elected as the 43rd governor of the Florida in 1998, and re-elected by a wide margin in 2002, Gov. Bush reformed education, cut taxes every year during his tenure and led the state to the highest job growth in the nation. His second term ended in Jan. 2007. He currently runs his own consulting business, Jeb Bush and Associates, with clients ranging from small technology start-ups to Fortune 500 companies. He is also chairman of the Foundation for Excellence in Education, a national foundation focused on education reform; co-chairman of the Barbara Bush Family Literacy Foundation; and chair of the National Constitution Center. Bush is co-author of Immigration Wars: Forging an American Solution, released in March 2013. He is the son of former President George H.W. Bush and Barbara Bush. He lives in Miami with his wife Columba, and they have three children and three grandchildren.

Forrest McConnell
McConnell is the 2014 NADA chairman, and president of McConnell Honda/Acura in Montgomery, Ala. He is a third-generation new-car dealer, attorney and represents Alabama’s franchised auto dealers on NADA’s board of directors. The family started out in the business as Hupmobile and Scripps-Booth dealers in 1919, and through the years they have owned and operated multiple dealer franchises. As NADA chairman, McConnell is currently promoting the consumer and manufacturer benefits of the franchised dealer network, and leading NADA’s efforts through intense regulatory challenges facing dealers, such as efforts by the Consumer Financial Protection Bureau to eliminate an auto dealer’s flexibility to discount interest rates on consumer auto loans at dealerships.

Jay Leno
Leno, an award-winning comedian/host and best-selling author of children’s books, hosted the “The Tonight Show with Jay Leno” for nearly two decades. Following in the footsteps of legendary NBC late-night hosts Steve Allen, Jack Paar and Johnny Carson, Leno became host of the “Tonight Show” in May 1992. Currently, he is performing stand-up comedy in top venues across the U.S., and continues to work on his Web venture, “Jay Leno’s Garage” which highlights his passion for automobiles. In his spare times, he enjoys working on his collection of classic cars and motorcycles.

Bill Fox
Fox is the 2014 NADA vice chairman, and a partner in Fox Dealerships, Inc., selling Chevrolet, Chrysler, Dodge, Honda, Jeep, Ram, Subaru and Toyota brand vehicles in the upstate New York cities of Auburn and Phoenix. Since his election to the NADA board of directors in Feb. 2006, he’s held numerous leadership positions, including chairman of the Public Affairs and Regulatory Affairs committees—where he championed dealers’ interests through an immense number of challenges, particularly the Great Recession of 2008 when the industry was hardest hit. This year at NADA, he is advocating on behalf of dealers in a world of changing technology and an endless stream of government regulations. His platform is built on the security and betterment of the dealer businesses. As a member of NADA’s board of directors, he represents franchised new-car dealers in the state of New York. He has served on the board and committee of the New York State Auto Dealers Association for more than a decade. As an attorney, he is admitted to practice law before all New York state courts, including the Federal District Court for the Northern District of New York, and the U.S. Supreme Court.

Beck Weathers
On the night of May 10, 1996, a violent storm swept over Mt. Everest with heavy snow, subzero cold and hurricane-force winds. Within 24 hours, eight climbers, including three professional guides, were dead. Weathers, an amateur climber, was severely injured, lying unconscious on the mountain’s icy rocks about 300 yards from camp. His wife and family were notified of his death. Miraculously, he awoke after the storm barely alive. With his hands and feet severely frostbitten and vision impaired, he astonished his fellow climbers by returning to camp. Dr. Weathers, an accomplished pathologist, lost his right hand and part of his left hand to frostbite. His story, a triumph of the human spirit, was the inspiration behind the No. 1 best-selling book, Into Thin Air, by Jon Krakauer, which is being made into a movie, titled Everest, set for release in 2015.

Considered the “Automotive Industry Event of the Year,” the NADA convention includes dealer-manufacturer franchise meetings, hundreds of educational workshops for dealers and their managers, several hundred exhibitors on the expo floor and numerous networking events.

The American Truck Dealers (ATD) Convention & Expo runs concurrently with the NADA convention at the Moscone Center. The NADA expo runs Jan. 23-25.

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Hybrid Electric Vehicle Sales Soften, NADA Reports

MCCLEAN, Va. — Vehicle sales for both new and used have more than weathered the harsh winter storms from earlier this year. The one segment that hasn’t, according to the National Automobile Dealers Association, is hybrid electric vehicles.

The new vehicle seasonally-adjusted annual rate (SAAR) from March through May averaged more than 16 million units, the first time such a streak has occurred since the onset of the recession. The report also noted that May’s SAAR of 16.7 million was the highest figure recorded in more than seven years.

New-vehicle sales, overall, were up 5% in the first five months of 2014, while used-vehicle demand drove up the average price of used vehicles up to 8 years old by 0.5% from April to May. The prices of used cars in that time were nearly 3% higher than they were last year.

Sales of hybrid electric vehicles, however, were down 10% year to date. Sales of Toyota’s Prius were off by 19% and deliveries of the smaller Prius C were down by 1%.

“The drop in hybrid sales amid a market that’s expanding overall means that share for the group has also contracted,” the report read, in part. “Hybrid share of total new-vehicle sales has fallen from 3.1% in 2013 to 2.9% this year, which is the first non-production related decline recorded since 2010.”

Hybrids also retain less of their original value compared to internal combustion engine (ICE) models, with the Prius usually being an exception. That has since changed. Last year, one-year-old Prius retention fell to 70%, three points lower than the Corolla’s 73%. And so far this year, Corolla retention stands at 75%, six points above the Prius’ 69%.

“The recent softness in new hybrid sales and the moderation in used-price depreciation over the past couple of years can largely be tied to relatively consistent gasoline prices and the improved fuel efficiency of ICE models,” the report said.

Going forward, the NADA forecasts that hybrid depreciation will remain higher than depreciation for ICE vehicles. Gas prices are expected to remain at current levels, and with the push for all vehicles to improve fuel economy, “hybrids will likely be more challenged to woo new consumers into the EV fold over the coming years.”

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