Running an international nameplate automobile dealership is time consuming. Reading the news shouldn't be. Each morning, we research hundreds of stories from around the globe in order to create a daily e-newsletter that provides you with easy-to-read summaries and links to top news and features from our industry.
Sent to over 30,000 recipients every weekday morning, FirstUp conveys the day's auto-related news quickly, concisely, and accurately. Topics covered in FirstUp range from new vehicle releases, to the latest legislation concerning the auto industry. This is news designed with you in mind.
October 21, 2014
U.S. Agency Warns Car Owners to Get Air Bags Fixed
The U.S. government issued an urgent plea to more than 4.7 million people to get the air bags in their cars fixed, amid concern that a defect in the devices can possibly kill or injure the driver or passengers. According to ABC News, the inflator mechanisms in the air bags can rupture, causing metal fragments to fly out when the bags are deployed in crashes. Safety advocates say at least four people have died from the problem and there have been multiple injuries. Multiple automakers have recalled vehicles in the U.S. over the past two years to repair air bag inflators made by Takata Corp., a Tokyo-based supplier of seat belts, air bags, steering wheels and other auto parts. In a statement Monday, the National Highway Traffic and Safety Administration (NHTSA) warned owners of those cars to act right away. The agency has been investigating the problem since June, and has cited reports of six inflators rupturing, causing three injuries. Worldwide, automakers have recalled about 12 million vehicles because of the problem. The warning covers cars made by Toyota, Honda, Mazda, BMW, Nissan, General Motors, and Ford. For more on NHTSA’s warning to drivers over flawed airbags, click here.
Falling Gasoline Prices Make Alternative-Fuel Vehicles a Tougher Sell
The national average price of gasoline hit $3.14 per gallon last Friday, the lowest level since at least February 2011, after falling 10 cents per gallon last week alone, the fastest rate of decline in roughly two years, according to AAA. Meanwhile, reports Automotive News, dealer lots are flush with hybrids and fuel-efficient small cars developed over the past several years in anticipation of continued oil shocks and higher federal mpg standards. As fuel prices drop, those vehicles increasingly need a push out the door. Alternative-powertrain vehicles, which once commanded a significant premium over their gasoline-powered counterparts, now come with heavy incentives. Data from KBB.com show that Toyota boosted Prius incentives to $2,300 per vehicle in September from $1,400 a year ago while Ford ramped up C-Max spiffs to $4,900 from $2,650 per vehicle in the same period; neither move helped sales. Despite their low volume, alternative-powertrain vehicles are central to automakers' plans to comply with toughening federal fuel economy standards. Dealers aren't concerned yet, saying consumers remain vigilant about the risk of another oil spike, even as they gravitate toward trucks. For more on the current challenges dealers face when selling alternative-fuel vehicles, click here.
U.S. ‘Close’ to Naming NHTSA Chief
Transportation Secretary Anthony Foxx says the Obama administration is close to deciding on a permanent chief to run NHTSA, reports The Detroit News. In a brief Detroit News interview Monday, Foxx said he expected an announcement “soon.” He didn’t say if the administration is planning to name Deputy Administrator David Friedman to the top job. “This is the president’s call and I think we’re real close,” Foxx said after making remarks at a distracted driving event. “We’ve been working on this for a while. I think we’re very close but I don’t want to get in front of the president.” Foxx said in a separate interview in early September that the administration had been working to fill the NHTSA job. Obama faces other nominations to make — including picking a new attorney general and new deputy attorney general. In a separate interview, Friedman declined to say if he is under consideration for the job. “We’ll circle back to you,” Friedman said. “You heard from the secretary.” Friedman — a former top official with the Union of Concerned Scientists who became deputy NHTSA administrator in 2013 — was named acting chief in January after then NHTSA chief David Strickland departed to join a Washington law firm. For more on a possible new NHTSA chief, click here.
What Does Warren Buffett See in Car Dealers?
According to Forbes, new data from Sageworks, a financial information company, provide a closer look at the financial condition of privately held auto dealers, including some of the traits that Warren Buffett has said make the industry attractive. New-automobile dealers are growing sales at a healthy rate, and profit margins are relatively thin but consistent over the last several years, according to Sageworks’ financial statement analysis. Sales increased by 9.2 percent, according to an analysis of statements for the 12 months ended Oct. 6. Recent sales growth at new-car dealers has continued to outpace growth for the broader retail category, according to Sageworks’ data. Buffett has described car dealerships that are run well as “a very good business.” In an interview with Fortune about Berkshire Hathaway’s purchase of the Van Tuyl Group, he noted dealerships “have no receivables to speak of, you floor-plan your inventory, you can lease your real estate . . . So you can have very little capital actually invested in the business, and you do a large volume.” For more on why the auto retail market was likely appealing for Warren Buffett, click here.
California Readies Pay-As-You-Drive Tax Test, Coming Soon to a Road Near You
It won't happen immediately, or even within the next year, but not too far into the future you might pay a tax for every mile you drive — thanks to California. Three weeks ago, California Gov. Jerry Brown signed into law the first test of mileage-based road taxes in the Golden State. The bill, which passed the state legislature with the backing of transit agencies, environmental groups, and most major automakers, creates a 15-person panel to oversee a pilot of pay-by-the-mile taxation by 2018. According to Yahoo! Autos, the move makes California the largest state to explore how modern technology might replace the dwindling money from gasoline taxes used to build and maintain roads, thanks to ever-more efficient vehicles and less driving overall. Congress has been forced to fill the gap at the federal level with billions of dollars in temporary funding; in California, where residents pay 48.5 cents on the gallon in state gasoline taxes worth more than $3 billion a year, the state has borrowed from those revenues in recent years to cover shortfalls elsewhere. Read more about California’s plan, and what it could mean for the rest of the country, by clicking here.
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Around the Web
The Importance of Timely Site Updates and Social Media [CBT News]
Audi Piloted Driving Success [Forbes]
Studies: Parents Set Bad Example for Teen Drivers [USA Today]
10 Best Fun Cars for a 100-Mile Commute [Jalopnik]