July 22, 2010

The Rick Report: Forecast for Washington: Less Policy, More Politics
AIADA Chairman Rick DeSilva writes that every July, AIADA's leaders gather together to reflect upon the past year, plot out the events of the coming year, and strategize for what lies beyond the next twelve months. Congress will be busy over the next year, and that means AIADA will be busy, too; defending dealers and their employees from anti-business policies, intrusive legislation, a stagnant economy, and a dangerous trade status quo. However, in the immediate future, DeSilva reports that he doesn't expect to see too much substantial policy making its ways through the halls of Congress. As July comes to a close, all attention in Washington will be on elections, not legislation. AIADA is doing what it can to secure members' future during this busy election season. Dealers can do their part as well. Stay educated on the issues (a good place to start is www.aiada.org/the-issues) and find out where your candidates stand. Keep up the calls and e-mails to your legislators. Then, if you can, plan a dealer visit with your legislator. Read more about the dealer visit program here. Finally, and most simple of all, do what AIADA can't do for you. Vote. Click here for more from AIADA Chairman Rick DeSilva on what to expect from Washington in the coming months, and what dealers can do to make sure their businesses' needs are heard.

Fight Over Consumer Agency Looms as Overhaul is Signed Into Law
President Barack Obama on Wednesday signed into law the most sweeping financial overhaul since the Depression, putting the country on a course toward a more muscular regulatory framework. According to the Wall Street Journal, the law gives the government authority to take over and liquidate failing financial firms, injects transparency into transactions involving financial instruments called derivatives, and will restrict banks from making risky bets with their own capital. But one provision that barely survived will have the most direct bearing on millions of ordinary people's lives: a new agency meant to protect consumers from abusive financial products, called the Bureau of Consumer Financial Protection. In June, dealers successfully gained an exemption from the bureau's oversight. However, the battles over the new bureau are far from over. The biggest looming one is over who will head the agency. President Obama's choice, expected soon, will be a momentous one because the first director will have great influence over agency's direction, wielding a roughly $500 million annual budget that doesn't require approval from Congress. Click here for the Wall Street Journal's collection of interactive graphics that explain how new finance reform regulation will be implemented, and who will be affected by the new Bureau of Consumer Financial Protection. Click here to read its entire article on the battles still ahead for the new agency.

Luxury Market Bouncing Back
Germany's carmakers struggled in last year's global downturn, which didn't spare luxury brands any more than it did mainstream segments. But this year is turning out better for them than anyone anticipated. The Detroit News reports that with premium car sales rebounding in most regions, Daimler AG's Mercedes-Benz Cars, BMW AG, and Volkswagen AG's Audi and other upscale brands are benefitting from deep cuts in staff and other costs in 2009. Click here for a side-by-side comparison of German premium brand production and profit figures. In addition to the economic recovery boosting the overall auto industry, Germany's carmakers are profiting from strong demand for premium cars in China and other emerging markets, a recovery in credit availability, and favorable currency trends. Underscoring the growing optimism, BMW raised its full-year sales and earnings forecasts last week, and Daimler issued preliminary second-quarter results, including pre-tax earnings of $2.5 billion, that were above investors' expectations. BMW, whose brands include Mini and Rolls-Royce, reported a 13.1 percent rise in half-year vehicle sales and predicted annual sales would rise by around 10 percent to more than 1.4 million vehicles. Click here for more on the resurgence of the luxury auto market.

Half of U.S. Vehicles Would be Electrified by 2030 Under Proposed House Bill
Millions of electric-powered vehicles that would slash America's dependence on foreign oil and cut carbon emissions would be put on the road under legislation approved by a Senate committee on Wednesday. According to Automotive News, the legislation, passed 19-4 in favor, was one of several bills cleared by the Senate Energy and Natural Resources Committee that might be folded into a broader energy and climate bill Democrats are struggling to bring to the Senate floor. The bill approved by the committee would pour nearly $3.9 billion over 10 years into selected communities to build infrastructure to charge electric cars, conduct research, and provide incentives for consumers to buy plug-in vehicles. The goal is to put the United States on a path to electrify half the country's cars and trucks by 2030, which would cut U.S. demand for oil by about one-third. Senator Jeff Bingaman (D-N.M.), who chairs the energy panel, said he was not sure if Senate Majority Leader Harry Reid would unveil his encompassing energy and climate legislation next week. The bill would be in trouble if the Senate does not pass it before the August break, according to Bingaman. Click here for more on Congressional efforts to generate greater usage of electric vehicles on U.S. roadways.

MSN Autos Top Value Picks
For most of us, a car will be the second most expensive item we purchase in our lifetimes, next to a home. Unlike a dwelling, however, in which one might live for 30 or more years, we buy a different car on average every four years or so. With all that money at stake, it's advisable to shop wisely when looking for a 4-wheeled compadre. The reviewers at MSN Autos are in the business of determining what is a good deal. Each of them drives 50 to 100 new cars every year. Consequently, the virtues of various models rise above the fray, and a little research into pricing reveals which automakers are offering great bargains and which are asking a bit too much for what you get. With this in mind, MSN Autos has compiled its choices for the top 10 automotive value picks on the market today. Click here to see the list, which includes the Honda Fit - noted for its versatility, superior use of space, and fun factor. The Hyundai Sonata also earns a spot in the midsize category for offering what many of its competitors do, but at a lesser price and packaged in a fresh redesign that has drawn positive reviews across the industry. Click here for more on MSN Autos' selections for the most valuable vehicles in showrooms today.

Not all Vehicle Service Contract Providers Are Created Equal . . .
When was the last time you reviewed your Vehicle Service Contract program? Are you getting the most of your investment and underwriting income? Not all VSC programs are created equal, and now is the time to take a good look at your program. See how your VSC provider stacks up. An AIADA Affinity Partner since 1995, CNA National has been voted "Best Service Contract Provider" six years running by Dealers' Choice Awards. CNA National is committed to providing a variety of coverage levels and options to suit your customers' needs, along with unparalleled claims service (claims calls are answered on average in less than 5 seconds by one of over 70 ASE certified technicians). In addition to the superior protection and service your customers will receive, CNA National's profit-participation programs allow you to maximize profitability. No other provider offers more flexibility, including a retro program, a choice of two reinsurance structures, and a program - called AIADA Equity - that doesn't require production minimums. They've returned more than $173 million to dealers. For more information on CNA National click here or call Randy Rife at (800) 345-0191, ext 720.

Around the Web
First Drive: 2011 VW Jetta [Motor Trend]
Rolls Royce Updates the Classic Picnic Basket [NY Times Wheels Blog]
What's the Right Way to Teach Teens to Drive? [WSJ]
Honda's Marysville, OH Plant Builds 10 Millionth Vehicle [Autoblog]