December 14, 2011

Senate Panel to Weigh More Government Oversight of Auto Industry
A U.S. Senate committee plans to consider several transportation safety bills today, including a long-delayed bill that would strengthen government oversight of the auto industry. The Committee on Commerce, Science, and Transportation has scheduled hearings on a bill crafted after Toyota Motor Corp.’s unintended acceleration crisis last year. According to Automotive News, the bill – the Motor Vehicle and Highway Safety Improvement Act – seeks to give more regulatory power to U.S. safety officials, including raising the maximum fine to $250 million on automakers that delay recalls. The current maximum is $17.35 million. The legislation, sponsored by Sens. Mark Pryor (D-Ark.) and Jay Rockefeller (D-W.Va.) also provides grants to states for cracking down on texting while driving and bolsters early warning requirements for vehicle safety defects. Several auto industry groups, including the AIADA and Alliance of Automobile, have opposed some measures in the bill. In a letter sent to the bill’s patrons last week, a coalition of industry groups argued that some of the proposed requirements are of questionable benefit and will divert resources from other “pressing safety concerns.” They also said the language on distracted driving grants is too vague. For the latest on efforts to place more oversight on the auto industry, click here.

NTSB Wants to Ban Driver Use of Cell Phones
According to The Detroit News, the National Traffic Safety Board (NTSB) called Tuesday for a nationwide ban on the use of all cell phones and other electronic devices by all drivers. The sweeping proposal goes far beyond what any state currently prohibits. And it could force automakers to make major changes to in-vehicle technology systems that now allow drivers to link cell phones to their vehicles. The safety board, which makes nonbinding recommendations, wants states to ban all cellphone use – hands-free or hand-held – behind the wheel. Jonathan Adkins, a spokesman for the Governors Highway Safety Association, said, "The NTSB recommendation may be a game-changer. States aren't ready to support a total ban yet, but this may start the discussion." At least for now, the NTSB is not calling for bans for calls from cellular devices built directly into vehicles in systems like OnStar. The safety board will reassess the risks of those distractions next year. The recommendation follows a 2010 Missouri crash that killed two and injured 38. The 19-year-old driver of a truck that crashed into a tractor-trailer had sent or received 11 text messages in a 13-minute period before the crash. For more on a proposed ban on cell phones, click here.

China to Impose Duties on Imported Cars from U.S.
China said today it would impose anti-subsidy and anti-dumping duties on imported cars made in the United States, the latest in a series of trade spats between the world's two largest economies. Automotive News reports that the duties, which will impact some U.S.-based international automakers, will begin tomorrow and last two years. Cars that have engine capacity at or above 2.5 liters will be hit with duties ranging from 2 percent to 21.5 percent. General Motors Co. will face anti-dumping and countervailing duties ranging from 8.9 percent to 12.9 percent. Chrysler Group's will range from 6.2 percent to 8.8 percent, while the U.S. units of BMW AG and Mercedes-Benz will face duties of 2 percent and 2.7 percent, respectively. The ministry's statement said U.S.-made cars and SUVs benefited from subsidies and had been dumped into the China market, causing "substantial damage to China's domestic industry". U.S.-China trade tensions have been mounting in recent months, particularly in the solar industry, where tit-for-tat trade probes have underscored leaders' warnings of a rising tide of protectionism amid gloomy global economic forecasts. For more on China’s decision to impose duties on U.S. made cars, click here.

Auto Lending Rebound to Continue
The lending environment for automotive loans is getting better for consumers, and fewer people are paying their auto loans late, according to the latest data from TransUnion. For the final three months of the year, TransUnion estimates that just 0.51 percent of people with an auto loan will be 60 days or more past due on their payments, down from a peak of 0.86 percent for last three months of 2008. "Auto loan delinquencies have stabilized and are down to near record-low levels," Peter Turek, automotive vice president in TransUnion's financial services business unit, told The Detroit Free Press. Click here for a comparison chart from recent years. TransUnion's auto-loan delinquency rates are based on 27 million anonymous consumer records that are randomly sampled. Turek also said that the volume of automotive loans for new and used cars is increasing and predicts that trend will continue in 2012. During the second quarter of this year, automotive lenders signed 28 percent more loans than during the second quarter of 2009, Turek said. He also predicted that banks and auto loan financing companies will be competing even more fiercely for new business next year. For more on the rise in auto lending, click here.

Germans Set Bar in U.S. Auto Exporting
BMW AG and Daimler AG’s Mercedes-Benz have both spent the last several years focusing on the export-production potential of their growing operations in the United States. More recently, Volkswagen has built a U.S. plant in Chattanooga, Tenn., which could eventually serve as that German automaker’s export base. Asian automakers are also increasingly bolstering their manufacturing in North America as they cope with factors pushing and pulling them in that direction, ranging from their highly-appreciated currency to natural disasters in the Asia region that have the United States looking like a safe haven from the ravages of Mother Nature. Edmunds Auto Observer reports that at Mercedes-Benz’s U.S. International plant near Birmingham, Ala., slightly more than half of its 2010 output of 125,000 vehicles – 52 percent – were exported outside the United States, Canada, and Mexico. Likewise, BMW’s sprawling complex in Spartanburg, S.C., has emerged as the model for how to turn a U.S. manufacturing site into an export base for the world. In 2002, BMW produced about 70 percent of its vehicles in Germany. By the end of last year, that figure was down to 62 percent, and now it has come down to 58 percent. Read more on German leadership in U.S. auto exports here.

Don’t Miss Your Chance – Register Today for AIADA’s 42nd Annual Meeting and Luncheon
Join AIADA, fellow dealers, and industry leaders at our 42nd Annual Meeting and Luncheon on February 6 in Las Vegas. Together, we’ll consider the Legacy of Leadership that is inspiring today’s international dealer community and what it means for the future of our industry. This year's meeting will include keynote remarks from Mark Templin, Group Vice President and General Manager at Lexus. “Lexus has proven itself a leader in the U.S. auto market, and Mark Templin has played a central role in making it one of today’s most popular luxury brands,” said AIADA President Cody Lusk. “His remarks will provide invaluable perspective for dealers considering how our industry can continue to lead in the U.S.” Read more about Templin and AIADA’s 42nd Annual Meeting and Luncheon here. In addition to Templin’s remarks, the event will include the presentation of the David F. Mungenast Lifetime Achievement Award and the passing of AIADA’s chairman’s gavel from the current chairman, Jim Smail of Pennsylvania to Chairman-Elect Ray Mungenast of Missouri. Don’t miss your chance; register today by clicking here or call 1-800-GO-AIADA.

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