May 17, 2012

Subaru to Expand Indiana Plant, Boost Outback, Legacy Output
Subaru said on Wednesday it will expand its Lafayette, Ind., plant to boost production of the Outback crossover and Legacy sedan and wagon. The $75 million, 52,000-square-foot expansion of the plant’s body assembly section is slated to start this summer and will increase the plant’s capacity to 180,000 vehicles during regular shifts, according to Subaru. The current limit is 156,000 units on straight time, the company said. The expansion also is expected to create 100 full-time jobs, according to Subaru, a unit of Fuji Heavy Industries Ltd. of Japan. According to Automotive News, the Lafayette plant employs 3,600, with more than 600 jobs added since 2009, Subaru said. It also makes the Tribeca SUV. Another line there produces the Camry sedan for Toyota Motor Corp. The expansion confirms plans for more North American capacity, which Fuji signaled during a May 8 press conference in Japan. In 2011, more than half of Subaru’s vehicles sold in North America were assembled at the Indiana plant, which opened in 1987. The plant produced 170,629 vehicles in the 2012 fiscal year, but daily and Saturday overtime shifts were needed to reach that number. Click here to read more about Subaru’s expansion plans for its Lafayette, Ind., plant.

E15 Fuel Harms Autos, Says Study Backed by Carmakers, Refiners
A study backed by automakers and oil companies has found that a new blend of gasoline and ethanol recently approved by the U.S. Environmental Protection Agency could damage some engines. According to The Detroit News, the study found that the new formula, 85 percent gasoline and 15 percent ethanol, damaged two of the eight vehicles used as guinea pigs in the high-mileage test. "(These) objective scientific tests have found disturbing evidence that increasing the amount of ethanol in gasoline above the current 10 percent causes serious damage to car engines," said American Fuel & Petrochemical Manufacturers President Charles Drevna in a statement. "These are cars [the] EPA has approved to run on E15 and are representative of approximately 5 million vehicles in the nation's existing fleet." But the Department of Energy, which conducted its own tests on the new standard, called the methodology "unreliable and incomplete." Patrick Davis, vehicle technologies program manager, wrote on a DOE blog following the study’s release on Wednesday that, "(T)he Energy Department conducted its own rigorous . . . study. It) showed no statistically significant loss of vehicle performance." Click here for the latest on E15 fuel’s impact on vehicle engines.

BMW, Mercedes Look to Grow by Shrinking
Sometimes you have to think small to grow bigger. Hoping to lock down its position as the U.S. luxury market leader, BMW is getting ready to introduce some of the smallest products it has ever sold here, including a new version of its little 1-Series and the all-new BMW Vehicle. MSNBC reports that the Bavarian maker isn’t alone. The compact and even subcompact luxury classes, which barely existed just a few years ago, are suddenly being flooded with new products and may be critical in an increasingly competitive market where a new generation of buyers is proving unexpectedly resistant to the siren call of luxury automobiles. “You can no longer assume Gen-Y buyers necessarily want a luxury vehicle anymore,” cautions Rebecca Lindland, senior analyst with IHS Automotive, “and even if they do aspire to luxury, they may not have the money.” BMW won’t be alone. Mercedes-Benz is also downsizing, with a totally redesigned A-Class coming to the U.S. In fact, company officials hint they may offer as many as four different versions of their smallest-ever model in the U.S. For the latest on luxury automakers and their efforts to appeal to today’s generation of buyers by downsizing, click here.

Auto Insurance Companies with the Most-Satisfied Customers
While many motorists shopping for car insurance tend to focus on their monthly premiums, price is only part of the equation. Insurance remains a service business, and the manner in which a company interacts with and treats its customers – whether in person or online – is paramount to retaining their business. Forbes reports that the Hartford was recently cited as delivering the most satisfying auto insurance shopping experience among all carriers, getting a perfect five-circle overall rating in the 2012 U.S. Insurance Shopping Survey conducted by J.D. Power and Associates. Other auto insurance companies rated highly for overall customer satisfaction included Liberty Mutual, American Family, Auto Club Group, Nationwide, Amica Mutual, State Farm, Erie Insurance, and MetLife, all of which received four-circle scores. USAA got similar marks but was not included in the rankings because its coverage is available only to U.S. military personnel and their families. Among specific categories surveyed, American Family got the highest ratings for its local agents, while Progressive, Esurance, and Nationwide were cited for their online shopping venues. The study, fielded this past January and February, is based on responses from over 16,100 shoppers. Click here for more on the best auto insurance companies.

U.S. Factory Output Rose in April on Stronger Autos
BusinessWeek reports that U.S. factory output increased in April, helped by a gain in auto production. The Federal Reserve said Wednesday that factory production rose 0.6 percent in April, erasing a 0.5 percent decline in March. Half of the April increase reflected a 3.9 percent jump in the production of motor vehicles and parts. That's the fifth consecutive gain at auto plants and the biggest rise since January. Factories are cranking out more goods because consumers are more confident in the economy and spending more. Consumer spending grew at an annual rate of 2.9 percent in the first three months of the year, the fastest pace since late 2010. However, some of that strength was aided by a mild winter, which boosted sales in February and March. In April, retail sales grew by just 0.1 percent. But sales of autos, furniture, electronics, and appliances rose. All are big-ticket items made in factories that help drive growth. The economy grew at an annual rate of 2.2 percent in the January-March quarter. That's slower than the 3 percent growth in the October-December quarter, but better than the 1.7 percent growth for all of last year. Click here for the latest on U.S. factory output.

Safeguard Your Dealership & Keep Data Safe for Customers
Credit card fraud remains an important issue for consumers today. While the majority of security occurs behind the scenes, there are several key tips for your team to make sure your customers feel protected. Number one: when accepting a credit card payment in person, it’s important to inspect the card, verify the signature and, if there are any questions, ask for additional identification. Two: if you accept payments via phone, it’s critical that information be entered into your operating system or the terminal and not written on scrap paper. Finally, if your team is suspicious, they should make a Code 10 request: keeping the card, phone 1.800.228.1122 and request a ‘Code 10 Authorization Request.’ Once they are live with the operator, remain calm and answer the operator’s questions, and then follow their instructions. When you work with AIADA’s Affinity Partner, Merchant Warehouse, you’ll receive 24/7 service and technical support for you and your team. Click here to learn more about our exclusive AIADA payment processing solutions and how we deliver value. Or call (800)795-6073 to speak with an AIADA-dedicated sales rep.

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