Mercedes Brings its 'A' Game: Entry-Level Sedan Coming to U.S. in 2018

First Up 06/19/17

Why More States Are Killing Estate Taxes

Want proof taxes can actually go down? In the past three years, nine states have eliminated or lowered their estate taxes, mostly by raising exemptions. And, according to the Wall Street Journal, more reductions are coming. Minnesota lawmakers recently raised the state’s estate-tax exemption to $2.1 million retroactive to January, and the exemption will rise to $2.4 million next year. Maryland will raise its $3 million exemption to $4 million next year. New Jersey’s exemption, which used to rank last at $675,000 a person, rose to $2 million a person this year. Next year, New Jersey is scheduled to eliminate its estate tax altogether, joining about a half-dozen others that have ended their estate taxes over the past decade. This tax-cutting trend has been fueled by competition between the states for affluent and wealthy taxpayers. Such residents owe income taxes every year, but some are willing to move out of state to avoid death duties that come only once. “States are under pressure to keep pace with both the federal estate-tax exemption and exemptions in neighboring states,” says Bruno Graziano, a senior analyst with information services firm Wolters Kluwer NV. For more information, including which states are holding out, click here.

Mercedes Brings its 'A' Game: Entry-Level Sedan Coming to U.S. in 2018

After years of back and forth over whether American luxury consumers were ready for the A-class small car, Mercedes- Benz will finally bring an A-class sedan to the U.S. in 2018. Mercedes-Benz USA officials confirmed the car's arrival, slated for around September of next year, to U.S. dealers at a meeting in Miami this month, according to dealers who attended. Click here for concept images. Dealers saw the actual car, which was described to them as the brand's new entry-level model slotting below the CLA four-door coupe. "It's a very nice-looking vehicle," Ken Schnitzer, chairman of the Mercedes-Benz Dealer Board and owner of four Mercedes-Benz dealerships in Texas, told Automotive News. "I'm sure it will be competitively priced." The A-class sedan could start in the sub-$30,000 territory. The current base price of the CLA is $32,700 before shipping. When the CLA was introduced in 2013, it started at $29,900 before shipping. In addition to the A-class sedan, Mercedes also showed dealers a version of the AMG GT four-door high-performance sedan and confirmed to them that it will go on sale in the U.S. in the summer of 2018. Click here for the full story.

Customer Retention Comes in Different F&I Packages at Dealerships

Tire-related protection plans – some of them offered for free – can keep customers coming back to dealerships. Wards reports that such plans provide a service if a tire is punctured by a road hazard on a public road. Bundled with an oil-change service, dealers offer the tire-protection coverage at no charge, but tires must pass inspection, which itself can present opportunities for upselling behind-the-wheel maintenance and parts. Bill Springer, president of Krex, a provider of services-based retention programs, says dealers use the program both to get a competitive advantage over aftermarket competitors, and also warm customers to purchasing value-added F&I products. The program is driving customer retention at Liberty Auto Plaza’s Kia store. It has reduced oil change services to a five-month cycle from six-to-seven months, says Richard T. Owen, service director for the three-brand dealership group in Libertyville, Il. That increased service frequency coupled with greater attention to customer tires and wheels helps drive additional maintenance work, he says. “Customers seem to like it. The free tire service is a big deal, especially here in the Chicago area with all its potholes and road construction.” For more on customer retention, click here.

The Race to Monetize Vehicle Data Gets More Crowded as BMW Hooks Up With IBM

As cars and trucks get ever more packed with sensors and connectivity, they are already generating tens of gigabytes of data per hour and will soon be producing terabytes per hour. That’s why everyone connected to the auto industry is scrambling to figure out ways to make a business out of data with the latest being BMW and IBM. As telematics become increasingly ubiquitous, Forbes reports that it’s likely that the companies in this space will experiment with a variety of models for making money from Data. As the company that has been doing telematics longer than anyone, OnStar will likely keep everything in-house, just as relative newcomer Ford seems to be doing with FordPass, building platforms and interfaces that service providers can plug into. BMW and IBM seem to be doing more of the latter model with raw information from customers that opt-in, being anonymized and then passed into IBM’s BlueMix cloud platform. Once IBM has it, the Watson IoT system will be used to analyze the data, gain insights and make it available to suitable third-party providers. For the full story, click here.

Automakers 'Destroying Themselves' With Stair-Steps

Steve Kalafer, subject of an interview in today's Automotive News, makes documentary films. He's working on one about Volkswagen's diesel emissions scandal right now. He also is the founding chairman of Flemington Car & Truck Country Family of Dealerships in Flemington, N.J., about 60 miles west of New York City. The group's eight rooftops sell 16 brands, including VW, retailing about 18,000 vehicles a year. In the interview, Kalafer, 67, bluntly denounces some automaker practices, such as stair-step incentive programs. Last year, he sold a profitable Nissan dealership he had owned for 36 years, citing among other problems "the complexity of doing business with them." He told Automotive News that, “Manufacturers have overproduced, as they always do. They defer reality. The incentives are becoming gigantic. The inventories are backing up. The other shoe has to drop. We just don't know if it's going to be the right shoe or the left shoe.” For the full interview, including Kalafer’s explanation of why he sold his Nissan store, click here.

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