April 7, 2015
VW Wants More Room to Grow in Chattanooga
Automotive News reports that Volkswagen AG will ask a Chattanooga government panel today for approval to add another 130,000 square feet to its $900 million factory expansion there. The expansion, which would increase the size of the body shop, would add 25 percent more square footage and $18 million to the project’s cost. In a bid to more than double U.S. sales to 800,000 vehicles by 2018, VW announced last summer that would expand the Chattanooga plant, which builds the Passat, and build a new crossover based on the CrossBlue concept. The investment is expected to add 2,000 jobs. Production is expected to begin in late 2016. In addition, Volkswagen will open a new North American vehicle design and development center in Chattanooga to be staffed by about 200 engineers to better cater its vehicles to the North American market. Hiring for engineers who will work at the center starting in 2017 has begun, engineering and planning chief Matthias Erb told the Chattanooga Times Free Press. Last year, the VW brand’s U.S. sales fell 10 percent to 366,970 vehicles while the overall market rose 5.9 percent. For more on Volkswagen’s growth plans in Chattanooga, click here.
GM Ignition Deaths Rise to 80
Eighty deaths have been caused by General Motors' defective ignition switches, three more than the prior week, according to The Detroit Free Press, citing the weekly update by the compensation fund determining eligibility of victims' claims. Another 1,246 cases remain under review out of the 4,342 filed since the fund was created last August. About 28 percent have been deemed ineligible either because there was insufficient documentation or the claimants failed to prove that the ignition switch was the primary cause of someone's injury or death. The claims arose from General Motors' recall of about 2.5 million small cars, mostly Chevrolet Cobalts and Saturn Ions, from the 2003 through 2007 model years. The switches on those cars sometimes slipped from the "on" position to "accessory" either from the weight of a key chain or from inadvertent contact with a driver's leg. That caused a loss of electrical power to the cars' steering and air bags. Of the 228 claims eligible for compensation, the fund has extended 126 offers. So far 93 claimants have accepted, five have rejected them and 28 are still considering their offers, a spokeswoman for the fund said in an email. For the latest on GM’s ignition claims, click here.
We Need Trade Promotion Authority More Than Ever
According to a blog by Pinar Çebi Wilber, PhD, appearing in The Hill, Trade Promotion Authority (TPA) is showing signs of life as Republican congressional leaders and senior White House officials try to forge ahead on the one critical area on which they share common ground. Two ongoing trade deals that have been widely covered by press are the Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP). If finalized, both could have significant impacts on world trade as well as the U.S. economy. However, there is one major roadblock to these negotiations on the U.S. side: Congress has failed to grant Trade Promotion Authority (TPA) to President Obama. Without TPA, the possibility of unlimited congressional debate and amendments could result in hesitation by other negotiating parties, negatively impacting the future of any trade deal. In the current political environment, TPA has morphed into something bigger: It will show a united front for American politics abroad, where our leadership has appeared to be bitterly divided, and reinforce strong U.S. support for free trade. It will also symbolize the desire to work together with our allies. Read more from Weber on why TPA is crucial here. To send a letter to your elected officials urging support for TPA, click here.
Pa. Dealership Group Gains from Market-Based Pricing
According to Automotive News, 18 months after #1 Cochran Automotive launched a customer experience initiative centered on market-based pricing and transparency, the dealership group says its market share and customer satisfaction ratings are up. Employee turnover is down, and the company is hiring more people with experience outside the auto industry. The effort is still a work in progress, CEO Rob Cochran said, but results so far validate the hard work and years of research that went into the approach launched in late 2013. Central tenets of the Cochran initiative, dubbed Clearly Better Car Buying, include pricing vehicles at transaction prices for the market, as supported by third-party data; limiting negotiations to a couple of hundred dollars; paying the higher of Autotrader's or Cochran's own trade-in evaluations; and offering a three-day, no-questions-asked return. "We do feel good about it," said Cochran, whose dealership group has 16 stores in western Pennsylvania and is ranked by Pittsburgh Business Times as the largest Pittsburgh-area auto retailer based on 2013 new-vehicle sales and total revenue. "We think that's where the industry is going anyway. We'd rather be a leader in the evolution and the transition than get pulled kicking and screaming." For more on #1 Cochran Automotive’s new pricing strategy, click here.
Worried About a Gas Price Spike? Now There's Gas Insurance
According to CNN Money, chances are gas prices will eventually rebound above $3 a gallon nationally, though no one can say with certainty when that will happen, let alone how high they'll go. Now drivers have a way to protect themselves against the threat of a sudden spike. Enter LoveMyGasPrice.com, a service that launched last week allowing consumers to essentially purchase insurance against significantly higher prices. Using the hedging strategies that large companies like FedEx (FDX) and Southwest (LUV) rely on, LoveMyGasPrice.com lets drivers put a cap on their monthly gas expenses. When prices rise above the capped price, customers actually get cash back. This is a way to "take control and manage your fuel exposure," GP Manalac, who founded the company after creating a similar one in the electricity market, told CNNMoney. "This addresses a need that is not being met by the marketplace." LoveMyGasPrice.com isn't the only player in this market. MyGallons.com allows customers to pre-purchase gas online and lock in the current price. That's very helpful if prices spike, though it could backfire if the opposite occurs. For more on new ways for customers to protect themselves against gas price leaps, click here.
An Industry in Action: Register Today for AIADA's Summit
Make your voice heard in Washington, D.C., by joining AIADA May 11-12 for the 9th Annual International Auto Industry Summit. AIADA has a full program of speakers lined up, starting with our opening dinner, headlined by Robert O'Neill—a renowned member of Navy SEAL Team 6—who will discuss his involvement in several high-profile operations. Dealers will also hear from Erin Kerrigan, managing director of Kerrigan Advisors, on the state of the dealership buy/sell market; congressional speakers; and Washington, D.C., insiders like Politico's chief White House Correspondent, Mike Allen. Gen Y Guy® Jason Dorsey will help dealers understand how to connect with millennial employees and customers. Additionally, AIADA and Global Automakers will unveil the results of this year's Economic Impact Survey, and OEM executives from Hyundai, Toyota, and Subaru will be on hand for the always-popular panel discussion. Please, do not wait. Registration for AIADA's 9th Annual International Auto Industry Summit is limited. Register now by clicking here or calling 1-800-GO-AIADA.
Around the Web
2016 Mercedes-Benz SLC Spy Shots [MotorAuthority]
6 Navigation Features for Your Next Car [Forbes]
Kia GT Getting Closer to Production [Autoblog]
'Furious 7': The Fastest Cars at the NY Auto Show [NY Daily News]