9/16/13: “California New Car Dealers Claim Tesla Violates Advertising Laws”

The California New Car Dealers Association is pressing the California DMV to investigate Tesla Motor’s advertising practices, alleging the automaker inflates the savings and incentives customers acquire when purchasing a Tesla. The association wrote in the complaint, “Tesla fails to provide required information and shatters the notion of comparison finance shopping by including the potential availability of incentives, gas savings, and tax savings into final payment quotes for prospective customers.” Tesla’s pricing also automatically deducts a $7,500 federal tax credit, but to receive it, potential buyers must have a federal income tax bill of at least $7,500. Tesla declined to comment on the complaint.

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9/12/13: “FTC launches investigation of dealers that opposed TrueCar”

The FTC is investigating possible anticompetitive acts between auto dealers against TrueCar Inc. in 2011 and 2012 ‘by agreeing to refuse to deal with TrueCar.” TrueCar CEO Scott Painter said the investigation was not due to a TrueCar complaint. The Kelly Automotive Group of suburban Boston received a letter from the FTC last week regarding the FTC’s non-public investigation of possible legal violations.

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9/12/13: “Feds develop optional used-car mpg window stickers”

The U.S. Department of Energy and the Environmental Protection Agency (EPA) developed window labels for used cars and trucks to feature the estimated EPA fuel economy and pollution levels. These labels are available for download at for vehicles 1984 model year and newer.

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9/4/13: “CFPB Warns of Crackdown if Credit-Report Errors Aren’t Fixed”

A U.S. consumer watchdog is warning it will crack down on lenders and debt collectors if they fail to evaluate and fix mistakes in consumers' credit reports. The Consumer Financial Protection Bureau told financial firms Wednesday they must improve their responses to disputes about credit reports. The regulator said lenders must conduct a close review of documents submitted by consumers to contest any errors, and report any mistakes to credit-reporting agencies. The credit-reporting industry has long faced criticism from consumer advocates about difficulties in correcting mistakes such as debt already repaid or payments erroneously marked as late. Errors in a credit reports can cause consumers to pay higher interest rates or be turned down for a loan.

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9/3/13: “FTC Halts Two Automobile Dealers’ Deceptive Ads”

The Federal Trade Commission (FTC) charged Timonium Chrysler, Inc., in Cockeysville, Maryland and Ganley Ford West, Inc., in Cleveland, Ohio of falsely advertising the cost or available discounts for their vehicles. The two dealerships have agreed to settle with the FTC’s charges.

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8/29/13: “NHTSA extends connected vehicle tests by 6 months”

The U.S. Department of Transportation will extend its test of connected vehicles that monitor and communicate with each other using a technology called dedicated short range communication (DSRC) to avoid crashes. Automakers who jointly developed the technology through a group called Crash Avoidance Metrics Partnership are Ford, General Motors, Honda, Hyundai, Mercedes-Benz, Nissan, Toyota, and Volkswagen.

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Read about Connected Vehicles

8/27/13: “French Court Lifts an Environmental Ban on Mercedes-Benz Sales”

Daimler may resume sales in France after the Council of State temporarily lifted a ban on certain Mercedes-Benz models. Sales are suspended since July after a French environment ministry barred the registration of certain Mercedes-Benz models without an air-conditioning refrigerant that conformed to EU law. The court gave the government two days to begin providing registration numbers to Daimler to resume sales and will now begin deliberation over a final ruling in the case.

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9/16/13: “193,936 Suzuki vehicles from 2006-2011, including Grand Vitara and SX4 models”

Suzuki Motor of America, Inc. will recall certain model year 2006-2011 Grand Vitara and 2007-2011 SX4 vehicles for potential malfunction of sensor in the passenger seat. The air bag will deploy in the affected vehicles, increasing the risk of injury.

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9/9/13: “780,584 Toyota vehicles from 2006-2011, including RAV4 and Lexus HS250h models”

Toyota Motor Engineering & Manufacturing will recall certain model year 2006 through 2011 RAV4 and 2010 Lexus HS250h passenger vehicles manufactured from October 2005 through September 2010 for possible failure of the rear tie rod, which could cause an abrupt change in the vehicle’s alignment.

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9/9/13: “133,081 Toyota hybrid vehicles from 2006-2010, including Highlander and Lexus RX400h models”

Toyota Motor Engineering & Manufacturing will recall certain model year 2006-2010 Highlander hybrid vehicles manufactured 2/16/05 through 7/29/10 and model year 2006-2008 Lexus RX400h vehicles manufactured 2/23/05 through 12/2/08 for potential shutting down of the hybrid system, causing the vehicle to stall.

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9/9/13: “101,584 Toyota Lexus vehicles from 2006-2011, including GS350 and IS350 models”

Toyota Motor Engineering & Manufacturing will recall certain model year 2007-2011 Lexus GS350 vehicles manufactured 6/29/06 through 7/12/11; model year 2006-2011 Lexus IS350 vehicles manufactured 5/27/05 through 7/13/11; and model year 2010-2011 Lexus IS350c vehicles manufactured 11/25/09 through 7/19/11. The affected vehicles equipped with 2GR-FSE engine have loose bolts on the Variable-Valve Timing system gear assembly, potentially causing the engine to stop while driving.

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9/3/13: “355,000 various Ford vehicles from 2005-2011, including Crown Victoria and Mercury Grand Marquis models”

Ford Motor Company will recall certain 2005-2011 Ford Crown Victoria (including Crown Victoria Police Interceptors), Mercury Grand Marquis, and Lincoln Town Car vehicles for potential loss of steering due to corrosion. The affected vehicles are currently registered or were sold in Connecticut, Delaware, the District of Columbia, Illinois, Indiana, Iowa, Kentucky, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, Rhode Island, Vermont, Virginia, West Virginia, and Wisconsin.

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8/26/13: “292,879 Chevrolet Cruze vehicles from 2011-2012”

General Motors LLC will recall 2011-2012 Chevrolet Cruze vehicles equipped with 1.4L DOHC gasoline turbo engines and 6T40 front wheel drive automatic transmissions and equipped with an electric vacuum pump. The affected vehicles may have faulty electric vacuum brake-assist pumps, increasing the risk of a crash.

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9/18/13: “ADA Claims are Back and on the Rise”

In 1990, Congress enacted Title III of the Americans with Disabilities Act (“ADA”) to eliminate barriers to disabled individuals’ access to public spaces. Dealerships must comply with an array of ADA requirements unless they meet the “readily achievable” cost benefit exception.

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9/9/13: “State battles yield mixed results. A federal approach might be next.”

Tesla Motor Co. may bring its state-level battle with dealers over its direct-selling model to Washington DC. CEO Elon Musk is considering two options: (1) lobby congress to pass legislation to allow direct sales of electric cars; or (2) file a federal lawsuit challenging state restrictions as unconstitutional violations of interstate commerce. Musk says Tesla will fail unless it is allowed to operate its own retail network. Some auto dealers fear the flip-side to Tesla’s success: possibly jeopardizing the franchise system as a whole, as well as creating an opportunity for manufacturers from developing countries to sell direct to U.S. consumers.

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9/9/13: “Ohio AG sues used car dealer, says it didn’t deliver titles”

Ohio Attorney General Mike DeWine filed a lawsuit against an out-of-business used car dealership for failure to deliver titles to customers and engaging in unfair or deceptive acts or practices. The lawsuit seeks reimbursement of $94,345 to the state’s Title Defect Rescission Fund, a civil penalty of $25,000 for each “unfair or deceptive acts” mentioned in the Complaint, and an additional $200 for each violation of the Certificate of Motor Vehicle Title Act.

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8/27/13: “Toyota executive testifies in acceleration case: ‘I am not very technical’”

A top U.S. executive for Toyota Motor Corp., James Lentz, took the stand in a $20-million wrongful death suit against Toyota surrounding claims of unintended acceleration. Lentz pleaded ignorance on many technical and mechanical questions saying in his 31 years at Toyota, he focused on sales and marketing rather than manufacturing. In response to questioning about why Toyota failed to include a brake override system in Noriko Uno’s 2006 Camry and if an incident of sudden acceleration constituted a driving emergency, Lentz testified he knew little about the development and availability of such systems, but conceded unintended acceleration has the “potential for death or injury” to car occupants. Toyota claims driver error was the reason for the fatal crash, and the subject vehicle contained no defects.

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8/27/13: “Ford Truck Dealers’ $29M Verdict In Class-Action Is Overturned”

A federal appeals court overturned a $29 million jury verdict against Ford Motor Co. in Bayshore Ford Truck Sales Inc. v. Ford Motor Co. over its withdrawal from the heavy-truck market in 1997 whereby 11 dealers claimed Ford’s discontinuance constituted a breach of contract. The U.S. Court of Appeals for the Third Circuit held Ford did not breach sales contracts because it continued to distribute the required “company products” such as heavy truck and Ford parts and accessories.

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Interests of the Industry

9/16/13: “Chrysler IPO to bring shareholder battle to a head”

Chrysler plans to file documents this week which would allow its minority investor (healthcare trust VEBA) to sell shares in a stock market listing. Majority owner Fiat, which currently holds 58.5% of Chrysler, expressed interest in purchasing the 41.5 percent stake, but VEBA was not enticed by the price Fiat offered. According to Reuters’ sources, VEBA is seeking more than $5 billion for its Chrysler stake, while UBS analysts estimate the stake to be worth about $4 billion. VEBA may sell up to 25% of Chrysler, while the rest is protected as part of an agreement which allows Fiat the option of gradually buying portions of the minority holding. Fiat CEO Marchionne said a listing could take place in Q4 of this year, but was more likely to occur in early 2014.

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9/16/13: “Ford to announce $700M investment for Canadian plant”

Ford Motor Co. plans to announce an approximately $700 million investment for its sole Canadian assembly plant as part of a commitment made last year during negotiations with the Canadian Auto Workers union. The investment announcement is expected to be made by Ford on Thursday.

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9/16/13: “Fisker’s loan up for sale after missed payments to U.S., report says”

Fisker Automotive Inc. failed to repay its federal loans, spurring the U.S. Department of Energy to consider unloading the automaker’s loan via either a straight sale or through an auction. Despite receiving $529 million from the D.O.E., Fisker never turned a profit, and lost an estimated $1 billion from 2008 to 2012. The government has recovered about $21 million from Fisker.

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9/14/13: “GM Reaches Tentative Pact with Canada Union Over Ontario Plant”

GM and Canada’s Unifor reached a tentative settlement on an agreement which covers employees at the CAMI assembly plant in Ontario. Unifor was created in August after a merger between Canadian Auto Workers union and Communications, Energy, and Paperworkers union and represents nearly 2,500 employees at the facility in Ingersoll, Ontario. On March 8, 2013, GM announced a plan to invest in the plant to augment its production lineup.

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9/11/13: “U.S. VW executives ‘forced’ by German boss to sign UAW letter: Sen Corker”

U.S. VW executives were allegedly “forced” by a German board member to sign a letter sent to employees at the Chattanooga plant in which the contents disclosed the United Auto Workers’ effort to organize the factory. A rebuttal was made by VW spokesman Guenther Scherelis, at the Chattanooga plant, “The letter to the Chattanooga workforce was drafted, written and signed by Frank Fischer and Sebastian Patta to avoid further speculation from outside the company, without being forced by anyone.” The contested letter stated that VW executives were in talks with UAW about the U.S. union’s bid to represent workers at the factory using an “innovative model.” VW’s German board includes IG Metal union members who would like to see the UAW win its bid for the Chattanooga plant, so the factory may fall in line with VW’s other plants around the world which all have union representation.

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9/10/13: “Canada, Ontario sell part of GM stake for about $1.1 billion”

The Canadian and Ontario governments sold 10 million GM shares -- nearly a quarter of their common shares -- for $1.11 billion. The governments became shareholders of GM in 2009 to help the automaker stay above the water-line. In return, they required GM to maintain production in Canada for several years moving forward. The U.S. Treasury said in December 2012 it also plans to sell its entire stake in GM over the next 15 months.

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9/10/13: “Porsche $845,000 Hybrid Beats Prius as Hot Rods Go Green”

Porsche unveiled a new $845,000 918 Spyder hybrid capable of 0-100 kilometers per hour in just 2.8 seconds and gets an equivalent 72 miles per gallon. Following suit, BMW introduced the $135,925 i8 plug-in hybrid which will get the better of 113 miles per gallon with its combination 231-horsepower front wheel motor and three-cylinder gas rear wheel engine.

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9/10/13: “Tesla Model S Buyback Offer May Generate More Revenue”

Bloomberg analysts say a Tesla Model S buyback from customers using its lease-style option may generate further revenue when the automaker begins to sell used vehicles. Used Model S sales may produce $368 million in annual revenue in 2016. The estimate is based on Tesla reselling upwards of 10,000 used cars in 2016 at an average resale price of $36,763.

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9/9/13: “Hyundai Motor Workers Approve Wages Pact to End Union Strike”

Union members at Hyundai’s South Korean plants approved a preliminary pact to raise base salary by 5.1%. The agreement ends a strike a strike that cost the automaker more than 1 trillion won in lost production. The wage agreement included bonuses worth 3.5 months of wages plus 5 million won in cash, or an equivalent to an average of 28.8 million won extra per person. Kia Motors Corp. is still negotiating this year’s wage pact with its union and has lost 352 billion won in production since strikes began on August 21.

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9/8/13: “Daimler aims to launch self-driving car by 2020”

Daimler AG plans to roll out self-driving cars by 2020 in an effort to regain the top spot among premium automakers. “We want to be the first to launch autonomous functions in production vehicles. You can be sure: we will accomplish that in this decade,” Daimler head of development Thomas Weber said. Testing is already under way and the automaker is working with Google to outfit vehicles with equipment to let them navigate roads in California and Nevada.

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9/3/13: “Daimler, Nissan to jointly build small luxury cars in Mexico”

Nissan and Daimler AG will jointly build small Infiniti and Mercedes-Benz luxury cars at a new $2 billion plant which will open in late 2013 next to an existing Nissan assembly plant. The Infiniti Q30, a compact 4-door hatchback, will be the first vehicle to develop under the Nissan-Daimler cooperative agreement signed in 2010 to share vehicle platforms, engines, and other components.

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8/27/13: “U.S. to Revive Loan Program That Backed Tesla, Fisker”

The $25 billion Advanced Technology Vehicle Manufacturing loan program created in 2008 by President George W. Bush will resume marketing to industry groups and possible applicants. The program has about $15 billion in funding remaining after having made no loans since 2011. The Energy Department is likely to seek recipients looking to supplement their capital, rather than a main funding source.

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8/27/13: “Nissan vows self-driving cars by 2020”

Nissan pledges to have multiple “commercially viable” self-driving vehicles ready for sale by 2020. Nissan aims for “realistic prices for consumers” and an availability of self-driving technologies across its model range “within two vehicle generations.” The automaker is working closely with MIT, Stanford, Oxford, Carnegie Mellon, and University of Tokyo on the technology.

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8/26/13: “Tesla outsells Porsche, Jaguar, others in Calif.”

According to the California New Car Dealers Association, Tesla outsold all Porsche, Volvo, Lincoln, Land Rover, and Jaguar models during the first half of 2013 with 4,714 new vehicles registered. Lexus sold 2,298 GS models, while Audi sold 1,619 A6 models.

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8/26/13: “Tesla Market Value Reaches $20 Billion on EV Optimism”

Investor and EV optimism vaulted Tesla’s market value over the $20 billion mark in intraday trading before settling to $19.9 billion at close. Tesla plans to deliver 21,000 Model S sedans this year, and 42,000 next year. The Model S ranked as the third-best-selling luxury sedan in the U.S. market, behind Mercedes-Benz E-Class and BMW’s 5 Series. According to Bloomberg’s Billionaires Index, Elon Musk’s net worth has tripled to $8 billion this year.

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8/23/13: “ Study Reveals Deep Insights into how Millennials Relate to Cars”

An study found Millennials will seek cars fitting best with their personal image: stylish, sophisticated, and innovative. Audi, Honda, Mercedes, Toyota, BMW, and Chevrolet, respectively, were found to be most reflective of their personality. Furthermore, according to senior director of Research and Marketing Analytics, Isabelle Helms, Millennials will heavily research their purchase decisions, and desire time and space to make the right decision; and when shopping, “[Millennials] will value the salespeople who provide the information they seek in a no-pressure way.”

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View a PDF of the Study