REGULATORY UPDATES

1/26/14: “Rough patch for Uber Service’s challenge to taxis”

Uber faces scrutiny by the California Public Utilities Commission over the nature of its business. The commission, which oversees limousine companies, called Uber’s arguments “creative,” but ultimately decided Uber is a transportation company and as such, subject to its regulation. Uber is appealing, saying the company’s system of asking passengers for feedback means it is self-regulating.

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1/24/14: “Nissan, ad agency settle FTC charges on deceptive advertising”

Nissan Motor Co. and its U.S. advertising agency, TBWA Worldwide, agreed to settle a  FTC complaint over deceptive advertising charges. The 30 second TV spot from 2011 featured a Frontier pickup truck pushing a buggy stuck in a steep sand dune. The FTC complaint alleged the actual truck could not execute the feat on its own, and instead relied on cables and camera tricks to create the illusion of a steeper hill. Under the settlement,  the companies will need to maintain a record of all advertisements for Nissan trucks for 5 years.  Despite Nissan and TBWA Worldwide avoiding immediate punishment by the courts, the two companies could face civil penalties of $16,000 per day if either produces a  similarly deceptive ad within the next 20 years. The last time the FTC and an automaker settled such a case was with Volvo in 1992, where the ad showed a monster truck   crushing a series of vehicles but unable to damage a Volvo station wagon. Nissan said it has no plans to end its relationship with TBWA.

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LITIGATION UPDATES

1/31/14: “Former Diamond Electric execs to admit price-fixing: U.S. prosecutors” 

Shigehiko Ikenaga, former president of Diamond Electric, and Tatsuo Ikenaga, former vice president, agreed to plead guilty to conspiring to fix the prices of ignition coils in cars. The former president will serve 16 months in prison, while the former vice president will serve 13 months. Including Diamond Electric, 24 companies and 28 executives pled guilty or agreed to plead guilty in what the U.S. Justice Department calls the largest price-fixing scheme in the history of its oversight.

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INDUSTRY INTERESTS

1/30/14: “Toyota tells dealers to stop selling 6 models”

Toyota asked dealers to stop selling certain 2013 and 2014 Camry, Avalon, Sienna, Tacoma, Corolla, and Tundra models with heated seats. Concerns were raised because the fabric in the seats does not comply with U.S. safety codes and could potentially catch fire. The order affects 36,000 vehicles, or about 13 percent of U.S. dealer inventory.

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1/29/14: “When NADA says it’s OK to stray from reserve cap”

According to NADA’s new “Fair Credit Compliance Policy & Program,” there are seven categories of allowable deviations from a dealer’s reserve; by category: (1) lower cap imposed by assignee; (2) monthly payment constraint; (3) more competitive offers; (4) dealership promotional financing campaign; (5) manufacturer subvention program; (6) dealership employee incentive program (if applicable); and, (7) dealership inventory reduction considerations. Click the link for a more detailed breakdown of all seven categories.

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1/26/14: “Tesla completes L.A.-to-New York electric Model S drive chargers”

Tesla announced the completion of its LA to New York “Supercharger” network, allowing Model S owners for the first time the ability to drive coast-to-coast. Elon Musk tweeted, “Tesla Supercharger network now energized from New York to LA, both coast + Texas!” According to Musk, Tesla’s 70 stations in North America covers approximately 80% of the Tesla-driving US population. The chargers are installed near major highway interchanges and proved 170 miles of range on a 30-minute charge.

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1/24/14: “2015 Hyundai Genesis first to feature new hook-up with Verizon”

The redesigned 2015 Hyundai Genesis will be the automaker’s first car to feature a new wireless system developed with partner Verizon. Senior Group Manager for Connected Care, Michael Dietz, said Hyundai customers will be assured of “consistent coverage” as a result of the Verizon link. The coverage will also become available for the 2015 Hyundai Sonata, followed additional newer models.

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1/23/14: “No. 1 Toyota fends off GM and VW in global sales race”

Toyota reported it sold 9.8 million passenger vehicles in 2013, retaining its title as the world’s largest automaker. GM came in second with 9.7 million cars and trucks sold, and Volkswagen AG in third with 9.5 million sold.

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1/22/14: “Small cars get crushed in crash tests”

According to an IIHS testing of 11 subcompact cars in the “small overlap crash test”, only one vehicle, GM’s Chevrolet Spark, performed adequately. Nissan Versa, Toyota Prius C, Hyundai Accent, Mitubishi Mirage, Chrysler Group’s Fiat 500, and the Honda Fit all earned the lowest rating of “poor.” The Mazda2, Kia Rio, Toyota Yaris, and Ford Fiesta scored second from the bottom with “marginal.”

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1/21/14: “CarWoo slams the door shut”

CarWoo is shutting down according to a post made by President and CEO Tommy McClung on the company’s website. McClung said he and a small group from CarWoo will be joining TrueCar.

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1/20/14: “Study: 3,800 stores could disappear in U.S. by 2020”

A study by Roland Berger Strategy Consultants says the U.S. dealer network in unsustainable, and that manufacturers are looking to consolidate the dealer body. Key findings of the study include, (1) 3,800 outlets are at risk for closure by 2020 without consolidation; (2) If no consolidation, dealers profit margins will fall from today’s 2.2% to 0.8%; (3) if multistore groups acquire one additional store, only 5% reduction in outlets would be required to maintain current margins; and, (4) consolidation saves average dealership 12% on expenses of $4.4 million per year.

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1/14/14: “Michelin sets new standard in automotive safety with Michelin Premier A/S tire”

Tire-maker Michelin announced a new line of tires which “combines hidden grooves that emerge as the tire wears down, expanding rain grooves that widen over time to continue to evacuate water and a unique rubber compound for increased wet grip.” Michelin states the new tires will provide for shorter stopping, hydroplaning resistance, and increased grip when new and worn.

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Alternate Source

1/14/14: “Tesla revenue expected to exceed guidance by 20% in fourth quarter”

According to a press release by Tesla, sales for Q4 of 2013 were the highest in the electric automaker’s history. 6,900 vehicles were sold and delivered, exceeding prior guidance by nearly 20%. Tesla attributes the increase in sales to the “superlative safety record of the Model S and great performance under extremely cold conditions.”

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1/14/14: “Lamborghini plans SUV in 2017 in luxury push into segment”

According to Lamborghini CEO Stephan Winkelmann, the luxury automaker will begin building the anticipated Urus sport-utility vehicle in 2017. Volkswagen’s Lamborghini, Bentley, and Porsche are all adding SUVs to their line-ups in the near future as well. Both Aston Martin and BMW’s Rolls-Royce are also considering whether an SUV would fit into their repertoires.

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1/13/14: “Autobytel acquires AutoUSA subsidiary of AutoNation”

Autobytel Inc. announced the acquisition of Ft. Lauderdale-based AutoUSA, a web-based auto leads and services provider from AutoNation, Inc. From the press release: “the transaction significantly expands Autobytel’s dealer network; expected to deliver meaningful increases in revenue and cash flow.” AutoUSA generated approximately $30 million in revenues in 2013, with positive income and cash flow. The acquisition expands Autobytel’s new and used car dealer network from 3,800 to more than 5,200 participating dealerships.

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1/10/14: “Tesla to upgrade overheating chargers”

Tesla will provide owners of its vehicles with new charger adapters after a defective charger allegedly started a fire in an Irvine, California garage last November. The new wall adapters will have thermal fuses and will be provided to all existing and new Tesla owners “starting  in a few weeks.” Tesla denies allegations of its charger being the cause of the fire.

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RECALLS

1/15/14: “27,933 Ford Edge Vehicles From 2012-2013”

Ford Motor Company recalled certain 2012-2013 Edge vehicles manufactured from 9/2/10 through 4/25/13, and equipped with 2.0L engines for a potential fuel leak due to a crack in the fuel line pulse damper metal housing.

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1/14/14: “300,000 Chevrolet Silverados And GMC Sierras From 2014”

General Motors recalled certain 2014 model Chevrolet Silverados and GMC Sierras equipped with 4.3L or 5.3L engines for exhaust components that may overheat in colder temperatures, which could lead to an engine fire.

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1/14/14: “29,222 Tesla Model S Vehicles From 2013, Equipped For And Delivered With Certain NEMA 14-50 Universal Mobile Connector Adapters”

Tesla Motors, Inc. recalled certain 2013 Model S vehicles for potential overheating of the adapter, cord, or wall outlet while charging.

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1/13/14: “667 Zero Motorcycles From 2012-2013, Including XU And DS Models”

Zero Motorcycles Inc. recalled certain 2012-2013 XU, S, DS, and 2013 FX motorcycles for controller firmware which may shut off power to the motor.

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1/8/14: “38,434 Skyline Recreational Vehicle Travel Trailers From 2006-2013”  

Skyline Corporation recalled certain 2006-2013 recreational vehicle travel trailers and fifth wheel trailers manufactured 1/1/06 through 5/31/13 and equipped with Fastec-brand door locks.  The affected trailers have door locks which may jam, leaving individuals inside without an exit.

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1/8/14: “7,387 Acura RLX Vehicles From 2014”

American Honda Motor Company recalled certain 2014 Acura RLX vehicles manufactured 8/7/12 through 11/5/13 for loose rear lower control arm bolts that may reduce steering ability, increasing the risk of a crash.

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