• • MEET YOUR 2011 IADA BOARD CHAIRMAN TIM MOONEY
• • CONGRATULATIONS TO JOHN WOLF
• • TIRED OF THE SNOW AND COLD WEATHER
• • UPCOMING INDUSTRY EVENTS - PLAN TO ATTEND!
• • INCOME TAX INCREASE REQUIRES EMPLOYERS TO INCREASE WITHHOLDING RATE
• • REMINDER: SOCIAL SECURITY TAX RATE CHANGE
• • FEDERAL AUTO EMISSIONS STANDARDS
• • 2010 AUTO INDUSTRY HIGHLIGHTS
• • COMPLIANCE REMINDER
• • GM DEALERS GEOGRAPHIC MARKET AREAS
• • INVENTORY MANAGEMENT BEST PRACTICES
• • IADA - DEALERS EDGE FEBRUARY WEBINAR SCHEULE
• • OUR IADA PARTNER - ZURICH

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Tim Mooney, President, Tim Mooney, Inc. was elected the 2011 Chairman of the Board of the Illinois Automobile Dealers Association, during its annual meeting for the election of officers held in Springfield, December 1, 2010.

He began his involvement with IADA being elected to the Board of Directors in 2002, representing dealers in Illinois’ 55th Senatorial District. He previously held the position of Vice Chairman, Secretary and Treasurer in addition to serving on the IADA Executive Committee. Tim has been a franchised dealer since 1998 and is a Past Chairman of the IL/IOWA FDAF and also served on that Board for 16 years.
 
He is a graduate of Northwood University in Midland, Michigan and began in the automobile business working with his father the late Norm Mooney, Chrisman and his brother Mike Mooney, Paris and DeKalb.

In the community he is involved in many local organizations serving on the Board of Directors of the Sarah Bush Lincoln Hospital in Mattoon, as a Director and Secretary of the Tuscola Chamber of Commerce, Past President and Director of the Tuscola Rotary Club, Past Cub Scout Leader and current Scout Building Board Member and Treasurer.  He has coached in the Boys Little League and Girls Softball League and is currently the “Voice of the Lady Warriors” Tuscola High School Girls Sports Team.
 
Tim resides in Tuscola with his wife Laurie and their (3) children. On behalf of our IADA membership we congratulate Tim Mooney on his election and look forward to working with him as your 2011 IADA Board Chairman.

 
2011 IADA OFFFICERS

We offer our congratulations to these Dealers who were elected to serve as IADA Officers in 2011.  From Left to Right: Mike Mangold, Mangold Ford,  Eureka (Secretary); Jim Lombardi, Lombardi Chev-Buick, Wilmington (Vice Chairman); Tim Mooney, Mooney Ford, Tuscola (Chairman); Pete Sander, Springfield (IADA President) and Gary Knight, Carmack Car Capitol, Danville (Treasurer).   
 

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On behalf of the IADA Board of Directors and Staff we offer our congratulations to Past Chairman John Wolf, Wolf Belvidere, for his outstanding service and leadership to IADA during his term as Chairman in 2010. John will be recognized during the IADA Annual Spring Conference to be held in Marco Island, March 26-30, 2011, at the Marriott Marco Island Resort & Spa.

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Make plans to join IADA and CATA for our spring get away to the Marriott Marco Island Resort & Spa, Marco Island, Florida, March 26-30, 2011. 
Register today and get away from the Illinois winter blues.  Join us on this beautiful island known for its inspirational sunsets.  Marco Island provides the perfect location to spend time with your family while meeting and networking with your fellow dealers.  An IADA/CATA Golf Tournament is scheduled along with other social activities.

To join us for an outstanding meeting, click here to view a conference registration and sign up today!

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• NADA San Francisco Convention – February 5-7, 2011
• Chicago Auto Show – First Look for Charity Preview Night – Feb. 10, 2011 (Invitation)
• IADA MARCO ISLAND, FLORIDA CONFERENCE – MARCH 26-31, 2010 (Registration Info)
• IADA LEGISLATIVE CONFERENCE – MAY 10, 2010 - SPRINGFIELD

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Illinois employers are required to immediately adjust Illinois income tax withholding rates for their employees. Public Act 96-1496 increased the individual income tax rate from 3% to 5% of net income.  To accommodate the Income Tax increase, the Illinois Department of Revenue has revised the Illinois Withholding Tax Tables so that employers can withhold the correct amount for Illinois Income Taxes.  An employer who has already paid a January payroll and withheld at the 3% rate is NOT required to go back and adjust the withholding for that period. However, if an employer and an employee agree, the employer may withhold an additional amount from a future paycheck to make up for the missed withholding. Otherwise, the employee will receive a smaller refund or pay more tax when he or she files his or her 2011 return.
 
Additional information can be found on the Illinois Department of Revenue website at: http://www.revenue.state.il.us/Businesses/TaxIncrease.htm

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The new Social Security “federal tax break” law went into effect January 1st, 2011. In addition to extending the current income tax rates which were about to expire, the law lowers the amount of money employees pay into Social Security during calendar year 2011. The employers’ share is unchanged, and the reduced rate only runs through December 31st, 2011.

Employees usually pay 6.2% of their initial $106,800 yearly earned wages into Social Security, but during 2011 the amount changes to 4.2% of employees’ income. There is no change in the Medicare tax rate; it remains at 1.45% for both employees and employers on the full salary. The IRS deadline for employers to adjust payroll systems is January 31st, 2011. Any incorrect amounts deducted in the first payroll of the year must be returned in subsequent payrolls no later than March 31st, 2011. For additional information, click here for IRS Publication 80.

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NADA is urging the federal Court of Appeals for the D.C. Circuit to overturn EPA’s decision to grant California’s request to set fuel economy standards. Unless the Court overturns EPA’s grant of the waiver, California will be empowered to put in place a patchwork of potentially conflicting state fuel economy standards, creating conditions for economic uncertainty without commensurate environmental benefits. The federal government should control the process of setting national fuel economy and greenhouse gas standards, not individual states. "No one state should dictate the outcome of federal regulatory policy," says Andrew Koblenz, NADA vice president and general counsel. NADA remains committed to fuel economy increases under the federal CAFE program.

The U.S. Chamber of Commerce and the National Automobile Dealers Association asked the U.S. Court of Appeals in Washington to revoke a waiver issued by the U.S. Environmental Protection Agency that lets California opt for stricter emissions rules than federal standards require. Auto dealers, in court papers, said the standards will limit their ability to keep popular vehicles in stock, especially those with the most powerful engines.

On Monday, January 24th, the Environmental Protection Agency, the National Highway Traffic Safety Administration, and the state of California made a joint announcement that they will all propose 2017-25 emission standards by September 1st rather than on separate dates. This is an encouraging sign that all 3 entities may try to work toward a single emissions standard. 
 

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•  The U.S. Auto Industry sold 11.5 million units in 2010, an increase of 11.1% from 2009

•  Car sales were up 4.3% and truck/SUV/CUV’s sales were up 18.4% for the year

• Trucks/SUV/CUV’s constituted 51.2% of the industry

• The Detroit 3 captured 45% of industry, up 0.9 points in 2010

•  European and Korean automakers each captured 7.7% of industry volume respectively

• Of the volume brands, Ford had the largest gain in share - 14.9% up from 13.6% in 2009 (up 1.3 points on volume of 1.7 million units)

•  Toyota suffered the largest share decline with share of 13.3% down from 14.9% in 2009 (1.6 point decrease on volume of 1.5 million units)

•  The Toyota Camry and the Ford F-Series were the top selling car and truck

•  11 brands recorded sales increases of over 20% 
        Buick 51.9%, Cadillac 34.7%, Porsche 28.6%, Audi 22.9%,
        Infiniti 27.5%, Acura 26.4%, GMC 24.4% Hyundai 23.7%,  
        Subaru 21.8%,  Ford 21.6%, Land Rover 21.1% Chrysler/Jeep 20.7
        and VW 20.3%

•  Hybrid sales declined 5.6% in 2010 (truck hybrids down 20.2% and cars down 2.2%)

• The CUV segment was the largest segment in the industry at 24.5% and this segment’s volume grew 22.3% (total volume was 2.8 million units)

• The large pick-up segment showed strength in 2010 at 11.6% of industry up from 10.7% in 2009 (total volume was 1.3 million units)

• The top ten selling cars constituted 20.1% of industry volume

• The top ten selling trucks/SUV/CUV’s constituted 18.8% of industry volume

   

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The Environmental Protection Agency’s (EPA) rule governing hazardous air pollutants (HAPs) required existing body shops to achieve full compliance by January 10, 2011, and file a Notification of Compliance status form by March 11, 2011. Specifically, dealership body shops must:

1. Paint only inside filtered, ventilated paint booths or prep stations.
2. Use high transfer efficiency application equipment.
3. Clean guns with non-hazardous solvents, in gun-enclosed washers, or using a method that does not involve atomized spraying to the open air.
4. Have painters trained and certified every five years.
5. Keep basic records demonstrating compliance.

The rule also:

1. Allows a shop to petition for an exemption if it does not spray coatings with any of the above-listed HAPs of concern.
2. Excludes the spraying of coatings from hand-held guns with paint cups of 3.0 fluid ounces or less.

Also, paint stripping involving methylene chloride (MeCl) is significantly regulated for shops using more than one ton of MeCl per year (very rare). Where possible, body shops should avoid the use of strippers containing MeCl.  For more information, please read the Regulatory Bulletin and download the forms below (all .pdf).

Regulatory Bulletin: Compliance with EPA’s Body Shop Hazardous Air Pollutant Rule
Initial Notification Form
Notification of Compliance Status Exemption Petition Form
 Notification of Changes Report
A training course is available through NADA University, and questions on the rule can be directed to Regulatory Affairs at: regulatoryaffairs@nada.org or 703-821-7040.

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General Motors Co., compensating for dealer cuts during its 2009 bankruptcy, has expanded the geographic market area used in performance reviews for thousands of dealerships.

Woodward & Associates advises - Most new vehicle dealers, if not all, have new vehicle market areas that are determined and assigned by their manufacturer. Most manufacturers assign to their dealers geographic market areas based on census tracts or zip codes.

Manufacturers will notify their dealers on occasion what their assigned market area is. At times these manufacturer assigned market areas are updated and / or changed. The manufacturers usually make these changes due to additional dealers in the market, to allow for dealer locations that have been eliminated or just to "realign" the assigned market.

Why do you care?  If you are assigned census tracts that are closer to other dealers in either miles or drive time, it probably will distort your dealership's new vehicle sales effectiveness. Also, we have seen where the manufacturer did not allow for state boundaries, rivers, lakes, and other natural boundaries when assigning market areas. If you are assigned census tracts that more properly belong to other dealers or should not be assigned to any dealer due to the distance from same franchise dealers, you should request these census tracts be removed from your assigned area.

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Inventory Analysis

Require your sales manager to complete a monthly sales history and stock analysis for every model.

• Require your sales manager to analyze inventory for color and equipment balance. Only high-demand colors, engines, transmissions, and other options should be ordered. Expensive option packages (sport, entertainment, luxury, etc.) should be ordered only if there is demand.
  
• Identify your 10 oldest new vehicles in stock and consider a special incentive to clear them from inventory.
  
• Compare your own inventory to market, region, and national inventory averages using manufacturers’ inventory analysis tools (days’ supply, fast turn reports, etc.). This way, you can ensure you have the proper mix of vehicles, colors, and equipment packages.
  
• Review any lost sales from the past 30 days to determine if your current inventory mix is lacking popular models, colors, or options.
  
  Ordering

• Consider dealer transfer opportunities before ordering. Your requirements may be met from another dealer’s stock to your mutual benefit, without placing additional orders.
  
• Designate to your manufacturer or distributor, in writing, those dealership employees who are authorized to order vehicles. Inform the supplier that you will not be bound by commitments made by others.
  
• Post your incoming inventory so salespeople can sell before new vehicles arrive. 
  
• If a representative of the manufacturer or distributor indicates to you that a given unit will not be delivered before a certain date, note the agreement on the order (e.g., “Not to be delivered before June 15, 2xxx”) and refuse delivery if the unit arrives before the agreement date.
  
• Each week, review the specifications on units ordered but not yet produced. Cancel all orders for units that are no longer desired. Confirm all cancellations in writing to the distribution office.
  
• Re-evaluate the demand for each model on a weekly basis. Establish a clear ordering policy and ensure that the person ordering units understands it.
  
• Carefully consider the equipment levels of all vehicles ordered. Floor plan rates apply to options too. If an option is easily installed locally, order your units without it and add it if the customer desires.

This article is excerpted from NADA Inventory Planner, which is available through NADA University’s Resource Toolbox. The guide contains easy-to-use forms to aid you in your inventory decisions.

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Through a specially negotiated discount, IADA members are now entitled to a 50% discount off of the full non-member registration rate for these webinar training opportunities.
Click here to view the webinars coming up in the next month for your consideration.  Just another benefit of your dealership’s IADA membership.

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Zurich makes insuring your business easy. For more than 80 years, they’ve been specializing in providing commercial property and liability insurance for businesses that sell or service autos, trucks and motorcycles.

They offer a wide assortment of products including commercial property, general liability, garage liability, commercial and personal umbrella, workers' compensation, life insurance, finance & insurance products, and more. They're your one-stop-shop, offering you the convenience of working with one organization for your insurance needs. You can also benefit from their risk engineering consulting services tailored to your business exposures and a major loss team that can respond within 48 hours of a disaster - a team with the experience and authority to settle catastrophic claims quickly.

Click here for to view their monthly Loss Prevention Bulletin – this month, Winter Hazards
 

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