US sales of new cars and light trucks will set an all-time record in 2016, according to predictions from the National Automobile Dealers Association (NADA) which also indicate that sales may then start to decline.
Steven Szakaly, NADA's chief economist, said: "More than 17.7 million new light vehicles will be purchased or leased this year, about a 2% increase from 2015, and setting back-to-back records. It will be the seventh consecutive year of auto sales growth."
In 2015, a record 17.4 million new light vehicles were retailed, up 5.8% from 2014, according to WardsAuto.
"We are living peak auto sales right now, and we will see one more year of that growth in 2016," Szakaly added. "But only because of rising incentives that will keep consumers coming into showrooms. The real worry now is whether were starting to pull sales ahead from future years."
Szakaly explained that, in the battle for market share, automakers are expected to increase incentives this year to manage increased manufacturing capacity, and to offset the effects of a slowing global economy, especially in emerging markets.
"Growth in places like Mexico will offer some temporary reprieve, but it wont be sufficient to offset falling demand from Brazil, South Africa and other emerging markets. This means incentives will rise to stoke demand," Szakaly added.
Sustained sales momentum in 2016 is also dependent on expectations that auto financing rates will remain competitive, with interest rates rising modestly - by less than 1 percentage point - by the end of 2016; wages will grow about 2.5% this year; and the economy will add more than 2 million net new jobs in 2016, Szakaly added.
TORRANCE, Calif., Jan. 15, 2016 (GLOBE NEWSWIRE) -- In honor of the life and vision of Dr. Martin Luther King, Jr., Toyota Financial Services (TFS) is continuing its support of Historically Black Colleges and Universities (HBCUs) and their communities, by providing $60,000 to five HBCUs as well as the Tom Joyner Foundation.
Were really excited to work with our new partner Toyota Financial Services, said Thomas Joyner, Jr., President and CEO of the Foundation. The support of these scholarships is a really important step in helping these students complete their college education and, in the long run, help sustain these HBCUs.
Bennett College in North Carolina, Tuskegee University in Alabama, and South Carolina State University will each receive a $10,000 contribution to support their scholarship funds. Additionally, TFS is donating two $10,000 scholarships to Wiley College in Texas and North Carolina Central, through the Tom Joyner Foundation. TFS is donating an extra $10,000 to support the Tom Joyner Foundation, as well. The foundation provides academic support, scholarships, and programming to over 80 HBCUs in the Southern and Eastern United States. The overall goal of these contributions is to support educational opportunities within many of the communities in which TFS operates.
Education is truly the greatest equalizer and should be accessible to all. Toyota Financial Services donation to Historically Black Colleges and Universities is a much needed investment that will help support students attending our HBCUs, said Rep. Alma Adams (D-NC), Co-Chair of the Bipartisan Congressional HBCU Caucus. As a former professor, administrator, and an alumnus of an HBCU, Im always happy to see the philanthropic endeavors of a socially responsible company that shares my interests in scholarship, education, and helping underserved communities.
Toyota Financial Services is honored to echo the dream of Martin Luther King, Jr., by supporting these fine institutions and advocating higher education in these communities, said Al Smith, TFS Group Vice President, Service Operations and Corporate Planning. TFS has a deeply held commitment to diversity and inclusion, not only now, but year round as seen with our national Making Life Easier Scholarship Program and with our 10th anniversary of supporting the CBS Baltimore Black History Month Oratory Contest.
According to the Journal of Blacks in Higher Education, the college graduation rate for black students in the U.S stands at 42%, as opposed to 62% for their white counterpart. It is also noted that the financial support of universities is key in black student retention, thereby producing high graduation rates.
When speaking with each of the institutions officials, its so inspirational to hear how this money impacts these HBCUs and the plans that they have for these scholarships, said John Ridgeway, TFS Corporate Manager of TFS Customer Service Center in Maryland. HBCUs are challenged with lower student retention resulting from financial hardships. As a Toyota executive and an HBCU alumnus, I am proud that Toyota Financial Services is making a contribution to these HBCUs and the Tom Joyner Foundation to support their efforts.
TFS has been named a DiversityInc Top 50 company for the past eight years in a row and has been consistently recognized by Black Enterprise, Hispanic Business, and the Human Rights Campaign as a Best Company for Diversity and one of the Best Places to Work. TFS executives actively support and sponsor the companys many diversity and inclusion initiatives. For more information about Toyotas commitment to diversity and inclusion, please visit www.toyota.com/diversity.
About Toyota Financial Services
TFS is the finance and insurance brand for Toyota in the United States, offering retail auto financing and leasing through Toyota Motor Credit Corporation (TMCC) and Toyota Lease Trust. TFS also offers extended service contracts through Toyota Motor Insurance Services (TMIS). Lexus Financial Services is the brand for financial products for Lexus dealers and customers. TFS currently employs approximately 3,200 associates nationwide, and has assets totaling over $102 billion. It is part of a worldwide network of comprehensive financial services offered by Toyota Financial Services Corporation, a wholly-owned subsidiary of Toyota Motor Corporation. We announce material financial information using the investor relations section of our website (www.toyotafinancial.com) and SEC filings. We use these channels, press releases, and social media to communicate about our company, our services and other issues. While not all information we post on social media is of a material nature, some information could be material. Therefore, we encourage those interested in our company to review our posts on
Twitter at www.twitter.com/toyotafinancial.
For more information about the companys support of financial literacy, after-school programs, and other community initiatives, please visit www.tfsinthecommunity.com.
1) Quotes from Recipients:
Wiley College is most appreciative of Toyota Financial Services contribution for scholarships for promising students. Please know that this will allow them to continue their education at Wiley without incurring increased student debt. Of equal importance, the College affirms that Toyotas support will enable the scholarship recipients to go places in their careers. As such the Toyota brand is further underscored by supporting students; all of whom would be the first in their families to earn a college degree. Thank you Toyota.
- Dr. Haywood L. Strickland, President and CEO, Wiley College
Thanks again for making college completion a reality for a Bennett Belle. We are working with our many promising students that need this type of assistance to close the gap, build a bridge to their future, and reduce the debt load once they begin working. This grant is the annual amount that we have calculated that makes a significant difference in meeting each of these three goals for a student.
- Dr. Rosalind Fuse-Hall, President, Bennett College
Tuskegee University is thrilled that Toyota Financial Services has seen fit to invest in our students by supporting our general scholarship fund. This is especially meaningful during Black History Month, and it is appropriate that this generous gift is being made at a time in which we celebrate Martin Luther King and his impact on our society, and the world. This support will allow our most deserving students to succeed and thrive, both at Tuskegee as well as in their careers and lives. Were deeply grateful to Toyota Financial Services, and their representative, Mr. John Ridgeway, for this relationship which we hope will only grow in the coming years.
- Mr. Robert Blakely, Vice President of Advancement and Development, Tuskegee University
South Carolina State University is thrilled to be the recipient of this special contribution from Toyota Financial Services. The gift will play a major role in providing scholarships and support, that will help transform the lives of our students and inspire them to be great contributors in a highly competitive global arena.
- Dr. W. Franklin Evans, Interim President, South Carolina State University
North Carolina Central University is thrilled to receive a generous gift from Toyota Financial Services through the Tom Joyner Foundation that provides four of our student-scholars with scholarship support that will enable them to complete their education. The University and our student scholarship recipients are grateful to Toyota Financial Services for investing in higher education and future leaders who will contribute greatly to the global marketplace.
- Dr. Harriet F. Davis, Vice Chancellor for Institutional Advancement, North Carolina Central University
CONTACT: Justin Leach: (310) 468-5332
The NH Auto Dealers Association visited me in Washington, DC, this fall. Whether at the capital or a Granite State roundtable, President Peter McNamara and members usually have one thing on their minds: the Consumer Financial Protection Bureau.
Currently, auto dealers can negotiate lower rates and fees with lending companies, in order to offer customers the best possible deals. A competitive market benefits most buyers. However, the CFPB claims that dealers flexibility to offer low financing rates disproportionately harms minorities. Sen. Elizabeth Warrens comments in support earned her four Pinocchios, its lowest rating on the truth meter, from the Washington Post.
Even so, the agency issued a notice of liability to auto dealers. The Wall Street Journal estimates that the CFPBs efforts to restrict competition will raise the price of the average car loan by $586. That may not seem like much to a federal agency with a half-billion dollar budget, but to a middle-class family of four, the figure amounts to about a months worth of groceries.
Federal interference could drive prices even higher, preventing millions of Americans from purchasing affordable, reliable transportation. Small businesses, including minority- and women-owned, would likely lose customers, and in turn, employees.
Thats one reason Congressman David Scott, my colleague in the US House of Representatives, a Democrat, joined me to introduce the Reforming CFPB Indirect Auto Financing Act of 2015, which would force the CFPB to reconsider its findings.
The African-American member of the House Financial Services Committee, where I also serve, understands the agencys potential impact on car buyers and dealers of every race and ethnicity.
In November, our bill, HR 1737, passed the House by a super-majority of Republicans and Democrats, voting 332-96 in favor, despite a presidential veto threat.
Just days after the large, bipartisan vote, the Financial Services Committee released a report describing the many reasons, legal as well as economic, why legislation to rein in the CFPB is so necessary.
The report explains that the agencys findings of auto lenders liability is based on shaky legal ground. The report reveals that the CFPB relied on faulty data and scientific analysis to prove the theory, called disparate impact, and concealed inconvenient facts, which undermine its argument, from public view.
Lacking solid evidence to regulate the auto loan market, the CFPB turned to backroom political pressure. The committee report suggests the CFPB may have coordinated with the Federal Deposit Insurance Company to pressure Ally Financial, at the time seeking FDIC approval for a business model change, to agree to an $80 million settlement with the CFPB as a precondition.
Because the agency relies on faulty data, rather than actual plaintiffs, to pressure lenders, in two years of litigation the CFPB has not paid a cent to its hypothetical victims, instead keeping the lions share of settlement money to itself. The agencys true purpose, according to CFPB officials whom the committee quotes at length, is a nondiscretionary form of dealer compensation.
In other words, bureaucrats would like to set a high, flat loan rate for everyone. And apparently, the CFPB is willing to circumvent due process to obtain the dubious goal. HR 1737 calls on the CFPB to retract its findings and start over, taking into consideration up-to-date census data, applying verifiable analysis, and factoring in the economic impact of new regulations, while doing so with full transparency and public input.
Bipartisan members of Congress, representing diverse districts, have joined to protect our constituents access to competitive financing, as well as small businesses and jobs in our communities. To expand access to consumer credit and grow the economy, we will continue to hold the CFPB to account.
Rep. Frank Guinta, R-Manchester, represents New Hampshires 1st Congressional District.
The ABAI rose 6.6 points year-over-year (51.3 to 57.9), largely driven by an increase of $2,866 in the MHI. The ATP was up two percent in December, but remained below the December 2014 peak value throughout 2015. Market forces that kept a lid on prices last yearwaning US sales growth, increasing supply of nearly new vehicles, and rising interest ratesare expected to intensify this year. As a result, manufacturers will face increased pressure to compete on price.
New-car prices were essentially flat in 2015, and more of the same is expected this year, said Phil Kelton (@Phil_Kelton), President of Requisite Press. Consumers will benefit from improving affordability, and can gain additional savings with this simple strategyavoid third-party buying services, broadcast the sales opportunity to multiple dealers, and buy from the best.
Direct consumer access to the new-car marketplace is now easier than ever before (even as third-party buying services offer access for a price). New-car buyers, if armed with the right information, can easily gain the benefit of robust competition without the historical hassle. Requisite Press intends to expand consumer access to such information this year.
The December 2015 ABAI of 57.9 is based on a median household income of $56,746, a light-vehicle average transaction price of $31,365, and adherence to the 20-4-10 auto financing rule. This equates to an affordable monthly payment of $360 and price of $18,163.
The monthly ABAI was developed to enable buyers to easily view current new-car prices in the context of sound financial advice. The 20-4-10 auto financing rule consists of a minimum 20 percent down payment, a maximum 4-year loan term, and monthly payments of no more than 10 percent of gross household income. The rule is widely recommended by personal finance experts to maintain financial security, avoid excessive interest costs, and preserve future investment opportunities.
The index is published each month, along with additional information and analysis, at the following location:
Requisite Press, LLC, founded in 2012, is the publisher of the consumer-focused Auto Buyers Affordability index. In addition to the index, Requisite Press, LLC also published Power Shift: The New No-Stress, No-Hassle Way to Get the Best New-Car DealEvery Time! Power Shift enables consumers to maximize savings while obtaining an improved car-buying experience.
SOURCE Requisite Press, LLCRelated Links