April 21, 2014
www.usedcarnews.com
ON THE WEB: Honda, Mercedes Top Kelley Brand Awards
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Used Car Market Starts Strong in ‘14
Kelley Blue Book named Honda the Best Overall Brand and Mercedes-Benz Best Luxury Brand as part of its 2014 Brand Image Awards. The awards recognize what shoppers who visit KBB.com perceive to be the most outstanding automakers.
Toyota Recalls Millions Of Vehicles for Airbags
Toyota issued two recalls affecting almost 1.8 million vehicles and close to 6 million units worldwide. In this recall, the driver’s airbag module in the involved vehicles is attached to a spiral cable assembly with electrical connections that could become damaged when the steering wheel is turned. PICKING UP SPEED: Lexus set a new record for certified sales in March, with dealers moving nearly 7,000 CPO units. The first three months of the year have been very good for the used-car market.
Social Media Plays Critical Role in Sales
Social media plays a critical role in driving consumer purchase and service decisions across all generational groups in the automotive marketplace, according to J.D. Power.
Used-car sales set new records in the first quarter on both the wholesale and retail sides of the business. First quarter certified preowned sales were 551,707 to start the year. That’s the highest first quarter ever for certified sales, according to AutoData Corp. Certified pre-owned sales
also reached an all-time high in March, with dealers selling 206,409 certified units. That is 15.3 percent higher than sales in February and 8.6 percent higher than March 2013. There were 26 selling days in March, compared with 24 in February and 27 in March
2013. The daily selling rate of 7,939 in March was also an all-time high. Toyota led all brands with certified sales of 31,687. The company’s Lexus brand set a March record with 6,896 certified units sold. AutoData reports that many brands either reached
new highs in March or came close. Used-car superstore CarMax Inc. also reported strong results to start the year. Net sales and operating revenues increased 9 percent to $3.08 billion in the fourth quarter ended Feb. 28. Continued on page 8
Rush - Dated Material
Dealer Services Spin Off Costs ADP AAA Rating Moody’s Investors Service downgraded Automatic Data Processing Inc.’s Issuer Rating to Aa1 from Aaa due to ADP’s proposed spin off of its dealer services business. As part of the rating action, Moody’s assigned an Aa1 rating to a $5.25 million industrial revenue bond backed by ADP, and affirmed the company’s P-1 Short-term Rating. The rating outlook remains Stable. The downgrade reflects Moody’s view that the company’s plan to effect a tax-free spinoff of its dealer services business segment increases the company’s credit risk due to the diminished scale of the company’s operations and decreased diversification of its product portfolio. The down-
grade also reflects Moody’s view that, in the unlikely event that the spinoff does not occur, the company will pursue alternative shareholder reward strategies that would also be consistent with the Aa1 rating. Supporting the Aa1 rating and stable outlook are ADP’s predictable profit and cash flow that result from its dominant market positions in human resources and payroll processing markets, and ADP’s significant recurring revenue base that is spread over a large and diverse group of customers. Moody’s views the spinoff as a significant weakening to ADP’s cash generating profile considering that ADP’s scale was relatively small.
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