Pub. 16 2017-2018 Issue 4

N E W J E R S E Y C O A L I T I O N O F A U T O M O T I V E R E T A I L E R S 9 new jersey auto retailer W W W . N J C A R . O R G V O Y N OW B A Y A R D W H Y T E A N D C OM PA N Y , L L P C E R T I F I E D P U B L I C A C C O U N T A N T S V O Y N OW B A Y A R D W H Y T E A N D C OM PA N Y , L L P C E R T I F I E D P U B L I C A C C O U N T A N T S The Northbrook Corporate Center • 1210 Northbrook Dr., Suite 140, Trevose PA 19053 Contact Hugh Whyte, Randall E. Franzen or Kenneth Mann: Financial Reporting & Projections/Forecasts Lifo Inventory Applications n Tax & Estate Planning Cash Management & Budgeting n Performance Evaluation Cost Analysis n Buy/Sell Agreements & Succession Planning Mergers & Acquisition s n Internal Control Design 215-355-8000 n voynowbayard.com Accountants & Management Advisors to the Auto Industry since 1954 We have the road map. Arent Fox’s Automotive Group drives innovative strategies forward. Our cutting-edge, national practice advises automotive leaders as the industry faces a dizzying array of competitive and regulatory hurdles. Smart In Your World arentfox.com J.D. Power conducted a study a few years ago that determined the true cost of recalls to dealerships was approximately 2.5 percent per month. The 1.75% number is an attempt to find middle ground with manufacturers. Safety recalls are important. While some recalls are issued by manufacturers demonstrating an overabundance of caution, their aim is to ensure that any mechanical defects impacting vehicle and highway safety are addressed. This means, manufacturers must quickly accept responsibility for legitimate design defects that could potentially endanger drivers and issue a recall when it is warranted. Once a recall is issued, the clock starts ticking and the manufacturer is the one that controls the pace of the repair process. The automaker must communicate the recall to its dealers and consumers who have purchased the affected model(s). They must identify a fix for the defect and arrange for the production and distribution of any necessary parts, so dealership service departments are prepared to quickly respond to customers who want to schedule a recall repair. Manufacturers must also live up to their statutory obligations to offer full and fair compensation to dealers for ALL costs associated with a “stop sale” recall. When manufacturers don’t live up to their obligations to provide “full and fair” compensation to their dealers, in connection with any recall, it hurts the brand’s reputation, it hurts dealers, it hurts consumers and it undermines highway safety for everyone on the road. It’s simple- manufacturers must do what’s right and live up to their statutory, financial and customer obligations.