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April 14, 2017 FacebookTwitterFlickrRSSSEND TO A FRIENDPRINT
Inside this issue
NADA Report Shows Dealers are Hiring as Sales Plateau, Costs Rise
Video: AutoNationís Mike Jackson Shares Views on Auto Retailing at NADA/J.D. Power Forum
Online Upstarts Seek to Disrupt Used-Car Buying
GM Adding 1,100 Jobs in Calif. at Cruise Automation Unit
Dealers Urged to Promote Teen Driving Safety during Prom Season
Top Stories
NADA Report Shows Dealers are Hiring as Sales Plateau, Costs Rise

Dealerships are hiring, at good wages, even as new-vehicle sales plateau and pretax profit margins remain flat. Those trends are shown in the National Automobile Dealers Association’s NADA Data 2016 released Thursday.

“The industry is continuing to recover and that recovery means that you are continuing to hire,” said Steven Szakaly, NADA’s chief economist. That hiring, of course, costs dealers, he said. Still, “You’ve got a lot fewer dealers, relative to the last time the industry sold 17.5 million vehicles, who are doing a lot more volume. They are expanding and you have to hire more people.”

NADA’s annual report provides financial profiles of new-car dealerships based on 2016 data. The general industry overview was released this week, but dealers still have three weeks to participate in the full study due out this summer, said Szakaly.
Source: Automotive News

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Video: AutoNationís Mike Jackson Shares Views on Auto Retailing at NADA/J.D. Power Forum

NEW YORK – Mike Jackson, chairman and CEO of AutoNation, said dealers will have to find creative ways to grow their business in an ever-challenging retail environment during an interview with Wall Street Journal reporter Mike Spector at the 2017 NADA/J.D. Power Automotive Forum on April 11.

Jackson, who shared his views on several topics, said stair-step incentives were deceptive and corrosive.

“Multi-tiered pricing or targeted incentive systems in the extreme are unfair to consumers, introduce a level of mistrust at retail between consumers and dealers … and are extremely disruptive,” he said. “It’s not in [the automakers'] interest to destroy their brand and their resale value and that’s what they’re doing with these programs.”

On the topic of fuel-economy standards, restoring the midterm review and CAFE debate with new federal regulators, Jackson highlighted the importance of consumer choice in determining new rules since light trucks now account for nearly 65 percent of the sales mix in the U.S.

“This shift to sport utility vehicles and crossovers and pickup trucks is permanent. It’s structural. It’s long term because the customer passionately loves these vehicles,” he said. “With affordable gas, there is no reason to go back.”

Jackson called single-point dealers in rural towns “pillars of their community.”

“I cannot understand why manufacturers make life so difficult for rural American automobile dealers,” he added. “They care for their markets that is a labor of love and passion.”

Click here for the full 32-minute interview.
Source: NADA

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Online Upstarts Seek to Disrupt Used-Car Buying

In the last three years, online used-car start-ups have grown rapidly, accruing more than $2 billion in funding, according to ABI Research. Still, some say these companies underestimate the complexity of automotive retail and that upending a century-old business model may prove difficult. “History is littered with the corpses of companies that thought they could do better,” said Cliff Banks, president and founder of the Banks Report, which analyzes the automotive retail industry. “None have succeeded yet.”

Jonathan Collegio, senior vice president for public affairs of the National Automobile Dealers Association, said that while consumers had benefited from the competitive used-car market, new companies could encounter tough times. “New entrants are always moving in,” he said, “but under the assumption that they can better figure out how to crack the nut than the thousands of other entrepreneurs who have been at it for decades.”

Still, Mr. Sullivan said it would be folly to discount what would probably be a swelling number of e-commerce car businesses. “This should be a wake-up call for dealerships that there’s a business model that some consumers prefer,” he said. “Consumers don’t want to be told how they’ll buy something. For some, the traditional model works. For others, they’re ready to try something new.”
Source: The New York Times

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GM Adding 1,100 Jobs in Calif. at Cruise Automation Unit

General Motors Co. said on Thursday it will add more than 1,100 jobs in California over five years at its Cruise Automation unit to boost self-driving efforts after receiving $8 million in state tax credits.

The automaker said it is investing $14 million in a new research and development center in San Francisco that will more than double its current space.
Source: Automotive News

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Dealers Urged to Promote Teen Driving Safety during Prom Season

The National Foundation for Teen Safe Driving is calling on new-car dealerships to help raise awareness of Senior Promise 2017. The campaign kicks off on April 15 and runs through Memorial Day.

“The campaign’s messages are targeted to the high school graduating class of 2017, with a similar call-to-action to other members of the community, reminding us that safety is a shared responsibility,” said Roy Bavaro, NFTSD executive director. “The goal of the campaign is to guard against poor choices that can have tragic consequences during a time that is among the deadliest times of the year for teens.”

NFTSD will provide participating dealerships – at no cost – with all campaign materials, ready for co-branding, instruction, tips and guidance. The campaign slogan is “Dance with your date, not with your fate.” Dealerships can choose the level of participation and duration that works best. Schools, local organizations and others interested in joining the campaign are invited to partner with a participating dealership in their community. 

“The call-to-action begins with a knowledge and understanding of the facts, followed by a pledge from each of us to behave responsibly, drive safely, abide by and enforce the rules and lead by example,” Bavaro added.

For information on how to participate, send an email to RBavaro@nftsd.org or call 732.952.0218. Visit www.nftsd.org or www.SeniorPromise2017.com for more details.
Source: NFTSD

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Quotable
"Multi-tiered pricing or targeted incentive systems in the extreme are unfair to consumers, introduce a level of mistrust at retail between consumers and dealers … and are extremely disruptive. It’s not in [the automaker’s] interest to destroy their brand and their resale value and that’s what they’re doing with these programs."
    -- Mike Jackson, chairman and CEO of AutoNation, said at the NADA/J.D. Power Automotive Forum in NYC on April 11

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