#NorthAmericanDealersAssociation

As the industry continues struggling with its planned swap to electric vehicles, we’ve seen plenty of framing suggesting dealer networks are only too happy to participate. But it’s usually juxtaposed with articles indicating that pushback exists, typically whenever the metaphorical rubber meets the road. This month provided several premium examples stemming from the National Automobile Dealers Association Expo (NADA Show 2022) held at the Las Vegas Convention Center.

Though the best had to be when several dealer groups piped up about how much it’s actually going to cost them to install some of the newer chargers some manufacturers believe should be mandatory if they’re intent on selling EVs. Some showrooms are finding out that not all buildings are wired for the high loads incurred by modern charging systems, requiring additional financial investments they hadn’t counted on. With automotive dealerships using product delays as leverage for unprecedented vehicle pricing, it’s nice to see them getting a taste of their own medicine. Or it would be if the costs for updating facilities weren’t guaranteed to be reflected on future window stickers.

With so many articles discussing how poor automotive sales have been through 2021, one could be forgiven for thinking this was going to be a hard year for anybody owning a dealership. However, the reality of the matter is that it’s a seller’s market and those who can sell are making a killing off everyone else’s misery.

The National Automobile Dealers Association (NADA) has reported that the ongoing deficit of product has helped the average store rake in more money than they did in 2020, breaking the previous twelve-month profitability record. Today’s average dealership is reporting a net pretax profit of about $3.38 million through October for 2021. That’s more than twice what was tallied within the same timeframe last year and really goes to show how much money can be made when the customer’s needs are the only items being discounted.

Unless you happen to be the primary stakeholder in Amazon, 2020 probably hasn’t’ been the kind of year you’re likely to miss. However, there is no shortage of lobbyist groups and trade organizations willing to praise it as a triumphant time for modernity. This includes the National Automobile Dealers Association (NADA) Chairman Rhett Ricart, who believes digitizing the industry is the best pathway forward. While he hasn’t forgotten that pandemic-related lockdowns closed showrooms and factories, resulting in extremely lean inventories and weak sales, he claims it has accelerated everyone’s willingness to utilize online sales formats.

But there’s little reason to assume such a move would be better for dealerships from our vantage point. Haggle-free, direct pricing and ordering over the internet removes a lot of what the showroom does. This new model runs the risk of obliterating smaller storefronts and relegating the rest into glorified service centers doubling as a delivery hub.

The National Automobile Dealers Association (NADA) has decided to go digital to combat the coronavirus pandemic, canceling plans for what would have been an in-person event held at the end of January. Plans now include a virtual, mid-week conference starting on February 9th, which organizers agree will be far better than a bunch of people enjoying themselves at the Ernest N. Morial Convention Center in New Orleans over a long weekend.

Truth be told, there wasn’t much of a decision to be made. New Orleans may have decided it’s ready to open up restaurants, retail outlets, and giant shopping centers to the public but trade shows and bars have proven themselves bridge too far. While locals have accused the city of using COVID-19 as an excuse to gentrify certain areas of the city, drunks have a penchant for forgetting social-distancing rules. NADA would have brought in thousands of dealers and vendors, many of whom would be engaged in frequent bouts of close-range talking between beers. That’s to say nothing of the forbidden romantic entanglements (cheating) your author is just going to assume happens.

U.S. light-vehicle dealers reported an operating loss for the first time since the National Automobile Dealers Association (NADA) began collecting data in 2009. While everyone continues reporting pretax net profits, concerns are beginning to swell around their dependency on factory incentives, which are not included in operating tabulations.

NADA’s analysis of 2019’s first-quarter auto sales shows that incentive spending is down compared to the same period a year ago. The group expects above-average discipline from automakers in terms of incentive spending throughout the year. According to J.D. Power, average incentive spending per unit was down $119 to $3,821 through March 2019 — with the brunt of that going toward trucks. However, if sales remain low, spending may creep back up to help clear out languishing inventories.

Last year, Ford announced its intent to develop a rewards program aimed at keeping customers engaged — while also making it worth their while to stick with the brand for their next purchase. While customer rewards are old hat, regardless of industry, automakers are busy devising new ways of using the venerable marketing theory to improve customer retention. It’s an urgent gambit, given today’s cooling market.

General Motors launched its “My GM Rewards” loyalty program in 2018, using a points-based system to reward customers who use OnStar’s new services, purchase a new vehicle, or service an older one. Those points can then be redeemed, knocking some cash off a subsequent GM purchase. Meanwhile, Honda previewed “Dream Drive” at the recent Consumer Electronics Show — a concept with its own redeemable points system (one that incorporates some potentially unsettling gamification within the app).

While Ford’s FordPass-based efforts appeared similar, it wasn’t until this month’s North American Dealers Association (NADA) meeting that the automaker was willing to flesh it out.