The last year has been one of the busiest for dealer associations as the industry grapples with a host of unprecedented events, some of which could permanently change the face of the car business. From shifts in government policy, such as the Biden Administration’s efforts to restrict sales of gas-powered models and boost electric vehicle adoption, to moves that may threaten the franchise system, such as Amazon’s plan to sell Hyundai vehicles online in 2024, state dealer organizations have played a critical role as representatives of the retail automotive community.
To learn more about these events from an industry leader’s perspective, CBT News assembled a panel of four dealer association presidents representing the Automotive Trade Association Executives (ATAE) group, which has been heavily involved in the Amazon-Hyundai partnership and the Biden Administration’s electric vehicle policies. Joining CBT News anchor Jim Fitzpatrick on this special edition of Inside Automotive are Jim Appleton, president of the New Jersey Coalition of Automotive Retailers; Don Hall, president of the Virginia Automobile Dealers Association; Brian Maas, president of the California New Car Dealers Association and 2023 chairman of the ATAE; and Ted Smith, president of the Florida Automobile Dealers Association.
Key Takeaways
1. Appleton cites three main questions concerning the Amazon-Hyundai partnership:
- Will the two companies sell directly to consumers?
- Will Amazon need to acquire dealer licenses from state authorities?
- Does this collaboration give Amazon an opportunity to monopolize car sales and dismantle the franchise system down the road?
Maas adds that many of the finer details concerning the partnership, including matters of trade-ins, financing, etc., are also largely unknown.
2. Appleton reiterates that the digitization of car sales has been occurring for decades, a trend that consumers largely favor. As such, he clarifies that neither he nor his dealer association colleagues oppose a progressive partnership between automakers and e-commerce platforms like Hyundai and Amazon that would improve the customer experience but are rather taking a stance against the manner in which the two companies have handled their arrangement, which he argues “threw the dealers under the bus.”
3. Hall notes that challenging Amazon in court would be a difficult and uphill battle due to its size and its existence outside the car industry. However, given that Hyundai both has a comparatively smal presence in the U.S. and is more subject to automotive franchise regulation, he expects dealer associations to have a better chance of scoring a victory by targeting the manufacturer. Hall urges automaker executives to work more closely with dealers to improve the customer experience rather than searching for third-party partners.
4. In November, retailers and dealer association leaders from across the U.S. submitted a letter to the Biden Administration challenging its electric vehicle policies. Maas explains that the letter sought to convince the White House that its efforts to spur automotive electrification were too aggressive and could harm both dealers and consumers. Despite California, where he resides, leading the U.S. in EV sales, he notes that battery-powered cars are also piling up on the dealership lots within the state. Smith adds that consumer choice, not administrative agendas, should be the driving force behind the electric vehicle transition.
5. Hall and Maas expect 2024 to be a solid year for the automotive industry, given the resilience shown by the sector throughout 2023. Alternatively, Smith and Appleton urge retailers to remember that challenges remain and certain trends, such as slowing sales seen throughout the third and fourth quarters, could continue into the next year. However, all guests agree that the dealer community has demonstrated its ability to maneuver through difficult markets and take advantage of periods of stability, ensuring the retail automotive sector will continue to grow and expand regardless of the events that occur in 2024.
"We've gotta be careful about opposing progress and opposing digital retailing that will help dealers and help consumers enjoy the process of buying a car more. But at the same time, we don't want to see that done at the expense of the dealer's reputation and the acknowledgment of the critical role the dealer plays in the sales process for all OEMs." — Jim Appleton, New Jersey Coalition of Automotive Retailers
