The role dealers play in shaping the future of the car business is more essential than ever, but do manufacturers see it that way? On this episode of Inside Automotive, host Jim Fitzpatrick is joined by Mike Stanton, president and CEO of the National Automobile Dealers Association (NADA), to provide an update on the organization’s work to support and represent automotive retailers and to offer his perspectives on the car market.
Stanton notes that car inventory has seen a marked improvement since 2022, driving sales and demand throughout the first quarter. However, while overall stock has grown, OEM production continues to vary significantly between brands and even models. Stanton notes that the only vehicles to see steady supplies are premium makes, a trend that has some dealers worried. “The mix of vehicles…tends towards the high end, and dealers are looking for a little more affordability,” he remarks.
Although many electric vehicle brands such as Tesla and Rivian have sought to circumvent the franchise process, Stanton notes that dealers are essential for convincing consumers to ditch their gas-powered cars. “If there was ever any question about dealers being essential, that has to be put to rest,” he explains. “Customers are asking all the right questions…and dealers are well positioned to answer these because they’re doing the training [and] they’re making the investments.” However, Stanton admits that retailers have questions about the industry’s transition to electric as well. The confusion, he notes, underscores the crucial roles auto retail associations like the NADA play during times of chaos or instability, as they can facilitate conversations between manufacturers and dealerships to ensure both sides are on the same page.
Those discussions are equally important during periods of tension or mistrust. While dealers and OEMs both depend on each other for success, conflicts between the two groups are frequent. This is due to the unique interests both sides represent; customer-facing retailers are invested in providing the best service possible while focusing on the particular needs of their local market; automakers are concentrated on supply chains, driving growth for shareholders and following the overarching trends in consumer demands. However, Stanton believes that much of the disagreement arising from these seemingly opposing priorities is essential for the industry’s growth since it stimulates conversation and problem solving. “There will always be tension there, but I don’t view that as a bad thing. I view that as very healthy,” he remarks.
Recently, the NADA released its guiding principles, a list of pressing issues facing dealers and detailed explanations of where the organization stands on each topic. Stanton notes the guidelines were written with the support and input of the industry’s foremost retail leaders, especially those with their fingers on the pulse of developing automotive trends. He explains the document has also promoted OEM participation in developing solutions for the myriad issues facing dealers.
One of the key issues facing the industry is its shortage of fixed-operations workers. In fact, Stanton notes that some estimates suggest that “We’re going to be short 39,000 technicians a year in our industry through 2026.” Earlier this year, the NADA partnered with the National Urban League, an auto technician training organization, to teach aspiring mechanics and connect them to apprenticeships and internships. The initiative is essential to the future of the car business, and as it grows, it could supply thousands of skilled employees to desperate businesses. However, while the program will help furnish the next generation of repair specialists, Stanton urges both dealers and OEMs to open even more opportunities, as the collaboration will not be enough to prevent a shortage on its own.
Over the last three years, manufacturers have committed to aggressive electrification targets along with the Biden Administration and the Environmental Protection Agency. This month, the government announced even more ambitious goals for cutting greenhouse gases, introducing never-before-seen regulations on vehicle emissions. While dealers are dedicated to supporting the industry’s transition to a more eco-friendly state, Stanton notes that retailers have had little say in how these new objectives should be met. “It’s one thing to put a mandate out there, and it’s one thing to do our part,” he notes, adding, “but we need to see the bigger picture…we need a seat at the table to help craft that bigger picture because we all want this to be a success.” More than ever, the NADA is focused on giving retailers a voice, ensuring that they can provide insight on the consumer perspective and warn automakers against ineffective solutions.
The next NADA event is set to take place in Las Vegas next February. After the success of this year’s convention, Stanton is excited for the multitude of speakers already planning to attend in 2024. “The best one ever, needs to be the next one,” he quips.