In every corner of the country, people are still buying cars, despite the shortages making headlines. Today on Inside Automotive, we’re pleased to welcome back Mike Stanton, the President, and CEO of NADA, the National Automobile Dealers Association, to talk to us about the state of automotive today, and he’ll also give us a sneak peek of the 2023 NADA show.
As the entire automotive industry knows, automakers face critical supply chain and production issues. Some manufacturers predict that supply will improve by the end of the summer or fall, but Stanton says it still won’t be enough. The used car market is holding steady, and values remain strong. Dealer profitability is incredibly robust, although dealers are concerned about rising interest rates and access to capital. Dealers are excited about electric vehicles and want to see more and more hit their inventory, adds Stanton.
Transaction prices are also high, and there is a richer mix of vehicles costing north of $45,000 on average. Incentives down to record lows; less than $1K per copy compared to $5K per copy pre-pandemic.
“We’ve always been an industry of one too few or one too many. This is a very unique time in that we just have way too few,” says Stanton.
Fortunately, so far, inflation has not impacted consumer demand. NADA Chief Economist Patrick Manzi estimates 4 million units of unsatisfied demand. Most of those units are on the fleet side, but there are also over 1 million units on the retail side.
There has been record participation in NADA 20 groups and the NADA academy this year. Both are great channels for education and preparation for widespread EV adoption. NADA also partnered with the Center for Sustainable Energy and Plug In America to develop a new curriculum in Q3 of this year. Stanton explains, “Our role is to advocate for the dealer but also to educate, and we’re doing just that.”
You can find out more on NADA’s brand new website. Stanton says it was time to refresh and upgrade the association’s digital presence. Their goal is to attract more people to the regulatory, legislative, and news content that the NADA team produces. It’s crucial to raise awareness not only of the work NADA does on behalf of dealers but also the plethora of resources available for dealers.
NADA and its dealer member have made great strides in diversity, inclusion, and equity efforts. NADA announced a new partnership with the National Urban League earlier this year at the NADA Show.
Together, the organizations are creating and implementing two workforce development pilot projects; The Jumpstart! Technician Apprenticeship Program and a Dealership Internship Program. NADA is also collaborating with the Louisiana Urban League and the Louisiana Automobile Dealers Association (LADA) to actively develop the pilot projects.
The 2023 NADA Show in Dallas, Texas, will be held Jan 26 – 29 next year. There are already great speakers and entertainment lined up. Stanton says it’s all about bringing the industry together, comparing notes, networking, educating, and being together to share best practices.
On the agenda for the remainder of the year, NADA is looking closely at what Stanton calls massive government overreach by the Federal Trade Commission. The FTC is proposing new standards for car dealer advertising; effectively eliminating certain marketing practices. NADA is also focused on encouraging and assisting dealers to comply with the revised safeguards rule issued by the FTC.
Now is the time for dealers to get involved with their trade associations and engage at the state and local levels. Dealers have a huge say with their lawmakers and everyone must come together to protect the dealer franchise system.
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