Attacks on franchise system and dealer financing top dealer assns. agenda at summer meeting

Attacks on franchise system and dealer financing top dealer assns. agenda at summer meeting

Senior executives from auto dealer associations across the U.S. and Canada, which comprise the Automotive Trade Associations network (ATAE), met last week on the West Coast to sort out industry issues before Congress, state legislatures and between dealers and automakers.

High on the list of government relations and industry concerns for the dealer association representatives was the ongoing assault on state dealer licensing laws by high end, electric car maker Tesla, and the media fallout it has caused calling into question the relative utility and public interest of the franchise system. While the overall impact of Tesla sales in the industry is small, the continuing media flurry stirred up by the companyês flamboyant owner, Elon Musk, in furtherance of his agenda that Tesla be dealerless, remains bothersome. Just the same, ATAE conferees began to recognize that the Tesla controversy presented an opportunity to tout the unconditional necessity of the franchise system and its inherent value to car buyers.

Multi-state, multi-brand auto retailer Mike Jackson, chairman of AutoNation, agreed that the franchise system remains the gold standard of automotive retailing and as such is secure for years to come, simply because there is no better way for the OEMs to retail their vehicles to consumers than through franchised dealers. Jackson, who was the industry keynote speaker at the conference, covered a variety of macro- and inter-industry topics, including his plan to keep AutoNation ahead of the curve in social media and electronic marketing.

Social media was a topic all on its own during the 2 _ day ATAE Summer Conference in a segment devoted to –next generation relations and marketing considerations.”

Another high profile matter the ATAEs took up with NADA was the escalating controversy dealers nationwide have with the unprecedented regulatory intrusion into car loans by the Obama administrationês new signature law agency, the Consumer Finance Protection Bureau. Issues here that have been part of the auto retail industry conversation for some time emanate from assertions put forth by CFPB regulators that dealers as credit arrangers systematically engage in discrimination against minority consumers when such consumers receive offers for vehicle financing that arenêt as favorable as offers dealers make to non-minorities. From there, banks that are regulated by CFPB are being pressured by the agency to radically alter and reduce compensation arrangements they have with dealers with whom they do business, ostensibly to address the alleged illegal discrimination against minority consumers. All of this is in the context of an agency that has not been accountable to Congress for its actions, as it has resisted being transparent to the public.

The consensus among dealer association conferees on this is that so long as the CFPB persists in choosing to emulate the closed and tyrannical style of the failed, former Soviet Union in its approach to auto financing, ATAE and NADA will persist in resisting their baseless intrusion into the automobile business, while arming dealers with programs necessary to protect them from the prospect of legal actions brought by misguided regulators and/or plaintiffsê lawyers inspired by CFPBês specious regulatory theories.

WANADAês John OêDonnell joins ATAE

On a personal note, Gerard Murphy, who has been a member of ATAE as CEO of WANADA for the past 30 plus years, introduced John OêDonnell, who succeeds him this month as WANADAês chief of staff, as WANADAês new ATAE. ATAEês leadership, in turn, recognized Murphy, a former chairman of the dealer association organization, as an Honorary member of ATAE.

Auto Shows of North America meet during ATAE Summer Conference

Taking advantage of the ATAE dealer associations from across the U.S. and Canada convening at their annual

Summer Conference, the Auto Shows of North America came together ahead of time so that the many ATAE dealer associations represented, including WANADA, which produces the Washington Auto Show, would get the chance to meet and compare operational and programmatic notes among themselves, with OEM exhibitors and suppliers. ASNA represents auto shows in the U.S. and Canada, from the largest and most prestigious on the global industry circuit to the least large and strictly regional.

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