Nothing but Aces in Las Vegas as upbeat dealers convene 2012 NADA/ATD Convention

Nothing but Aces in Las Vegas as upbeat dealers convene 2012 NADA/ATD Convention

WANADA dealer members joined their counterparts from across the U.S. in Las Vegas, NV last week for the 2012 NADA/ATD Convention that was more upbeat than any the industry has seen for some years. From the general sessions, numerous management workshops and record-sized auto and truck dealer exposition, dealer attendees were indeed bullish on their industry and more than pleased the Great Recession that had forced many of their colleagues out of the business was in the rearview mirror.

Emblematic of the recovery in the industry, the keynote address at the convention was delivered by Sergio Marchionne, the globetrotting CEO of FIAT/Chrysler LLC, who took over the helm of Chrysler in the midst of the companys bankruptcy reorganization in 2009. The plain talking CEO lauded Chrysler dealers for saving the company, noting it was they who sold its product and got the company back on course. And speaking of back on course, later in the convention President George W. Bush said he would do it all again, when asked if he favored the government bailout of GM and Chrysler.

In his opening remarks Marchionne also chided NADA for its opposition to pending fuel economy standards that call for year-over-year increases in CAFE to 54.5 mpg between now and 2025. Those standards are 14 years away, Marchionne said. If we cant plan for 14 years ahead, we should get out of this business and do something else. In the same opening session, the gavel passed from outgoing NADA chairman Stephen Wade, a multi-franchised dealer from Utah, to Bill Underriner, a multi-franchised dealer from Billings, Montana.

Wade focused his remarks on a new NADA dealership facilities study, which was looking at current manufacturer inspired facilities requirements with an eye toward developing a process that is more rational, informed and fact driven.

The study, performed by a former McKinsey and Company partner who interviewed a broad range of industry participants, was launched by NADA in August 2011. The study found that unreasonably high and frequently changing market area volume forecasts, as well as outdated capacity formulas can lead to overbuilding and waste, said Wade. It also found that manufacturers should work with smaller dealers to come up with facilities requirements more suitable to them and work with all dealers to better analyze future business models before pressing facility upgrades. Wade said that NADA has shared its findings with many OEMs, all of which seemed receptive to the findings.

Incoming Chairman Underrinner said that NADA would not give up on its longstanding tradition of advocating for vehicle affordability on behalf of consumers, a role the association has had since its inception in 1917, when 30 auto dealers travelled to Washington to convince Congress not to impose a luxury tax on automobiles – – an idea clearly ahead of its time given the luxury tax on cars Congress ultimately passed in the 1980s.

Taking exception with advocates inside and outside the industry who believe the 54.5 mpg standard by 2025 is reasonable, including Chryslers Marchionne, Underrinner expressed the dealer associations concern that the CAFE mandate could price many people out of a new car. Without a car you are less likely to have a job and the ability to move up the economic ladder, said Underrriner. All NADA wants is a full and fair public debate on the underlying assumptions of the CAFE rule, which we believe will add significantly to the cost of a new vehicle, he said.