ORLANDO, Fla., Feb. 15, 2010—Attendees at the NADA convention’s annual International Dealers Roundtable today had three main things on their minds: the global economic crisis; greener cars; and how most governments don’t really understand auto retailing.

But it was the numbers that spoke volumes:

• In China, auto sales grew 47 percent from 2008 to 2009.

• In Ecuador, some imports are taxed at 82 percent; in Turkey, it’s 84 percent.

• In Brazil, the average annual dealership net profit is $900,000.

The roundtable speakers represented 11 nations, including Belgium, Brazil, Britain, China, Ecuador, France, India, Italy, New Zealand, Russia and the United States. Many of the speakers, such as those from New Zealand and Russia, noted how the worldwide credit crunch made vehicle purchases difficult in their countries.

In Brazil, the government took bold steps to ensure the availability of credit when it forced banks to hold back 45 percent of their deposits. “They realized that the automobile business was important to the national economy,” said Sergio Antonio Reze of Brazil’s dealer association.  One result, Reze said: The average dealer net profit is $900,000 per year, a figure that surprised attendees.

Unlike in other countries, green cars receive are not taxed and come with no title fees, which makes these vehicles more affordable than regular cars. New Zealand buyers also are migrating to smaller cars, and in France, smaller cars from Eastern Europe are replacing units scrapped in that country’s version of “Cash for Clunkers.” But Belgian dealers find low margins on greener cars a challenge.

Representatives of dealer associations throughout the world said the Chinese automakers were slowly setting up dealerships in their countries.

Paul Williams, chairman of the United Kingdom’s auto dealer association, said it was important to argue to their governments the case that NADA is making in the United States: Dealers are an asset, not a profit drain, to automakers.

Most dealers spoke of harmful government actions taken by politicians and bureaucrats who don’t understand the auto-retailing business. For instance, European dealers denounced upcoming changes to the complicated European Union Block Exemption Regulations. Those changes would allow automakers to block multiple-brand dealerships, to stop the sale of dealerships and to easily end franchise relationships. As they exist now, the regulations let dealers create economies of scale and compete more effectively, said Williams. “We’re trying to get Brussels [the European Union’s capital] to understand that the BER have benefited the consumer by keeping prices down.”
 
To plug harmful gaps in communication, said NADA president Phil Brady, “let’s redouble our efforts to educate our governments of the importance of our industry to our countries’ economies.”

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