Category: Press Releases

NADA to Automakers: Stop Unfair Business Practices

DETROIT (Oct. 23, 2012) – Bill Underriner, chairman of the National Automobile Dealers Association, outlined two contentious factory issues facing new-car dealers and urged automakers to support a level playing field for dealerships of all sizes.

“Two-tier pricing and mandatory facility upgrades are symptoms of a bigger overall problem—manufacturer intrusion into dealers’ businesses,” Underriner said today in remarks to the Automotive Press Association in Detroit. “NADA wants the automakers to stop unfair practices.”

This summer, NADA created a special dealer task force to focus on the fairness of stair-step programs, also referred to as two-tier pricing, which is a manufacturer-to-dealer incentive tied to sales goals.

“The history of our industry is littered with automaker attempts to impose one-size-fits-all programs on dealers. These efforts at top-down control almost always fail,” added Underriner, a Buick, Honda, Hyundai and Volvo dealer in Billings, Mont. “We favor lawful, equal and fair treatment by a manufacturer for all its dealers. Unfortunately, history shows that, at times, manufacturers create incentive programs that favor some dealers over others.”

Underriner cited the “incredible diversity among dealer businesses” as a reason why these programs are often unsuccessful. Dealerships range from being publicly traded or privately-owned to mass-market or single-point dealers competing in distinct urban and rural regions of the country.

“There is equal diversity in local market conditions and customer preferences across the country,” he added as another reason why these automaker programs fail. “Distant corporations simply cannot understand or respond effectively to these differences. We know our customers’ preferences and local market conditions better than anyone – certainly far better than a corporation with headquarters thousands of miles away.”

NADA has also commissioned its second study on factory-mandated dealership renovation programs to analyze the return on investment. These programs often require a dealer to invest millions of dollars.

“When it comes to facility image programs, the key word is ‘flexibility.’ Manufacturers that build flexibility into the programs tend to have more success,” Underriner said. “When programs are not flexible and don’t consider local conditions, there is a much higher likelihood of pushback and controversy.”

NADA’s first study recommended that automakers get more dealer input into these programs early in the process, before “the cake is already baked.”

“This is when dealers can help automakers shape a program that’s well received by dealers at large,” Underriner added.

Since the first study, NADA has added pertinent questions about facility image mandates to its Dealer Attitude Survey, which is conducted twice a year. The results of the survey are reviewed by high-level executives from the automakers.

The second phase of the project will also focus on what the dealership of the future will look like.

“We want to know whether we are investing in the kind of dealership that will be most competitive in 2020 and beyond,” he said.…

NADA Report: Prices for Luxury Brand Used-Vehicles to Rise in 2012

McLEAN, Va. (June 26, 2012) – A sharp decline in the supply of luxury brand used cars and light trucks will result in higher prices this year, said Jonathan Banks, senior analyst with the National Automobile Dealers Association (NADA) Used Car Guide.

NADA predicts the supply of luxury used vehicles up to 5-years-old will decline by 13% in 2012 compared to a year ago, resulting in an average price increase of 1.9% this year. Prices in the overall used-vehicle market are expected to increase 2.9% in 2012.

“The falling used supply will raise used-vehicle luxury prices again this year, but overall appreciation will be mild by recent standards,” said Banks, in the NADA Used Car Guide’s latest report, 2012 Special Analysis: Luxury Brand Trends and Used Price Forecast. Prices for luxury brand used vehicles increased 9% in 2011.

NADA’s price forecast for the following luxury brands in 2012, include: Acura (up 4.8%), Audi (up 3.3%), BMW (down 0.2%), Cadillac (up 0.5%), Infiniti (up 1.5%), Lexus (up 1.6%), Lincoln (up 2.6%), Mercedes-Benz (up 0.7%) and Volvo (down 3.1%).

The decline in used-vehicle supply was caused by the 2007-2009 economic recession when fewer new vehicles were purchased or leased, resulting in a drastic drop in trade-ins and off-lease vehicles returning to the market. In 2011, mainstream (non-luxury brands) and luxury brand sales grew by 11% and 4%, respectively, compared to 2010.

In the luxury sector alone from 2009 to 2011, prices for used vehicles up to 5-years-old grew by about 22%, with appreciation across brands ranging from a low of 14.7% for Volvo to a high of 29% for Mercedes-Benz, according to the NADA Used Car Guide. Prices for luxury used vehicles are still at historic high levels.

“Used-vehicle prices have risen over the past couple of years because of economic conditions that lowered supply and increased demand,” Banks added.

NADA anticipates another year and a half of losses before the supply of luxury used vehicles swings back up again. Although the upturn in overall supply is still some ways off, shorter-term off-lease supply is set to improve much sooner, Banks said. In fact, NADA estimates that 36-month off-lease supply is already on the rise, and that supply for these units will be 9% higher in the second half of the year than it was in the first.

“This means that for the first time in years, downside price risk is on the horizon in 2013 and even more so farther out into 2014,” Banks said.

About the NADA Used Car Guide

Over a 79-year history, the NADA Used Car Guide has earned its reputation as the leading provider of accurate vehicle valuations and auction data. NADA offers a wide range of vehicle values, including those for used passenger car, light-duty and commercial truck, motorcycle, classic car and many more specialty vehicles. Available in a variety of delivery methods, NADA’s products and services are used daily throughout the auto, finance, fleet-lease, government and insurance industries.…

NADA Introduces Fully Automated Online Energy Use Survey

Marks important step toward ENERGY STAR certification for dealerships

McLEAN, Va. (June 21, 2012) – The National Automobile Dealers Association has introduced a fully automated online energy usage survey as part of a national effort to understand energy consumption trends among U.S. dealerships.

The data derived from the survey will aid in the development of a national ENERGY STAR energy performance scale for automobile dealerships by the U.S. Environmental Protection Agency (EPA).

The newly automated survey, created in partnership with leading energy management systems provider GridNavigator, can be completed by NADA member dealerships in just one step by entering energy usage data and other key dealership information. This anonymous information will then be analyzed by the EPA to develop an ENERGY STAR energy performance scale for dealerships.

Once an ENERGY STAR energy performance scale becomes available for dealerships, those that achieve a score of 75 or higher on the 1-to-100 scale may be eligible for the ENERGY STAR certification, which studies show is an important factor for consumers in the shopping process. A majority of Americans are influenced by the ENERGY STAR label, and nearly 80 percent are likely to recommend an ENERGY STAR product to others, according to a recent report by the Consortium for Energy Efficiency.

“Dealerships across the country are on the leading edge of energy reduction initiatives, which are a win-win by helping the environment and driving down operating costs,” said NADA Chairman Bill Underriner. “We believe consumers want to know about these efforts in their communities. By streamlining the survey process for developing the ENERGY STAR certification tool, more dealerships will be able to participate and share that important accomplishment with their customers.”

Past ENERGY STAR Small Business Award winners saved an average of nearly $35,000 annually in energy bills, according to the EPA. All dealerships participating in the survey will gain cost-cutting insights by being able to compare their energy use improvement to their baseline and, with the new tool, to others nationwide through the ENERGY STAR energy performance scale for dealerships.

“An ENERGY STAR certification provides a financial discipline and baseline for any asset upgrade, with the added benefit of improved property value,” said Al Cabrini, CEO of GridNavigator.

Energy reduction for dealerships may include such steps as investing in cost-cutting heating and cooling systems, using more efficient lighting and working smarter, among other examples.

NADA members were emailed a unique user name and password to access the newly automated energy usage survey at www.CarbonIndex.com. All surveys must be completed by July 6 to be eligible for ENERGY STAR certification.

Study: Proposed Fuel Economy Rules Cut 7 Million Car Buyers Out of New-Vehicle Market

NADA: New-vehicle dealers support fuel economy increases if affordable for consumers

WASHINGTON (April 12, 2012) – The National Automobile Dealers Association (NADA) released a study today indicating that higher vehicle prices resulting from proposed fuel economy rules will cut millions of potential new-car buyers out of the market in 2025.

“To work, fuel economy improvements must be affordable,” said Don Chalmers, president of Don Chalmers Ford in Rio Rancho, N.M., at a press briefing today. “While you can mandate what automakers must build, you can’t dictate what customers will buy, nor can you dictate if a bank will make a loan.”

“If my customers can’t buy what I’ve got to sell, there are no savings at the gas pump and there is no environmental benefit,” added Chalmers, chairman of NADA’s Government Affairs Committee. “If car and truck buyers do not purchase these new products, we all lose.”

The proposed rules, combined with the Obama administration’s previous fuel economy mandates, will raise the average price of passenger cars and light trucks for the 2025 model year by nearly $3,000, according to estimates by the Environmental Protection Agency and National Highway Traffic Safety Administration.

The NADA study, “The Effect of Proposed MY 2017-2025 Corporate Average Fuel Economy (CAFE) Standards on the New Vehicle Market Population,” points out that nearly 7 million lower income consumers, such as college students and working families, will not qualify for auto financing to cover the additional cost.

“Loan qualification is based mainly on the customer’s income, existing debt and the vehicle’s price,” Chalmers said. “The resulting calculation is simple: fewer car shoppers will qualify for auto financing with higher vehicle costs.”

The study is based on an evaluation of a consumer expenditures report from the U.S. Bureau of Labor Statistics. NADA analyzed the financial profiles and purchasing behavior of a large sample of U. S. consumers to calculate debt-to-income ratio for households.

“The unintended consequences of the proposed fuel economy increases are clear,” said David Wagner, the primary author of the study and an analyst with the NADA Used Car Guide. “If the price of a vehicle goes up by the government estimate of almost $3,000, millions of people will no longer be able to finance a new vehicle.”

Doug Greenhaus, NADA’s chief regulatory counsel for environment, health and safety, says the government needs to better understand the impact of the proposed fuel economy rules on consumers and auto lending before doubling down on new mandates.

“Disregarding vehicle affordability will undermine the environmental and national security benefits the administration is seeking,” Greenhaus said. “The proposed MY 2017-2025 fuel economy rules should be delayed until there is a more accurate picture of how prospective buyers likely will react.”

Used Cars Prices Continue to Rise in 2012, NADA Says

LAS VEGAS (Feb. 4, 2012) – Increasing demand and a drop in the supply of used cars and trucks will lead to higher used vehicle prices in 2012, says Jonathan Banks, executive automotive analyst with the National Automobile Dealers Association (NADA) Used Car Guide.

“Consumers shopping for either a new or used vehicle will benefit this year from higher trade-in values along with loosening credit,” Banks said at a press briefing during the NADA Convention and Expo in Las Vegas. “For dealers, reliance on customer trade-ins will increase as they strive to meet the challenges of growing demand in a supply-constrained market.”

On a seasonally adjusted basis, the NADA Used Car Guide predicts used vehicle prices will increase by 1.8 percent by the end of the year, peaking in April and May. Used vehicle prices increased 3 percent in 2011.

“The slowing rate of depreciation on used vehicles over the course of the year will lead to even stronger trade-in values and enhance the equity that a consumer has in their vehicle,” Banks added.

Banks said fuel prices hovering at $3.50 a gallon will increase demand for fuel-efficient compact and midsize cars with prices up by 2.7 percent and 2.1 percent, respectively, by the end of the year.

The NADA Used Car Guide predicts prices for large SUVs will increase by 1.4 percent this year.

“A 15 percent drop year-over-year in the used supply of large SUVs will offset the elevated price of gasoline,” he said.

The NADA convention runs through Monday, Feb. 6, at the Las Vegas Convention Center. For more information, visit www.nadaconventionandexpo.org.

About the NADA Used Car Guide

NADA Used Car Guide, over its 79-year history, has earned the reputation as a leader in providing accurate and comprehensive vehicle valuation products, services and information to businesses worldwide. NADA collects and analyzes more than 1 million combined wholesale and retail auto-related transaction prices each month. NADA’s guidebooks, auction data, analysis and data solutions offer automotive, financial, insurance and government professionals the timely information and reliable solutions they need to make better business decisions.…

Hyundai, Subaru and Lexus Top Overall Rankings in NADA Survey

New-car dealers to meet with automaker executives at 26 franchise meetings during the NADA convention in Las Vegas

McLEAN, Va. (Jan. 27, 2012) – New-car dealer satisfaction with their respective auto manufacturers continued to increase in 2011, according to the National Automobile Dealers Association’s (NADA) latest Dealer Attitude Survey.

The survey, conducted twice a year, measures dealer sentiment in three key areas: franchise value, automaker policy decisions that affect the dealership and the automaker’s field staff who visit dealerships. Nearly 54 percent of new-car dealers nationwide, representing more than 14,700 franchises, responded to the 2011 summer survey.

Hyundai finished in the top overall spot for the third consecutive survey period, with affiliate Kia finishing fourth. Subaru climbed back to second place for its fifth consecutive Top 3 finish. Lexus dropped to the third spot. Mercedes-Benz finished fifth. Toyota and Volkswagen improved to sixth and seventh place, respectively. Porsche, Audi and Cadillac/Honda rounded out the Top 10.

Next month, thousands of the nation’s dealers will have an opportunity to meet face-to-face with top automaker executives at 26 franchise meetings to discuss the outlook for sales, marketing plans and product launches during the 2012 NADA Convention and Expo in Las Vegas.

NADA Chairman Stephen W. Wade, a new-car dealer in Utah and California, joins an industry panel discussion at J.D. Power and Associates’ 2012 International Automotive Roundtable in Las Vegas on Friday, Feb. 3. The other panelists are Alan Batey, vice president of General Motors’ Chevrolet division; Reid Bigland, head of the Dodge brand; and Dave Zuchowski, Hyundai Motor America’s executive vice president of national sales. Mike Jackson, CEO and chairman of AutoNation, will moderate the panel discussion. NADA President Phil Brady will provide closing remarks.

Industry keynote speakers at the convention include Chrysler Group CEO Sergio Marchionne and NADA’s Wade on Saturday, Feb. 4, and incoming NADA Chairman William P. Underriner, a new-car dealer in Montana, on Monday, Feb. 6.

NADA’s 95th annual convention runs Feb. 3 to 6 at the Las Vegas Convention Center. For more information, visit www.nadaconventionandexpo.org.

Survey Methodology

Nearly 54 percent of new-car dealers, representing more 14,700 franchises nationwide, responded to the 2011 summer survey, which measured dealer sentiment this past July to August. Overall scores were calculated from 12 “core” questions that measured dealer attitude in three key areas. The survey results were presented to more than 325 senior automaker executives representing 30 automotive brands in a series of meetings over a two-month period.

Proposed Fuel Economy Rules Underestimate Rising Vehicle Cost, NADA Says

DETROIT, Mich. (Jan. 17, 2012) – At a public hearing today on proposed fuel economy rules for model year 2017-2025 passenger cars and light-duty trucks, the National Automobile Dealers Association (NADA) urged federal agencies to properly consider the rising consumer cost of new vehicles.

“To work, fuel economy rules must require improvements that are affordable,” said New Mexico Ford dealer Don Chalmers, and chairman of NADA’s Government Relations Committee, at a joint Environmental Protection Agency (EPA) and National Highway Traffic Safety Administration (NHTSA) hearing in Detroit, Mich. “According to EPA and NHTSA, the cumulative cost of all of their fuel economy rules will raise the average price of a vehicle by $3,200. This is not pro-consumer.”

“While EPA and NHTSA can mandate what automakers must build, no one can dictate what customers will buy. If our customers do not purchase these products, we all lose,” Chalmers added. “NADA supports fuel economy increases as long as they take consumer demand and vehicle choice into account.”

With new auto sales rebounding from a low of 10.4 million in 2009 to 12.7 million last year, Chalmers cautioned that proposed fuel economy standards for the 2017-2025 model year could have real economic consequences if consumer demand is not fully taken into account.

“Dealers embrace the pivotal role we are playing to help lead our nation back to the road of prosperity, but we are wary of anything that might depress auto sales and turn back the gains being made,” he said.

In the testimony, Chalmers pointed out that model year 2017-2025 fuel economy rules are not even due until April 1, 2015.

“Rushing to set costly new standards nearly three years early will unnecessarily and unhelpfully forgo the opportunity to learn how consumers react to the aggressive new standards now being put into place,” Chalmers said.

Chalmers also questioned the government’s estimated $3,200 per vehicle price increase as a result of the proposed regulations. Initial analysis from new research, conducted by NADA, indicates the federal government’s estimate of $3,200 may be substantially underestimated and the actual cost to consumers may be as high as $5,000. Chalmers indicated that the study will be released in several weeks.

NADA will raise significant concerns over how the federal government calculated vehicle cost. Chalmers indicated from the initial analysis that the administration’s fuel economy proposal grossly underestimates costs and actual retail prices may increase by as much as 60 percent.

In another study to be released in the coming months, NADA will look back at the EPA’s 2002-2010 medium- and heavy-duty truck emissions mandates, revealing that the EPA underestimated the average actual compliance costs by a factor of three and that widely recognized market disruptions occurred as a result of fuel economy rules.

EPA and NHTSA are holding two more public hearings in Philadelphia (Jan. 19) and San Francisco (Jan. 24).…

New Vehicle Fuel Economy Rules to Cost Consumers

WASHINGTON (April 1, 2010) – In response to the new model year 2012-16 automobile and light-truck fuel economy mandates, Ed Tonkin, chairman of the National Automobile Dealers Association (NADA) released the following statement:

“These new rules are the most expensive fuel economy mandates in history. In part, this is a result of three different fuel economy standards set by three different agencies (U.S. Department of Transportation, U.S. Environmental Protection Agency and the California Air Resources Board) under three different sets of rules. This is in direct contradiction to the one national fuel economy standard established by Congress in 2007.

“America’s new car and truck dealers support higher fuel economy standards, but recognize that for most Americans a car or truck is a necessity, not a luxury. Under these new mandates, the price of new cars and light trucks will rise significantly, meaning fewer Americans will be able to buy the new vehicles of their choice.

“With tight family budgets and a shaky job outlook, consumers want to maximize their transportation dollars, not pay more for redundant rules and an unnecessary bureaucracy.

“Also troubling, EPA’s rule allows for lower standards for some automakers, creating an uneven playing field for some dealers selling makes that are fully regulated. These loopholes will reduce fuel savings, and needlessly distort the fragile auto market, further hurting consumers.”…

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