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NADA has vigorous agenda on facility image, stair-step incentives

July 20, 2012
By Mark Scarpelli, Chicago Metro NADA Director
Factory-mandated dealership upgrade programs and stair-step incentives (or two-tier pricing) are two highly contentious issues facing many new-car dealers.
Some of these programs, as currently administered by the auto manufacturers, are also causing confusion among consumers and disrupting business.
To address these issues with auto manufacturers, the National Automobile Dealers Association has created an Industry Relations Task Force, which set a vigorous agenda at its first meeting in June. The work of the task force is a high-level priority and has been fast-tracked.
As each day passes, the NADA recognizes that dealers are reaching deadlines to make huge financial decisions about investing in their facilities. Working on an expedited timeline, the NADA task force will meet face-to-face in Washington in early August to explore all options to support dealers.
In addition, Phase II of the NADA’s facilities image study, which currently is underway, will analyze return-on-investment. And questions that will evaluate dealer opinions and experiences with facility programs have been added to the NADA’s Dealer Attitude Survey for July. The survey is conducted twice a year.
NADA policy is clear: All dealers — large or small, urban or rural — should be treated fairly by their manufacturers. Automakers should be flexible and give all dealers an equal chance to benefit from these programs. 
In other NADA news ...
• In response to the Supreme Court decision on June 28 to uphold the primary provisions of the Affordable Care Act (ACA), the NADA released the following statement:
“Although the ruling by the Supreme Court appears to uphold the majority of the Affordable Care Act, it remains a flawed law. Keeping and retaining highly skilled and trained employees is a priority for all auto retailers. Dealers strive to provide their employees with the most affordable health care plans available that best fit their needs. Each year, it becomes increasingly challenging for dealers to find the most affordable health insurance plans with the best coverage.
“Since the passage of the ACA, health insurance costs have continued to rise, and compliance has become more complex. The resources that dealers must put toward meeting these new health care mandates prevent them from growing their businesses and, in many cases, hinder their ability to offer quality health care plans to their employees. While the decision did not strike down most of the ACA, Congress should revisit this law to ensure that dealership employees are not forced out of employer-based health care plans.”
The NADA will provide the membership with further guidance after the impact of the Supreme Court’s 193-page decision has been fully analyzed.
Employment at new-car dealerships rose 4.6 percent in 2011, to 933,500 workers.
Paul Taylor, the NADA’s chief economist, released the findings as part of NADA Data 2012, the association’s latest state-of-the-industry report on dealership financial trends.
The increase in the number of employees occurred as the number of dealerships, which had declined in recent years, continued to stabilize. In the first quarter of 2012, there was an increase of 66 dealerships on a net basis.
“The arrival of new brands and new dealerships is a sign that even more vigorous competition is on the way in the U.S. vehicle marketplace,” Taylor said. “As new brands enter the U.S. market, the net dealership count may increase in future years of strong economic growth.”
In 2011, the average new-car dealership employed 53 workers and had an annual payroll of $2.6 million. Dealerships also provided an average 14.5 percent of total retail payroll in their states in 2011.
Taylor also noted that “franchised dealers are major employers as well as significant contributors to their communities’ economies, tax bases and civic and charitable organizations.”
• Two new bulletins from NADA will help the new-vehicle sales staff at dealerships respond to consumer questions on safety and fuel economy:
A two-page Q/A bulletin issued jointly by the NADA and the National Highway Traffic Safety Administration aims to help sales employees respond to consumer questions on “stars-for-cars” safety information. This new information is required on Monroney labels starting with Model Year 2012 light-duty vehicles rated and manufactured after Jan. 31, 2012. “The Dealer Guide to NHTSA’s 5-Star Safety Rating Label” describes how vehicles are rated, what the new labels look like, and how consumers can compare vehicles.

A four-page Q/A bulletin, “Revised EPA/NHTSA Fuel Economy Labels,” addresses the revised fuel economy and emissions information required for MY 2013 and later vehicles. Designed to allow for better comparisons between vehicles, this revised information also typically will be presented on light-duty Monroney labels.