Chicago Automobile Trade Association
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CATA Bulletin
March 31, 2014


Road Dealer named a CATA preferred provider

March 28, 2014

Since being named the CATA preferred provider of Auction Alternative Services in 2013, Road Dealer has rapidly expanded its base of Chicago area dealers and continues to grow its network of dealers throughout the Midwest. Now serving dozens of CATA member dealers and more than 200 total dealers across the states of Illinois, Indiana, Wisconsin and Michigan, and with Minnesota to be added soon, Road Dealer continues to benefit dealers by eliminating traditional auction fees and minimizing transportation expenses.
The Road Dealer program offers all networked dealers the ability to buy and sell an unlimited number of vehicles from fellow dealerships for a low fixed monthly subscription fee. One of the more popular features is the "Buy Figure" button, which enables a dealer to request a buy bid on an unwanted trade from hundreds of other dealers, in just one click. Here are a couple of recent examples of how the program is helping dealers:
• Fox Valley Volkswagen was taking in a 2013 model SUV. Store employees called a dealer down the street and received a buy bid of $21,000. After sending a broadcast message out to the Road Dealer network using the "Buy Figure" button, Fox Valley Volkswagen was able to source a buy bid of $24,000 from another Road Dealer member, which had already found a customer for the car. This allowed Fox Valley Volkswagen to make their deal, and the buyer was able to sell the vehicle to his customer the next day.
• Highland Volkswagen was taking in a high mileage TDI for which the customer was asking more money than Bruce at Highland was willing to offer for the trade. Bruce sent the TDI through requesting a "Buy Figure" and was able to find a dealer in Michigan that had a customer for the car and was able to offer a bid that allowed Bruce to make his deal.
Examples like these are taking place every day among Road Dealer members. The recently launched Road Dealer App, available for both Android devices and iPhones, makes the process even quicker by allowing dealers to send and receive Buy Figure Requests directly through their phones. Members of the Road Dealer network can download the Road Dealer app for free from the Google Play store or App store.
For information on how to join the Road Dealer network contact Jim Battista at (708) 692-2280 or  CATA dealer members receive a discounted monthly rate of $400, a $100 discount from the regular monthly rate of $500. Learn more about Road Dealer at  

Tesla, Ohio dealers reach a deal

March 28, 2014

Tesla Motors Inc. struck a deal March 26 with Ohio auto dealers that could allow the electric-car maker to ease a battle over its direct-to-consumer retailing model, at least for the near term. 
Under the agreement, Tesla would be allowed to keep operating two company-owned retail stores in the state, and open just one more. The deal requires approval from the Ohio state legislature. The proposed bill would bar all other automakers from bypassing franchised dealers to retail cars. 
Diarmuid O’Connell, Tesla’s vice president of business development, said the compromise reached in Ohio should serve as a model to resolve fights with dealers in other states, where Tesla is confronting legislation and regulation aimed at outlawing its company-owned stores.
"I do think the Ohio solution points to a way dealers and Tesla can resolve this issue for the present, while letting both sides see how this develops," O’Connell said. "While on the margin it’s disappointing that we don’t have the ability to grow freely in Ohio, the compromise we achieved in the past 24 hours is sufficient for now."
Joe Cannon, vice president of government affairs for the Ohio Automobile Dealers Association, called the agreement "a very fair proposal that is helpful to both sides." It allows Tesla to keep operating in Ohio, he said, while reinforcing rules its dealer members have abided by for decades.
The political and legal battles have been a distraction for the automaker. Tesla is pursuing a plan to build a multibillion-battery factory, expand overseas, and launch new vehicle lines.
Since establishing its first store in California in 2008, Tesla has come under attack in other states by franchised dealers representing rival brands amid concerns the automaker’s direct-sales model would undermine their businesses. Tesla has defended its business model, arguing that its electric-car technology requires a more hands-on approach in educating its consumers about the vehicles, compared with what a traditional dealership offers.
Earlier this month, Tesla lost a battle in New Jersey to preserve its direct-sales model after state regulators approved a rule change, forcing the company to shut down its retail operations in the state, including two stores. Tesla also is prohibited from selling cars directly to buyers in Texas and Arizona.
Similarly in Ohio, the state’s dealer association had sought to block Tesla from selling cars there.
Tesla is looking to reach a solution with auto dealers in New York, where lawmakers have proposed a bill to outlaw its direct-sales operations, O’Connell said. Tesla operates five stores in New York and has made "significant investment there," he said. "It would be the rational solution to the dealers’ arguments and concerns."

NADA: Used-vehicle values to peak in March

March 28, 2014

By Mark Scarpelli, Chicago Metro NADA Director
Extremely cold weather during the first two weeks of February and more moderate temperatures over the second half of the month correlated exactly with used price movement, according to the NADA Used Car Guide in the March edition of Guidelines, a monthly report on new- and used-vehicle sales trends and price movement. 
"Used prices grew by 0.7 percent over the first half of the month, but more favorable weather over the second half of the month allowed prices to grow 2.2 percent by month’s end, which is in line with the NADA’s forecast of 2.1 percent," said Jonathan Banks, executive automotive analyst of NADA Used-Car Guide. 
The NADA expects the seasonal uptick in used auto demand to continue for another month before dissipating in the second quarter of the year. 
The dealer association’s forecast had prices rising by an additional 1 percent in March and then falling by an average range of 2.5 percent to 3 percent per month from April through June. Prices are forecast to be 0.5 percent to 1 percent lower than 2013 levels by the end of year.
In other NADA news ...
• The NADA encourages dealers around the country to meet with their senators and representatives during Congressional Dealership Days, April 14-25, to discuss ongoing concerns with the Consumer Financial Protection Bureau and other federal legislative and regulatory issues impacting franchised dealers.
New-car and -truck dealers are effectively positioned to build long-term grassroots relationships with members of Congress. During this election year, most representatives and senators would welcome the opportunity to visit dealerships in their districts and interact with those whose livelihoods depend on the continued success of franchised dealers. 
If you are interested in hosting a Congress member and would like assistance with setting up a visit, contact Patrick Calpin, NADA director of grassroots advocacy, at or (202) 547-5500.
• Participation continues until April 30 in the NADA’s 2014 Dealership Workforce Study. A major challenge facing new-car and -truck dealers is attracting and keeping talented employees. There is no cost to participate. 
Participating dealers will receive a complimentary copy of the study’s Basic Report, a custom report that compares the individual dealership’s compensation for 60 job positions, employee benefits programs, hours of operation, work schedules, and retention and turnover to the aggregated data of other participating dealerships, both regionally and nationally; and the 2014 Dealership Workforce Study Industry Report, which provides an overall industry-wide analysis of the aggregated DWS data, including hiring and retention trends, demographics such as generational differences and the gender gap, compensation, tenure, employee benefits statistics, plus hours of operation and work schedules for all U.S. regions, as well as an economic overview of 2013 and forecast for the future. 
Enroll at For more information, send an email to or call (800) 557-6232. 
In other news ...
• The Federal Trade Commission on March 12 reached a $3.4 million settlement with a company for violations of the Do-Not-Call (DNC) restrictions under the FTC’s Telemarketing Sales Rule based on phone calls the company made to consumers on lists purchased from "lead generators" who had represented they had consent from the consumers for those calls. However, they did not have consent, and many of the phone numbers were on the national and company-specific DNC lists. 
This is a valuable reminder that dealers — not the vendor — are likely to be held liable for any DNC or similar violations related to leads purchased from a third party vendor. 
"Companies that use lead generators must exercise due diligence when they buy lists of phone numbers," said Jessica Rich, director of the FTC’s Bureau of Consumer Protection, "or else they can be on the hook for illegal telemarketing."  
Editor’s note: The NADA encourages dealers not only to conduct due diligence with all their vendors based on the services each vendor provides, but also to clarify compliance obligations via contract and ensure that the dealership is protected in the event that the vendor has misrepresented its compliance efforts. 
For one example of this type of contractual protection, visit

Generation Y will buy cars when paychecks allow, new study finds

March 28, 2014

Young Americans will buy automobiles when their pocketbooks and paychecks eventually allow them to make such a large purchase, according to a new study by Deloitte LLP.
The study found that those in Generation Y — a generation of nearly 80 million Americans born after 1980 — have specific ideas for what they want in a car. And though they don’t have the same affinity for vehicles as their parents and grandparents have, an overwhelming majority of them still want to own a car or truck.
"While Gen Y may not necessarily scrutinize horsepower, acceleration times or engine size, they do have clear needs, wants and desires, especially when it comes to remaining connected to all of their lifestyle technology while on the road," Deloitte’s Masa Hasegawa said in a statement. "This is good news for carmakers, who already offer — or are bringing to market — many of the features Gen Y consumers most want in a vehicle."
Those features include alternative powertrains — hybrid and electric cars — and the latest technology.
The report, which surveyed 2,000 U.S. consumers, including 677 in Generation Y, found that three in five young people plan to buy or lease a car in the next three years.
Fewer than one in 10 says they plan to never buy or lease a car or truck.
Practicality over performance
The number of teenagers with driver’s licenses is off nearly 20 percent in the past decade, according to the Federal Highway Administration.
Young people are delaying taking road tests. Nearly half say they’d rather communicate digitally than hop in a car and, say, cruise Lake Shore Drive with friends. And those who do want a car say they prefer practicality and efficiency over performance.
But most of that can be attributed to the time frame in which this younger generation grew up. Their prime car-buying age came about when the U.S. went through the beginning stages of the Great Recession.
The unemployment rate in that age group reached historic highs in 2009. Coupling unemployment with skyrocketing vehicle prices and large student loan debts, vehicle ownership hasn’t yet been affordable for most.
The Deloitte report found that 80 percent said the biggest barrier to owning or leasing a car is the cost.
Lowering price points
Ford Motor Co. CEO Alan Mulally said the automaker will focus on smaller, less expensive vehicles as a way to tap into new customer bases, including young people.
Mulally stressed the need for the industry to lower price points and make vehicles more affordable.
"We have to find a way," he said. "All of our data say the economics are very, very important."
There also are industry trends that, while in the infancy stages, could be turning off young people. Sales and offerings of diesel-powered cars and trucks, for example, are on the rise because of their increased fuel efficiency.
But those cars and trucks still are more expensive than gas counterparts, and three-quarters of Gen Y have never driven one, according to a recent online survey by Harris Interactive, on behalf of Honeywell International Inc.

Safety compliance companies urge dealers to keep lift safety a priority

March 28, 2014

Certain OSHA offices are about to launch a special emphasis program on automotive lift locations, to reduce injuries and fatalities, CATA allied member ComplyNet Corporation reports. Inspectors will select automotive facilities on a random basis.  
"Workers in the automotive industry are exposed to crushing hazards from automotive lifts when servicing and repairing lifts. These hazardous risks can be limited by properly maintaining automotive lifts and providing workers with effective training regarding the inspection and use of lifts," said Ken Atha, an OSHA regional administrator.
Since 2007, according to OSHA’s Fatality and Catastrophe Investigation Summary database, OSHA has conducted several automotive lift inspections, 11 of which followed fatal accidents. According to the Consumer Product Safety Commission, a total of 15,000 workers in the past six years were treated in hospitals for automotive lift, jack or jack stand injuries. By targeting inspection activity to employers in the automotive industry, OSHA hopes to reduce the injury and fatality rates of employees who use these devices.               
There are special rules in place for lift regarding inspecting, maintaining and training employees. KPA, another CATA allied member, said dealers can avoid injury and financial risk by establishing periodic maintenance plans for their lifts. The plans should be performed by an employee qualified to operate a lift. 
A plan should be documented and should focus on replacing worn, damaged, or broken parts with approved parts that meet the original manufacturer’s specifications. 
KPA recommends that inspections be completed by a certified lift inspector who has significant technical expertise that includes:
Annual lift inspections should involve a Certified Lift Inspector with significant technical expertise including:
• Knowledge of personal safety practices necessary to perform routine and periodic inspections of existing equipment; 
• Familiarity with industry terminology; and
• Knowledge of the purpose and function of all lift components; purpose and function of all components; Knowledge of electrical, pneumatic, hydraulic, and mechanical lift systems.
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