CATA News

A couple weeks ago, the CATA hosted its first-ever Chicago Drives Electric program which brought together media, dealer members, policymakers and consumers to provide EV education and spotlight the critical role franchised dealers will play in the adoption of EVs. The CATA partnered with the Midwest Automotive Media Association to bring in national and local media members to hear from independent research firm, Escalent. In addition, every local TV broadcast station came onsite to learn and capture expert interviews and footage. According to Escalent’s 2022 EVForward Dealer DeepDive study, franchised dealers will remain a pivotal part of an EV intender's shopping experience. The DeepDive survey found that 74 percent of respondents prefer to buy an EV at a dealership, rather than from an auto manufacturer or third party. This research proves that the franchise dealership model works just as well for EVs as it does for traditional vehicles, a message the CATA made clear to media, policymakers and consumers. In addition, this next stage of EV adoption will mean getting everyday consumers into mass-market vehicles, and new-car dealerships will be critical to this process.

The following day, the CATA hosted its dealer members for a half-day session to gather EV business strategies and network with a handful of experts. Cars.com opened the morning with a discussion on “Customer Insights and Retail Strategies for the EV Future.” Following, a panel discussion focused on preparing dealers for the EV revolution and strategies on how to make the wisest business decisions to best adapt. A variety of topics were addressed ranging from how dealers can select the right EV charging solution/find efficiencies in the process, own their energy with solar, service considerations around BEVs and ideas for creating new business opportunities/sources of revenue into the future. Experts included Charge Enterprise VP OEM, Dealer and Commercial Development Mark Buzzell; Powering Chicago’s Gina Dooley; PLEMCo CEO Brad Rinehart; and Solar One Director of Commercial Development Michael Stonesifer.

Over the course of the weekend, the event opened to pre-registered consumers to test drive, experience and learn about the latest BEVs, hybrids and plug-in hybrids. Featured brands and vehicles included: Alfa Romeo Tonale; Chrysler Pacifica PHEV; Chevrolet Bolt EV; Chevrolet Bolt EUV; Ford F-150 Lightning; Ford Mustang Mach-E; Ford E-transit; Hyundai IONIQ 5; Hyundai Santa Fe PHEV; Hyundai Tucson PHEV; Hyundai Kona EV; Jeep Grand Cherokee 4xe PHEV; Jeep Wrangler 4xe PHEV; Kia EV6; Volkswagen ID.4; Volvo C40 Recharge; Volvo XC40 Recharge; Volvo XC60 Recharge PHEV; and Volvo XC90 Recharge PHEV.

In addition to putting interested parties behind the wheel of some of the latest EVs, the CATA brought in a variety of experts to help break down the various aspects of EV ownership and tackle complex topics such as range anxiety; at-home charging solutions; on-the-go charging and infrastructure; tax credits and incentives; and where people can begin their search. On-hand experts included Cars.com, Charge Enterprises, ComEd and Powering Chicago.

The event surpassed expectations: the CATA anticipated a range of 750-1,000 attendees. Over the course of the weekend, the event netted 947 total registered drivers and nearly 3,000 in-vehicle experiences, surpassing expectations. The buzz generated from the event carried over to social media; Chicago Drives Electric reached 4.5 million, according to initial results from media measurement firm Meltwater.

“We invited previous Chicago Auto Show ticket purchasers, in the form of one email, to preregister for their preferred date and two-hour timeslot,” said CATA Chairman JC Phelan. “We were shocked to find all the timeslots filled overnight! The response and interest were overwhelming, in a very good way, which is why we’re looking to enhance our indoor EV track at the Chicago Auto Show and incorporate elements of Chicago Drives Electric including consumer education and resources.”

“We’re planning to triple the size of our indoor EV track, adding more brands and vehicles, and building out the surrounding area with educational exhibits and panel discussions featuring industry experts,” said Chicago Auto Show Co-General Manager Jennifer Morand. “All of that rich content will translate well to social media where we’ll take in-person panel discussions and broadcast them live on our Facebook and Instagram channels, create educational Instagram Reels and TikTok videos, and partner with key influencers in the space to take over our social media channels throughout the show.” 

“Chicago Drives Electric validated to us the public’s enthusiasm to further their knowledge about EVs,” continued Morand. “There are many complexities associated with the topic, which is why personal service and education is needed now more than ever, and the Chicagoland new-car dealers are dedicated to assisting consumers in their EV journey.”

CATA counsel has received questions regarding mechanics' liens. The statute provides that the dealer must retain possession of the car in order for the lien to be in place. It does not provide for placing an actual lien on the title to the car or fifing a lien with the Recorder of Deeds Office. If the customer does not pick up the car and pay the bill within 90 days after the work has been completed, then the dealer can sell the car at a public or private sale after providing 30 days’ notice to the customer.

Problems arise when the customer who requested the service picks up the car but refuses to pay the bill. Under the statute, once the dealer voluntarily delivers the car to the customer, he loses the lien. The dealer's only recourse then Is to file a lawsuit to recover his expenses.

If the dealer is forced to deliver the car (for example, by law enforcement personnel) an argument may be made that the dealer did not "voluntarily" give up possession of the car and the lien remains in place. In this instance, the dealer would still have to file a lawsuit to enforce the lien.

Mechanics’ Lien Law & Foreclosure Process

Nearly all new-car dealerships are facing manufacturer-mandated EV charger installations over the next few months. This process can be both daunting and expensive. Powering Chicago, a partnership between the International Brotherhood of Electrical Workers (IBEW) Local 134 electricians and the Electrical Contractors’ Association (ECA) of Chicago and Cook County, wants to make that process slightly less daunting by providing an e-book that breaks down the process from design to implementation.

Download Powering Chicago e-book

[from NADA] NADA recently reminded members about potential legal issues that arise when dealers charge documentary or other fees to consumers who exercise an option to purchase at the end of their lease agreement when those fees are not provided for in the lease agreement. This issue continues to draw scrutiny, and NADA would like to remind dealers about the importance of consulting with their legal counsel about any contractual and regulatory obligations that could arise in connection with consumer fees charged with lease-end vehicle purchases.

In order to more fully explain the requirements and limitations that apply to fees that a dealer may charge a lessee who exercises an option to purchase, we have set forth below the relevant excerpt from NADA’s A Dealer Guide to Federal Consumer Leasing Act Requirements. As the excerpt generally explains –

The excerpt provides important details regarding these limitations. Dealers are encouraged to review with legal counsel their current procedures for handling options to purchase leased vehicles.

This class will be an overview of each of the laws and regulations listed above and how they pertain to dealerships in today’s market. The seminar will be doing a deeper dive on the new safeguards rule additions that need to be in place now and regulated come December 9, 2022.

This class will include an overview of:

• Unfair and deceptive trade practices
• Material fact act
• Damage disclosure
• Regulation Z as it applies to TILA
• Holder in due course rule
• Regulation M
• Adverse action notice
• Risk based pricing
• Magnuson moss warranty act
• Regulation B
• Privacy rule
• Safeguards rule with the new additions that come into effect on Dec. 9, 2022GLBA
• Red flag rule
• IRS 8300 form
• Military lending act
• Sales, desking, and menu compliance

When: October 19th 9am – 1pm

Where: CATA HQ

Cost: Free

Register @ www.adgtoday.com or call your BBDS Representative.

Any questions call Mike Browner: (708) 774-1243.

A new set of guiding principles by the National Automobile Dealers Association advocating on behalf of dealer franchise laws could help state association leaders frame discussions with policymakers on legislative issues. This topic was addressed during the NADA’s Legislative Conference held in Chicago earlier this week.

NADA's framework outlines the association's stance on shifting state regulations around how vehicles are sold and automakers' early efforts with build-to-order programs and with over-the-air sales of vehicle features. NADA leaders say that the principles are meant to be a starting point for conversations between dealers and automakers. The principles also help offer a unified message at the national and state levels, and NADA could provide additional resources to state and metropolitan dealer associations in terms of financial and legal help.

Read the principles here: NADA's guiding principles: What it's for and what it's against | Automotive News (autonews.com)

The CATA office and operations will be closed Monday, Oct. 3 due to the Chicago Drives Electric event. Normal business hours resume at 9 a.m. on Tuesday, Oct. 4.

Chicago Drives Electric (CDE) is an EV education event designed to bridge the gap between EV myth and reality. Targeting consumers and media, CDE will take place from Sept. 29 to Oct. 2 at CATA HQ in Oakbrook Terrace. (NOTE: there will be a dealer specific session for CDE on Friday, Sept. 30, see below.)

In alignment with National Drive Electric week, CDE helps to raise awareness of the many benefits of all-electric, hybrid and plug-in hybrid vehicles and help consumers understand how EVs can fit individual needs and lifestyles. In addition to putting interested parties behind the wheel of some of the latest EVs, event organizers are bringing in a variety of experts to help break down the various aspects of EV ownership and tackle complex topics such as range anxiety; at-home charging solutions; on-the-go charging and infrastructure; tax credits and incentives; and where people can begin their search. On-hand experts will include Cars.com, CHARGE Enterprises, ComEd and Powering Chicago.

Automakers will have product specialists on hand throughout the event who will field consumer questions and as they relate to the vehicle brands they represent. Participating automakers include Alfa Romeo, Chevrolet, Chrysler, Ford, Hyundai, Jeep, Kia, Volkswagen and Volvo showcasing a variety of EVs like the Ford F-150 Lightning, Kia EV6 and Volkswagen ID.4, among others.

Registrations for the event were limited to a first come, first served basis. The consumer interest and initial response has been overwhelming; all registration timeslots were filled in less than 12 hours from a single email invitation to the Chicago Auto Show attendee database. 

The CATA plans to carry the CDE branding and name over to the 2023 Chicago Auto Show with the Chicago Drives Electric Indoor EV Track. To help the burgeoning EV market grow faster than it already has, the Chicago Auto Show debuted its first indoor multi-brand EV track during the 2022 Chicago Auto Show last February. Next year, organizers say the track will triple in size and the area will be enhanced as an EV education destination for show-goers, featuring panel discussions with experts available throughout the show to address consumer questions.

“Hosting Chicago Drives Electric this fall will be a great way to test drive the programs we want to implement during the 2023 Chicago Auto Show, while making essential connections in the EV space,” said Jennifer Morand, co-president of the Chicago Automobile Trade Association and co-general manager, Chicago Auto Show. “This next stage of EV adoption will mean getting everyday consumers into mass-market vehicles, and new-car dealerships will be critical to this process.”

According to the 2022 EVForward Dealer DeepDive study by independent analytics firm Escalent, the dealership will remain a pivotal part of an EV intender's shopping experience. The DeepDive survey found that 74% of respondents prefer to buy an EV at a dealership, rather than from an auto manufacturer or third party. Read more about that study in the article below.

This research proves that the franchise dealership model works just as well for EVs as it does for gas-powered vehicles.

“The EV customers of yesterday can’t be compared to today’s EV buyer,” added JC Phelan, CATA chairman. “With game-changing technology like EVs, personal service and education is needed now more than ever before. Plus, the customer wins. Because local dealerships compete for customers on sales and service, the result is that pricing is competitive, and service is plentiful with a nationwide network of local new-car dealers.”

[From Automotive News] NADA data shows that while new- and used-vehicle sales are down through the first half of the year, demand for both sales and service remains high.

2022 is shaping up to be another good year for the nation's new-vehicle retailers, according to dealership financial data from the National Automobile Dealers Association through the first half of the year.

New-vehicle production remains constrained and likely will stay that way for the rest of the year, if not into 2023, Patrick Manzi, NADA's chief economist, told Automotive News following the release of the NADA Data midyear report. The report offers data on sales, service and other financial trends at franchised dealerships through June.

But consumer demand for new and used vehicles remains strong, and parts and service operations also are performing well, Manzi said.

New-vehicle prices should remain elevated for the rest of the year, he said, in part because of the combination of automakers prioritizing higher-trim models and lower incentive spending. Average incentive spending per vehicle declined every month to a record low of less than $1,000 in June, according to the midyear report. That's down from a record high of more than $4,700 in April 2020.

Used-vehicle pricing remains high but may begin to moderate as wholesale prices have begun to drop in recent months, Manzi said. That could cause some dealers to adjust how much they pay to acquire used vehicles and how they price them, he added.

Read the full Automotive News story here.

In today’s automotive retail landscape, there’s little incentive for dealers to spend money on marketing when inventory is so limited. But, it is an opportunity to hit the reset button in the showroom and back office.

Digital retailing is one place where dealers can shift gears and take advantage of the inventory shortage to “evolve” the car-buying process. Rather than fearing digital retailing, dealers should embrace it as an opportunity to improve the buying process, making it more transparent, customizable, user-friendly and, most importantly, more profitable. Digital retailing is really a win-win for the consumer and the dealer.  Consumers appreciate a more streamlined process to minimize “perceived” pain points and dealers win by providing a digital check out option that requires minimal re-work to close and provides solid front and back-end margins.

According to J.D. Power, 25% of people are willing to conduct the car-buying process online. And more-importantly, the digital retailing process can be controlled to provide a pleasant experience every time. J.D. Power also notes that digital shoppers are more willing to purchase F&I products and dealer accessories when purchasing digitally.

When selecting a digital retailing solution, many dealers don’t realize they have several options.  What is key is to invest in a solution that provides a minimum 25% close rate.

When selecting a digital retailing solution, dealers should make sure of the following:

On the flip side, the keys to digital-retailing success also depend on a 100% buy-in across the store, from the owner to the GM to the used-car manager to the parts manager to the F&I manager. It’s also important to select the right calls to action on your website. And finally, utilize your current marketing tools, like email, social and traditional digital to “brand” your digital marketing tool and create a competitive advantage in your market!

The time is now to hit reset. For many dealers, digital retailing is something that’s being shoved down their throat by automakers. However, that doesn’t necessarily need to be the case as dealers have a great opportunity to demonstrate again to the OEMs that retailing of vehicles belongs in the hands of the franchised network.