Tag Archive | "National Automobile Dealers Association"

Rapid Recon Salutes 100 Years of NADA and Vehicle Reconditioning


PALO ALTO — In 2017, the National Automobile Dealers Association (NADA) celebrates 100 years serving franchised automobile dealers. Next year also marks the centennial of the first evidence of vehicle reconditioning, according to a provider of reconditioning workflow time-to-market software solutions.

Rapid Recon issued a press release today saluting the NADA for 100 years of faithful service to the automobile industry. It also offered a brief look into the history of the industy, the association and the reconditioning.

The NADA story began in 1917 when 30 auto dealers traveled to the nation’s capital to convince Congress not to impose a luxury tax on the automobile. They successfully argued that the automobile is a necessity of American life, not a luxury. From that experience, the NADA was born.

“We’re excited to be an exhibitor at NADA in New Orleans for its 100th anniversary, a proud organization for a great industry,” said Dennis McGinn, founder and CEO of Rapid Recon. “It is remarkable how many people today make their living working in and supporting the American automobile dealership, nearly five million men and women.”

The company will be exhibiting in Booth No. 5417 at the NADA Convention & Expo, which will be held at the New Orleans Ernest N. Morial Convention Center on Jan. 26-29.

Some industry milestones, sourced from The American Car Dealership, show how quickly the franchised auto dealer network developed:

  • 1896: The first franchised new-car dealership opened in Reading, Pa. It sold Winton automobiles, one of the earliest successes of the emerging automobile manufacturing business
  • 1899: First automotive showroom opened in New York City, displaying Winton cars
  • 1905: Cars first sold on an installment plan. Two dealer groups formed from which would become the National Automobile Dealers Association
  • 1917: NADA officially organized with 15,000 dealers, representing 600 brands, many of which never produced a working vehicle or sold vehicles
  • 1933: First NADA Used Car Guide
  • 1934: NADA membership reaches 30,000
  • 2017: NADA membership totals 16,000 new car and truck dealers, with 32,500 franchises, both domestic and international members, representing 38 brands.

Recon Recognized

As for recon, there was no need for reconditioning at first, at least not as it exists today. What trade-ins there were in the industry’s beginning were animal-drawn wagons and similar conveyances, according to information collected by Rapid Recon. Undoubtedly, some of America’s first automobile dealers spiffed up those vehicles, replacing a wooden wheel or two, repairing a broken seat or strengthening a weak axle spring to give a worn-out buggy “like-new” appeal for buyers.

By the time the NADA was founded in 1917, the sufficiency of units in operation meant a growing opportunity for used-vehicle sales. According to motor vehicle registrations in 1917, as compiled by the U.S. Bureau of Public Roads, nearly five million cars and trucks were registered. While difficult to calculate how many of the 7,653 million vehicles registered from 1914 until then would have still be in operation, it’s likely many of them flowed back to dealers as trades.

By late 1916, creative rebuilders were putting old cars, now “reconditioned,” back on the road.

Motor Age magazines from the 1920s discuss reconditioning in he role of used-car sales success. The May 11, 1922, edition presented two ideas: “The used-car company will sell its car at cost, plus reconditioning, plus sales expense, plus a normal profit.” In a separate article, “The National Used Car Company Plan,” the publication floated the idea of centralized used-car operations and reconditioning by zone — the thought then being used-car sales were a distraction to new-car salespeople.

Most reconditioning in those early days was cosmetic, though there was a growing recognition of the need to make those cars both safe and somewhat “reliable,” according to Rapid Recon’s research. During the Great Depression, reconditioned vehicles supplemented dealers’ new-car opportunities.

The beginning of World War II is recognized as the birth of intentional reconditioning, which morphed into the operation that’s now integral to new-car dealership used-car departments. With new-car manufacturing curtailed by the U.S. government from 1942 to late 1945, new-car supply was virtually nonexistent. Used cars were in demand, and dealers survived by sourcing and refurbishing those vehicles. Service, parts, tires and other related opportunities became dealers’ bread-and-butter, not unlike today.

Throughout the ‘50s and ‘60s, most dealers viewed reconditioning as a necessary evil and as a means of disposing used cars taken in trade during that era of the two-to-three-year trade cycle.

Today, reconditioning continues as a discipline for cosmetically and mechanically upgrading used vehicles so they’re safer and more reliable and can command higher sales grosses. Recognizing the faster they can get used cars from acquisition to the front line to sell them, many dealers today are adopting time-to-market workflow software to reduce this cycle to three to five days, not the average and costly eight to 15 or so days, McGinn noted.

This need has expanded considerably in recent years with the flow of off-lease vehicles, which OEMs ask their dealers to market as pre-owned certified models. Certified pre-owned worked its way into the automotive vocabulary when Lexus launched the first CPO program in November 1993. Toyota’s program started in 1996. Most manufacturers and their dealers today offer certified pre-owned vehicles to buyers.

A Dealer’s Recall

One expert industry veteran, still in the business today, spent his earlier career working for Garber Buick in Saginaw, Mich., which was Buick’s first store. Its owner Gary Garber was one of General Motors’ first 13 distributors. Working in that historic environment gave this industry veteran opportunity to review and study old dealership and industry records, from which he shared recently, including perspectives on attitudes about vehicle reconditioning through the years and how over time recon practices changed.

“In the ‘50s and ‘60s, recon was patching vehicles up — making them look good cosmetically, but just good enough to pass off to somebody else and make some money on them,” he recalled.

It was not until the late ‘70s and early ‘80s that dealers began to take a serious interest in reconditioning used cars. That work, however, was predominately sublet. It was the advice of industry consultants, Garber said, that began to convince dealers they needed to bring reconditioning into their own operations to keep that profit internally.

About this time too, he added, dealers, seeing the growth in third-party service contract sales, formed their own off-shore service contract companies to retain those profits themselves. As service contract professionalism grew, those companies’ management teams, in order protect their risks, pushed for higher reconditioning standards. Better reconditioned vehicles, in turn, helped attract more used-car buyers, making used-car departments integral to dealership profitability.

As we move toward a new decade, industry changes will continue to keep manufacturers, dealers, and solution providers watchful. The huge volume of vehicle open safety recalls in recent years is one concern. Fortunately, use of recall management software woven into the reconditioning process helps identify affected models so their recall issues can be addressed before those vehicles reach the frontline and the consumer, whenever the recall is announced in the recon cycle.

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NADA Announces New Senior Vice President of Dealership Operations


TYSONS, Va. — The National Automobile Dealers Association (NADA) announced that it has found its new senior vice president of dealership operations: Peter L. Fong.

Fong expressed that one of his key areas of interest will be to accelerate the process of moving dealerships toward the “0online to in-store” car-buying experience for consumers.

“I’m absolutely thrilled to be returning to the automotive industry, particularly now given the ongoing digital transformation of both the automotive manufacturing and retail sectors,” Fong said. “My primary goal will be driving value-added changes in all areas of dealership operations, so that the next generation of products and services provided by the NADA to dealers and their employees is second-to-none.”

Before joining the NADA, Fong was the executive vice president and CMO at The Judge Group, a firm specializing in technology consulting, staffing solutions, and corporate training. He has also held multiple executive-level sales, marketing, and brand management positions at Ford Motor Co. and Chrysler Group LLC. He brings a cumulative 20 years of industry experience.

“Peter brings tremendous understanding and a wealth of hands-on experience to the NADA,” said NADA President Peter Welch. “With Peter at the helm of Dealership Operations, the NADA will be able to continue providing our member dealers and their employees with innovative educational and training programs designed to meet the challenges of automotive retailing both now and well into the future.”

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NADA Announces New Senior Vice President of Dealership Operations


TYSONS, Va. — The National Automobile Dealers Association (NADA) announced that it has found its new senior vice president of dealership operations: Peter L. Fong.

Fong expressed that one of his key areas of interest will be to accelerate the process of moving dealerships toward the “0online to in-store” car-buying experience for consumers.

“I’m absolutely thrilled to be returning to the automotive industry, particularly now given the ongoing digital transformation of both the automotive manufacturing and retail sectors,” Fong said. “My primary goal will be driving value-added changes in all areas of dealership operations, so that the next generation of products and services provided by the NADA to dealers and their employees is second-to-none.”

Before joining the NADA, Fong was the executive vice president and CMO at The Judge Group, a firm specializing in technology consulting, staffing solutions, and corporate training. He has also held multiple executive-level sales, marketing, and brand management positions at Ford Motor Co. and Chrysler Group LLC. He brings a cumulative 20 years of industry experience.

“Peter brings tremendous understanding and a wealth of hands-on experience to the NADA,” said NADA President Peter Welch. “With Peter at the helm of Dealership Operations, the NADA will be able to continue providing our member dealers and their employees with innovative educational and training programs designed to meet the challenges of automotive retailing both now and well into the future.”

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NADA Forges Partnership With MyCarDoesWhat Campaign


LAS VEGAS — The National Automobile Dealers Association (NADA) has announced a partnership with the MyCarDoesWhat campaign — a research-driven campaign created by the National Safety Council and University of Iowa to help raise awareness of new vehicle safety features designed to prevent crashes and reduce deaths and injuries.

Research from the University of Iowa shows that most consumers are unsure about how potentially life-saving vehicle safety features work. It also shows that consumers are unlikely to fully and properly utilize the features if they are not introduced to them within the first 90 days of vehicle ownership.

“While our cars are getting safer, we might not be taking advantage of the new safety features on our cars as much as we can be,” said NADA President Peter Welch. “A blind spot monitoring system can’t help you if you don’t have it turned on, and automatic emergency braking isn’t going to keep you safe if you think it’s a substitute for being an active, alert driver.

“As the main touch point for consumers considering new car purchases, dealers have a very natural role to play here,” he added. “And by working together, hopefully we can close the consumer education gap, and achieve our shared goal of getting drivers to feel comfortable and confident with all their vehicles have to offer on the safety front.”

The MyCarDoesWhat campaign was created to educate consumers about how to best interact with safety features in order to promote safer driving experiences. The campaign uses multi-media educational tools, public service announcements, consumer-friendly videos and graphics, brochures, fact sheets, a game app and social media platform to educate drivers, according to the association.

“If motor vehicle crashes were a disease, vehicle safety technologies could be the cure,” said Deborah A.P. Hersman, president and CEO of the National Safety Council. “Through this partnership, it is our hope that making these materials available to new car owners will pique their curiosity, and they will take the time to learn about the new technology they’re driving home.”

For more, visit the campaign’s website.

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NADA’s Koblenz to Shed Light on CFPB at Agent Summit


LAS VEGAS — Andrew D. Koblenz of the National Automobile Dealers Association (NADA) will speak at the upcoming Agent Summit and provide attendees with insights into the Consumer Financial Protection Bureau (CFPB)’s regulation of the auto finance market, organizers announced Monday. The sixth annual event will be held May 9–11, 2016, at the Venetian Palazzo Las Vegas.

“Understanding the trajectory of the CFPB’s activity regarding the auto finance market is critical to understanding the current regulatory environment in which we find ourselves,” Koblenz said. “It’s also a vital part of evaluating those concrete steps that dealers and lenders can and should be taking in the face of this new regulatory reality.”

Koblenz currently serves as executive vice president of legal and regulatory affairs for NADA, and also oversees the organization’s economic and research department. He is a frequent speaker and valued source for a number of industry events and publications.

At September’s Industry Summit, Koblenz presented “Solving the CFPB Problem,” a comprehensive review of actions undertaken by the CFPB, the effects of those actions on the industry and what the future holds for the oft-maligned agency. He is expected to touch on similar themes at Agent Summit.

“Andy never fails to connect with his audience, because he approaches the topic of compliance with hard-won expertise and disarming humor,” said David Gesualdo, show chair and publisher of Agent Entrepreneur and F&I and Showroom magazines. “He understands both the seriousness and absurdity of the CFPB’s efforts. He is the ideal speaker for a key topic at a critical juncture.”

Registration for Agent Summit is now open at the event’s website as well as by phone, fax and email. Attendees who register by April 4 will enjoy a $100 discount. To inquire about sponsorship and exhibition opportunities, contact Eric Gesualdo via email hidden; JavaScript is required or call 727-612-8826.

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NADA Forecasts a Record 17.7 Million New-Car Sales in 2016


DETROIT – U.S. sales of new cars and light trucks will set an all-time record in 2016, said Steven Szakaly, chief economist of the National Automobile Dealers Association.

“More than 17.7 million new light vehicles will be purchased or leased this year, about a 2-percent increase from 2015, and setting back-to-back records,” Szakaly said. “It will be the seventh consecutive year of auto sales growth.”

In 2015, a record 17.4 million new light vehicles were retailed, up 5.8 percent from 2014, according to WardsAuto. The average transaction price of a new car and light truck was $33,269 in 2015, according to NADA.

“We are living peak auto sales right now, and we will see one more year of that growth in 2016,” Szakaly added. “But only because of rising incentives that will keep consumers coming into showrooms. The real worry now is whether we’re starting to pull sales ahead from future years.”

Szakaly explained that, in the battle for market share, automakers are expected to increase incentives this year to manage increased manufacturing capacity, and to offset the effects of a slowing global economy, especially in emerging markets.

“If we were looking at a market with stable global growth and no increases in manufacturing, auto sales might actually fall in 2016,” he said. “But we have a situation where plants have been built, demand is slowing, and the U.S. market remains the most profitable in the world. Growth in places like Mexico will offer some temporary reprieve, but it won’t be sufficient to offset falling demand from Brazil, South Africa and other emerging markets. This means incentives will rise to stoke demand.”

Sustained sales momentum in 2016 is also dependent on expectations that auto financing rates will remain competitive, with interest rates rising modestly – by less than 1 percentage point – by the end of 2016; wages will grow about 2.5 percent this year; and the economy will add more than 2 million net new jobs in 2016, Szakaly added.

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