The incoming chairman of the National Automobile Dealers Association (NADA), Mark Scarpelli, says the resilience of Dealers will be the key factor in helping them cope with one of the most significant eras of change in the industry’s history.
Speaking in the lead-up to the 2017 NADA Convention, the Illinois Chevrolet and Kia Dealer identified four main priorities for his tenure: emphasising how the Dealer franchise system benefits the consumer; keeping vehicles affordable via advocating Dealer issues in Washington; working with auto makers, and introducing the next generation of Dealers into the NADA framework.
Ensuring the customer remains the prime consideration is a key goal.
“At the end of the day they pay our wages,” he told Auto Remarketing.
“We want to make sure that our services are something they want and desire, and that our automobiles – whether they be new, financed or leased – are affordable to them. We want to make sure that system is intact for them going forward.”
Embrace change, be resilient
Mr Scarpelli said regulatory change was the greatest challenge faced by car Dealers, something Australian Dealers are all too familiar with thanks to the likes of ASIC and ACCC and their continual reviews of the car business.
Such scrutiny can be unrelenting, but that is the environment we live in. Ours is far from the only industry that regulators watch.
“Some of the well-intended regulations and laws and initiatives from (Washington) DC are just that. But there are some unintended consequences we live and we breathe every day, and we deal with,” Mr Scarpelli said.
“Automobile Dealers are very resilient. The evolution and change that has happened in our business is mind-blowing. What I was doing five years ago until today is not the same activity.”
AADA encourages Dealers to take a ‘glass half full’ attitude to change. Change is inevitable, so we must embrace it, whether it be in the areas of insurance, finance, the technology revolution, and the regulatory changes that come along with it.
Change = opportunity
As Mr Scarpelli pointed out, change always provides new opportunities.
The age of automation is fast approaching. It’s being driven by technological development and consumer demand feeding off each other, and it will force both regulators and Dealers to adapt.
This will create opportunities to sell and service new types of vehicles in innovative ways (see the rise of the shopping centre pop-up). The transition period will see many consumers upgrading their vehicles.
“The cars and trucks on the road owned by American consumers is one of the oldest fleets in a very, very long time,” Mr Scarpelli pointed out.
“That being said, the turnover, if you will, of older cars to newer cars and trucks, there’s an opportunity there. And there are new people coming into the market, meaning new drivers and people who want to upgrade their older automobile.
“At the end of the day, car Dealers are there to sell, service automobiles and to please the public.”
Mr Scarpelli said he was excited for the future of automotive dealing, stating his opinion that although there almost certainly will be changes in buying habits, consumer preferences and regulatory issues that arise, the basics of the retail automotive industry will remain largely the same.
“We don’t feel as though the Dealer franchise network will change significantly, meaning the actual physical plant of the dealership,” he said.
“It’s still a place and it’s the best network to buy your car, fix your car, do warranty repairs. It’s still the number one source.
“And when you think about it, there’s over 16,500 retail outlets where a consumer, if they buy their car in Chicago, Illinois, and they’re driving it through Topeka, Kansas, and they have an issue, they can probably get their car serviced through the wide network that sprawls America. So we feel that is never going to change.”
The same could be said of Australia’s Dealer network, on a smaller scale.
Regulators are dealing with a complex set of problems. Manufacturers are too. Automation is the next evolution of the auto industry, but it will cause a revolution in how laws are made, roads and cars are used, and even the traditional ownership model is under threat.
The resilience Mr Scarpelli refers to means having the attitude to look towards the future in a positive way. Change is not necessarily bad, you have to grow with it.
One example of change and the opportunities it provides is the growth in the USA of standalone used car stores. It’s a function of the oversupply of new cars we have dealt with in previous issues that has led to a stockpile of ‘cyber-cars’ – which are essentially new cars being sold as used cars.
That’s change brought on, not by regulators, but by the OEMs. Other changes will be market-driven or technologically-driven.
As the organisation representing all franchised Dealers in this country, AADA can represent the interests of its members in negotiating the extent and rate of change with government. We aim to create the most effective solution for that change for everyone.
To have an organisation as strong as NADA you have to be involved. Just as outgoing US President Barack Obama said about democracy, the same is true of advocacy.
An organisation such as ours is only as strong as its membership. Another political and social truism is that ‘the world is run by those who show up’. Our numbers are our strength, if we use them. We might be competitors but, ultimately, we need to act together for the good of our industry.