Tag: NADA

Categories
Compliance

Take Action Now!

The retail automotive industry is buzzing about the Federal Trade Commission’s recent proposed changes to regulations impacting federal advertising laws and prohibitions on unfair and deceptive dealership practices. The 37-page document outlines six key areas the agency would like to address:

  • Full up-front pricing, costs and finance disclosures
  • Sales process disclosures
  • Add-on product benefits
  • Bait & switch
  • Surprise junk fees
  • Record retention

The public commentary period closes on September 12, at which time the agency will evaluate the responses and make a final ruling. Industry associations – including NADA – requested an extension to the 60-day review period proposal, which the FTC declined.

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Categories
EFG Companies

Labor in the Retail Automotive Space

2022 is already shaping up to be another banner year. In fact, the National Automobile Dealers Association (NADA) issued their 2022 forecast recently, projecting new vehicle sales to reach 15.4 million units – an increase of 3.4 percent. However, labor shortages could put a crimp in an otherwise positive 2022. The good news is there are three simple steps you can take to make your dealership more competitive in today’s labor market.

2022 Labor Market

Auto dealerships certainly felt the impact of the pandemic on employment. In March 2020, COVID-19 shutdowns forced dealerships across the country to lay off most of its sales staff. Since then, many dealers have not returned to pre-pandemic staffing levels. According to NADA, dealership employment for 2021 measured down 4-5 percent throughout the year.

As dealers look to restaff in 2022, some are finding themselves competing in a very tight labor market. Some economists are starting to believe the pandemic has changed the behavior of the job market in ways that could have a lasting impact, including resetting the relationship between workers and their employers.

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Categories
Economy

Mid-Year Economic Indicators Guide 2022 Planning

The midway point for 2021 is in the rearview mirror and many dealership owners and managers are knee-deep in planning for 2022. Now is the perfect time for a quick review of the mid-year economic indicators. While new model retail sales are trending up and used vehicle prices are hitting record highs, there are some broader market trends which should be considered.

Supply chain issues impact sales forecast

According to NADA, new light-vehicle sales are expected to reach 15.5 million units for 2021, representing a 7.2 percent year-over-year increase.  Fitch Ratings expects vehicle sales to return to 2019 levels in 2022/2023. However, IHS Markit and Wards Intelligence do not expect the U.S. to see 17 million light-vehicle registrations annually until 2025. This market skepticism is fueled by supply chain issues and a persistent semiconductor shortage. General Motors, Fiat Chrysler and Ford have all felt the impact on production, and analysts believe the semiconductor chip shortage will reduce new vehicle production by 1.28 million.

While dealers have experienced the vehicle shortages first hand, one bright spot is the strong trend toward online sales which were bolstered during the 2020 shutdown. Consumers increasingly became more comfortable completing more of the vehicle purchase process online. This has allowed dealers to stay in the game even with the persistent production issues as the online sales model is perfect for a vehicle order rather than immediate delivery.

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