Dealerships

NADA report: Franchised dealers on pace for more workforce records

TYSONS, Va. - 

More workers making more money.

That’s the crux of the latest report from the National Automobile Dealers Association

Employment and payroll at franchised dealerships continued to rise through the first six months of 2017, according to a new midyear report released by NADA.

Officials tabulated that franchised dealerships directly employed 1,134,200 workers through the second quarter of this year, up from a record 1,131,900 in 2016, according to NADA Data 2017: Midyear Report, which provides a biannual financial profile of franchised dealerships, as well as data on employment, payroll and more.

“We expect to see employment at new-car dealerships reach an all-time high at the end of 2017,” NADA senior economist Patrick Manzi said in a news release. “In addition to the direct employment provided by dealerships, more than another million other jobs in local communities are dependent on dealerships.”

The report indicated payroll at franchised dealerships reached nearly $33 billion in June year-to-date, up more than 11 percent compared to the same six months in 2016.

The average compensation for employees at franchised dealerships was $69,784 per year in 2016.

“For the past several years, dealership employees have seen steady increases in their incomes as well as in their total compensation,” Manzi added. “Dealership jobs offer significantly higher compensation than other retail sectors.”



Manheim to host charity auction for NIADA Foundation at NABD event

ORLANDO, Fla. - 

The National Alliance of Buy-Here, Pay-Here Dealers, Manheim and the National Independent Automobile Dealers Association are all rallying during the East Coast BHPH Conference that begins on Monday to help operators still impacted by hurricane damage.

Officials from NABD and Manheim confirmed with AuSM on Friday that a golf cart will be auctioned off by the staff from Manheim Orlando during the conference with the proceeds benefitting NIADA Foundation’s Hurricane Harvey relief campaign.

Officials said the item will be at Manheim’s conference booth, and the sale will take place during Tuesday evening’s networking session.

NABD also highlighted that operators who can’t get away from their stores for all three days of the conference can attend for at least a day. Dealers can gain important training, industry updates and networking opportunities for just $150 on Monday, $250 on Tuesday or $100 on Wednesday. To learn more, call (832) 767-4759.

And in the process, attendees can help NIADA’s philanthropic efforts.

The Disaster Relief Fund was established by the NIADA Foundation to provide a venue for members of the National Independent Automobile Dealers Association and its industry partners to assist fellow dealers and others in the automotive community affected by the recent storms.

The NIADA Foundation is a non-profit 501(c)(3) charitable organization that serves as the focal point of NIADA’s charitable efforts and coordinates the association’s charitable giving.

Perhaps the bidding for this golf cart will generate at least a portion what conference exhibitor gave recently as Spireon contributed $100,000 to NIADA’s charity arm.

The NIADA Foundation will continue to fund hurricane relief efforts in the coming months.

It is not too late to donate. For more information or to contribute, visit .



Columbus Day shopping activity takes a downturn this year

CARY, N.C. - 

Columbus Day Weekend car shopping activity was down this year, according to new data from Cox Automotive brands Dealer.com and Dealertrack.

“Normally we see an increase in shopping behavior on holiday weekends, but on Columbus Day we saw a decrease,” Cox Automotive product analytics senior director James Grace said in a phone interview with AuSM. “Last year we saw a similar trend for Columbus Day in terms of being down, but not as much as this year.”

This Columbus Day weekend, Dealer.com’s DataView saw a 5-percent drop in visits and a 1-percent drop in vehicle views compared to the six prior weekends, while Presidents Day and Memorial Day saw shopping activity go up by single and double digits, respectively, on Dealer.com dealership websites this year.

Grace said, “I think there’s a couple of reasons for that. It’s difficult for me to parse out how much percentage credit to give to all the factors, but first of all I think the hurricane and fires are definitely impacting those areas affected.”

As the end of the year approaches, the industry has struggled to create additional demand, according to Grace.

“We’re seeing OEMs continue to put a lot of incentive money out there. Inventories in terms of dates and supply are still quite high, so I think there’s been a pretty consistent push for serval months on getting additional demand out there.”

Grace suggests that the time of year is a key factor when it comes to car buyers shopping activity in October because consumers don’t typically see it as a car shopping holiday when faced with other expenses this time of year.

“With everyone going back to school at the end of the summer and families kind of adjusting to that period, there’s definitely some new expenses that come in during this time of year," Grace said. 

For the next Columbus Day weekend, Grace said local dealers can capitalize on the holiday by mirroring OEM advertising.

“When there’s an OEM or franchise dealer doing an advertising campaign, a lot of times its really wise for local dealers to sort of do their own advertising at the same time and sort of draft off of that larger national spend that’s going on," he said. “In this case, dealers are really going to have to focus on every sale, every opportunity, really measuring the quality of their efforts to finish the year out strong.”



TradeRev makes 3 executive changes following KAR's purchase of remaining interest

CARMEL, Ind. - 

TradeRev announced three executive changes Thursday, including sales team promotions and additions following KAR Auction Services recent acquisition of remaining interest in the company earlier this month.

In 2014, KAR purchased a 50-percent stake in TradeRev and over the next four years, acquired the remaining interest for $50 million in cash and an additional $75 million.

The company said the new role changes are aimed at both boosting TradeRev’s market expansion and integrating KAR’s capabilities into its buying and selling experience.

TradeRev’s leadership changes include sales and operations executive vice president Keith Crerar, who will take on the additional responsibilities of leading commercial accounts sales and account management for the company's U.S. and Canada markets.

Prior to his current role, Crerar served as vice president of dealer services for ADESA, a business unit of KAR.

Crerar has more than 15 years of automotive industry experience and has been recognized through Nissan’s Club Excellence as one of the top three Sales Managers in the country for five consecutive years, according to TradeRev.

Will Farmer, who most recently served as southeast regional director, managing the southeast sales team and account management for major auto group operations, has been promoted to executive director of dealer sales for the U.S. markets, and will report to Crerar.

In his new role, he will focus on national sales growth and management of TradeRev’s five regional sales teams, according to the company.

Farmer has more than 14 years of experience as a licensed auctioneer, including being president and owner of Farmer Auctions in Virginia. Before heading Farmer Auctions, Farmer worked at ADESA East Tennessee.

Additionally, TradeRev has brought on Vince McNeal to serve as executive director of commercial sales for its U.S. and Canada markets, and he will also be reporting to Crerar.

Since 2013, McNeal has served as executive sales director at ADESA and will continue to oversee a number of KAR commercial clients while serving in his new role, according to TradeRev.

He joined ADESA in 2005 as a dealer sales representative and later transitioned to management and leadership positions, including fleet lease manager and assistant general manager at ADESA Lexington.

Last year, McNeal earned a spot on the Remarketing & Used-Car Industry’s 40 Under 40 list, and Farmer made the list this year. 

When announcing the acquisition of TradeRev’s remaining interest this month, KAR officials highlighted that TradeRev brings mobile and digital technology to KAR’s portfolio of 250 whole car and salvage auctions and floorplan financing solutions.



Black Book becomes AutoAlert valuation partner

LAWRENCEVILLE, Ga. - 

Black Book announced Thursday it has partnered with AutoAlert to populate the data-mining and communication solution’s algorithms with its vehicle valuation data.

“With the addition of Black Book, our dealer customers will have access to the industry’s most accurate vehicle valuation data, which can make a significant difference in elevating profit potential,"  AutoAlert general manager and executive vice president Meg Stapleton said in a news release. “Today’s dealership environment requires resources and partners that are trusted by automotive professionals, particularly in an effort to grow their business and maximize sales potential.”

With Black Book as its valuation partner, dealers using AutoAlert can maximize sales opportunities and profit potential when making trade valuations as well as during service and repair visits, the company said.

“Data and equity mining are practices that are not necessarily new to the automotive world, but recently have become even more critical as dealers continue to find ways to maximize profits in light of a sales environment that has begun to plateau,” said Jared Kalfus, senior vice president of Black Book. “As such, dealers need the most accurate vehicle valuation data in order to effectively leverage all data practices, and we’re proud to know they can rely on Black Book to put them in the best possible position.”



NADA reiterates IRS warning about new phishing scam

WASHINGTON, D.C. - 

The National Automobile Dealers Association relayed a warning from the Internal Revenue Service about the latest tax-related activities generated by unscrupulous entities on the Internet.

The IRS warned all e-services users to beware of a new phishing scam that tries to trick tax professionals into “signing” a new e-Services user agreement. The phishing scam seeks to steal passwords and data.

Officials explained the scam email claims to be from “e-Services Registration” and uses “Important Update about Your e-Services Account” in the subject line. It states, in part, “We are rolling out a new user agreement and all registered users must accept its revised terms to have access to e-Services and its products.” It asks the individual to review and accept the agreement but takes them to a fake site instead.

NADA suggested that all tax professionals should be aware that as e-Services begins its move later this month to Secure Access authentication and its two-factor protections, cybercriminals likely will make last-ditch efforts to steal passwords and data prior to the transition.

“As the IRS has warned over the past few years, these sophisticated schemes are adaptive in nature, and everyone should be cautious before clicking on a link or entering sensitive personal information,” NADA said.

IRS commissioner John Koskinen added, “These scams evolve over time and adjust to reflect events in the news, but they all typically are variations on a familiar theme. Recognizing these schemes and taking some simple steps can protect taxpayers against these con artists.”



AIADA concerned about major changes or elimination of NAFTA

ALEXANDRIA, Va., and WASHINGTON, D.C. - 

With President Trump evidently having no objections to seeing the North American Free Trade Agreement (NAFTA) potentially disappear, the American International Automobile Dealers Association (AIADA) expressed great concern over the impact changes to the policy involving the U.S., Canada and Mexico would likely have on the cost of vehicle prices.

This past Wednesday, Trump hosted Prime Minister Justin Trudeau of Canada where the leaders discussed a wide array of issues, including NAFTA, which apparently isn’t favored by the current administration.

When replying to a question that NAFTA only needed some “tweaks,” Trump replied, “Well, I don’t think anything changed. We’re negotiating a NAFTA deal. It’s time, after all of these years, and we'll see what happens.

“It’s possible we won't be able to make a deal, and it’s possible that we will,” the president continued according to a transcript released by the White House. “We have a great personal relationship, and we have a relationship now as two countries, I think, that's as close as ever.

“But we'll see if we can do the kind of changes that we need,” Trump went on to say. “We have to protect our workers, and, in all fairness, the Prime Minister wants to protect Canada and his people also. So we'll see what happens with NAFTA, but I've been opposed to NAFTA for a long time. In terms of the fairness of NAFTA, I said we'll renegotiate. And I think Justin understands this: If we can't make a deal, it'll be terminated, and that will be fine. They're going to do well; we're going to do well, but maybe that won’t be necessary. But it has to be fair to both countries.”

After the country’s leaders met, AIADA president Cody Lusk issued his assessment.

“America’s 9,600 international nameplate dealership franchises, and the 577,000 Americans they employ, are concerned about the prices their customers may be forced to pay if certain aspects of NAFTA are changed. In 2017, Edmunds predicts that the average vehicle transaction price will increase to an all-time high of $35,000. American consumers can’t afford the additional costs that would come with disruptive changes to NAFTA,” Lusk said.

"The auto industry is one of NAFTA's biggest success stories and helped international nameplate dealers — located in cities and towns across America — to sell 8.4 million vehicles to American consumers last year resulting in 59 percent of total U.S. retail vehicle sales,” he continued.

“While NAFTA modernization is important, we urge caution in considering the jobs that might be lost and the prices American consumers may incur as the result of changes to key aspects of the agreement,” Lusk went on to say.

More analysis from AIADA can be found at .



NIADA picks Wheel’s Automotive as exclusive supplier of CPO point-of-sale tools

ARLINGTON, Texas and NIAGARA FALLS, N.Y. - 

A service provider sporting relationships with nearly 20 automakers now is in place to help independent dealerships retail certified metal.

Wheel’s Automotive Dealer Supplies has been selected by the National Independent Automobile Dealers Association as the exclusive supplier of point-of-sale merchandising, collateral and printing services for the NIADA Certified Pre-Owned program.

Wheel’s Automotive, which also services 19 CPO programs for OEMs and other providers and has some 9,000 dealership clients, can combine all the elements of a successful national CPO program into one phone call or click, according to the company.

The NIADA CPO program now includes Wheel’s print-on-demand and direct-from-manufacturer convenience to furnish NIADA member dealers with the exact customized CPO marketing materials desired.

Print-on-demand means highly customized printed items are delivered practically overnight in most cases to support dealers’ CPO sales and marketing efforts.

“Wheel's Automotive represents best-in-class promotional tools and marketing resources for our CPO program dealerships,” NIADA senior vice president of member services Scott Lilja said. “That allows our member dealers to more effectively compete in the CPO marketplace with new car franchise stores and enhances their ability to differentiate their digital and physical lot inventory, driving increased inventory turn, gross margin and customer loyalty.”

Renee Perri, vice president of Wheel’s Corporate Division and a member of AuSM’s annual Remarketing & Used-Car Industry’s 40 Under 40, welcomed the opportunity to work with independent dealers.

“Independent dealers are a vital part of the automotive retail industry,” Perri said. “Proper signage and marketing materials can help them merchandise and market CPO inventory with more authority and appeal as they service the transportation needs of a wide variety of consumers.”

For more information, Perri at (800) 465-8831, ext. 105, or visit www.wheelsauto.com.



NADA chair describes how stair-step incentives kills trust in dealers, brands

DETROIT - 

It’s probably been a topic mentioned during sales staff meetings and around the coffee pot at franchised dealerships — stair-step programs sometimes leveraged by automakers to incentivize stores to get new metal rolled over the curb.

Current National Automobile Dealers Association chairman Mark Scarpelli took on the subject this week within a test drive of the three domestic OEMs. Scarpelli urged all automakers to consider how stair-step incentive programs are damaging their brands and alerted manufacturers about the unintended consequences of such programs that erode consumer trust and lead to a lack of loyalty to — and desire for — their brands over time.

“Any dealer who’s had to deal with these programs can tell you that they are not only trust killers, but they’re brand killers, too,” Scarpelli said in remarks to the Automotive Press Association in Detroit, later provided to the media. “Not being able to offer two customers the same price on the exact same equipped vehicle, just because they came into the dealership on different days of the month, destroys consumer confidence.”

The ongoing proliferation of market strategies such as indiscriminate price coupons and unfair stair-step incentive programs are leading to severe, unintended, negative consequences for consumers, dealers and manufacturers alike, Scarpelli said.

The president of Raymond Chevrolet and Raymond Kia in Antioch, Ill., and co-owner of Ray Chevrolet and Ray Chrysler-Jeep-Dodge-Ram in Fox Lake, Ill. then asked this question:  “In a world where customers rightfully expect fairness and transparency in price, why do so many manufactures still deploy unfair marketing strategies that produce huge discrepancies in price between various customers — discrepancies that aren’t transparent, that can’t be explained rationally, and that run afoul of everything our customers really care about?”

The 2017 NADA chairman then followed with, “Shoppers of brands that use stair-step incentive programs see large discrepancies in price for the same or similar vehicles across different dealers. Or, worse, at the same dealer, but at different points in time. Or, even worse still, a discount applied to a vehicle they don’t want, but that can’t be applied to a vehicle they do want.

“So these consumers see wild discrepancies and fluctuations in prices; and discrepancies that aren’t transparent, and that can’t be explained by pointing out meaningful differences in the product itself,” he said.

Scarpelli then made the connection to the badge on the front of the vehicle.

“That lack of consistency, lack of transparency, and lack of explanation is leading directly to a lack of trust — lack of trust in both the individual dealer, and, in fact, lack of trust in every dealer who also carries that make. And when you have a lack of trust in every brand dealer, guess what? You have a lack of trust in that brand itself. And that lack of trust in the brand leads directly to a lack of loyalty to the brand,” Scarpelli said.

“Over time, the consumer’s lack of loyalty to the brand will lead to less consumer demand for that brand. Yes, that’s right: To less demand for that automakers’ vehicles in general,” he added.

Scarpelli closed by mentioning that he hopes to continue having constructive conversations with manufacturers about this issue.

“America’s dealers and manufacturers have the same exact goal — selling our inventory in large volume and at competitive prices. But we believe that goal should be achieved in the right way: Meaning in a way that enhances customer experience, and that maintains the integrity of the brand,” Scarpelli said.

“Ours is a symbiotic relationship that has stood the test of time, and that is ready to take on the next 100 years of making and selling cars and trucks — if we let it. And so to our manufacturer partners, I say: Let us be entrepreneurs. We’re pretty good at it,” he went on to say.

Scarpelli’s entire remarks or through the window at the top of this page.



AutoWeb finalizes license agreement with DealerX

IRVINE, Calif. - 

A day after officially changing its name, dealership lead provider AutoWeb — formerly Autobytel —  on Tuesday entered into a license agreement with DealerX Partners,a provider of data-driven marketing products for car dealerships and OEMs.

Under the terms of the agreement, AutoWeb will receive a perpetual license to access and use DealerX’s proprietary platform and technology for targeted online marketing. The company indicated this process will be implemented through the creation of consumer information databases and audiences, which will allow AutoWeb to generate traffic, clicks, and leads.

Officials explained DealerX will operate the platform for AutoWeb and provide enhancements to and support for the platform for an initial five-year period, which may be extended in perpetuity.

“Today, most dealers know very little about users of their websites and many display the same message to all users—a ‘one size fits all’ strategy,” AutoWeb president and chief executive officer Jeff Coats said in a news release. “Dealers can only hope that the offers presented are relevant and attractive.

“At AutoWeb, our critical mission is to know what users want and when they want it in order to deliver the best marketing at the best time — and to deliver that user to the right dealership at the right time,” Coats continued. “In DealerX, we have found a powerful partner in this mission, and we look forward to leveraging the DealerX platform to further capitalize on the evolving consumer and automotive marketplace.”

At the end of 2016, AutoWeb promoted Billy Ferriolo to chief operating officer to accelerate improvements in its clicks and lead generation businesses. AutoWeb said this licensing arrangement is a prime example of that improvement.

 “DealerX has created a unique, all-in-one automotive online marketing platform encompassing data collection, activation, analytics and attribution,” Ferriolo said. “Its platform employs extensive machine learning in the determination of what content to show which consumer across multiple devices, where and when. This is all derived from the real-time capture and scoring of consumer-driven behavioral events.

“We look forward to using this audience intelligence to deliver a better car-buying experience for consumers,” he went on to say.

AutoWeb mentioned the transaction consideration consists of a lump-sum payment to DealerX of $8.0 million upon the execution of the agreement.

During the initial five-year support period, DealerX will have the ability to earn shares of AutoWeb common stock representing approximately 5 percent of AutoWeb’s outstanding common stock if AutoWeb’s market capitalization reaches $225 million.

If these shares are issued to DealerX, its obligation to provide platform operation, enhancements and support for the platform will continue in perpetuity.

Alternatively, AutoWeb may elect to make a lump-sum payment of $12.5 million upon the occurrence of certain events in order to extend DealerX’s obligations in perpetuity. If such a lump-sum payment is made, DealerX’s right to receive shares of common stock is terminated.

Tax and stock implications

As of Dec. 31, AutoWeb reported that it had approximately $75.8 million in available net operating loss carryforwards (NOLs) for U.S. federal income tax purposes.

In light of the company’s recent stock repurchases, the company reminds stockholders about AutoWeb’s Tax Benefit Preservation Plan dated May 26, 2010, as amended on April 14, 2014 and May 26 of this year between the company and Computershare Trust Company, N.A., as rights agent.

AutoWeb explained the plan was adopted by the company’s board of directors to preserve the company’s NOLs and other tax attributes, and thus reduce the risk of a possible change of ownership under Section 382 of the Internal Revenue Code. Any such change of ownership under Section 382 would limit or eliminate the ability of the company to use its existing NOLs for federal income tax purposes.

In general, AutoWeb pointed out that an ownership change will occur if the company’s 5 percent shareholders, for purposes of Section 382, collectively increase their ownership in the company by an aggregate of more than 50 percentage points over a rolling three-year period. The plan is designed to reduce the likelihood that the company experiences such an ownership change by discouraging any person or group from becoming a new 5 percent shareholder under Section 382.

The company acknowledged rights issued under the plan could be triggered upon the acquisition by any person or group of 4.9 percent or more of the company’s outstanding common stock and could result in substantial dilution of the acquirer’s percentage ownership in the company.

“There is no guarantee that the Plan will achieve the objective of preserving the value of the company’s NOLs,” officials said.

As of Oct. 1, there were 13,082,948 shares of the company’s common stock, $0.001 par value, outstanding.

“Persons or groups considering the acquisition of shares of beneficial ownership of the company’s common stock should first evaluate their percentage ownership based on this revised outstanding share number to ensure that the acquisition of shares does not result in beneficial ownership of 4.9 percent or more of outstanding shares,” officials said.

In connection with the license agreement, the company’s board of directors considered and granted to DealerX an exemption under the plan with respect to the shares of common stock that may be issued to DealerX under the license agreement, and DealerX and the company entered into a stockholder agreement that provides for various restrictions on transfers of the shares and the grant of a proxy to the company to vote the shares as long as the restrictions remain in effect.

For more information about the Plan, please visit .



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