Both incoming and outgoing chairs of the National Automobile Dealers Association addressed their peers during NADA Show 2023 in Dallas.
During his first address on Saturday, 2023 NADA chairman Geoffrey Pohanka stressed that franchised “dealers and their OEMs essentially want the same things: to give customers a great buying experience and to sell a lot of cars and trucks.”
And a day earlier during his final remarks as NADA chairman, Mike Alford highlighted the evolving auto retail business model and how dealers and auto manufacturers “are connected by the desire to provide an unrivaled customer experience.”
Pohanka, a third-generation dealer who serves as chairman of the Pohanka Automotive Group in Capitol Heights, Md., added that “we don’t always agree on how to do that,” noting that “OEMs often don’t understand how complex it is to sell a car…. Sometimes we have to remind our legacy OEMs that dealers are their competitive advantage.”
“It is good for dealers and the manufacturers that there are buzzes in our industry,” Pohanka said through a news release provided by NADA. “Electric vehicles, autonomous cars and new power sources such as hydrogen. These cars are new. They’re exciting. They give people a reason to go out and buy a new car.”
Pohanka went on to tout the value of the franchise model to automakers and consumers alike. “Dealers’ opposition to the direct sellers is not about EVs…our opposition is that we know the franchise system is the best way to sell cars and take care of customers,” he added.
In light of NADA acknowledging higher-than-average inflation and increased interest rates, Pohanka also addressed vehicle affordability and the importance of attainable federal and state fuel and emissions mandates. “Affordability is an issue for consumers… The EV revolution isn’t only fueled by consumer demand. It’s also drive by federal and state fuel economy and emissions mandates. These new regulations are significant; they’re also very difficult for OEMs to meet.”
“The rising cost of commodities required to manufacture batteries is making EVs less affordable,” Pohanka continued. “If consumers are priced out of the market, their only option is to buy a used car or keep the old one. And that’s not good for the economy, the environment, or for public safety.”
To move dealers into the next generation in the auto retail evolution, Pohanka urged dealers “get more involved at the local, state, and national level. It’s truly time to stand up and be counted,” he went on to say.
On Friday after the celebratory opening of the event’s expo hall, Alford underscored the dealer commitment to evolving business model.
“We are working together in a single ecosystem,” Alford said in his Friday keynote address at the NADA Show 2023 in Dallas, according to a news release from the association. “When we embrace the reality that auto manufacturing and retailing are not separate entities but are components of a single, evolving ecosystem, then we have to collaborate… and continue to keep our customers first.”
“Dealers and legacy OEMs are better equipped to provide real, substantiable, and market-wide customer satisfaction than direct sellers.”
Alford, who represents North Carolina’s franchised dealers on the NADA board and is president of Marine Chevrolet in Jacksonville, N.C., and Trent Buick GMC and Trent Cadillac in New Bern, N.C., said “local dealerships are crushing direct sellers when it comes to the Consumer Satisfaction Index (CSI). Cadillac, Infiniti, and Mercedes-Benz held the top spots in customer satisfaction among 25 luxury brands. The direct sellers scored 21st, 23rd, and 25th — bottom of the barrel.”
“We also know that direct sellers are buying up land and putting up stores, but they don’t come close to dealerships,” Alford added. “We know that 11,000 Tesla owners went to GM dealers to get their Teslas fixed in the last two years alone, because of failures of a direct seller model.”
Alford also shared that “one EV manufacturer was so desperate to learn about auto retailing, they literally picked up the phone and called the NADA Academy and asked if we could provide them with our training materials.”
“The dealer franchise system is the most consumer-friendly, efficient, and effective model of distribution for motor vehicles in the U.S,” Alford went on to say. “Dealers are truly essential to the future of ICE and EVs… only a local dealership network can provide the personal relationship consumers want.”