CARY, N.C. –
After car sales, manufacturing, repair and other key pieces of automotive were found to be essential businesses in a guidance update from the Department of Homeland Security’s Cybersecurity & Infrastructure Security Agency on Friday, it begs this question:
Would the wholesale and auto auction industry be included?
“I think it’s still open to interpretation, but I would believe that it’s going to impact our business, as well,” National Auto Auction Association chief executive Frank Hackett said Monday of the CISA guidance. “It’s got to. We are essential. It’s no doubt. We’re part of that food chain.”
Looking at how the auto ecosystem works and the importance auto auctions have, Hackett said, it would be difficult “to not look at us as being essential.”
While it does not appear that the CISA guidance specifically lists wholesale or auto auction workers as “essential,” the guidance does include “supply chains,” which almost assuredly would have to inlcude auctions.
Auctions, of course, are a major supplier of used vehicles for dealers, who sell tens of millions of pre-owned vehicles each year.
Below is the key passage of the CISA guidance applicable to this industry, where the agency deemed essential, “Workers critical to the manufacturing, distribution, sales, rental, leasing, repair, and maintenance of vehicles and other transportation equipment (including electric vehicle charging stations) and the supply chains that enable these operations to facilitate continuity of travel-related operations for essential workers.”
In a letter to President Donald Trump sent March 25, Hackett voiced his support of efforts made by franchised and independent car dealers, who had asked the president for clarification that sales and leasing at their stores is an essential service amid COVID-19.
Hackett also emphasized the importance that auto auctions play in both the auto industry and the nation’s overall economic health.
On March 24, the leaders of the National Automobile Dealers Association (NADA), the American Truck Dealers (ATD), the National Association of Minority Automobile Dealers (NAMAD), the American International Automobile Dealers Association (AIADA) and the Alliance for Automotive Innovation sent a letter to Trump asking for clarification that vehicle sales are essential services that need to be maintained during the COVID-19 pandemic.
The National Independent Automobile Dealers Association also delivered a letter to the White House so stores not connected with an automaker can remain open, too.
In a subsequent news release, NIADA lauded the decision by DHS.
“Transportation is absolutely essential, and our industry can serve the needs of those on the front lines of our efforts to vanquish the virus,” NIADA CEO Steve Jordan said in that release. “We are thrilled that CISA and the Administration have expanded the list of essential services to include vehicle sales, especially as communities are beginning to come together to re-open the economy.
“Independent auto dealers are ready to assist health care workers, emergency responders, infrastructure workers, delivery drivers and others who are performing vital tasks to support public health when they have a need to replace or repair their vehicle.”
During NAAA’s latest teleconference meeting with leaders of the auction industry, Sante Esposito, a lobbyist for the association, said the lobbying efforts of NAAA in recent years have paid off, including the recent letters sent by the trade group to leaders in Washington, Hackett said.
“One good thing that came out of this was our lobbying efforts in Washington,” Hackett said.
“Here’s an example of where we’ve kind of gone from being that unknown to spending a lot of time in Washington, where we helped with a letter to all of the important folks in Washington — the president, the vice president, members of the cabinet and so forth”, he said, emphasizing their support of independent and franchised dealers being essential services.
Hackett would later add, “We as an industry — Manheim, ADESA and all the independents — compete for business. But at the same time, it’s the strength of our industry, with all of those groups coming together and having a lobbying effort to really demonstrate our industry as being important. Without everyone playing on the same team, I don’t think that we can do all the things that (NAAA does).
“It just demonstrates the importance of a trade association and what we’re supposed to be doing,” he said. “And here’s an example of what we’ve done right.”
Speaking of legislative or government issues, Hackett said people continue to talk about a potential “Cash for Clunkers” reboot, but he has not seen any legislative movement so far.
Hackett said NADA is aware of NAAA’s concerns around vehicles included in a potential Cash for Clunkers program being crushed.
“We don’t have a problem with the program,” Hackett said. “But we just don’t want the vehicles destroyed or crushed.”
In a previous interview, he had said “those are the cars that run through the lanes. And it just hurts everyone when they take them off the street. Because those are the cars that some people can afford to buy, that we think are important to keep in the market. Some people aren’t in the market for a new car.”
Automotive lobbying efforts like those of NAAA have been widespread around this issue of auto sales being deemed essential.
That would include the CARS Inc. group of Cars.com, Dealer Inspire and DealerRater, which said it has helped further the efforts made by the likes of NADA, NIADA and the Alliance for Automotive Innovation through a “Allow Safe Auto Sales” and “Keep Auto Open” campaign launched last month.
That campaign included a digital petition where local dealers could communicate directly with Homeland Security via personalized requests to advise auto sales and leasing as essential. There were nearly 5,000 signatures to that petition, Cars.com said.
“I’m proud to see the automotive industry come together to help car shoppers and sellers get what they need during this difficult time,” CARS CEO Alex Vetter said in a news release.
“Dealerships across the country are innovating overnight to meet the needs of homebound consumers who are still shopping and looking to connect differently with local dealers,” Vetter said. “Car sales can be done remotely and digitally or during one-on-one scheduled appointments keeping social distancing regulations at the forefront, as many states have done. I commend the industry for its efforts and trust dealers will keep public health a top priority as they return to selling cars safely while keeping the economy moving forward.”
Vetter adds, “The technology is available to advance the automotive industry and help consumers experience cars through virtual test drives and vehicle walk-arounds, communicate in real-time with dealers through online chat tools, conduct credit pulls and financial paperwork digitally and, ultimately, purchase a car and have it delivered to the home.
“This is the digital revolution for automotive that will greatly advance car shopping for consumers and we’re ready for it.”
An important reminder CARS makes is that the situation is fluid, with governors determining if the DHS guidance works for their respective states.
Along those lines, NIADA urged state and local governments to match the federal guidance issued Friday.
“Now is the time for state governors, county executives and mayors who have issued local orders to resolve any conflicts with the updated federal guidelines as it relates to motor vehicle sales,” NIADA senior vice president of legal and government affairs Shaun Petersen said in a release.
“The updated federal guidance is an express recognition that motor vehicle sales can safely continue, and NIADA will continue to urge all independent dealers to place the safety of their customers and employees first.”
Nick Zulovich contributed to this report.