NADA Dispatch 1: Inventories, Efficiencies and the Future

January 28, 2017

Dealers are pretty clear-eyed about the coming months in the car business, judging from my conversations on the opening day of the exhibit hall at the National Automobile Dealers Association (NADA) convention here in New Orleans.

Overall, dealers are generally optimistic that we’ll have another relatively NADA-100 logostrong year in terms of new and used vehicle sales. But there’s concern that rising new vehicle inventory levels, as well as increased supplies of used vehicles and valuation volatility, will make it more difficult to match prior profit levels on dealers retail.

“I’m tired of celebrating birthdays for some of my new vehicles,” a Hyundai dealer told me.

“I’m confident we’ll sell more used cars, but it’ll be tougher to keep our gross averages where we want them,” added the used vehicle director for a Midwest dealer group.

I was impressed by the number of dealers who shared goals to improve dealership performance by optimizing their current operations. “We’ve already got the processes and tools we need,” a New York dealer shared. “But we’re not executing as consistently as we could and should.”

I suspect dealers will be leaning more on their vendor partners to help them maximize the value of their current solutions to achieve better results. A Southeast dealer says he’s shopping for a new dealer management system partner after getting frustrated that he can’t easily get the information he needs to run his business from his current DMS.

“I shouldn’t need a college degree to use the system,” he says. “It’s pretty frustrating.”

Several dealers also mentioned that they weren’t able to get a seat at a workshop that offered highlights from NADA’s study on the dealership of tomorrow. The strong interest in the session suggests that the old adage—“the future for a dealer is the next six months”—may not be as relevant as it used to be.

I’m looking forward to Day 2 on the exhibit floor at the vAuto (#1719) and Stockwave (#1737) booths.