MSADA, One McKinley Square, Sixth Floor, Boston, MA 02109
auto M A S S A C H U S E T T S
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FIRST CLASS MAIL US POSTAGE PAID BOSTON, MA PERMIT NO. 216
April 2014 • Vol. 27 No. 4
The official publication of the Massachusetts State Automobile Dealers Association, Inc
Star Team
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S TA F F D I R E C T O R Y Robert O’Koniewski, Esq. Executive Vice President rokoniewski@msada.org Jean Fabrizio Director of Administration jfabrizio@msada.org Peter Brennan, Esq. Staff Attorney pbrennan@msada.org Paul Fellows Administrative Assistant/ Membership Coordinator pfellows@msada.org AUTO DEALER MAGAZINE Robert O’Koniewski, Esq. Executive Editor Catherine MacDonald Editorial Coordinator macdonaldcs8@gmail.com Subscriptions provided annually to Massachusetts member dealers. All address changes should be submitted to: MSADA by e-mail: pfellows@msada.org Postmaster: Send address change to: One McKinley Square, Sixth Floor Boston, MA 02109 Quarter Page: $450 Half Page: $700
Full Page: $1,400 Back Cover: $1,800
Auto Dealer is published by the Massachusetts State Automobile Dealers Association, Inc. to provide information about the Bay State auto retail industry and news of MSADA and its membership.
AD DIRECTORY Bellavia Blatt, 2 Boston Herald, 32 Blum Shapiro, 23 Lynnway Auto Auction, 20 M&T Bank, 22 Nancy Phillips Associates, Inc., 23 O’Connor & Drew, P.C., 31 Schlossberg, LLC, 24 Southern Auto Auction, 21 ADVERTISING RATES Inquire for multiple-insertion discounts or full Media Kit. E-mail jfabrizio@msada.org
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The official publication of the Massachusetts State Automobile Dealers Association, Inc
TA B L E O F C O N T E N T S
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FROM THE PRESIDENT: Fostering the Future THE ROUNDUP: UI Rate Freeze x6 – Reform Package Put On Hold TROUBLESHOOTNG: Transactions with Non-English Speakers LEGAL: The Disability Dilemma: How Should Employers Deal with Employees’ Medical Issues AUTO OUTLOOK ACCOUNTING: Auto Dealership Audits: Focus on Real Estate ACCOUNTING: Is the CFPB Coming for You?
16 COVER STORY: Cape Cod Tech Competes in Big Apple
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TRUCK CORNER: Believe It Or Not NEWS From Around the Horn FINANCIAL SERVICES: Are You Ready for a Visit from the Department of Labor?
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NADA UPDATE: Auto Dealers Provide Their Customers with a Safety Net During Recalls NADA MARKET BEAT
Join us on Twitter at @MassAutoDealers www.msada.org
Massachusetts Auto Dealer APRIL 2014
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from the PRESIDENT
by Scott Dube, MSADA President
Fostering the Future
Paving the way for the next generation of automotive professionals
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et’s take a moment to think about how much our industry has changed in even the past 20 years. Vehicles are constantly becoming better -- whether that means more fuel efficient, reliable or simply more fun. And while we’re charged with bringing these wondrous pieces of technology to the consumer, it’s our techs who ensure those vehicles remain safe and running. And it’s a hard job. The techs in our shop are as highly trained as they have ever been -- often with years of experience under their belt before they walk in our doors. The technology involved in modern automobiles has gotten to a point where they are more like computers on wheels than our fathers could have ever imagined. In 50 years, it will be impossible to tinker on a 2014 era vehicle in your garage without a plethora of scan tools and laptops by your side. Education is the key to making sure this quickly advancing technology doesn’t leave our businesses behind. We need to ensure that our service bays are full of qualified, capable techs who know not just the ins and outs of today’s vehicles but also continue to be up to speed on what’s coming down the pike as well. Such employees are already essential to day-to-day operations. They will be more important as vehicles continue to become more technologically advanced. That’s why your Association continues to make supporting the education of the next generation of techs a priority. We have our long-running scholarship program, which continues to fund
the education of promising young techs as they attend four-year schools. And we give a chance for high school students from across the Commonwealth to test their mettle as well. We sponsor the Massachusetts team at the auto tech competition which takes place in New York City at the Jacob Javits Center. It’s an exciting opportunity for students to test their skills and compete against peers from throughout the country. Over two days, contestants are challenged on their knowledge of everything from waveforms to tire balance, culminating in a final showdown where teams compete to debug vehicles. I’m told the team had a wonderful time in New York and had a blast competing, and it’s one of many ways that your Association hopes to build networks with both tech schools and their students. This year’s team, from Cape Cod Regional Technical High School, worked hard to qualify, and they worked even harder at the competition, with help from Dick Beard Chevrolet, which counts many Cape Cod Tech graduates among its employees. Read more about the team in this month’s cover story. I hope you will join me in congratulating the team and making sure to keep your eye out for any promising techs in your shops who could benefit from the opportunities your Association has to offer. Our scholarship program deadline is May 23, and I encourage you to spread the word to your employees who might benefit from it.
“The techs in our shop are as highly trained as they have ever been -- often with years of experience under their belt before they walk in our doors.”
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MSADA
MSADA BOARD Barnstable County Gary Beard, Dick Beard Chevrolet
Berkshire County Brian Bedard, Bedard Brothers Auto Sales
Bristol County Richard Mastria, Mastria Auto Group
Essex County William DeLuca III, Woodworth Motors John Hartman, Ira Motor Group
Franklin County Jay Dillon, Dillon Chevrolet
Hampden County Jack Sarat, Jr., Sarat Ford
Hampshire County Bryan Burke, Burke Chevrolet
Middlesex County Chris Connolly, Jr., Herb Connolly Motors Scott Dube, Bill Dube Hyundai Frank Hanenberger, MetroWest Subaru
Norfolk County Jack Madden, Jr., Jack Madden Ford Charles Tufankjian, Toyota Scion of Braintree
Plymouth County Christine Alicandro, Marty’s Buick GMC Isuzu
Suffolk County Robert Boch, Expressway Toyota
Worcester County Steven Sewell, Westboro Mitsubishi Steve Salvadore, Salvadore Auto
Medium/Heavy-Duty Truck Dealer Director-at-Large [Open]
Immediate Past President James G. Boyle, Tuck’s Trucks
NADA Director Don Sudbay, Jr., Sudbay Motors
OFFICERS President, Scott Dube Vice President, Chris Connolly, Jr. Treasurer, Jack Madden, Jr. Clerk, Charles Tufankjian
A ssociate M ember D irectory Name Contact Telephone ADESA Boston Chris Carli (508) 270-5403 ADP Dealer Services Maria Trezza (973) 404-4466 Albin, Randall & Bennett Barton D. Haag (207) 772-1981 American Fidelity Assurance Co. Tom Trudell (413) 885-5477 AutoAlert Don Corinna (949) 398-7008 AutoRaptor (RAL) Howard L. Leavitt (401) 421-6533 Bank of America Merrill Lynch Dan Duda and Nancy Price (781) 534-8543 Bellavia Blatt Andron & Crossett, PC Leonard A. Bellavia, Esq (516) 873-3000 Blum Shapiro John D. Spatcher (860) 561-4000 Boston Globe Mary Kelly (617) 929-8373 The Boston Business Advisory Group Paul Cuomo (781) 681-1501 Vincent Saccone (781) 681-1519 Burns & Levinson LLP Paul Marshall Harris (617) 345-3854 Cars.com Heidi Allen (312) 601-5376 CitNOW Jack Gardner (617) 221-8008 CloudDOCX Michael DeCarlo (585) 704-6826 Construction Management & Builders, Inc. Kate Sullivan (781) 246-9400 CVR John Alviggi (267) 419-3261 Dealermine Inc. Karen Parmenter (800) 304-3341 x5179 DealerTrack Ernest Lattimer (516) 547-2242 Downey & Company Paul McGovern (781) 849-3100 EasyCare New England Inc. Mike Douglas (770) 246-9724 Ethos Group, Inc. Drew Spring (617) 694-9761 F & I Resources Jason Bayko (508) 624-4344 Federated Insurance John Ballard (859) 312-9896 First Citizens Federal Credit Union Joe Ender (508) 979-4728 Fisher & Phillips LLP John Donovan (404) 240-4236 Joe Ambash (617) 532-9320 Grant Thornton LLP Alan Oslomowski (508) 926-2200 GW Marketing Services Gordon G. Wisbach Jr. (781) 899-8509 Huntington National Bank John J. Marchand (781) 326-0823 Key Bank James Q. Moretti (781) 558-5132 Leader Auto Resources, Inc. Brendan J. Murphy (518) 878-6341 Lynnway Auto Auction Jim Lamb (781) 596-8500 M & T Bank John Federici (508) 699-3576 MetroMedia Energy Timothy Teevens (800) 828-9427 Micorp Dealer Services Frank Salkovitz (508) 832-9816 Mid-State Insurance Agency James Pietro (508) 791-5566 Mintz Levin Kurt Steinkrauss (617) 542-6000 Murtha Cullina Thomas Vangel (617) 457-4000 Nancy Phillips Associates, Inc. Nancy Phillips (603) 658-0004 O’Connor & Drew, P.C. Kevin Carnes (617) 471-1120 Performance Management Group, Inc. Mark Puccio (508) 393-1400 R.L. Tennant Insurance Agency, Inc. Walter F. Tennant (617) 969-1300 Resources Management Group J. Gregory Hoffman (800) 761-4546 Reynolds & Reynolds Marc Appel (413) 537-1336 Robinson Donovan Madden & Barry, P.C. James F. Martin, Esq. (413) 732-2301 Samet & Company John J. Czyzewski (617) 731-1222 Schlossberg, LLC Michael O’Neil, Esq. (781) 848-5028 Sentry Insurance Company Eric Stiles (715) 346-7096 Shepherd & Goldstein Ron Masiello (508) 757-3311 Silverman Advisors, PC Scott Silverman (781) 591-2886 Southern Auto Auction Tom Munson (860) 292-7500 Sovereign Bank Richard Anderson (401) 432-0749 Target Dealer Services Andrew Boli (508) 564-5050 TD Auto Finance BethAnn Durepo (603) 490-9615 TD Bank Michael M. Lefebvre (413) 748-8272 TrueCar Steve White (774) 392-2904 Wells Fargo Dealer Services Christopher Peck (508) 314-1283 Wicked Local Media Massachusetts Jay Pelland (508) 626-4334 Windstream Rick Caruth (978) 296-0313; (413) 977-6111 Zurich American Insurance Company Steven Megee (774) 210-0092
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Massachusetts Auto Dealer APRIL 2014
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The Roundup
UI Rate Freeze x6 – Reform Package Put On Hold by Robert O’Koniewski, Esq. MSADA Executive Vice President On April 15 the governor signed legislation implementing an Unemployment Insurance (UI) rate freeze for 2014, thereby eliminating a $500 million increase on employers that took effect January 1, 2014. The new law – Chapter 71 of the Acts of 2014 – freezes UI contributions at the current Schedule E. It marks the sixth consecutive year in which the governor and Legislature have rolled back an automatic increase in employer UI taxes. With the 2014 rate issue resolved, employers must now engage with the UI system to settle accounts for the first quarter of 2014. The deadline for filing first quarter taxes is May 30, 2014. According to the Massachusetts Division of Unemployment Assistance (DUA): • All employers must submit employment and wage details no later than April 30; • The rates will be loaded the first two weeks in May; • During the week of May 19, the system will open back up for employers to make their quarterly contributions; and • Contributions are due by May 30. DUA is updating its website to reflect the new schedule. DUA indicates that it will work with individual employers seeking deferrals. For the first and second quarters, an employer may check off the deferral option for up to one-third of the contributions due to the following second and third quarters respectively. An employer may file and pay online by logging into its account at www. mass.gov/dua. It is the employer’s responsibility to file the report before the due date. If the employer fails to APRIL 2014
Massachusetts Auto Dealer www.msada.org
file on the due date, the employer may be assessed a penalty. The employer, by law, will be charged interest (12% per year) on all contributions paid after the due date; interest is charged on contributions starting from the due date until the payment date. The Voluntary Contribution option allows experience-rated employers to make additional UI contributions to reduce their UI contribution rate for the forthcoming calendar year. To qualify for the Voluntary Contribution program, an employer must: • be eligible for experience rating; • have submitted all Employment and Wage Detail Reports; and • have paid all Unemployment Insurance contributions, interest, and penalties to date. Finally, this UI rate freeze law is a temporary fix. The Legislature still is debating long-term structural changes to the UI system. The Senate and House of Representatives have passed separate reform bills that contain: a new rate table that decreases the financial burden on high-rated employers with low workforce turnover; multipleyear rate freezes; and an increase to the wage base upon which benefits are calculated. We will keep you posted on developments as they may occur.
FY2015 Budget Debate to Begin As we go to press, the Massachusetts House of Representatives is scheduled on April 28 to begin debate on the FY2015 budget. The House will sift through the 1,175 amendments filed by members to the $36.2 billion plan submitted by House Ways
MSADA and Means Chairman Brian Dempsey (DHaverhill) two weeks ago. The House’s budget plan increases proposed spending by 5 percent over last year’s budget, and it spends $191 million less than proposed by the governor. The pending House budget does not call for higher taxes. However, legislators have at least $1.1 billion in new tax revenues available due to a substantial hike in the sales tax several years ago and last year’s increase in cigarette and gas taxes. Once the House approves a FY2015 budget, which is expected to be completed by the beginning of May, the Senate will take a crack at formulating its own plan. A conference committee would then need to resolve the differences between the two documents, hopefully in time for the governor to sign a budget bill by the July 1 start of the fiscal year. One amendment of note (#458) would require the governor to request the state’s Congressional delegation to file legislation granting Massachusetts a waiver from Obamacare. A waiver would permit the Commonwealth to continue to operate under its current health insurance rules and avoid financial hardships on small employers and their employees. Business groups argue a waiver is warranted given that 97% of the state’s population has health insurance coverage. To highlight the need for resolving the waiver issue, just days before the start of the budget debate the Obama administration granted Massachusetts an additional year to transition to the new system required by Obamacare that would change the way insurance carriers calculate premiums for Massachusetts businesses and potentially drive up the cost for many employers. The governor twice previously has requested a full waiver from the Obama administration, but the requests have fallen on deaf ears. The allowed rating factors under Obamacare are age, geography, family size, and tobacco use. In Massachusetts, carriers have been allowed to
consider five additional factors, including industry, group size, participation rate, use of intermediary and membership in a group purchasing cooperative. Massachusetts had been allowed a three-year window to phase out its own rating factors, but this extension increases the transition period to 2017. According to the governor’s analysis, 53 percent of subscribers in the small group and individual market in the state will see premium increases, while 47 percent will see decreases resulting from the rating changes.
Annual Meeting – May 2, Mandarin Oriental Hotel, Boston We are days away from our 74th Annual Meeting of the members. If you have not done so yet, do not delay and register today. Your Association will conduct this year’s Annual Meeting on Friday, May 2, at the Mandarin Oriental Hotel in Boston. We will commence with a buffet lunch at Noon, with our business meeting running from 1:00-5:00 p.m. We will conclude with a cocktail reception for attendees from 5:00-7:00 p.m. We have an exciting line-up of industry and political speakers, including: • Jeremy Anspach, President and CEO, PureCars.com; • Jason Stein, publisher and editor of Automotive News; • George Magliano, IHS Global Insight; • Celia Blue, Massachusetts Registrar of Motor Vehicles; • Sen. Stan Rosenberg, Majority Leader, Massachusetts Senate; • Gubernatorial candidates State Treasurer Steve Grossman (D) and Charles Baker (R). Invitations and reminder e-mails have been sent out, so please register today. If you have any questions, contact Jean Fabrizio in our office by phone at (617) 4511051 or by e-mail at jfabrizio@msada. org.
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Congratulations to Cape Cod Tech HS We extend our congratulations to Austin Dowler and Brandon Wilkinson from Cape Cod Tech High School (CCT), who represented MSADA at the National Automotive Technology Competition staged at the NY International Auto Show this month. We also congratulate their Cape Cod Tech instructor, Robert Fitzgerald. The CCT team was selected to attend the competition after they took first place in the MSADA’s repair competition this past December. Our sponsorship of the Massachusetts team each year demonstrates our commitment to grow our involvement with the next generation of technicians through events like this, our Foundation scholarship program, and working with MassBay Community College and other schools to help show students the potentially rewarding opportunities at our members’ dealerships. It is important for these tech savvy students to realize and embrace the career opportunities available in this field. We are proud of the efforts Misters Dowler, Fitzgerald and Wilkinson brought to New York City this year, and wish them continued success in the years ahead. We couldn’t ask for classier representatives to be our standard bearer at the competition.
MSADCF Auto Tech Scholarships Available – May 23, 2014 Deadline Applications for the Massachusetts State Auto Dealers Charitable Foundation’s 2014-2015 Auto Tech Scholarships are now available on our website at www. msada.org. The Foundation’s auto tech scholarship program awards scholarships to eligible applicants for use at postsecondary educational institutions that offer auto tech training programs. Since its inception in 2003, the Foundation has awarded in excess of $900,000 to more than 200 students. A scholarship award is worth $6,000-$13,000 each over two years.
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The Roundup Five years ago the Foundation’s scholarship program expanded to include not just manufacturer-backed programs but also general automotive technology programs at a greater number of colleges in the Massachusetts area. This gives dealers an even greater chance to capitalize on a highly skilled base of potential employees. To obtain additional information on the scholarship program, contact Jean Fabrizio at MSADA at (617) 451-1051 or by e-mail at jfabrizio@msada.org. The application deadline is Friday, May 23, 2014.
Special Election Results In mid-April four new members of the Massachusetts House or Representatives were elected to fill vacancies created when their predecessors moved on to new jobs, and another House member resigned to take his seat in the Senate to which he was elected in yet another special election for that body. • Rep. Daniel Hunt (D-Dorchester) won the seat vacated by Boston Mayor Marty Walsh. • Rep. RoseLee Vincent (D-Revere) won the seat of Kathi-Anne Reinstein, for whom Vincent served as a legislative aide. Reinstein left the House to take a job with the Boston Beer Co. • Rep. Daniel Ryan (D-Charlestown) won the seat vacated by Eugene Flaherty, won resigned to become corporate counsel for the City of Boston, appointed by his colleague Mayor Walsh. • Rep. John Velis (D-Westfield) won the seat vacated when former Republican Rep. Donald Humason was elected to the state Senate in a special election to fill that seat. • Rep. Jason Lewis (D-Winchester) was elected in a special election to the state Senate for the seat that opened up when former state Senator Katherine Clark (DMelrose) was elected to the U.S. House of Representatives. In addition to these changes, the seat formerly held by Carlos Henriquez will APRIL 2014
be filled by a special election on April 29. Readers may recall Henriquez was expelled by the House after his felony conviction and is currently serving a jail sentence. Another five House vacancies will remain empty for the remainder of the year, as House Speaker Robert DeLeo (D-Winthrop) has decided not to call any more special elections.
Congress’ CFPB Saga Nary a dealer has escaped the flood of information from various sources regarding the attempted overreach of the Consumer Financial Protection Bureau (CFPB) as it engages in backdoor attempts to commit inordinate harm to dealers’ finance practices conducted on behalf of their customers. In an effort to address the CFPB’s overreach, this month U.S. Senator Deb Fischer (R-Nebraska) introduced two bills aimed at restructuring the CFPB. The Consumer Financial Protection Commission Act of 2014 (SB 2213) would replace the agency’s single director position with a five-member, bipartisan commission. Sen. Fischer’s second bill, the CFPB Improvement Act of 2014 (SB 2212), would change the requirement for the Financial Stability Oversight Council (FSOC) to overturn CFPB regulations. Under the Consumer Financial Protection Commission Act of 2014, each member of the commission would be appointed by the President and confirmed by the Senate. Commissioners would each serve staggered five-year terms, and no more than three commissioners could be from the same political party. If approved, the legislation would not take effect until the end of current CFPB Director Richard Cordray’s term. Currently, two-thirds of the FSOC’s 10 voting members are required to overturn CFPB regulations. The proposed CFPB Improvement Act of 2014 would change the two-thirds requirement to a simple majority. It would also exclude the director of the CFPB from such a vote, removing any individual bias.
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The reforms included in Senator Fischer’s bills were recently passed by the House of Representatives as part of H.R. 3193, legislation sponsored by Rep. Sean Duffy (R-Wisconsin).
Our PACs - DEAC & NCDPAC We appreciate the contributions thus far received from our member dealers who have answered our calls for donations to our PACs. Each year MSADA expresses itself politically through NADA’s federal PAC, Dealers Election Action Committee (DEAC), and through our state PAC, the New Car Dealers Political Action Committee (NCDPAC). We depend on contributions from our dealers to keep these PACs strong, as we need to have an active voice in Washington and on Beacon Hill. Contributions to our PACs are an inexpensive insurance policy. Since by law we cannot use our membership dues or other association revenues for political contributions, the PACs help us to remain strong politically as we advocate for our dealers’ interests in the political process. If you have not yet given to the PACs this year, please contact me at rokoniewski@msada.org and we can make sure your contributions happen. Thank you.
DealersEdge Webinars Schedule for May Are you taking full advantage of our weekly educational and training seminars provided to you through our partnership with DealersEdge Management Training? Are you receiving our weekly e-mails announcing upcoming webinars and registration information? If not, you are missing out on an incredible bargain that will add value to your employees knowledge and skills, and ultimately to the success of your stores. The live courses, and more than 100 pre-recorded webinars (and growing), are available to MSADA members in two ways. Members can elect to register for a live webinar or purchase a pre-recorded
MSADA course on an a la carte basis with MSADA’s member discount OR you can sign up for the MSADA VIP Season Ticket. A dealership can use the VIP Season Ticket to register up to 10 team members to access all programming, both live and recorded. If you aren’t already, we hope you will consider this extremely cost-effective and time-saving method of training your management staff on the latest information in their area of expertise. If you have any questions, please don’t hesitate to contact DealersEdge at 800-321-5312 or me at rokoniewski@msada.org. All MSADA-related DealersEdge information can be found at https://msada. dealersedge.com. The upcoming schedule of webinars for the next several weeks is as follows: • May 1, 1pm EST – “Updated Phone Skills for Showroom and BDC”; • May 8, 1pm EST – “How to Create a Killer Business Plan for Your Service Department”; • May 15, 1pm EST – “Which Online Tactics Are Working Best in Dealerships Today”; • May 22, 1pm EST – “How to Use ‘Captive Insurance’ to Manage Risk”; • May 29, 1pm EST – “Why 70% of Used Car Departments Underperform...And How to Unlock Your Real Used Vehicle Potential”.
Tesla Update Readers may recall that our lawsuit against Tesla Motors regarding its attempt to open a factory-owned store in Natick in violation of our state dealer franchise law (at MGL Ch. 93B, sec. 4(c) (10)) is pending before the state’s highest court, the Supreme Judicial Court (SJC). MSADA is appealing the adverse decision of the Superior Court issued on technical grounds, stating that the MSADA and the involved dealers did not have standing to bring suit against the manufacturer. We have been informed that oral arguments in the Tesla matter will be held be-
fore the Supreme Judicial Court on May 6, 2014, at 9:00 a.m., in the John Adams Courthouse, Courtroom 1, 2nd Floor, One Pemberton Square, Boston. If one cannot attend in person, one can view the proceedings that day via this link: www2. suffolk.edu/sjc.
State Employment on the Rise [The following information is provided by Associated Industries of Massachusetts.] The Massachusetts employment report for March, released in mid-April, marked a milestone for the Commonwealth’s economy – total employment statewide edged past its previous high, attained more than 13 years ago in February 2001. Although total employment today is almost exactly what it was then (3,396,400 compared to 3,391,200, seasonally adjusted), the distribution of these jobs has changed considerably. Despite the new employment record, many broad sectors of the economy are down from 2001. These include Manufacturing (-39%), Information (-22%), Financial Activities (-11%), Construction (-11%), and Trade, Transportation & Utilities (-6%). Different factors are at work in the various sectors. Manufacturing, the principal source of productivity growth, has been shedding jobs for three decades while maintaining and increasing its output. Finance and utilities have undergone significant restructuring and consolidation. The Information sector was hammered in the “dot-com bust,” and Construction suffered badly in the more recent recession. Offsetting these losses were employment gains in Education & Health Services (+34%), Leisure & Hospitality (+20%), Other Services (+11%) and Professional, Scientific and Business Services (+2%). In Education & Health Services, 90 percent of the gain was on the health side (+39%). In Professional, Scientific and Business Services, all of the increase was in Professional, Scientific, Technical Services, while management www.msada.org
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and support functions gave ground. What the sectors on the positive side have in common is reliance on increased staffing to generate growth – although efficiency may improve, personal services and billable hours are key measures of output. Government employment is almost exactly what it was 13 years ago (-0.2%), with a significant drop in federal jobs almost offset by small gains at the state and local levels. These numbers include public services in education and health – fields in which the private sector has added jobs. Has Massachusetts finally achieved recovery, not only from the last recession but also from the one before that? The employment totals may say we have, but there is other evidence – some of it from the same employment report. The unemployment rate in February 2001 was 3.0 percent (it had already begun to tick up). At the inter-recession employment peak in April 2008, the rate was 4.8 percent. In March 2014, despite recent improvement, it stands at 6.3 percent. Employers and job-seekers know that we aren’t all the way back yet.
ICYMI Recently we found an interesting comment in the second to last paragraph of a majority opinion that we hope justices someday can apply to any challenge to the CFPB’s crusade against dealer finance practices and the phantom concept of disparate impact. In the non-auto case of Equal Employment Opportunity Commission v. Kaplan Higher Education Corp., the federal Sixth Circuit Court of Appeals wrote, “We need not belabor the issue further. The EEOC brought this case on the basis of a homemade methodology, crafted by a witness with no particular expertise to craft it, administered by persons with no particular expertise to administer it, tested by no one, and accepted only by the witness himself. The district court did not abuse its discretion in excluding [the] testimony.”
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Troubleshooting
MSADA
Transactions with Non-English Speakers By Peter Brennan, Esq.
Staff Attorney, MSADA Many of our Association members operate and advertise in areas where a significant portion of the population does not speak English as their primary language. Dealers that operate in these areas can expect to have a higher percentage of customers that do not speak English and must be prepared to follow federal and state regulations when transacting business with these customers. Even if a dealership gets relatively few non-English speaking customers, compliance with these laws and regulations is required. The first impact that dealers should be aware of is the need, under the Federal Trade Commission’s Used Car Rule, to post a Spanish-language Buyer’s Guide on an automobile that is the subject of a Spanish-language negotiation. Under the Rule, the Buyers Guide must include the following information: (i) whether the vehicle is being sold with a warranty, (ii) what percentage of the repair costs a dealer will pay under warranty, (iii) that oral promises are difficult to enforce, (iv) that the consumer should get all promises in writing, (v) to keep the Buyers Guide for reference after the sale, (vi) a description of the major mechanical and electrical systems on the car, as well as some of the major problems that consumers should look out for, and (vii) a statement that the consumer should have the car inspected by an in-
APRIL 2014
dependent mechanic before they buy. Importantly, if a transaction is conducted in Spanish, the Spanish language Buyers Guide must be displayed on the vehicle before the vehicle is offered for sale. Accordingly, if a dealer operates in an area with a high concentration of primarily Spanish speaking citizens, the dealer should display both the English language Buyer’s Guide and a Spanish translation of that form on the automobile before it is offered for sale. The FTC will find a violation of this rule if the Spanish-language Buyers Guide is not provided to the customer until after the details of the transaction are negotiated. Advertisements are a source of constant concern for most members, as complying with the various state and federal guidelines is a daunting task. These requirements can become even more onerous when advertising in multiple languages. The FTC has ruled that advertisements that include multiple languages can be deceptive if the statements expressed therein are inconsistent. For example, let’s say a Spanish language advertisement offers a low lease rate on a new car with no money down. An English language disclaimer at the end of the advertisement could be viewed as deceptive if the disclaimer is inconsistent with the language in the body of the advertisement. It is better to avoid this potential pitfall altogether by limiting the advertisement to one language. Additionally, the FTC has long held that if a company advertises, makes sales pitches and negotiates transactions in Spanish, the company should provide contracts and necessary disclosures in the same language. Failure to do so can be seen as an unfair and deceptive practice and leave a dealer exposed to civil liability and regulatory action. The predominant deciding factor in cases where
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liability has been found on the part of the business has been the conduct of the business and not the English proficiency of the customer, Thus, dealers should monitor their actions and the actions of their salespeople closely when negotiating a deal with a non-English speaking customer. Of course, many potential customers may speak neither English nor Spanish, so how should dealers plan to transact business with customers that speak other languages? Obviously, a dealership should not be expected to employ an interpreter for every language, and, in fact, it is better if the interpreter is provided by the customer to avoid any accusation of unfair dealing. In a situation where an interpreter is required (and provided) by the customer, and the deal documents are not available in the customer’s primary language, the dealer must ensure that the transaction is properly documented in case the customer files a complaint. In this situation, the dealer or dealership employee should have the interpreter complete an affidavit of translation in which: (i) the interpreter states that they are fluent in English and the language that the deal was negotiated in and (ii) the interpreter lists the deal documents that were interpreted and certifies that they have translated and verified the deal documents to the customer (the deal documents should then be attached to the affidavit). The interpreter must then sign and date the affidavit, and the document should be notarized. If you require any additional information on this topic or any other issue, please contact Robert O’Koniewski, MSADA Executive Vice President, rokoniewski@msada.org, or Peter Brennan, MSADA Staff Attorney, pbrennan@msada.org, or by phone at (617) 451-1051
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Legal
MSADA
By Joseph W. Ambash and Jeffrey A. Fritz
The Disability Dilemma: How Should Employers Deal With Employees’ Medical Issues? Back in December we discussed the importance of training your managers on discrimination, harassment, and retaliation as a means of minimizing the risk of a lawsuit or of an unfavorable outcome in the event that an employee or former employee files one. This month, we focus on one type of discrimination for which such training is absolutely essential: disability discrimination. The federal Americans With Disabilities Act (“ADA”) and its Massachusetts counterpart, Chapter 151B, prohibit employers from taking adverse employment actions against applicants or employees because of their “disabilities” or “handicaps,” or those of a family member (i.e., “associational discrimination”). These laws also require employers to make reasonable accommodations for employees’ disabilities or handicaps, when such accommodations would allow employees to perform the essential functions of their jobs, and do not unduly burden the employer’s business. Whether an accommodation is “reasonable” and whether it “unduly” burdens an employer’s business, will depend on the facts and circumstances in each case. In 2013, almost 28% of all charges filed nationally with the U.S. Equal Employment Opportunity Commission involved disability discrimination. The percentage was even higher in Massachusetts. Given the prevalence of such claims, having untrained managers making decisions concerning, or bearing on, employees’ medical issues is a very risky proposition. While no substitute for adequate training, what follows are some practical suggestions when it comes to dealing with employees’ medical issues: • Employers should not ask employees or applicants questions about disabilities or medical issues. Managers’ questions of applicants or employees should focus
only on their ability to perform the essential functions of their job. The proper formula is “This job requires X. Can you do X?” • Employers should have a “No Harassment” policy in their handbooks which covers disabilities. • Employers should have job descriptions that describe the duties and responsibilities of the job. Such descriptions should describe any physical and/or mental requirements • Employers should not spend much time considering whether applicants or employees technically qualify as “disabled” or “handicapped” under the law. The legal definitions are extremely broad, and the burden on employees of proving that they are “disabled” or “handicapped” is not particularly onerous. • Employers should train their managers not to discriminate, harass, or retaliate against applicants or employees because of their medical conditions, and not to make any negative or derogatory comments about applicants’ or employees’ physical or mental conditions. • Employers should train their managers to involve Human Resources whenever they are dealing with employees’ medical issues. HR involvement tends to result in more measured and consistent decisions. Especially in close cases, employers should seek advice from a lawyer. • Employers should engage in an interactive dialogue with applicants or employees about any physical or mental limitations that their medical conditions present and what, if any, accommodations exist that would allow them to perform the essential functions of their jobs. • Employers should consider whether they can reasonably accommodate employees’ physical or mental limitations. Some examples of potential reasonable accommodations are physical modifica-
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tions of facilities or work stations, reassignment to a vacant position, and acquiring assistive equipment or devices. The government rarely takes the cost of accommodations into account, unless they are extraordinary. And the government never takes into account the reactions of your customers or fellow employees toward individuals with disabilities. • Employers should know that, while they need not tolerate employees showing up to work under the influence, alcoholism may be a disability, especially where the employee is in treatment. • Employers should know that, while an open-ended leave of absence likely would not be a reasonable accommodation, absences of days, weeks, months, or even a year may be deemed a reasonable accommodation, depending on the facts and circumstances. Accordingly, employers should not have inflexible attendance policies, and should allow time off for medical issues as reasonably as the circumstances allow. • Employers should not retaliate against employees for raising medical issues, requesting accommodations, or otherwise exercising their rights under the ADA or Chapter 151B. As with any other areas of the law, there are many gray areas when it comes to disability discrimination, and whether an employer is acting appropriately under the law will depend on the facts and circumstances of each case. Training your managers appropriately to deal with these issues is essential.
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Joe Ambash is the Managing Partner and Jeff Fritz is counsel at Fisher & Phillips, LLP, a national labor and employment firm representing
hundreds
of
dealerships
Massachusetts and nationally. They reached at (617) 722-0044
in
may be
Massachusetts Auto Dealer APRIL 2014
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AUTO OUTLOOK
APRIL 2014
Massachusetts Auto Dealer www.msada.org
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Accounting
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Auto Dealership Audits: Focus on Real Estate By Barton Haag Barton D. Haag is a principal at Albin, Randall & Bennet, where he specializes in automobile and motorcycle dealerships. He can be reached bhaag@arbcpa.com.
For auto dealerships, building rent payments, leasing arrangements and other real estate transactions are often scrutinized by the IRS. In fact, to help its auditors with these types of issues, the IRS created the Market Segment Specialization Program (MSSP). The MSSP provides guidelines for auditors on examination issues specific to a wide variety of industries. There are approximately 50 guides in various industries including one for the retail automotive industry. For example, guides have been developed to assist auditors with auditing cost segregation, capitalization versus repair, and executive compensation. Although the guides are developed for IRS auditors, taxpayers can also use the guides to their advantage. They are an excellent tool for preparing for an audit to help taxpayers understand the IRS’ pointof-view. Auto dealerships commonly rent real estate, from a commonly owned real estate entity. In an IRS audit, the auditor is primarily concerned about the rent the auto dealership paid to the commonly owned real estate entity for the property and that it was negotiated at “arm’s length.” That means in terms similar to what unrelated parties would have negotiated. In an audit, IRS auditors are likely to APRIL 2014
examine the various aspects of leasing arrangements between an auto dealership and a related real estate entity. The primary focus is to determine whether the rent being paid is fair market rate of rent. The IRS uses a variety of methods to determine whether or not rent is fair market. In order for your rent to be defensible it should be based on the fair market of your building and a reasonable capitalization rate. Capitalization rates vary depending on the location of your building and whether or not your building is image compliant among other things. For example, a building in metro Boston will potentially have a significantly higher capitalization rate than a building in rural Massachusetts. In situations where excessive rent is being charged, the auditor may make an argument for reclassifying rent as compensation, dividends, or some other potentially less tax favorable payment. Upon notifying you that you have been selected for an audit, the auditor will generally request a list of items they would like to review. In the case of property and equipment, they will want a detail listing of all capitalized items. Auditors will also scour repairs and maintenance accounts, vendor accounts, miscellaneous supplies accounts and a variety of other balances. Their job is made easier today because these records must all be provided electronically, which means auditors can generally move much more efficiently through your information and be much more thorough in their analysis. Once the auditor has analyzed these records, they will take a closer look at several aspects, including: • Questionable items – large, unusual, or questionable items, as well as items that may be personal. For example, business owners capitalize and depreciate “company vehicles” like boats, RVs, tractors, or other property that may be personal and not 100% business related. • Like-Kind exchanges – structuring a
Massachusetts Auto Dealer www.msada.org
transaction as a like-kind exchange can save a dealer hundreds of thousands, if not millions, of dollars in taxes. However, the rules for what types of properties qualify for like-kind exchange treatment, the timing of transactions, and who has actual and constructive receipt of proceeds are very specific. In addition to complex rules, transactions that dealers enter into as likekind exchanges are often times complex. Unless qualified professionals are assisting the dealer through the various steps, mistakes are often times made and the IRS will disqualify the dealer from using the like-kind deferral provisions. • Real estate leasing arrangements – the IRS is looking for arms-length transactions for related party leasing arrangements. If you are leasing property to an unrelated party, the IRS is also now looking for the additional net investment income tax on this income. Bargain purchase options, sale lease-back, and other types of arrangements are also on the IRS radar screen related to real estate you lease. • Imaging/Inducement payments – many manufacturers reimburse dealers for a portion of the costs to renovate or relocate their dealerships. Auditors are well informed that dealers may be excluding these “imaging payments” from income as a reduction in the cost of their building, contributed capital or in some other manner. Unfortunately, that is generally incorrect and will likely result in a proposed adjustment from the IRS. The issues regarding property and equipment and related party lease agreements may seem straight-forward, but they are actually very complex. The new tangible property regulations have made them even more complex. Be sure to consult a qualified automotive CPA regarding these issues. Contact me at bhaag@arbcpa.com for a copy of the Auto Dealerships Audit Technique Guide.
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The Future of Dealer Reserve Is the CFPB coming for you?
By Todd E. Merriam Todd E. Merriam, CPA is a supervisor at O’Connor & Drew, PC where he specializes in
auto
dealership
accounting
and
tax
Over the last year, the Consumer Financial Protection Board’s (CFPB) war over dealer reserve has been one of the most scrutinized issues in the automotive industry. Dealer reserve, also known as dealer participation, is the additional interest over the wholesale buy rate that dealerships charge a customer when financing a vehicle. The additional interest over the buy rate compensates the dealership for acting as an intermediary between the customer and the financing institution. Dealer reserve is set at the discretion of the dealership and generally results in up to a 2% increase to the buy rate. The CFPB believes that the dealer’s discretion in setting the reserve results in higher interest rates being charged to minority borrowers than non-minority borrowers. To eliminate discrimination, the CFPB believes dealerships should move to a system where they are compensated by a flat fee. During the 2013 AICPA Auto Dealership Conference in October, Paul Metery, Chief Regulatory Counsel of the National Auto Dealers Association (NADA), discussed his organization’s opposition to moving to a flat fee compensation plan. NADA believes that under a flat fee system, dealerships may be motivated to finance customers with lenders that pay the largest flat fee and not necessarily the lowest interest rate. This, in turn, could result in higher interest rates being charged to finance customers. In December, the CFPB and US Department of Justice reached a $98 million dollar settlement with Ally Financial for engaging in discriminatory lending to consumers. The CFPB analyzed approximately 800,000 contracts which Ally had purchased from dealerships between April 2011 and March 2012 and found dealers mark up the buy rate by .2% to .29% more on certain minority groups than similarly situated non-Hispanic whites. As part of the settlement, Ally has elected to continue with the dealer reserve system but must analyze loans from dealerships for variations in dealer reserve on a quarterly basis at both the dealership level and portfolio level. To be in compliance with CFPB guidelines, the
variation in dealer reserve between minority and non-minority customers must be within 0.1 percentage points. Under the agreement, if Ally were to find disparities in lending to minority customers at the dealership level they must come up with a corrective action plan to address the situation. These corrective actions can range from Ally limiting the dealership’s ability to exercise discretion in setting its dealer reserve to eliminating lending with the dealership altogether. This is a huge development in the automotive industry, especially for dealerships that utilize Ally as its primary lending source. While it is unknown if other finance companies will be required to undergo reviews similar to Ally, dealerships need to be alert and review their current finance procedures and the element of discretion that is currently occurring in their finance office. Dealerships should consider implementing the following best practices to eliminate the appearance of potentially discriminatory lending: • Create a lending policy that establishes a standard mark-up on the buy rate for all finance customers to eliminate the discretion of finance personnel to set rates. • Any deviation from the standard mark-up should be documented in the customer’s deal. Documentation should show the deviation is for competitive reasons that would not be in violation of the Equal Credit Opportunity Act. • Require management approval for any deviations from the standard mark-up rate. A member of management should sign the deviation documentation before the deal is finalized. • Utilize any features from your F&I vendor to assist with compliance. For example, DealerTrack is currently in the process of implementing an electronic rate justification form in its software. • Periodically, audit deal jackets to ensure the dealership’s lending policy is being followed. This can be done internally or by an external company. If non-compliance is noted, management should identify the issue and take corrective action. Based on the actions of the CFPB over the past year it appears dealer reserve will continue to be scrutinized. The best course of action dealers can take at this point is to review and improve upon their current practices and make a strong commitment to having proper documentation and monitoring lending policies. If you have any questions about dealer reserve and the current events involving the CFPB, please feel free to contact Todd E. Merriam, CPA at O’Connor & Drew, PC at (617) 471-1120 or tmerriam@ocd.com.
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COVER STORY
Star Team Cape Cod Tech students showcase their skills at the National Automotive Technology Competition In today’s automotive industry, technology is everything. To test a car’s capa-
by Catherine MacDonald
bilities, diagnose its problems, and get the vehicle running again, finely honed tech skills are crucial. At the state level competition, Austin Dowler and Brandon Wilkinson were given one of the more sophisticated automobiles. Their tech talents, nurtured by Cape Cod Tech and Audi of Norwood, earned them the win as they successfully troubleshooted the Audi Q5’s problems, qualifying the team for the national competition in New York City. The first day of the annual National Automotive Technology Competition pits 30 teams of high school students from across the country against one another as they are tested on their ability to perform tasks at 15 different work stations. On the second day, teams have three hours to fix the “bugs” planted in their assigned cars. The competition, held at the Jacob Javits Center in New York City, distributes prizes and scholarship offers and is aimed at promoting careers in auto technology. The event took place alongside the New York International
APRIL 2014
Massachusetts Auto Dealer www.msada.org
Auto Show, which featured hundreds of vehicles from every major manufacturer and several new model unveilings. The MSADA sponsored the Cape Cod Regional Technical High School seniors to attend the competition, where they competed as a Team Chevrolet. Cape Cod Tech instructor Robert Fitzgerald accompanied Dowler and Wilkinson to New York. He said the four-year program at Cape Cod Tech produces well-prepared students. “The kids get a very well-rounded automotive, theoretical start. They are usually ready for industry work.” Fitzgerald is confident in his students’ abilities and offered the team high praise. “These two participants have been shining stars since they’ve started with me,” Fitzgerald said. “They both have motor oil in their blood. That’s the best way I can
describe it.” Dowler has been go-kart racing since he was a young child. He says he’s always been interested in cars, and after high school he will be attending McPherson College to learn to restore them. He currently works part time for Premier Cape Cod. He said he and Wilkinson make a great team and complement each other well. “We were able to lean on each other, (depending) on our weaknesses and strength,” Dowler said. “We’ve been friends for a few years. It’s easier to work with someone when you are friends with them.” Wilkinson says, “All sorts of automotive vehicles are cool,” but he is most interested in trucks. Currently an employee at Buick GMC Cadillac of Cape Cod, he recently joined the military and will ship off to Fort Benning in Georgia this summer. There he’ll be working on everything from golf carts to tractor trailers, Fitzgerald said. The team’s car was a Chevy, and Dick Beard Chevrolet donated a vehicle on which the team practiced. Fitzgerald said he was pleased to foster the school’s relationship with the dealership -- much of the staff are Cape Cod Tech alumni. On the final day of the competition, each team assembled be-
MSADA
We were able to lean on each other, (depending) on our weaknesses and strength.
fore their assigned car. Laptops are hooked up and a supervisor keeps a watchful eye to make sure no one accidentally starts any fires. The teams worked for three hours to get their vehicles running. While every manufacturer and most major brands were represented, the com– Cape Cod Tech student petition comes down to knowing the nuances of Austin Dowler the car. When the three hours were up, Wilkinson and Dowler were disappointed to see the car still wouldn’t run. However, competition was tight: The Cape Cod Tech team was only 26 points away from placing in the top ten.
On to the Next One Back at school, the students are preparing for the Ford/AAA Student Auto Skills State Competition on May 8. “We’re big time gearing up for the Ford competition,” Fitzgerald said with a chuckle. The back-to-back competitions are definitely a cause for stress, but mostly the whirlwind semester is exciting for the students. “It’s kind of crazy to be going from one competition to another so quickly. It’s a good feeling,” Dowler said. The team is practicing right now on a Ford Fiesta, which was
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“These two participants have been shining stars since they’ve started with me. They both have motor oil in their blood. That’s the best way I can describe it.” – Cape Cod Tech instructor Robert Fitzgerald
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Star Team
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MSADA Scholarships Help Meet Demand for Technicians In 2003, the Massachusetts State Auto Dealers Charitable Foundation began its Automotive Technician Scholarship Program. The Foundation is the charitable arm of the Massachusetts State Automobile Dealers Association. More than 200 students have benefited from over $950,000 in scholarships. Massachusetts Bay Community College has been a long-time partner and has the most extensive partnership (scholarships) with the Foundation in the state. Students from colleges, including Benjamin Franklin Institute of Technology, Springfield Technical Community College and Massasoit Community College, have also received scholarships from the Foundation. The Scholarship Program is competitive. A two-year scholarship ranges from $6,000 to $13,000 per year. Less than 10 percent of the students who apply are accepted. Students must maintain a 3.0 average in their tech courses, and they must have secured a co-op appointment in a Massachusetts new car dealer repair shop (dealership). A co-op is technically an internship and students are paid, offsetting the cost of tuition of the program at MassBay. The tuition for the automotive technician program is $16,000. The field of auto mechanics is changing dramatically. Today’s mechanic needs to know how to operate a keyboard as well as
a stick shift. As cars with sophisticated onboard computers become the rule rather than the exception, the profession is becoming more white collar, and technicians now need to be computer- as well as mechanically-savvy. Auto mechanics are now called technicians, and for good reason. While they may still sometimes get their hands dirty, more often than not, they turn to computers to help them diagnose a problem and perhaps even give them the repair instructions. MassBay, part of the state’s community college system, is training this new breed of automotive technicians at its state-of-the-art automotive center in Ashland, a suburb outside of Boston. MassBay’s Automotive Center is known for having one of the best programs in the Northeast. Its strong partnerships with area dealers ensures that its students get to work and train on the latest models. Job prospects for automotive technicians are very optimistic. The pay is excellent, and there is a shortage of up-and-coming technicians. According to the U.S. Department of Labor, the demand for auto technicians will have increased by almost 20 percent by 2014.
donated by Ford Chatham. Fitzgerald said for years the school has had a good relationship with the dealership for parts. Students and instructor all agreed that the New York competition provided good preparation. “In hindsight, it was nice to have that training,” Fitzgerald said. The national competition is serving as a great inspiration for the underclassmen, says Fitzgerald. He said the instructors are planning to have Wilkinson speak to the class about the experience – once the Ford competition is over. “We’re going be ready for that one,” Dowler said. “We’re going to win that one.” Meanwhile, MSADA Executive Vice President Robert O’Koniewski said the team’s overall academic success is just one way the Association supports its next generation of auto techs. “We are very proud of these students,” O’Koniewski said. “They represent the best of what our young Massachusetts technicians have to offer. We need to continue to grow our involvement with the next generation through sponsoring this competition, our Foundation scholarship program, and working with
MassBay and other schools to help show students the opportunities at our dealerships. “Plus, this is a great indicator of the high level of education and commitment Mr. Fitzgerald and his students bring to the table each year. We couldn’t ask for classier competitors to carry the Massachusetts label.”
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MSADA
TRUCK CORNER
Believe It or Not by Dick Witcher
Dick Witcher is Immediate Past Chairman of ATD and the dealer principal at Minuteman Trucks, Inc.
It’s been more than a decade since strict air quality control and emission regulations for commercial vehicles were first introduced. The performance advancements made since 2001 are staggering, and now even more changes are set to come. Medium- and heavy-duty trucks are about to see another round of improvements. In late February President Obama fulfilled a State of the Union promise when he announced he would once again task the Environmental Protection Agency (EPA) and National Highway Transportation Safety Administration (NHTSA) to develop a new series of commercial vehicle emission standards. The president called for the two agencies to create a first draft of the new regulations by March 2015, then he is allowing the agencies a year to review, edit and implement the regulations. It is likely that the second round of regulations will take effect in model year 2020. The president has described the new regulations as “win-win-win” and believes the stricter rules will continue to drive down emissions and improve fuel economy while combating climate change. Early response from the trucking industry has been positive. The American Trucking Associations hope the administration will set a path that is both based on the best science and research available and economically achievable. But there is little doubt that trucks featuring better fuel-efficiency and economy will cost more. These trucks will deliver reduced fuel expenses for fleets reducing life-cycle costs and therefore the total operating cost, while simultaneously reducing freight transportation’s carbon footprint. If there is a significant cost increase to achieve the new regulations, OEMs and dealers are likely to experience the same boom to bust purchasing cycle they experienced in 2006. Further, the increase in capital cost will likely further drive independent owner operators from the industry. In my farewell speech as Chairman of the American Truck Dealers I encouraged the nation’s commercial truck dealers to build relationships with government regulators and members of Congress to help them gain a better understanding of the industry and how laws and regulations can have adverse consequences. Cooperation will be key to making an economically reasonable solution a reality. The industry will evolve to meet the regulations quicker if all sides work together.
Officials from the Environmental Protection Agency and the Department of Transportation recently toured three commercial truck dealerships to learn more about the industry. The visits resulted from an earlier meeting with federal regulators last September. At my truck dealership last month, I hosted about a dozen regulators from the Volpe National Transportation Systems Center, which is part of DOT, located in Cambridge. We explained how dealerships operate, provided a tour, and spent time looking at engine components. Many regulators have theoretical knowledge of the industry, but they have seldom seen or touched the inside of a power plant on a heavy-duty truck. When regulatory agencies make policy decisions, they need to understand how their rules will impact the business community. ATD Chairman Eric Jorgensen, who hosted one of the visits last month, explained to officials from the EPA’s office in Ann Arbor, Michigan, how the 20042010 emission changes resulted in adverse consequences, adding ATD supports the goals of lower emissions and better fuel economy but wants to be sure the goals are technologically feasible and economically practical. “Previous emissions regulations had a negative impact on the industry and also had a costly impact on dealership service departments,” Jorgensen, president and CEO of JX Enterprises in Grand Rapids, Michigan, which operates 16 stores in four states, says. “Because of higher costs from regulations, our customers overhauled high-mileage trucks and purchased preowned trucks with old technology instead of buying new, efficient trucks.” Jack Saum, chairman of the board of Beltway Companies in Frederick, Md., who hosted the third visit with EPA and DOT officials, said, “Positive intentions can often have unintended consequences.” He explained that the positive intention of passing regulations to achieve a cleaner environment led to unintended economic consequences. “Since 2004, the cost of emissions compliance has increased the price of trucks about 25 to 30 percent,” says Saum, who was ATD’s Truck Dealer of the Year in 2010. “These new technologies added weight and increased cost, and purchase decisions were delayed. This resulted in an aging, less environmentally friendly fleet.”
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NEWS
from Around the Horn
LAWRENCE
PEABODY
Commonwealth Motors Increases Campus
Acura of Peabody Named Dealership of Distinction
Commonwealth Motors in Lawrence has announced the acquisition of the former Waste Management site located at 207 Marston Street in Lawrence adjacent to Commonwealth Chevrolet. The acquisition of this property will increase the Commonwealth Motors campus to 25 acres, all of which is adjacent to Interstate 495 between exit 45 and 46. Commonwealth Motors currently has five franchises: Chevrolet, Honda, Kia, Volkswagen and Nissan. The company has been in business since 1991. In a press release, Charlie Daher of Commonwealth Motors said the acquisition of this site will add an additional 4.5 acres, plus the ability for the family-run business to further expand and better accommodate their growing customer base. No development plans are currently available but should be in the near future.
Based on measurements of successful performance in 2013, Acura of Peabody earned a Dealership of Distinction award, the highest dealership honor and a designation of excellence granted by the Acura vehicle brand. This is the seventh year that the North Shore dealership has received the award. Acura, the luxury-car division of American Honda Motor Co., grants the distinction to dealers that demonstrate high standards in all areas that affect customers, including sales operations, service and parts departments, and building appearance and amenities. Acura of Peabody is among 93 Acura dealerships across the country to receive the honor for its 2013 performance.
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Massachusetts Auto Dealer www.msada.org
NEWS from Around the Horn
MSADA
ESSEX
Greg Davidson Dies
“Earning Dealership of Distinction honors requires a yearlong commitment by every member of the dealership team,” stated Jeff Conrad, vice president and general manager at Acura, which is headquartered in Torrance, California. “The ability to set your dealership apart as the best of the best is no easy task. Our expectations are high to ensure we provide the ultimate client experience in the luxury automobile market.”
Greg Davidson, formerly of Arlington and longtime owner of Davidson Chevrolet in Malden, died on April 15. He was 63 years old, an avid golfer, coach of the Arlington Dodgers and member of the Winchester Country Club. Davidson is survived by his wife, children, grandchildren and many nieces and nephews. His family asked that donations in his honor be made to www.alz.org.
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NEWS from Around the Horn FRAMINGHAM
Gubernatorial Candidate Greets Residents at Herb Connolly Acura Republican gubernatorial candidate Charlie Baker and his running mate Karyn Polito spoke to Framingham residents and business leaders at the Herb Connolly Acura dealership on April 15. Baker pledged not to place unfunded mandates on cities and towns and to set minimum levels of funding so municipalities can budget responsibly. As part of his campaign, Baker and his running mate have pledged to grow local aid at the same rate that revenue grows, by his second year in office, if elected. Chris Connolly Jr. gave Baker and Polito a tour of the dealership on Route 9. Connolly’s wife Heather is an elected member of the Framingham School Committee and was in attendance. The event was not a fundraiser but an opportunity for Framingham residents to get to know the candidate. Many in attendance had the opportunity to have private conversations with Baker and Polito.
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Chris Connolly Sr., who introduced Baker to the crowd, worked with Baker when Baker was Massachusetts Secretary of Administration and Finance, in both Gov. William Weld and the late Gov. Paul Cellucci’s administrations. Connolly had been in his position under a Democratic governor but stayed on under the Republican governor. Connolly, a lifelong Democrat, said he is supporting Baker for Governor.
MSADA HAVERHILL
Four Chevy Dealers Boost Little League Four Massachusetts Chevrolet dealers are contributing cash and equipment to Little League programs in area cities and towns. The season-long sponsorships are part of the Chevy Youth Baseball Program, an initiative by Chevrolet that aims to foster community involvement by encouraging dealers to support local youth sports. Bill DeLuca Chevrolet Buick GMC of Haverhill is sponsoring both the Riverside-Bradford Baseball program and the Dracut Baseball Association. In Andover, Bill DeLuca’s Woodworth Chevrolet Cadillac is supporting Andover Little League. Commonwealth Motors of Lawrence is backing Prospect Hill Little League. And, in Amesbury, the Amesbury Little League is receiving aid from Amesbury Chevrolet. Through the 2014 season, those dealerships will donate such equipment as balls, catcher’s gear, batting helmets, umpire’s equipment, bases, bat racks, gear bags and first aid kits to the Little Leagues under the support. In addition, their sponsorships qualify players to attend clinics conducted by professional baseball players. Amesbury Chevrolet, Bill DeLuca Chevrolet, Commonwealth Motors and Woodworth Chevrolet join other Chevy dealers in the Northeast that are assisting 334 youth baseball programs throughout the region. The dealerships are expected to make nearly $600,000 in monetary and equipment donations this year. SWANSEA
Longtime RI Dealership Moving to Massachusetts A landmark business in Bristol, Rhode Island, just purchased property to build a brand new facility and is moving to Massachusetts. Bristol Toyota Scion owner Ed Veader confirmed that his family business is moving up the road. He just bought eight acres of land near the intersection of Rte. 6 and 136. In this multi-million dollar deal, he’s planning to build a new 43,000 square foot dealership and service center in Swansea on the former property of Baker Tractor. His 45 employees have been offered jobs, and over time he plans to add another 20 to 30 new people. Before this can happen, the business will need permitting approval from the Town of Swansea and the Commonwealth. Ed Veader said Toyota recently gave his dealership more territory in Massachusetts so this new location will allow him to better serve both states. www.msada.org
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NEWS from Around the Horn
MSADA
HAVERHILL
BOSTON
Jaffarian Pledges Support for Focused Driving
Group 1 Q1 Profit Rises 7%, Revenue up 15%
The U.S. House of Representatives designated April National Distracted Driving Awareness Month. In Massachusetts, Jaffarian Volvo Toyota in Haverhill is running a campaign called “Take the Pledge” to raise awareness about the dangers of unfocused driving. During April, Jaffarian is donating $1 for every person who visits the dealership’s Facebook page and pledges to avoid distracted driving, up to $5,000. Facebook visitors are especially encouraged to avoid texting or speaking on a cell phone while driving. The charitable contribution will go to Focus Driven, a national advocacy group that promotes cell phone-free driving. “As a dealership, we are committed to increasing awareness of the real risks of driving distracted,” said Gary Jaffarian, owner of the auto dealership and a speaker at area driving schools about the dangers of distracted driving. “We commend Jaffarian Automotive Group for being one of the first car dealerships in the nation to step forward with their pledge to help raise awareness about this sweeping epidemic that is taking 11 lives every day due to a distracted driver,” Shelley Forney, a founding member of Focus Driven.
Group 1 Automotive Inc. reported first-quarter net income of $31.3 million, a 7 percent improvement over the same quarter a year ago. The retailer’s revenue rose 15 percent to $2.3 billion. The company’s U.S. revenue rose 7 percent to $1.8 billion. That growth was primarily attributed to a 4 percent increase in sales of new units to 29,947, an 8 percent increase in sales of used units to 22,743, and a 6 percent increase in same-store parts and service revenue, the company said in a statement. Overall, the company’s new-unit sales grew 14 percent to 37,749 new vehicles in the quarter and its used-vehicle retail sales grew 16 percent to 26,877. “Despite a difficult start to the year due to significant weather disruption, we were able to achieve respectable financial results for the quarter due to a very strong performance in March,” said Group 1 CEO Earl Hesterberg during a conference call to reporters. Hesterberg said business in January and February was “severely hampered by extreme weather” that led to store closures, reduced floor traffic and incremental costs. He said sales recovered in March and were strong, but it’s not possible to recover parts and service business lost to bad weather.
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Massachusetts Auto Dealer www.msada.org
Financial Sevices
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Are you ready for a visit from the Department of Labor? by Jed Davidson J ed
Davidson
partner
of
the
is
a
B os -
B usiness A dvisory G roup. H e specializes in E mployee B enefits . ton
If the Department of Labor stepped through your door today and conducted an audit of your ERISA plan requirements, would you be prepared for them? Are you aware of the penalties that can be imposed and consequences for not being in compliance or being unprepared? If you are like most auto dealers and employers, you may have an uneasy feeling right now. The Department of Labor will be prepared, and they have the resources to get the job done. Before now, employers with 30 to 300 employees have never been a target of the DOL. That has all changed as audits are increasing in frequency with the newly bolstered DOL workforce out on the streets. Most employers rely on their Human Resources Department to keep them in compliance; however, the demands on each organization can be a heavy burden. The Employee Benefits Security Administration is responsible for protecting the integrity of pensions, health and other employee benefits, and is charged with administering and enforcing ERISA. Much of the justification for EBSA’s 2014 budget proposal, which includes additional staff to conduct these audits, was based on concerns with how plan sponsors are managing these plans. The DOL has estimated that three out of four plans they audit have had an ERISA violation. You must arm your organization with the proper tools to pass an EBSA audit as the probability of your dealer-
ship having to do so is now becoming greater and greater. The actual audit from the DOL centers on the Summary Plan Description (SPD). The Summary Plan Description is often mistaken for the documents that the insurance company sends out every year; however it is much more complicated. The SPD is the cornerstone of the audit from the DOL and is the key to having a successful audit. Other parts of the audit that are crucial to success are HIPAA, 5500 filings, and COBRA compliance. Each of these areas has significant compliance demands. Just having the SPD document is not enough. Employers will want to be careful of the type of document they purchase. There are many organizations and services that are producing less than satisfactory documents. Buyers beware. Having an unsatisfactory document is no better than having no documentation at all. Your SPD should be a living breathing document, which is updated every single year as the plans change. There are many notices that are updated every single year that have to be included in this document and there are strict instructions as to how it is to be distributed to employees. Your benefits broker usually supplies these documents if they specialize in compliance. They have access to most of the information you need for the document. So what happens if you fail an audit? This is where the rubber meets the road. If you were to fail an ERISA audit from the DOL, your information would typically then be passed along to the IRS. After that you are faced with the possibility of a Wage and Hour audit, which is both time consuming and expensive for employers. These audits can be triggered on their own, and as many of you may know are not a very pleasant experience for the employer. The IRS always finds something. Compliance is a tricky issue. ERISA www.msada.org
compliance is a very complicated area, the main problem is there is no real clarity to the information that is in the marketplace. Most employers rely on their Human Resources department or insurance broker to help them navigate through the maze of ERISA and compliance. With all the requirements employers are faced with, it’s crucial that you align yourself with someone that can help you sort through all the changes and that will be an advocate for your organization.
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Saccone & Cuomo, Registered Representatives and Saccone, Financial Advisor of Park Avenue Securities LLC (PAS), 160 Gould Street, Needham, MA 02494, (781) 449-4402. Securities
products/services and advisory ser-
vices are offered through
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a registered
broker-dealer and investment advisor.
Financial Representatives, The Guardian Life Insurance Company of America (Guardian), New York, NY. PAS is an indirect, wholly owned subsidiary of Guardian. Neither Guardian nor its subsidiaries, agents or employees provide tax or legal advice. You should consult your tax or legal advisor regarding your individual situation. The Boston Business Advisory Group is not a registered investment advisor. The Bulfinch Group is not an affiliate or subsidiary of PAS or Guardian. Life insurance offered through The Bulfinch Group Insurance Agency Inc., an affiliate of The Bulfinch Group, Inc. The Bulfinch Group is not licensed to sell insurance. Neither Guardian nor any of its subsidiaries, employees or agents provides tax or legal advice. 2014 3264 PAS is a member of FINRA, SIPC.
The Boston Business Advisory Group will address your Financial Issues on a monthly basis. Email specific questions or suggestions for future articles to vsaccone@glic.com.
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NADA Update by Don Sudbay Auto Dealers Provide Their Customers with a Safety Net During Recalls Don Sudbay, President of Sudbay Automotive Group, represents MSADA members on the NADA Board of Directors. He welcomes your
questions
and
concerns
(donsudbayjr@sudbay.com).
“Matters of public safety, such as vehicle recalls, truly underscore the value of the franchised dealer network in times of crisis.” – NADA Chairman Forrest McConnell
Below you will find some words from Forrest McConnell, NADA’s Chairman. He talks about the value of the franchise system to the consumer. We all know what the franchise system and our individual investments do for the consumer, but unfortunately there is sometimes a disconnect with our customers who think people should be able to buy a car like they buy an iPad at an Apple store. We need to constantly promote the value of the franchise system to the consumer, and I am proud that NADA is taking the leading role in this effort.
A Special Note from NADA Chairman Forrest McConnell “The Associated Press reported that automakers have recalled about 9 million vehicles in the U.S. through the first four months of the year, and ‘if that pace continues, the nation would break the record of 30.8 million recalled vehicles set in 2004.’ “When something goes wrong on the assembly line, automakers turn to their franchised auto dealers and the dealerships’ service departments to make things right – all at no cost to the customer. The franchise system is a network that consists of more than 17,700 new-car dealerships across the country which support their customers beyond the point of sale. “General Motors’ dealers are now assisting their customers everywhere—from New York City to Yuma, Arizona. Car and truck owners know they have a dealership in their community to directly turn to. But the current GM recall is just one example. Over the past few years, dealerships nationwide have remedied engineering problems that span a range of problems. “How can auto manufacturers ensure that millions of their cars in any model year will be fixed in a safe and timely manner? “The answer is the franchised dealer system. APRIL 2014
Massachusetts Auto Dealer www.msada.org
“The effective handling of vehicle recalls is one of the important reasons why state policymakers adopt the franchised dealer system for the distribution, sale and service of new motor vehicles. Matters of public safety, such as vehicle recalls, truly underscore the value of the franchised dealer network in times of crisis. “With wide distribution and service channels, franchised dealers can respond to recalls faster and more efficiently than a single manufacturer or factory store ever could. When dealers are called upon to address a recall, they see an opportunity to help get their customers back on the road and restore confidence in the brand. “The franchised dealer network will always be a model that benefits both our customers and manufacturers alike. And it’s a network that is irreplaceable.”
NADA Chairman: Franchised Dealers Provide Price Competition, Safety and Local Economic Benefits Franchised new-car dealers in the U.S. helped pave the way for startup brands, such as Honda and Toyota, said Forrest McConnell, NADA chairman. “All these manufacturers—even back in 1968—leveraged the franchised dealer system to get their products to the public, because franchised dealers shouldered the cost of stores, service, employees and inventory,” McConnell said at the 2014 Automotive Forum presented by NADA and J.D. Power in New York City on April 15. “Dealers gave those franchises a partner on the road to success.” McConnell, a Honda and Acura dealer in Montgomery, Alabama, highlighted the consumer benefits of the current franchise dealer network for sales, service and handling vehicle recalls. He said the franchise dealer system drives competition up and keeps costs down, and “cutting out deal-
MSADA MSADA ers would not lower car prices because a factory-owned retail network would have to put in the same investment in physical assets and the same operating expenses that dealers now shoulder.”
2014 NADA Convention Recorded Workshops Are Available Online Recorded workshops from the 2014 NADA Convention & Expo are available at NADA University Online (www.nadauniversity.com). There are 64 recorded sessions, which cover seven tracks: Dealer/Executive, Human Resources, Legal and Regulatory, Internet and Marketing, Sales, Business Office/F&I, Parts, and Service/ Body Shop. Some of the workshops address hot topics like healthcare reform, and hiring and holding on to millennials. Premium subscribers to NADA University Online can access the workshops after logging in. Non-subscribers can purchase the workshops in the NADA University store at www.nadauniversity.com.
NADA: Used-Vehicle Price Index Reaches All-Time High in March Wholesale prices for used cars and light trucks up to eight years in age increased by 3.7% in March, well above February’s 2.2% increase, according to the National Automobile Dealers Association (NADA) Used Car Guide in the April edition of Guidelines, a monthly report on new and used vehicle sales trends and price movement. “Harsh weather in January and February compelled dealers to bid aggressively and play inventory catch-up in preparation for the traditional spring bounce in consumer demand,” said Jonathan Banks, executive automotive analyst of NADA Used Car Guide. Late-model volume continued to fall while dealer activity was heating up, adding further buoyancy to prices, he added. “These unique factors pushed NADA’s seasonally adjusted used vehicle price index to 127.0, a new all-time high,” Banks said. The index measures the change in used vehicle prices up to eight-years-old.
Deadline to Participate in NADA’s Dealership Workforce Study is April 30 Attracting and keeping talented employees is a major challenge for new-car and -truck dealers. To assist with this task, NADA and ATD members are eligible to participate in the 2014 Dealership Workforce Study. The enrollment period ends Wednesday, April 30. There is no cost to participate, and dealers will receive two complimentary reports, which include: • 2014 Dealership Workforce Study Basic Report, a custom report that compares the individual dealership’s com-
pensation for 60 job positions, employee benefits programs, hours of operation, work schedules, and retention and turnover to the aggregated data of other participating dealerships, both regionally and nationally; and • 2014 Dealership Workforce Study Industry Report, which provides an overall industry-wide analysis of the aggregated DWS data, including hiring and retention trends, demographics such as generational differences and the gender gap, compensation, tenure, employee benefits statistics, plus hours of operation and work schedules for all U.S. regions, as well as an economic overview of 2013 and forecast for the future. Dealers can enroll as individual dealerships or dealer groups using a secure, web-based process that includes completing a survey and uploading payroll data. Dealers can enroll at www.nadaworkforcestudy.com. For more information, send an email to WorkforceStudy@nada.org or call (800) 557-6232.
NADA and ATD Issue Call for Convention Workshop Proposals Workshop proposals for the 2015 NADA and American Truck Dealers Convention & Expo are now being accepted. Each workshop proposal should be new content – not previously presented – on a timely topic of broad interest to new car or commercial truck dealers and their managers. Each proposal should include a title, synopsis, learning objectives, presentation format and 60-second video clip covering the workshop’s main focus. The deadline to submit a proposal is 5 p.m. ET on May 2, 2014. The NADA and ATD selection panels meet in June, and they will inform those who submit proposals of their status by July 18. To submit a workshop proposal, including a video clip, visit www.nadaconvention.org for instructions. The 2015 NADA and ATD convention runs Thursday, January 22, to Sunday, January 25, in San Francisco.
Reminder: 2014 ATD Performance Measurement Available on NADA University Online Be sure to review the annual publication that provides medium- and heavy-duty truck dealers with comparative performance guides derived from ATD 20 Group and Academy data and industry information. Gain insight into your dealership and employee performance by combining knowledge of your market with two years’ data for 60 Critical Operating Variables covering all departments. Log in to www.nadauniversity.com and find 2014 ATD Performance Measurement in the Training Center … Dealer/Executive tab … Dealership Management.
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NADA Market Beat
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Produced by NADA’s Industry Analysis Group • Angela Lisulo, Economist
Review of New Light Vehicle Sales Overall
There were 1.5 million light-vehicle sales in the U.S. in March 2014. This marked an increase of 28.8 percent from February 2014 and an increase of 5.6 percent over March 2013. The March 2014 Seasonally Adjusted Annual Rate (SAAR) for light-vehicle sales was 16.3 million. This was the first month of the year to record a SAAR value that was at least 16.0 million. For March 2014 YTD (and for Q1 2014), light-vehicle sales amounted to 3.7 million up 1.3 percent from a year ago. March 2014 had the greatest lightvehicle sales volume for Q1 2014. In March 2014 YTD terms, car sales held a market share of 47.8 percent with sales down 4.3 percent from a year ago. Corresponding figures for light trucks put the light-truck share at 52.2 percent with sales up 7.1 percent from a year ago. See Figure 1.
Companies/Brands
Companies with a geographic base in the Asia/Pacific region held the largest market share of light-vehicle sales for March 2014: 46.3 percent of the market. This was followed by companies based in North America (Detroit 3 and Tesla Motors) at 45.0 percent and then companies based in Europe at 8.7 percent. In March 2014 YTD terms, companies with bases in the Asia/Pacific region also held the largest share of light-vehicle sales in the U.S. at 45.8 percent; this was an increase from a share of 45.4 percent a year ago. The corresponding share held by the North America-based companies was 45.5 percent and that for the Europe-based companies was 8.7 percent. The North America-based and Asia/Pacific-based company groups each experienced growth in lightvehicle sales in March 2014 YTD terms compared
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to last year while the companies based in Europe collectively experienced a contraction in sales. Of the Detroit 3, for March 2014 YTD, General Motors had the largest volume of light-vehicle sales with 649,637 units; the Chevrolet Silverado was the leading model by sales for General
MSADA Motors with 107,757 units sold. However, Fiat Chrysler was the only company in this group that experienced growth in YTD sales, from a year ago, at 11.0 percent – both General Motors and Ford had a contraction in sales compared to March 2013 YTD. From the group of Asia/Pacific-based companies, for March 2014 YTD, Toyota had the largest volume of light-vehicle sales with 520,997 units; the Toyota Camry was the leading model by sales for the company with 94,283 units sold. Isuzu experienced the most growth in March 2014 YTD sales from last March at 138.8 percent for the group. From the group of Europe-based companies, for March 2014 YTD, Volkswagen had the largest volume of light-vehicle sales with 87,323 units; the Volkswagen Jetta was the leading model by sales with 37,368 units sold. Jaguar Land Rover experienced the most growth in March 2014 YTD sales from a year ago at 11.2 percent for the group. See Figures 2, 3 and 4.
Segments
Of all the segments, the cross utility vehicle (CUV) segment held the largest share in YTD sales at 27.4 percent, and this share was an increase from 24.9 percent in March 2013 YTD. CUV sales were up 11.5 percent from a year ago. In terms of market share, for March 2014 YTD, the CUV segment was followed by the middle car segment (19.1 percent) and the small car segment (18.9 percent), respectively. The shares for the middle car and small car segments have each declined compared to their corresponding March 2013 YTD values. Within the CUV segment, the middle CUV sub-segment was the largest sub-segment holding 64.0 percent of March 2014 YTD CUV sales. The middle CUV sub-segment also held the largest share of CUV sales for March 2013 YTD but at a lower value of 62.6 percent. For March 2014 YTD, the leading model, in terms of sales, in the middle CUV sub-segment
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NADA Market Beat was the Ford Escape with 71,305 units sold, down 2.3 percent from a year ago. This was followed by the Honda CR-V with 67,648 sales and the Chevrolet Equinox with 56,073 sales in second and third ranks, in descending order of sales, respectively. See Figures 5 and 6.
Power source
For March 2014 YTD, gasoline-powered light vehicles dominated sales with a share of 93.8 percent of the U.S. market, which was up slightly from its share of 93.6 percent in March 2013 YTD. At 2.8 percent, the diesel-powered share was an increase from its corresponding share of 2.5 percent a year ago. The market shares held by electrics and plug-in hybrids have each increased since last year, in YTD terms, while those held by hybrids and natural gas-powered light vehicles have each declined since last year. In March 2014, for the alternative power category, the U.S. automobile industry sold the following light vehicles: 5,130 electrics, 0 units powered by fuel cells, 42,843 hybrids, 62 units powered by natural gas and 4,594 plug-in hybrids amounting to 52,629 light-vehicle sales. For March 2014 YTD, for the alternative power category, the following light vehicles were sold: 12,573 electrics, 0 units powered by fuel cells, 100,033 hybrids, 165 units powered by natural
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gas, and 11,220 plug-in hybrids amounting to 123,991 light-vehicle sales. Sales in this category were down 11.1 percent from a year ago. See Figure 7.
Models
There were three pickup trucks and two cars in the highest five ranks of the best-selling light vehicles for March 2014 YTD. The three leading pickup trucks were models from the Detroit three companies: Ford F-Series, Chevrolet Silverado, and the Ram pickup. The two leading cars were models from companies based in the Asia/Pacific region: Toyota Camry and the Nissan Altima. From the list of the 15 best-selling light vehicles for March 2014 YTD, eight out of 15 light vehicles were cars and seven of the models were light trucks. See Figure 8.
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