MSADA, One McKinley Square, Sixth Floor, Boston, MA 02109
M a s s a c h u s e t t s
auto D
E
A
L
E
R
The official publication of the Massachusetts State Automobile Dealers Association, Inc
New Coins On the Block
FIRST CLASS MAIL US POSTAGE PAID BOSTON, MA PERMIT NO. 216
May 2021 • Vol. 34 No. 5
Ma s s a c h u s e t t s
auto D
St a f f D ir e ct o ry 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 Auto Dealer MAgazine Robert O’Koniewski, Esq. Executive Editor Tom Nash Editorial Coordinator nashtc@gmail.com Subscriptions provided annually to Massachusetts member dealers. All address changes should be submitted to MSADA by e-mail: jfabrizio@msada.org Postmaster: Send address change to: One McKinley Square, Sixth Floor Boston, MA 02109 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 CliftonLarsonAllen LLP, 19 DealerShop, 21 Ethos, 17 O’Connor & Drew, 28
E
A
L
E
R
The official publication of the Massachusetts State Automobile Dealers Association, Inc
Table of Contents
4 5 6 8 9 10
From the President: Moving from Masks to Chips ASSOCIATE MEMBERS DIRECTORY THE ROUNDUP: Another Step Closer LEGISLATIVE SCORECARD TROUBLESHOOTING: Legal Issues with Dash Cams AUTO OUTLOOK
14 Cover Story: New Coins on the Block
18 20 22 24 25 26
NEWS From Around the Horn LEGAL: What Happens after COVID-19 Restrictions are Lifted? nada Market Beat AIADA Brief: A Summer of Impact TRUCK CORNER: Your ATD Show Returns in 2022 nada update: Moving Forward Together
ADVERTISING RATES Inquire for multiple-insertion discounts or full Media Kit. E-mail jfabrizio@msada.org Quarter Page: $450 Half Page: $700 Full Page: $1,400
Back Cover: $1,800 Inside Front: $1,700 Inside Back: $1,600
Join us on Twitter at @MassAutoDealers www.msada.org
Massachusetts Auto Dealer
MAY 2021
4
From the President
MSADA
Moving from Masks to Chips As we start to move toward the new normal, a classic problem resurfaces
By Chris Connolly, MSADA President By the time you read this, the mask mandates are a thing of the past, the vaccination rate of the entire country is hovering around 50%, and things are starting to feel, dare I say it, almost normal. Just like the days that followed September 11, 2001, we are going to keep lessons learned held closely. We know we cannot trust the government to always know how to move quickly and efficiently in the face of a public health emergency, which means we need to study the past year carefully. That being said, “As we begin to put we can indeed breathe a maskless sigh of relief that the pandemic behind our showrooms are functioning at full-speed again. If we are following the law of “If something can us, our industry go wrong, it will,” then that means another tempest is faced with an has arrived at our doorstep. With the pandemic mostalarming parts ly behind us, our industry is faced with an alarming shortage. We are new vehicle inventory challenge due to the global doing everything microchip shortage. Technology moves at increasing speeds, and our we can at MSADA lots are the first place anyone should look to see to ensure you are that this is not a platitude. The vehicles of today desupported through pend on technology that our grandfathers could not this challenge.” even conceive of, and that is, for the most part, what makes our industry so exciting. I know I am not the only one who is looking forward to finally hitting the floor of the next New England International Auto Show. The sheer breadth of what our industry puts forward each year is incredible to behold, but that comes with its own costs. Those costs emerge when the customers we have been hoping to see walk through our doors finally make it in, and we do not have the vehicles they are looking to buy. The chip shortages that have befallen our manufacturers have been so drastic that it is simply impossible to have enough stock on our lots. We are doing everything we can at MSADA to ensure you are supported through this challenge. You will read more about this issue in these pages in the coming months. And I encourage you to keep in touch with your OEM to make sure you are getting the latest updates on where things stand. As you will read in this month’s cover story, dealers cannot afford to lack understanding of the ins and outs of where technology is headed. That includes everything from the machinery under the hoods to the ways people may be looking to pay for our vehicles. The world is moving faster than ever, and we dealers need to work hard every day to ensure we are moving along with it. t MAY 2021
Massachusetts Auto Dealer www.msada.org
Msada Board Barnstable County
Brad Tracy, Tracy Volkswagen
Berkshire County
Brian Bedard, Bedard Brothers Auto Sales
Bristol County
Richard Mastria, Mastria Auto Group
Essex County
William DeLuca III, Woodworth Motors Don Sudbay, Sudbay Motors
Franklin County
Jay Dillon, Dillon Chevrolet
Hampden County
Jeb Balise, Balise Auto Group
Hampshire County
Bryan Burke, Burke Chevrolet
Middlesex County
Chris Connolly, Jr., Herb Connolly Motors 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 Chrysler Dodge Ram Jeep Steve Salvadore, Salvadore Auto
Medium/Heavy-Duty Truck Dealer Director-at-Large [Open]
Immediate Past President [Open]
NADA Director
Scott Dube, Bill Dube Hyundai
Officers
President, Chris Connolly, Jr. Vice President, Steve Sewell Treasurer, Jack Madden, Jr. Clerk, Charles Tufankjian
Associate Members
MSADA A ssociate M ember D irectory ACV Auctions Will Morris (860) 670-7867 ADESA Jack Neshe (508) 626-7000 Albin, Randall & Bennett Barton D. Haag (207) 772-1981 American Fidelity Assurance Co. Dan Clements (616) 450-1871 America’s Auto Auction Boston Jim Lamb (781) 596-8500 Armatus Dealer Uplift Joe Jankowski (410) 391-5701 Auto Auction of New England Steven DeLuca (603) 437-5700 Automotive Search Group Howard Weisberg (508) 620-6300 Bank of America Merrill Lynch Dan Duda and Nancy Price (781) 534-8543 Bellavia Blatt Leonard Bellavia (516) 873-3000 Bernstein Shur PA Ned Sackman (603) 623-8700 Boston Magazine Noreen Murray (617) 275-2012 Broadway Equipment Company Fred Bauer (860) 798-5869 Burns & Levinson LLP Paul Marshall Harris (617) 345-3854 CDK Global Chris Wong (847) 407-3187 Chase Auto Alex Khademi (404) 375-4504 Clifton Larson Allen Rick Parmelee (860) 982-9307 Coastal Outsourced Solutions Andrea Vieira (508) 979-4733 Construction Management & Builders, Inc. Nicole Mitsakis (781) 246-9400 Cooperative Systems Scott Spatz (860) 250-4965 Cox Automotive Ernest Lattimer (516) 547-2242 CVR John Alviggi (267) 419-3261 Dave Cantin Group Woody Woodward (401) 465-7000 DealerShop Ken Grove (248) 444-6283 Brian Fleischman (716) 864-0379 DealersSocket Troy Potter (877) 340-2677 Downey & Company Paul McGovern (781) 849-3100
DP Sales Distributors Andrew Prussack {631) 842-7549 Eastern Bank David Sawyer (617) 620-3484 Eastern Insurance Group John Berksza (508) 620-3349 EasyCare New England Greg Gomer (617) 967-0303 Enterprise Rent-A-Car Timothy Allard (602) 818-3607 Ethos Group, Inc. Drew Spring (617) 694-9761 F&I Direct Sean Wiita (508) 414-0706 Michelle Salas (508) 599-0081 F & I Resources Jason Bayko (508) 624-4344 Federated Insurance Matt Johnson (606) 923-6350 Fisher Phillips LLP John Donovan (404) 240-4236 Joe Ambash (617) 532-9320 Gulf State Financial Services Mike Sims (817) 689-1735 GW Marketing Services Gordon Wisbach (857) 404-0226 John W. Furrh Associates Inc. Kristin Perkins (508) 824-4939 Key Bank Mark Flibotte (617) 385-6232 KPA Abe Cohen (503) 902-6567 LocaliQ Automotive Jay Pelland (508) 626-4334 LotLinx Brad Bass (978) 766-9000 M & T Bank John Federici (508) 699-3576 Management Developers, Inc. Dale Boch (617) 312-2100 McWalter Volunteer Benefits Group Shawn Allen (617) 483-0359 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 NEAD Insurance Trust Charles Muise (781) 706-6944 Northeast Dealer Services Jim Schaffer (781) 255-6399
www.msada.org
O’Connor & Drew, P.C. Kevin Carnes (617) 471-1120 Performance Management Group, Inc. Dale Ducasse (508) 393-1400 Piper Consulting Jim Piper (207) 754-0789 Pro-Vigil Sasha Lam-Plattes (408) 569-2385 Resources Management Group J. Gregory Hoffman (800) 761-4546 Reynolds & Reynolds Mike O’Connor (860) 462-7958 Robinson Donovan Madden & Barry, P.C. James F. Martin, Esq. (413) 732-2301 Rockland Trust Co. Joseph Herzog (508)-830-3241 Samet & Company John J. Czyzewski (617) 731-1222 Santander Bank Richard Anderson (401) 432-0749 Chris Peck (508) 314-1283 Schlossberg & Associates, LLC Michael O’Neil, Esq. (781) 848-5028 Service Credit Union Dave Pasternak (603) 812-8967 Shepherd & Goldstein CPA Ron Masiello (508) 757-3311 Southern Auto Auction Joe Derohanian (860) 292-7500 Sprague Energy Robert Savary (603) 430-7254 SunPower Christie McCarthy (408) 457-2357 Kristin Hodges (707) 694-7759 SunTrust Bank Michael Walsh (617) 345-6567 Towne Law Firm P.C. Kate Gagnon (518) 213-0707 TradeRev Dennis Finkel (508) 397-2702 TrueCar Pat Watson (803) 360-6094 US Bank Vincent Gaglia (716) 649-0581 Wells Fargo Dealer Services Josh Tobin (508) 951-8334 Windwalker Herby Duverne (617) 797-9316 Zurich American Insurance Company Steven Megee (774) 210-0092
Massachusetts Auto Dealer
MAY 2021
5
6
The Roundup
Another Step Closer By Robert O’Koniewski, Esq. MSADA Executive Vice President rokoniewski@msada.org Follow us on Twitter • @MassAutoDealers
On March 10, 2020, Governor Charlie Baker declared a state of emergency to address the Coronavirus infection that was beginning to reach into every corner of the world. Soon thereafter, the governor would issue, on almost a daily basis, executive orders, restrictions, and guidelines affecting all aspects of businesses and civic life in the Commonwealth. On May 17, 2021, a full year after the governor issued an order announcing the first phase of the four-phase re-opening plan set by his advisory board, the governor finally moved the state one step closer to a full re-opening. With his announcement that day, the governor said he would remove by May 29 – more than two months ahead of the previously scheduled August 1 goal – all remaining COVID-19 restrictions. He added that the March 2020 emergency order will be lifted on June 15. The state’s requirement that people wear face coverings will go away May 29 and be replaced by an advisory consistent with the recent U.S. Centers for Disease Control guidance that fully-vaccinated people no longer need to wear a mask or social distance in most settings. Non-vaccinated people are advised, but not required, to wear masks and social distance in most situations. Masks will still be required on transportation, in health care settings, schools, and congregate living settings regardless of vaccination status. For businesses, employers have discretion to pursue several paths under the Massachusetts order: • Opt to remove masking and social distance policies for employees and customers in the workplace, regardless of vaccination status; or • Opt to require all employees and customers to wear masks and social distance in the workplace, regardless of vaccination status; or • Opt to allow vaccinated employees and customers to go maskless but require masks for the MAY 2021
Massachusetts Auto Dealer www.msada.org
unvaccinated. This obviously depends on the honor system for employees and customers to invoke based on their own vaccination status. If an employer is going to choose to obtain the vaccination status of their employees, he/she needs to seek guidance from competent counsel as to how to conduct and maintain that process so as to avoid violation of state and federal laws. It gets even more complicated if one is to request a customer’s status, especially without state or federal guidelines in place. On the threshold of the May 29 kick-in date, although the state recorded just under its 18,000th death from COVID-19, the state achieved a major milestone and reported that just over half of its population has fully received the vaccine. The vaccination numbers will only get better during the state’s aggressive messaging and organized vaccination activities. As we continue to move higher up the vaccinations ladder, we will be able to get beyond the yoke of the government restrictions and get back to business as usual as we knew it in February 2020. Hopefully the economic recovery and pandemic battle can continue on a positive path, leaving masks, social distancing rules, PPE requirements, and COVID-driven deaths and hospitalizations in our rear-view mirror. On to the next crisis – can anyone say “microchips”?
U.I. Rates Fix, COVID-Leave Bill Back on Gov.’s Desk On May 18 the Massachusetts House of Representatives approved legislation, 157-0, that would attempt to address the obnoxiously high unemployment insurance solvency rate assessments all employers received in early April as well as re-affirm the creation of a mandatory COVID-related
MSADA paid time off program. The Senate unanimously followed suit on May 20, placing the bill back on the governor’s desk for his signature. (1) U.I. Rate Hikes and Solvency Fund Assessments. Employers do not need anyone reminding them that the extraordinary unemployment insurance solvency fund assessments they received in early April from the state were, indeed, not a belated April Fools Day joke. As we had written previously, and pointed out to legislators as the legislation first worked its way through the Legislature months ago, the open-ended and vague language in the U.I relief bill, supposedly designed to freeze employers’ rates in Schedule E, essentially allowed the state to issue solvency fund assessments, in addition to the regular Schedule E payments, that jumped from 0.58 percent in 2020 to 9.23 percent for 2021, raising costs in many cases by hundreds of thousands of dollars. Payment of the first quarter assessment was delayed until June 1, however. Immediately upon receipt of the assessments, we asked our member dealers to contact their legislators to express their outrage and request them to address this injustice immediately. Many of them did so, thereby highlighting the problem for legislators. To staunch the outcry from employers, the Legislature passed a plan that gives with one hand and takes away with the other. After all, employers did not create the almost 20% unemployment rate experienced last year at the start of the pandemic due to restrictive governmental closure orders. But, unfortunately, there is a considerable progressive coalition of legislators who feel the state should do nothing to help businesses, ever. The plan sent to the governor knocks down the solvency fund assessments to a manageable increase of 1.1%, but keeps current and future employers on the hook for picking up the tab of COVID-related unemployment claims for the next twenty years. What the Legislature’s plan does not do is take any of the almost $13 billion in federally-provided rescue funds and apply
it to the solvency fund deficit. This runs counter to what other states are doing and is, in fact, allowed under the federal guidance that was issued. Massachusetts legislators had indicated that they were awaiting said guidance before they could fix the problem, but ultimately, in their wisdom, decided to ignore the guidance once it was issued. The components of the Legislature’s plan on solvency rates includes the following: • The state would shift all COVID-related unemployment claims from the solvency fund into a new COVID claims fund, and the solvency fund would revert to its original function. Lawmakers already authorized $7 billion in bonding over 20 years as part of the original unemployment stabilization bill Baker signed in late March, so the state basically would borrow to cover the newly created account. • Employers will still be on the hook, and a newly created COVID-related assessment on businesses will kick in for 2021 and 2022. Lawmakers believe the legislation will correct huge spikes in solvency fund charges that hit businesses in April, so the quarterly bills return to an amount roughly in line with 2020 rates. • The solvency assessment rate should fall from 9.23 percent to about 1.1 percent, a figure much closer to its historic levels, legislators have opined. • The state would resend bills to every employer. The plan would postpone the due date for first-quarter bills from June 1 to July 31. Employers who already paid the inflated version of their bills will receive a credit for the difference. (2) Mandatory COVID-Related Paid Time Off. In late March, the Legislature initially passed a bill that would create a mandatory COVID-related time off program for all employees. The governor did not veto those legislative provisions but, instead, sent back proposed amendments for legislative consideration. The Legislature’s latest version would re-affirm the passage of the program and ensure municipal and state employees are covered in it (something the governor opposed). www.msada.org
Provisions of the state’s paid leave bill will conflict with the current federal law on voluntary paid leave; please consult our Bulletin #63 (5/19/21) for a specific discussion of the conflicts. Key components of the current COVID leave proposal are the following: • New Paid Leave Mandate. Employers must provide COVID-19 related paid leave to employees for various reasons, including: self-isolation on the advice of a health professional; to care for oneself or receive medical treatment; to receive an immunization; to recover from a disability due to COVID-19; to comply with a quarantine order; to care for a family member including a domestic partner; or the inability to telework due to COVID-19. • How Much Leave Must Employers Provide? Employers must provide an amount of leave for an employee who takes COVID-19 emergency paid sick leave based on his/her regular work schedule, e.g. person works 40 hours/ week is eligible for 40 hours of leave; person regularly works 20 hours/week is eligible for 20 hours of leave. • Employee Eligibility. Employees can utilize the state-mandated leave on an intermittent basis and in hourly increments. Employers will be prohibited from forcing an employee to use other paid leave provided by the employer before the employee uses the COVID-19 emergency paid sick leave, and from retaliating against an employee for utilizing said leave. • The bill would establish the Massachusetts COVID-19 Emergency Paid Sick Leave Fund to reimburse eligible employers for providing the required COVID-19 emergency paid sick leave, until the $75 million in the fund is depleted or until September 30, 2021, whichever occurs first. The maximum reimbursement amount allowed under the state fund is $850 a week per person. An employer could not apply to the state for reimbursement from the new state Fund as well as the federal tax credit. t Massachusetts Auto Dealer
MAY 2021
7
MSADA L EGISLATIVE S CORECARD
8
MAY 2021
BILL#
SPONSOR
SUBJECT
S183 S239 H407
Sen Crighton Sen Pacheco Rep Hunt
Amendments to Ch. 93B, the auto dealer franchise law.
SUPPORT
In the Joint Committee on Consumer Protection; no hearing scheduled yet.
H365 H400
Rep Finn Rep Howitt
RTR Law amendments to fix Model Year start date and consumer notice.
SUPPORT
In the Joint Committee on Consumer Protection; no hearing scheduled yet.
H336 H361 S234
Rep Chan Rep Finn Sen O’Connor
Creates process to appeal improperly issued Class 1 license.
SUPPORT
In the Joint Committee on Consumer Protection; no hearing scheduled yet.
S180 H421
Sen Crighton Rep Lewis
Modernize on-line purchase process.
SUPPORT
In the Joint Committee on Consumer Protection; no hearing scheduled yet.
H282
Rep Linsky
Allows an OEM to open a factoryowned store, without a dealer, if there is no same line-make dealer in the state. (The so-called “Tesla Exemption.”)
OPPOSE
In the Joint Committee on Consumer Protection; no hearing scheduled yet.
H1152 H1178 S711
Rep McMurtry Rep Phillips Sen Moore
Creates process to increase the insurance reimbursed labor rate paid to auto body
SUPPORT
In the Joint Committee on Financial Services; no hearing scheduled yet.
H1183 S657
Rep Puppolo Sen DiZoglio
Protects dealers from OEMs’ restrictions on selling non-OEM service contracts.
SUPPORT
In the Joint Committee on Financial Services; no hearing scheduled yet.
H1070 S719
Rep Driscoll Sen O’Connor
Creates administrative appeal process for vehicle owners to seek diminished value of damaged vehicle returned to vehicle owner.
SUPPORT
In the Joint Committee on Financial Services; no hearing scheduled yet.
H3477 H3494 S2372
Rep Golden Rep Howitt Sen Rush
Creates statutory process for allowing temp tags for out-of-state sales.
SUPPORT
In the Joint Committee on Transportation; no hearing scheduled yet.
H2004
Rep Jones
Sleepy’s-related affirmative defense.
SUPPORT
In the Joint Committee on Labor and Workforce Development; no hearing scheduled yet.
MAY 2021
STATUS
Massachusetts Auto Dealer www.msada.org
Troubleshooting
MSADA
Legal Issues with Dash Cams By Peter Brennan, Esq. MSADA Staff Attorney
In an age where surveillance cameras are ubiquitous and every millennial with an iPhone is trying to become the next TikTok sensation, people have become accustomed to the idea of recording, and being recorded, as a part of everyday life. Many dealers operate cameras in their service bays and showrooms and may even record portions of the sales and F&I process for compliance purposes. Video cameras are now a required part of the Massachusetts vehicle inspection process, and technicians can be monitored from afar as they perform safety inspections. To take a brief foray into tin-hat paranoia – my webcam could be recording me as I write this column, and, if you are reading online, your webcam might be recording you while you read it. The same technological advances that made China’s surveillance state possible have also allowed the average consumer to stockpile more reconnaissance equipment than the Cold War KGB. One item that is increasing in popularity is the dashboard video camera, or “dash cam”. Drivers use dash cams for a variety of legitimate reasons – to prevent insurance fraud in the case of an accident, to record interactions with police officers and government officials, even for sightseeing. With dash cam usage on the rise, dealers and technicians have expressed justifiable concern about the devices recording while a vehicle is in the shop for service. Massachusetts law makes it a crime to record another person secretly and with-
out consent and is often referred to as a “two-party-consent” state in terms of recording conversations. If one party is making an audio recording of a conversation that is taking place over the phone, in-person, or through another medium, then the person doing the recording must notify the person being recorded of what is going on. Should the person being recorded continue to talk after being notified of the recording, they have given their implied consent to the recording. Until recently, Massachusetts did not recognize any exceptions based on whether a person has an expectation of privacy in what is recorded. However, the U.S. Court of Appeals in Project Veritas Action Fund v. Rollins recently carved out an exemption for certain activity protected by the First Amendment, such as the recording of police officers while they perform official duties. So, what should you do if a customer brings a vehicle into the shop with a dash cam? First, if the dash cam starts automatically with the vehicle, or is always recording, then the customer must notify the dealership. Failure to do so would constitute a violation of the Massachusetts wiretapping law, Mass. Gen. Laws ch. 272, § 99. The technician should require the customer to disable the camera prior to performing any work on the vehicle. If the customer records audio of anyone at the dealership without first notifying the person of the recording, even inadvertently, the customer can face criminal liability. Issues have arisen where a customer has used a dash cam recording of a repair to blame the dealership for an issue with the vehicle that the customer discovers after service is performed. There have also been cases where a customer has complained because a technician has disconnected or removed a dash cam during service or when the vehicle is being driven by a dealership employee post-service, www.msada.org
which is typically required to ensure the problem has been fixed or reset the necessary vehicle codes. To prevent issues with dash cam recordings, the dealership should adopt a written policy that prohibits the use of any recording devices in a customer’s vehicle while the vehicle is at the dealership. In Massachusetts, because of the strict wiretapping law, this should be easy to explain to even the most suspicious customer. As previously mentioned, the Massachusetts wiretapping statute does not have an exception for conversations in public spaces, aside from a limited exemption in First Amendment cases. In many states, if a recorded conversation takes place around the water cooler or on the shop floor, the participants are not protected by the state’s wiretapping statute because they do not have an expectation that the conversation is private and cannot be overheard by another party. In Massachusetts, this is not the case. Consequently, even if a technician is working on a vehicle solo and does not object to the recording, if the device picks up any conversations from the shop, the customer could be criminally liable. The dealership should post a notice stating that it does not consent to any recording and asking customers to disable any recording devices prior to leaving their vehicle for service. This notice can also be placed on a repair order, and any dash cams that are not disabled should be disconnected by the technician prior to servicing the vehicle. If a customer objects, kindly inform them of the law. t If you have any questions regarding this column, please contact Robert O’Koniewski, MSADA Executive Vice President, at rokoniewski@msada.org, or Peter Brennan, MSADA Staff Attorney, at pbrennan@msada.org, or by phone at (617) 451-1051. Massachusetts Auto Dealer
MAY 2021
9
10
AUTO OUTLOOK
MAY 2021
Massachusetts Auto Dealer www.msada.org
MSADA
www.msada.org
Massachusetts Auto Dealer
MAY 2021
11
12
AUTO OUTLOOK
MAY 2021
Massachusetts Auto Dealer www.msada.org
MSADA
www.msada.org
Massachusetts Auto Dealer
MAY 2021
13
14
RACE TO THE FINISH COVER STORY
N ew Coins on An Auto Dealers’ Introduction to Cryptocurrency By Heather Beasley Doyle In 2018, an IBM survey of 1,314 automotive executives in ten countries found that 62% believed blockchain technology would disrupt the industry by 2021. Moreover, an elite group (15% of respondents), described as “auto pioneers,” were already embracing blockchain, with many planning to implement their first networks by 2021. With 2021 well underway, blockchain technology is indeed affecting the automotive industry, with the potential to change it more in the years ahead. In fact, the 2018 IBM study was prescient enough that Scott Spatz and Sean Terry of Cooperative Systems referenced it during an April cryptocurrency webinar for MSADA. Currently more than 4,000 cryptocurrencies are in circulation, they said. Also known as “crypto,” the best-known cryptocurrencies are Bitcoin and Ethereum. And while Tesla Motors owner Elon Musk recently reversed course after adapting early to cryptocurrency payments for vehicles, MSADA has seen an increase in cryptocurrency queries. “Crypto has been on people’s minds for a couple of years now,” said MSADA Executive Vice President Robert O’Koniewski. This year, he learned that a handful of dealers across the country have added cryptocurrency to their list of accepted payment methods. NADA Director Scott Dube said that while neither NADA nor MSADA has taken a position on crypto payments yet, they continue to monitor adoption closely. “Right now cryptocurrency prices are far too volatile for a
“I think it is important to start the conversation about crypto. This is the first minute of a lengthy conversation that we are going to have in the next couple of decades.” -- Robert O’Koniewski, MSADA Executive Vice President
MAY 2021
Massachusetts Auto Dealer www.msada.org
dealer to be able to reliably price a car in Bitcoin, for example,” he says. “If a transaction closes at 8 p.m., you would be scrambling to convert the Bitcoin into dollars. What if you do not have the staffing to do that? There are too many logistical issues at the moment to make it practical for most dealers.” While crypto payments remain rare, a number of businesses accept encrypted virtual currencies, including BMW, Whole Foods, Nordstrom, Starbucks, and AT&T. Doing so establishes an organization as tech savvy, Terry and Spatz said. “The opportunity for auto retailers is informing themselves of some of these technologies and then marketing themselves as forward-thinking, security-minded retailers,” Spatz said in an interview.
Putting in Guardrails For many, cryptocurrency remains shrouded in mystery, but broken down a little, it is not as complicated as it might seem. Crypto is a payment method that uses
the
Block
MSADA
“The opportunity for auto retailers is informing themselves of some of these technologies and then marketing themselves as forward-thinking, security-minded retailers.” -- Scott Spatz, Cooperative Systems
a digital file (similar to those on personal computers), rather than paper coins or bills, to pay for transactions, explained Spatz and Terry, Cooperative Systems president and account manager, respectively. One of cryptocurrency’s key differentiators is that, unlike the United States dollar and other government-backed currencies, it is decentralized and unregulated. An additional value proposition is the security behind blockchain technology, which ensures each “coin” and each transaction is authentic. While cryptocurrency is a speculative enterprise for most -and prices have fluctuated wildly during the past few months -- there are emerging use cases beyond transactions. Nonfungible Tokens, built on a blockchain platform called Ethereum, are a way for digital files to be certifiably one-of-a-kind. Digital art pieces are commanding hundreds of thousands of dollars -- an unheard of market even six months ago. The original retail-oriented goal behind the technology, however, remains on the horizon. Typically, customers with Bitcoin or other crypto
to spend will be younger, between 20 and 40 years old. While it is important to remember that some older customers might also want to pay with Bitcoin, for example, customers aged 26 to 38 are most likely to do so. And most will want to buy a luxury
vehicle, Spatz and Terry said. “Online sales and online teams have an incredible opportunity to engage with this demographic,” Terry noted. “It is important to be pro-consumer, addressing their wants and desires,” O’Koniewski added. “But one needs to be prudent and protective of one‘s business if engaging in this process.” Dealerships that accept cryptocurrency can save this crypto payments in an organizational fund, convert them instantly to www.msada.org
Massachusetts Auto Dealer
MAY 2021
15
16
RACECoins TO THE FINISH New on the Block cash through a platform such as BitPay, or convert them to other cryptocurrencies—though this last option is not commonly exercised. Terry and Spatz explained that crypto can be held in an online exchange (similar to the stock market); stored in a safe in physical form, coins or paper wallets with embedded technology; or stored in a crypto wallet: A “hot” wallet is connected to the internet via an app, for example, while a “cold” wallet is offline, with the ability to connect via a USB cord or cell phone. The online exchange allows crypto holders to trade currencies, opening the potential of earning auto dealers and other retailers more income--but succeeding in this realm requires expertise. For the most part, “It is just another type of payment, albeit a bit confusing,” Terry said. Curious but cautious dealerships can put guardrails around new cryptocurrency interactions by limiting the size of accepted crypto transactions or immediately converting the currency back to cash, Spatz said. Cryptocurrency uses blockchain technology, a digital record or ledger protected by cryptography, or encoded messages. One of the benefits of blockchain— whether it is used for payment, title transfers, smart vehicle data, or regulatory transparency—is that it cannot be altered or counterfeited, Terry explained. Hearing Terry and Spatz talk, and looking back to the IBM survey, blockchain itself seems critical to understand, perhaps more so than crypto. “There is an exponential amount of money paid to establish trust within business, within agreements, within decisions,” Spatz said. “One of the things that blockchain does is eliminate the need for that, because each transaction is fully verifiable.” And as customers understand blockchain more via their insurers’ safe driving rewards or by using sites such as carVertical, which verifies a pre-owned vehicle’s history using blockchain, they might be more inclined to pay via cryptocurrency. MAY 2021
Massachusetts Auto Dealer www.msada.org
First Steps for Dealers A dealership preparing to accept crypto needs first to make sure that its IT infrastructure is strong and secure, with good internet connectivity speed, secure devices, and, eventually, protected crypto keys. It also means having an IT disaster recovery solution, malware protection, and web filtering, Spatz explained. In an interview, he described an adequate system as “multi-layered” and recommended having a thorough technology audit and assessment. As dealerships consider their options, “Everyone should do their own research, and also look at the trends within the industry and look at the major financial institutions,” Terry said. From a dealer perspective, Dube noted that a wait-and-see approach might remain most prudent for the majority of dealers. “The margins are already so thin, you cannot afford to accept a cryptocurrency whose price might fluctuate by thousands of dollars overnight,” he said. “But in the long-term, we will likely see one or two of these become more stable. And it is more important than ever for dealers to stay informed on what the future might hold.” O’Koniewski added that technology has been increasingly at the heart of how people pay and interact financially with the world, be that through online bill payment or Apple Pay or other accepted processes. Yet, he said, cryptocurrency is still a niche payment method requiring a certain income and mindset. “I think it is important to start the conversation about crypto,” he said. “This is the first minute of a lengthy conversation that we are going to have in the next couple of decades. When you see the Chinese Community Party start the process of digitizing their country’s own currency while other nations and companies struggle with the emergence of crypto in their countries, we all need to be aware of where this new technology may go and what it may bode for the retail economy. We are past the point of, ‘Since I do not understand it, I can just ignore it.’” t
17
www.msada.org
Massachusetts Auto Dealer
MARCH 2021
18
NEWS NEWS the NEWSfrom from Around from Around Around the Horn Horn NEWS
NEWS the Horn
BROCKTON
Copeland Toyota Sponsors Marvelous Marvin Hagler Event A memorial event dedicated to one of Brockton’s most wellknown sports heroes received backing from Copeland Toyota this month. Professional boxer Marvelous Marvin Hagler, who was 62-32 with 52 knockouts in his career and the undisputed middleweight champion from 1980 to April 6, 1987, unexpectedly died at the age of 66 in March. Hagler was born in Newark, New Jersey, and moved with his family to Brockton in the late 1960s. During his title reign, he defended his title successfully 12 times, all but one by knockout. Among the many he inspired was Copeland Toyota owner Todd Copeland, who attended Hagler’s matches in the ‘80s. Copeland Toyota put $15,000 toward Marvelous Marvin Hagler Day in Brockton. Gov. Charlie Baker extended the honor to statewide status, marking May 23 as Marvin Hagler Day across the Commonwealth. “Hagler was a true champion; he epitomizes this city,” Copeland said at a news conference, holding a program from a fight he attended at age 18. “He never gave up, never got knocked down, and never backed down.” The dealership received a citation from the city for its efforts to honor Hagler’s memory. WORCESTER
Fraudulent Camaro Purchase Nets Federal Charges A Worcester man was arrested and charged last month with attempting to fraudulently purchase a Chevrolet Camaro valued at $83,000 using the bank account of an Arizona resident. Brandon Brouillard, 27, was charged with one count of bank fraud. Brouillard was detained following an initial appearance MAY 2021
Massachusetts Auto Dealer www.msada.org
last month before U.S. District Court Magistrate Judge Marianne B. Bowler. According to the charging documents, on April 17, 2021, Brouillard arrived at a Chevrolet dealership in Norwood to test drive a 2021 Chevrolet Camaro. After test-driving the Camaro, Brouillard allegedly agreed to purchase it for $83,000 and paid for the vehicle with a cashier’s check made out to the dealership. It is alleged that Brouillard provided his Massachusetts driver’s license and proof of insurance, and signed a sales contract, Massachusetts application for registration, and car title in connection with the purchase. On April 19, 2021, Brouillard allegedly picked up the Camaro from the dealership. On April 23, 2021, the dealership learned that the account listed on the bank check provided by Brouillard was frozen. The dealership contacted Brouillard, who allegedly promised that he would wire $83,000 to pay for the car. On April 26, 2021, an Arizona resident contacted local police and reported an attempted fraudulent wire transfer of $83,000 from the victim’s bank account. The victim reported that a fraudulent email purportedly from the victim was sent to the bank, requesting a wire transfer of $83,000 to pay for the victim’s “brother-in-law’s car.” The bank contacted the victim for verification, and the victim did not approve the transfer. It is alleged that starting in or about September 2020, the victim’s accounts were compromised, and large fraudulent purchases were made and shipped to Brouillard’s address. It is estimated that approximately $500,000 of the victim’s funds were stolen. The charge of bank fraud provides for a sentence of up to 30 years in prison, up to three years of supervised release, and a fine of $1 million. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors. SOUTH ATTLEBORO
Kia of Attleboro Earns President’s Club Award Kia of Attleboro is one of only 40 dealerships across the country to earn the Kia President’s Club Award for 2020. The award offers recognition for dealers’ dedication to exemplary sales and customer service experiences. “Because of your efforts, alongside our dealerships across America, Kia achieved its highest-ever U.S. retail sales total in company history,” the company said in a statement.
MSADA
NEWS from Around the Horn
NORWELL
Audi Norwell General Manager Serves as Keynote Speaker for DECA Banquet Audi Norwell’s General Manager, Michael Gaughran, served as one of two keynote speakers along with State Rep. Shawn Dooley at King Philip Regional High School’s DECA Banquet. DECA offers students real world business experience as they design creative business plans in a variety of different categories and then present their business plans in front of a panel of judges, competing regionally and internationally. “Audi Norwell sends it’s congratulations to these incredibly
BOSTON
Honda Dealerships Earn Council of Excellence Award Honda Financial Services honored dealerships across the country with its annual Council of Excellence Awards, offered to those whose dedication to their customers and leadership in automotive financing became a testament to their perseverance in a year of change. Massachusetts dealerships receiving the distinction included: – Atamian Honda, Tewksbury – Cambridge Honda – Honda North, Danvers – Ocean Honda of Weymouth
bright, creative, and hard working students for their amazing continued success in the DECA program,” the dealership said in a statement. “This year was a very particular challenge as these competitions were held on Zoom calls, and they were resilient enough to persevere and continue their successful track record.” t www.msada.org
Massachusetts Auto Dealer
MAY 2021
19
20
LEGAL
MSADA
By Joseph W. Ambash, Jeffrey A. Fritz, and Joshua Nadreau of Fisher Phillips, LLC
What Happens after COVID-19 Restrictions are Lifted? On May 13, 2021, the CDC revised its COVID-19 guidance to provide that fully-vaccinated individuals no longer need to wear a mask or social distance in any setting, except where required under federal or state law (but still recommends these prevention measures for unvaccinated individuals). The CDC also updated its guidance to provide fully-vaccinated individuals need not get tested following a known exposure (subject to certain exceptions). On May 17, 2021, OSHA announced it was reviewing CDC’s new guidance and will update its directives accordingly. For now, OSHA suggests employers refer to CDC’s guidance for information on measures appropriate to protect fully-vaccinated workers. That same date, Gov. Charlie Baker announced Massachusetts would follow suit, lifting all remaining state COVID-19 restrictions effective May 29. In their place, he issued a new “Advisory Regarding Face Coverings and Cloth Masks” that simply suggests all people (and employers) in Massachusetts follow CDC’s revised guidance. Fully-vaccinated individuals can resume all activities without wearing a mask or social distancing. Non-vaccinated individuals are still advised (but not required) to continue wearing masks and social distancing in most settings. (That said, face coverings will still be required for all individuals on public and private transportation, healthcare facilities, and related spaces.) These developments are certainly welcome and, hopefully, a harbinger of the end of this pandemic (and a return to business-as-usual). But are we there yet? In some ways, yes; in others, no. This article tries to answer some of the questions these developments raise.
Can Mass. Employers Generally Return to Business-As-Usual? Largely, yes. From a state-law perspective, the governor’s Advisory means Massachusetts employers may choose to ditch their mask and social distancing policies MAY 2021
effective May 29, 2021, and largely return to a work environment in which masks are not mandated. That said, it may be prudent for employers to wait until OSHA announces its position before changing its policies, so as to avoid a problem in the unlikely event OSHA takes a different one.
Can Mass. Employers Continue to Maintain Mask and Social Distancing Policies? In short, yes. The CDC’s revised guidance makes clear that employers may continue to require employees to wear masks and social distance in the workplace, regardless of vaccination status. This status quo, again, is likely the most risk averse course at this point until OSHA definitively weighs in. Alternatively, many employers may seek a middle-ground, permitting vaccinated employees to go maskless, while continuing to require unvaccinated employees to wear masks. Employers who go this route must also decide how they intend to verify the vaccination status of their workforce. The EEOC has stated employers may inquire into their employees’ vaccination status without running afoul of the ADA, but, as always, they should be careful. Employers should designate a point-person at the dealership, preferably trained in HR compliance, to keep track. If the dealership requires employees to provide proof of their vaccination, those records must be kept separately from other personnel information in a confidential file. Alternatively, employers may choose to use the “honor system” and assume employees are vaccinated if they report to work without a mask.
Can Mass. Employers Prohibit the Wearing of Masks in the Workplace? While (assuming OSHA ultimately agrees) an employer need not require employees to wear a mask while at work or may continue to require them to do so, a prohibition on the wearing of masks can
Massachusetts Auto Dealer www.msada.org
be problematic. To be sure, if an employee cites an underlying medical reason as the basis for his or her request, the ADA may require an employer to allow that employee to continue to wear a mask as a reasonable accommodation. But what about employees who have no underlying medical condition of which to speak, but who nonetheless prefer to continue to wear a mask while at work. Must an employer continue to allow them to wear masks at work (even if fully-vaccinated)? The answer, at this point, appears to be no. No downside appears to exist to allowing employees to do so. Perhaps, as we (hopefully) get temporally further and further from this pandemic, an employer can take a harder line without any real problems. But, at this point, employers may be well-advised to allow employees to continue to wear masks if they so choose.
Can Mass. Businesses Require Customers to Mask if Unvaccinated? Should We? The policing of customer mask-wearing presents similar but different issues for dealerships. While dealerships may implement any one of the options above for customers, both the CDC and Governor Baker’s new advisory leave the key question unanswered: How can a dealership determine whether its guests are fully vaccinated and cleared for a mask-less experience? There is no easy answer at this time. Asking your guests for information about their vaccine status or proof of vaccinations is a risky proposition fraught with legal peril. You should coordinate with your legal counsel if you want to pursue such a course of action, but there are critical discrimination and privacy concerns to overcome. It may be far easier and less risky for dealerships to again rely on the “honor system” and assume if guests enter the showroom maskless, they have been vaccinated. t
MSADA
23
www.msada.org
Massachusetts Auto Dealer
MAY 2021
22 APRIL 2021
Patrick Manzi
NADA Senior Economist
Boyi Xu
Economist
April’s new light-vehicle sales saw an 18.5 million-unit SAAR— the second straight month (following a March revision) of sales above 18.0 million units and the highest monthly sales rate since July 2005 with a 20.6 million SAAR. The April 2021 SAAR is also up 112% from April 2020—which experienced the weakest sales of
MAY 2021
Massachusetts Auto Dealer www.msada.org
the pandemic—and up 12.1% from April 2019. Though pent-up demand from the pandemic played a role this April, sales were likely pulled forward by consumers’ uncertainty about being able to find the vehicles they want in coming months. t
MSADA
NADA MARKET BEAT
www.msada.org
Massachusetts Auto Dealer
MAY 2021
23
24
AIADA Brief
MSADA MSADA
A Summer of Impact
Every member of Congress has an auto dealership in his or her district. release of our Annual Economic Impact Report in conjunction with the manufacturer-led group Autos Drive America; a slate of informative, thought provoking webinars and podcasts; and a soon-toAIADA President & CEO launch Summer-long grassroots effort called “Dealers Make an Impact.” I am particularly excited for the Dealers Make an Impact, which will involve some brand new technology and opportunities for dealers to communicate directly with their lawmakers without leaving As Summer beckons, many Ameritheir stores. cans are busy making plans AND planOur goal, always, is to make it simple ning on making up for what was a pretty for dealers to engage in advocacy efforts grim season last year. But, even as the and break down any walls that country prepares for some exist between dealerships and well-deserved sun and the federal government. After fun, small business owna few decades on Capitol Hill, ers must also keep an eye it has been my experience that on a rapidly evolving polawmakers have a hard time litical situation. voting for policies that hurt Dealers cannot let down the people and businesses their guard when they they know. still face serious COVID By the end of the Summer, recovery challenges, init is my goal to make sure cluding production and there is not a member of Conemployee shortages. In gress who does not know, and addition, a number of very count as a friend, at least one real threats to internationinternational nameplate dealal nameplate dealers are er in his or her district. brewing in Washington, At AIADA, we believe that D.C., including a renewed when we remove the barriers “Buy American” push between you and your legislafrom the White House and newly empowered union “At its heart, this conflict between tors, good things happen. The more they know about your forces intent on influencdealers and lawmakers is based on business on Capitol Hill, the ing EV subsidies. a lack of understanding.” less likely we will see legislaI do not share all of this tion and policies that make it to scare you, but rather hard for you to hire, operate, and grow. of understanding? Through advocacy. to remind you that dealers, particularly So can dealers look forward to a SumAIADA has a number of plans in the international nameplate dealers, have alworks to ensure that dealers have a vamer of sand, sun, and sangria? Sure. But, ways had a complicated relationship with with AIADA’s support, you must also enriety of chances to impact policy at the our government. On one hand, lawmaksure that it is a Summer of impact. federal level this Summer. They include ers love you for the employment and tax t our evergreen Dealer Visit Program; the base you create.
By Cody Lusk
MAY 2021
But on the other, so called “foreign brands” – even those built here in America – have frequently served as a convenient scapegoat for politicians. At its heart, this conflict between dealers and lawmakers is based on a lack of understanding. Legislators are not familiar enough with your 9,500 franchises, your 564,000 employees, or your $34 billion payroll. By the same token, international nameplate dealers may not always be familiar with the legislative process or their own representatives, especially if there has been turnover in their district. How can AIADA help fix this problem
Massachusetts Auto Dealer www.msada.org
MSADA
TRUCK CORNER
Your ATD Show Returns in 2022 By Steve Bassett Chairman, American Truck Dealers Steve
is
the
dealer
General Truck Sales in Muncie, Indiana. He also has locations in Indianapolis, I ndiana , and T oledo , O hio . H e sells V olvo , Isuzu, H ino, and M ack trucks. principal
of
I am proud to personally invite you to ATD Show 2022, our latest and greatest Show experience in Las Vegas, March 10-13.
When ATD paused to re-imagine and recreate our signature show, our goal was to present new offerings and create an experience that optimally suits the needs of America’s truck dealers. We have done just that. I am proud to personally invite you to ATD Show 2022, our latest and greatest Show experience in Las Vegas, March 10-13. The ATD leadership has thoughtfully planned and carefully assessed a new schedule and Show format tailored to the needs of truck dealers. We took your feedback, comments, suggestions, and ideas, and the result is a Show that is not just made for you but built by you. In a rapidly changing climate like today’s— where space and time are precious commodities— we recognize every aspect of our Show must be as relevant as ever. Improving the quality of the ATD Show served as the foundation for all our new offerings. Our goal is to ensure that everyone can take full advantage of the Show’s resources from the first day to the last. That is why the ATD Show has been structured with intention and purpose, focusing on three specific areas: industry, government, and technology. Our restructured schedule includes programming dedicated to OEM, supplier, and allied industry participation and dealer networking for all participants. ATD recognizes the immense value of franchise meetings with dealers and OEM executives. There will be more opportunities than ever to meet and engage with your fellow dealers and the industry on the most important issues affecting your truck dealerships. ATD Show 2022 will also offer unrivaled educational content with workshops curated specifically for truck dealers. In a world of new technology and a changing business environment, education is
more important than ever. All 2022 workshops are designed to take the dealer business into the future and will cover emerging topics like managing truck inventory; improving gross profit through pricing strategies; finding diesel technicians; understanding how to develop and maximize digital marketing as a truck dealer and much more. It goes without saying that we have been distanced and disconnected for the past year. ATD Show 2022 will provide a welcome reprieve, bringing our industry together in one place at one time. I am excited for dealers to take advantage of new sponsorship and networking opportunities where we can all reconnect. Best of all, this new schedule maximizes your time. Whether it is the ATD Welcome Reception, the Connection Zone, or the general sessions, there will be more time for dealers and sponsors to interact at our Show. Finally, I am happy to announce that the Encore Las Vegas will serve as the headquarters for all ATD Show meetings and functions. Not only does the Encore provide first-class lodging and amenities, it offers the space and convenience for all ATD events and meetings. This renowned hotel also provides convenient shuttling to the convention center as our Show will once again be held in conjunction with NADA Show. I encourage all ATD attendees to take advantage of NADA Show’s offerings, including workshops, general sessions, and the action-packed expo hall. As the saying goes, the Show must go on! ATD is thrilled that ours will continue next March in the Entertainment Capital of the World. Mark your calendars and be on the lookout for more Show updates, including registration dates. t
www.msada.org
Massachusetts Auto Dealer
MAY 2021
25
26
NADA Update
By Scott Dube
Moving Forward Together Scott Dube, President of Bill Dube Hyundai and MSADA Immediate Past President, represents NADA’s Massachusetts members on the NADA Board of Directors. He can be reached at scott@dubecars.com. As we move into the Summer and find infection rates continuing to decline, we must first remember that much of the world is not as fortunate and subsequently appreciate how fortunate we are to finally be in sight of whatever “normal” might start to feel like. The mask mandates are disappearing, and our customers and staff are vaccinated. As an industry, we can look ahead to a world where customers are coming through our doors as they always have, and will continue to do so. At NADA, as a new administration pushes new proposals to change the nature of our business, we are working hard to ensure that we keep dealer and customer needs at the forefront of the conversation. As you will see below, there are several areas where your voice matters.
Participate Today in NADA Dealership Energy Use Survey By Paul Walser, NADA Chairman
As dealers, we are always looking for ways to enhance our businesses’ operations, including improving the energy efficiency of our dealerships and decreasing our usage where possible. So I was pleased that last month, NADA and the Environmental Protection Agency (EPA) made a major announcement on their ENERGY STAR partnership to promote and recognize dealership energy efficiency practices. You may recognize the bright blue ENERGY STAR logo or recall seeing it on businesses in your community, but dealers currently are not eligible for this certification. Why, you ask? Businesses in any sector must be measured against one another and at present, there is no scoring system for dealers. The first step in moving towards ENERGY STAR certification for dealerships is to collect the data necessary. NADA and EPA have developed the NADA Dealership Energy Use Survey, a 20-minute, anonymous survey that collects energy use information from dealerships, including percentage of facility that is heated and/or cooled. From this data, eligible dealerships will be able to earn the coveted ENERGY STAR certification for outstanding cost-saving, energy efficient initiatives. This is an important project that will reward our industry’s MAY 2021
Massachusetts Auto Dealer www.msada.org
commitment to energy use improvement and enhance our industry’s reputation for sustainability. But we cannot do this without your participation. I ask my fellow dealers across the country to step up today and have a member of your office or facilities team complete the voluntary, 20-minute survey at www.nada.org. If you have more than one dealership location, please complete a separate survey for as many as possible. And please do not hesitate to email any questions you may have to energysurvey@nada.org. Thank you in advance for your help!
Biden Touts $174 Billion EV Plan President Joe Biden made the case for his $174 billion electric vehicle plan this month, calling for government grants for new battery production facilities during a visit to a Ford Motor electric-vehicle plant in Michigan. “We are going to set a new pace for electric vehicles,” Biden said. The president spoke to Ford workers and executives in front of a display and map touting the company’s “EV-certified dealer network” consisting of 2,300+ EV-certified dealers nationwide, trained EV sales teams, EV-qualified technicians, and certified collision locations. Biden argues the United States is falling behind China, which is selling more EVs. “The real question is whether we will lead or we will fall behind in the race for the future, or whether we will build these vehicles and the batteries that go in them here in the United States or rely on other countries,” Biden said. He has ruled out consumer incentives for high-priced electric luxury models, according to a White House factsheet, as he argues for dramatic government spending to prod Americans to buy electric vehicles at a preview of Ford’s new EV version of its best-selling F-150 pickup truck. Biden’s plan “proposes cost-sharing grants to support new high capacity battery facilities in the United States,” the fact sheet said, and backs grants to fund the retooling of shuttered factories “to build advanced vehicles and parts.” The centerpiece of Biden’s EV plan is $100 billion in consumer rebates, according to an April U.S. Transportation Department email to lawmakers. The White House fact sheet says Biden’s plan provides “point-of-sale incentives that encourage EV deployment. These incentives will not go towards expensive luxury models.” The existing $7,500 EV tax credit applies to vehicles regardless of price but phases out after a manufacturer sells 200,000 EVs. Credits for both Tesla and General Motors expired after they hit the cap. Biden wants $15 billion to build 500,000 EV charging stations by 2030 – including in apartment buildings and public parking – and $45 billion to electrify a significant number of
MSADA school and transit buses. He also wants to fund shifting the federal fleet to more EVs.
Auto Shows Thriving in a COVID World Throughout the COVID-19 pandemic, personal transportation ownership has remained incredibly important to consumers, which has resulted in increased demand for new vehicles. Paired with inventory concerns from plant closures and the current microchip shortage, pent-up demand for new cars and trucks is high. There is no question that the coronavirus pandemic has changed the way dealers do business and sell cars, but one thing that has not changed is the value of auto shows to consumers. To meet consumer demand for vehicles and for an in-person experience, auto show organizers across the country are revamping their respective auto shows to operate in the COVID-19 environment. “Bringing auto shows back for our industry is a big deal, and consumers are absolutely ready,” said Auto Shows of North America (ASNA) Chair Jenn Jackson. “Auto shows are the quintessential opportunity to contrast and compare different makes and models in a low-pressure environment. For a consumer who is close to purchase, visiting an auto show will often solidify their decision on their next vehicle.” Consumers are not only ready for in-person events after facing social distancing and mask mandates for more than a year, but are also ready to shop for their next car or truck in a low-pressure, experiential environment. According to Foresight Research President Chris Stommel, “Auto shows continue to be an incredibly powerful experiential marketing channel and have not declined in the slightest from the consumer’s point of view.” “Auto shows are a unique way for us to reach consumers prior to their next vehicle purchase,” said Lisa Materazzo, Group Vice President, Toyota Marketing, Toyota Motor North America. “More than 11 million people attend auto shows annually, and two out of three attendees are in market to purchase a new vehicle within a year. Our presence at these shows offers a casual environment for consumers to get questions answered to assist them with their purchase decision.” This holds true from the dealer and auto show organizer perspective. “Nothing influences a consumer like the opportunity to physically experience all aspects of a product and that is exactly what an auto show allows,” added Jenn Jackson, also Executive Director of Greater Charlotte Auto Dealers Association, which produces the Charlotte Auto Show. “Consumers can count the cup holders, check the cargo space, experience the technology, move the seat and all in such a stimulating environment. There is no more superior platform for a manufacturer to highlight their brand and influence purchase decisions than an auto show.” While offering consumers a first-class auto show experi-
ence, attendee safety is the top priority for show organizers. Show organizers have adopted enhanced cleaning and safety protocols including temperature checks, mandatory mask use, increased sanitization stations, and enhanced vehicle cleanings between visitors. At the upcoming Houston Auto Show, visitors are also being asked to complete a short health screening before entering the venue, and the show has implemented the use of online tickets with QR codes to limit attendee and show staff contact. Some auto shows, including this month‘s Twin Cities Auto Show, are moving to outdoor venues to allow better social distancing and air flow; the show, to be held at the state fairgrounds, will feature a variety of interactive elements for attendees. The Denver Auto Show, taking place September 15-19, will be held at Elitch Gardens Theme Park. These are just a sampling of the safety measures organizers are taking, some of which are outlined in the ASNA Reopening Roadmap for Auto Shows, a guide produced with input from auto show producers and event industry advisers. All shows are working closely with health and safety officials to ensure that all applicable local, state, and federal sanitation guidelines are followed. Though the timing, locations, and safety procedures may have adapted, auto shows remain a vital marketing platform for automakers and a key shopping tool for consumers. In fact, at the recent Oklahoma City Auto Show, held March 5-7, paid attendance was up 13.2%; at the Tulsa Auto Show, held April 16-18, paid attendance was up 14.7%. “As consumer shopping trends have evolved, we have seen many auto shows quickly adapt, innovate, and improve in terms of immersive display and engagement options,” said Vinay Shahani, Lexus Vice President of Marketing. “Lexus remains committed to the auto show format as a strategic tool in our marketing mix to help show consumers our latest products and technologies while driving qualified traffic to our dealer network.” Subaru of America Senior Vice President of Marketing Alan Bethke shares this sentiment, as well. “An auto show allows us to create a unique experience that provides a window into the capability and lifestyle of our vehicles and provides a way for us to differentiate ourselves from the competition and connect with the consumer,” said Bethke. Subaru, Toyota, and Lexus are just a few of the automakers who remain committed to auto shows, including those shows taking place in a unique, altered format. While “auto shows are facing a perception issue by OEMs,” according to Foresight’s Stommel, we simply cannot ignore that “consumer driven metrics show that auto shows are just as relevant today as they ever have been.” Moving into the remainder of 2021 and beyond, auto show organizers are hopeful that OEMs will continue their support by participating in shows across the country. t www.msada.org
Massachusetts Auto Dealer
MAY 2021
27