MSADA, One McKinley Square, Sixth Floor, Boston, MA 02109
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FIRST CLASS MAIL US POSTAGE PAID BOSTON, MA PERMIT NO. 216
July 2014 • Vol. 27 No. 7
The official publication of the Massachusetts State Automobile Dealers Association, Inc
‘NoOther OtherEvent Event ‘No Like This’ ’ Like
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MA S S A C H U S E T T S
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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
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 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
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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: Stay Sharp THE ROUNDUP: How Are Your Compliance Programs? TROUBLESHOOTNG: Recalls and Dealer Obligations LEGAL: New Massachusetts Minimum Wage Law Is A Wake-Up Call To Review Your Pay Plans
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AUTO OUTLOOK
14 COVER STORY: No Other Event Like This
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NEWS From Around the Horn NADA UPDATE: Auto Credit Must Remain Affordable and Accessible for Car Buyers NADA MARKET BEAT
BlumShapiro, 20 Boston Herald, 28 Lynnway Auto Auction, 21 M&T Bank, 18 Nancy Phillips Associates, Inc., 20 O’Connor & Drew, P.C., 27 Schlossberg, LLC, 22 Southern Auto Auction, 19 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 JULY 2014
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from the PRESIDENT
by Scott Dube, MSADA President
Stay Sharp
Why we all have to update our skill sets I n an ever changing industry, old knowledge isn’t good enough. We all came up when computers were for keeping records. In fact, most of us remember the “precomputer dealerships.” In 20 years, the growing world of the Internet is completely changing almost everything we thought we knew about how to sell automobiles. It’s true that the core sales principles we’ve kept will always be central to making a sale, but getting people in the door is a completely different ball game. These days, the information consumers have access to dwarfs what our fathers and grandfathers ever could have imagined. When many potential customers walk through the door, they’ve compared dozens of vehicles. They know not just your manufacturer but have comparisons ready for every competitor under the Sun. We’ve been adjusting to this new reality for a long time. During the past few years, we’ve seen the rise of price comparison sites that have given would-be customers even more information to work with. Whether such information is accurate or not often doesn’t matter -- if customers believe they have the upper hand, everything can change quickly. Vehicles are quickly becoming more and more complex, are feature rich, and the customer is often as knowlegable as the salesperson. The Internet has made all of this research so much easier. It requires us to step up our skills and knowledge! For years, many of us have, to one extent or another, buried our heads in the sand. Now, as we face constant threats from various corners of the industry, it’s more important than ever that we dealers hone our skills collectively in order to make sure we’re not losing out on sales that could easily be ours if
JULY 2014
Massachusetts Auto Dealer www.msada.org
we keep our skills up to date. Not only that but the reputation of our industry, perhaps the very existence of the franchise system, depends on we dealers being prepared for today and the near future. Your Association works every day to make sure our member dealers have the access to the information they need to succeed in the marketplace as a group. One of our most popular ways we’ve shared that information with you is Internet sales expert Sean Bradley, who we’ve hosted at past Annual Meetings. While short bursts of his insight have been helpful, an opportunity to do a more in depth workshop is something you said you could benefit from. This Internet Sales 20 Group is a perfect opportunity for that! The Internet Sales 20 Group, which will take place September 22-24 at the Marriott Newton Hotel, is a great opportunity to experience industry expert Sean Bradley’s insight on how all of us can do a better job reaching for those Internet sales. The three-day intensive workshop will put us alongside Bradley and other experts, consultants, and vendors for an interactive experience that will help point the way forward for tackling the growing opportunities in Internet sales. It promises to be informative and useful, but also a whole lot of fun. Look for more information and more of my thoughts about the event in this month’s cover story on page 14. I look forward to seeing you in September. For any questions about registration, please contact MSADA Executive Vice President Robert O’Koniewski by phone at (617) 451-1051 or by email at rokoniewski@msada.org. In the meantime, I hope you continue to enjoy the remaining days of Summer.
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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 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 KPA Rob Stansbury (484) 326-9765 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 Management Developers, Inc. Dale Bosch (617) 312-2100 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 Reflex Lighting Ping Weiner (617) 269-4510 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
www.msada.org
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The Roundup
How Are Your Compliance Programs? by Robert O’Koniewski, Esq. MSADA Executive Vice President
A franchise dealership is probably the highest regulated business in this country, being accountable to scores of federal and state laws, regulations, and agencies. Making sure your operations remain in compliance with all these laws and rules is a daunting task. Throughout the year your Association sponsors any number of seminars and webinars designed to improve our member dealers’ compliance activities. These are on top of our writings, such as bulletins, guides, and manuals, we issue periodically in print and electronically and make available on our website (www.msada.org). Under the Obama administration, with its overzealous regulatory mission, dealers are facing two major regulatory challenges coming out of Washington: the Consumer Financial Protection Bureau’s (CFPB) allegations of discrimination when calculating dealer compensation for arranging auto financing and the Federal Trade Commission’s (FTC) enforcement program involving dealer advertising. Further, our state’s Attorney General maintains continued scrutiny over dealer advertising practices and is not shy to pursue hefty fines and compliance agreements against alleged violators. In continuing with our roster of Education and Compliance Seminars, we hosted a live seminar on July 29 at the Crowne Plaza Hotel in Natick, at which NADA senior regulatory attorney Paul Metrey and local auto dealer attorney Scott Silverman provided an overview of NADA’s optional Fair Credit Compliance Program, and recent enforcement actions by the Federal Trade Commission and the Massachusetts Attorney General’s JULY 2014
Massachusetts Auto Dealer www.msada.org
Office on vehicle advertising. The potential legal and financial liability for dealers posed by the recent actions of the CFPB, the FTC, and the Massachusetts Attorney General are considerable. Protect your dealership by learning how to mitigate the risks by attending our seminars in the future. Another tool our members can take advantage of is our legal compliance program we unveiled early last month. As we wrote last month, your Association’s Board of Directors approved a plan to enhance the value of your membership, which we announced at our Annual Meeting. This unique program is designed to assist our members in their compliance with employment laws as well as occupational and environmental safety laws. This program will be underwritten in substantial part by your Association in order to reduce costs and encourage all of our members to take advantage of this opportunity. We have established a two-part subsidy program to support your use of several compliance services offered by certain vendors, as described below. Employment Law Compliance Program: The MSADA has worked out an arrangement with Fisher & Phillips LLP, the national labor and employment firm with which we have worked for years, to provide the following services to our members, at a special discounted fee. The MSADA will underwrite a portion of each member’s legal fee for participating in any portion of the program in the following manner: • If you are a single point dealer, the MSADA
MSADA underwritten portion of one of the three items offered below will be $500. • If you have an anchor store and one or more affiliates, the MSADA underwritten portion of one of the three items offered below will be $500 for the anchor store and $300 per affiliate. The three Fisher & Phillips services dealers can partake in are the following. We encourage you to utilize each service; the MSADA financial assistance, however, is only available for a single choice: Pay Plan Review: Fisher & Phillips will review each dealership’s pay plans for all of its employees for compliance with Massachusetts and Federal wage and hour law. It will advise each dealership accordingly. The cost for this review is $1200, minus the MSADA portion of $500 (per single point/anchor)/$300 (per affiliate), for a total to you of $700/$900, if this is your selected choice. Employment Handbook/Application Review: Fisher & Phillips will review each dealership’s employment handbook and application form for compliance with Massachusetts and Federal law and make recommendations accordingly. The cost for this review is $1200, minus the MSADA portion of $500 (per single point/anchor)/$300 (per affiliate), for a total to you of $700 (per single point/anchor)/$900 (per affiliate), if this is your selected choice. 3. Management Training and General Audit: Fisher & Phillips will come to your dealership to provide special training to your managers about compliance with employment laws and the risks to the managers themselves and the dealership of failing to comply with employment laws. This includes training to avoid harassment and interference with employee rights on social media. In addition, Fisher & Phillips will meet with top management to perform a general audit of employment law compliance, such as I-9 forms and FMLA. The cost of this training and audit is $1700, minus the MSADA portion of $500 (per single point/anchor)/$300 (per affiliate), for a total to you of $1200 (per single point/anchor)/$1400 (per affiliate),
if this is your selected choice. To take advantage of this unique opportunity and begin the process, simply contact attorney Joe Ambash, the Boston Managing Partner of Fisher & Phillips, by phone at (617) 532-9320 or by email at jambash@laborlawyers.com. Fisher & Phillips will coordinate with MSADA to ensure that members receive the reduced fee underwritten by MSADA. Occupational/Environmental Safety Law Compliance Program: In addition to the employment law compliance program, MSADA has worked out an arrangement with two workplace safety compliance firms that many dealers use presently: John Furrh Associates and KPA. The Association’s financial commitment is the same as in the employment law compliance program. The MSADA will underwrite a portion of each member’s fee charged by either Furrh Associates or KPA for services rendered to your dealership(s) during the year in the following manner: • If you are a single point dealer, the MSADA underwritten portion of either’s service fee for the year will be $500. • If you have an anchor store and one or more affiliates, the MSADA underwritten portion of either’s service fee for the year will be $500 for the anchor store and $300 per affiliate. To take advantage of this opportunity and begin the process, simply contact: • At Furrh Associates – Jennie Cormier: (508)824-4939 or jcormier@johnwfurrhassociates.com • At KPA – Rob Stansbury: (484)326-9765 or rstansbury@kpaonline.com Each company will coordinate with MSADA to ensure that members receive the reduced fee for services as underwritten by MSADA. Laws and regulations are getting more complicated every year. You can no longer gamble and try to go it alone. We urge every member to take full advantage of this program to keep our dealer body compliant with all pertinent employment and workplace rules. So far 35 dealerships have taken advanwww.msada.org
tage of this program. Is your store one of them? Should you have any questions, please do not hesitate to contact me.
DealersEdge Webinars 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. DealersEdge annually provides more than 45 live weekly webinars that feature timely, topical information delivered by an incredible roster of presenters that are experts in various fields. 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 course on an a la carte basis with MSADA’s member discount of $149 per course OR you can sign up for the MSADA VIP Season Ticket. For just $800 annually, a dealership can use the VIP Season Ticket to register up to 10 team members to access all programming, both live and recorded. That’s more than $30,000 worth of training for JUST $800! 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. The upcoming schedule of webinars for the next several weeks is as follows: • Thursday, August 7, 1:00 p.m. EDT – Ed Kovalchick: The Habits and Practices of the Exceptional Service Manager. • Thursday, August 14, 1:00 p.m. EDT – Joni Stuker: Effective Dealership Massachusetts Auto Dealer JULY 2014
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The Roundup BDCs…What’s Working and What to Avoid. • Thursday, August 21, 1:00 p.m. EDT – Brooke Samples: Benchmarks and Key Performance Indicators…A Deeper Look at This “Every Manager” Tool. • Thursday, September 4, 1:00 p.m. EDT – Jeff Sacks: The Habits and Practices of the Exceptional General Manager. • Thursday, September 18, 1:00 p.m. EDT – Steve Kwiatkowski: How to Create a Professional Image on the Service Drive…Improve Retention, CSI, Sales and Profits. • Thursday, September 25, 1:00 p.m. EDT – Steve Nickelsen: The Habits and Practices of the Exceptional Used Vehicle Manager.
Save the Date: Internet Sales 20 Group - Boston On September 22-24, at the Marriott Newton Hotel, we will be joining forces with DealerSynergy to provide our member dealers and other affiliated industry entities throughout New England the opportunity to participate in a three-day series of workshops billed as “Internet Sales 20 Group – Boston”. DealerSynergy has conducted five similar events around the country, most recently in Atlantic City, with increasing attendance and success at each one. Check out our ad in this month’s publication as well as our cover story, including information about DealerSynergy CEO Sean V. Bradley, who has presented at MSADA meetings in the past. Look for our registration materials in the coming weeks or register today at www.internetsales20group.com. This event will provide you with everything you need to move your dealership’s needle in the right direction. Learn more than just the information. Learn how to evaluate, strategize, and execute a solid action plan to rise above your competition.
TIME Dealer of the Year 2015 It is that time of the year again. The highest honor bestowed on a dealer each year at the NADA convention is JULY 2014
the TIME Magazine Dealer of the Year Award (TDYA). The process begins with nominations from each state. At MSADA we consider the state nominee so important that he or she is also designated as the “Massachusetts Dealer of the Year”. Please help by nominating candidates for selection as the Massachusetts TDYA. The attached form details judging criteria and requirements, but here are the qualities that the judges at the national level are looking for: • Community service. This can be civic, political, educational, or philanthropic. The more personally involved the dealer is, the better. • Industry leadership. This can be state or national association leadership, or involvement in dealer councils. • Quality businessperson. This means success as a dealer measured by awards, commitment to customer service, and profitability. But success is measured relative to dealership size by using benchmarks. Both large and small dealerships have been finalists or won the national TDYA. Dealers may nominate him/herself or another dealer. Since your Association’s leadership does the selection at the state level, the members of the MSADA Executive Committee are not eligible; neither are the TDYA Recipients for the last four years nor current NADA directors. The last four TDYA honorees were: Brian Kelly, Ray Ciccolo, Ann Regan, and Bill DeLuca III. Please give this your careful consideration and e-mail me at rokoniewski@ msada.org with your nomination. Nominations must be received at our office by Friday, August 8. Thank you for your assistance on this matter.
Four Initiative Petitions for November 2014 Ballot It’s now all up to the voters. What started as seven initiative petitions in January are now down to four. With the completion of the signaturegathering process earlier this month, Secretary of State William Galvin has certified the following petitions to be consid-
Massachusetts Auto Dealer www.msada.org
ered by voters in November: • Question #1: Repeal automatic annual hikes in the gas tax based on increases in the Consumer Price Index; • Question #2: Expand the 5-cent bottle redemption law (the so-called “Bottle Bill”) to water bottles, juices, and other drinks; • Question #3: Repeal the 2011 legalization of casino gambling; and • Question #4: Establish mandatory earned sick time for employees. As an industry that collectively employs over 20,000 men and women, the question that potentially would have the most impact on dealership operations is a state-mandated requirement to provide paid sick time to all employees. Leading up to the November 4 Election Day, advocates for both sides on these issues will be expending large sums of money on political advertisements, which will be in addition to the sums paid for all the ads by the various statewide candidates. Welcome to the political season in Massachusetts!
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.
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Troubleshooting
MSADA
Recalls and Dealer Obligations By Peter Brennan, Esq.
Staff Attorney, MSADA Motor vehicle recalls are more frequent these days than sea gull sightings on Cape Cod. While most of the headlines have been generated by the controversy surrounding GM’s ignition switches, seemingly every manufacturer has issued a recall notice recently, with problems ranging from faulty air bags and pinched break lines to suspect vanity lamp wiring and seat belt fraying. The National Highway and Motor Vehicle Safety Act of 1966 first codified the authority of the Department of Transportation’s National Highway Traffic Safety Administration (NHSTA) to set motor vehicle safety standards and to require manufacturers to recall vehicles that fail to meet these standards or have safety related defects. The United States Department of Environmental Protection also can issue recalls, but only for violation of federal emission standards. Manufacturers initiate the majority of recalls and must alert NHTSA, vehicle owners, distributors, and dealers when a safety defect is discovered. NHTSA is responsible for monitoring the manufacturer’s response to a safety defect, and the manufacturer is responsible for the cost of repairing the defect. According to NHSTA, there were 632 recalls in 2013, encompassing 22 million vehicles. While millions of vehicles become subject to NHSTA safety recalls each year, a relatively small percentage of these recalls involve “stop operation” JULY 2014
or “stop sale” notices. Dealers must be aware of the following information pertaining to dealer responsibilities under relevant federal recall law (compiled by NADA): New vehicles in inventory or transit: Once any notice of an outstanding safety recall is received, federal law prohibits the delivery of impacted new vehicles until the recall is remedied. Used vehicles in for service, in inventory, or coming into inventory that are of the same make as the dealer sells new: Federal law neither imposes an obligation on dealerships to know the safety recall status of used vehicles, nor prohibits the resale of used vehicles with outstanding safety recalls. However, it is recommended that used vehicles of the same line make a dealer sells new be checked for outstanding, unremedied recalls (safety or emissions) since the dealership is authorized to do service or repair work involved. Important: If and when a dealership receives a recall notice indicating that certain used vehicles should not be operated and/or resold, they should not be operated or resold until the recall is remedied. Used vehicles in for service, in inventory, or coming into inventory that are not of a make the dealer sells new: Again, Federal law neither imposes an obligation on dealerships to know the safety recall status of used vehicles, nor prohibits the resale of used vehicles with outstanding safety recalls. Massachusetts law has no affirmative duty to check for open recalls on vehicles. However, in order to best protect themselves, dealers should always run a vehicle check report on a used vehicle taken in trade or purchased at auction in order to ascertain as much information about the vehicle as a consumer could. Further, our Massachusetts Attorney General has promulgated regulations under the Consumer Protection Act (MGL
Massachusetts Auto Dealer www.msada.org
Chapter 93A) regarding disclosure of product information to a consumer. The Act is broadly written to make unlawful any unfair methods of competition and any unfair or deceptive acts or practices in the conduct of any trade or commerce. The disclosure issue is addressed in the regulations at 940 CMR 3.16(2), which states, “Without limiting the scope of any other rule, regulation or statute, an act or practice is a violation of [the Act] if: … (2) Any person or other legal entity subject to this act fails to disclose to a buyer or prospective buyer any fact, the disclosure of which may have influenced the buyer or prospective buyer not to enter into the transaction;…” [emphasis added] Thus, the failure to disclose any information (including repaired vehicle damage) – regardless of dollar amount – that would influence a buyer not to enter into the transaction is an unfair and deceptive practice. The law and the regulations make no exception for seemingly inconsequential damage, say, under $100. This obviously creates a sliding scale in terms of disclosure: The greater the problem with the vehicle, the stronger a consumer’s argument that it would have influenced his or her decision not to purchase the new or used vehicle. As such, dealers need to disclose any and all facts about a vehicle to a buyer or prospective buyer no matter how trivial the information may appear to be. In this manner, a dealership can protect itself and avoid the severe penalties (treble damages, attorneys’ fees) provided under the Consumer Protection Act. If you require any additional information about complying with recall laws 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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MSADA
By Joseph W. Ambash and Jeffrey A. Fritz
New Massachusetts Minimum Wage Law Is A Wake-Up Call To Review Your Pay Plans On June 26, 2014, Massachusetts Governor Deval Patrick signed into law a bill that will increase the state’s minimum wage by $1 each year until 2017. Currently $8 an hour, the minimum wage will be $9 an hour beginning January 1, 2015, $10 an hour beginning January 1, 2016, and $11 an hour beginning January 1, 2017, the highest of any U.S. state. Dealerships should take steps now to ensure that they are paying their employees appropriately as of the first of each coming year. One such step should be a review (and revision, if necessary) of your pay plans, to ensure compliance with the minimum wage laws and other wage payment laws. A dealership’s failure to comply with such laws can prove very costly. Dealerships Must Comply With State And Federal Law. To be sure, Massachusetts dealerships must comply with the Massachusetts Wage Act and Wage Payment Laws, including the new Massachusetts Minimum Wage Law. At the same time, they also must comply with the Federal Fair Labor Standards Act. Where state and federal laws differ, dealerships must ensure that they are complying with the more employee-friendly law. For example, where the Federal minimum wage is $7.25 an hour and the Massachusetts minimum wage will increase to $9 an hour, dealerships must ensure that they comply with the latter. Why It Matters. Compliance with state and federal wage laws matters because the costs of noncompliance can be very significant, regardless of whether the noncompliance was innocent and unintentional. In addition to the amounts actually owed to employees, in a lawsuit setting, dealerships also would be on the hook for triple that amount and their own and their employees’ attorneys’ fees. They also may face civil and/or criminal penalties from the state or federal governments.
And while the liability can be hefty even just for one employee, the fact is that many violations are systemic and can affect a number of employees, which can drive up the costs exponentially. These things tend to snowball; once one employee uncovers and attempts to address a violation, s/he tends not to keep it to him or herself. Letting Sleeping Dogs Lie Is Not A Good Strategy. Some dealerships may think that, because no noncompliance issues have surfaced to date, letting sleeping dogs lie is a prudent or cost-effective strategy. They would be mistaken. Employees generally have a three-year window to recover unpaid wages. Accordingly, finding and fixing mistakes now can reduce your liability exposure, a day at a time. Moreover, should the state or federal government audit your dealership for compliance issues—as they recently have been doing, and levying substantial penalties—they typically look favorably on dealerships who have taken it upon themselves to look for and correct such mistakes. It shows that the dealership is trying to comply with the wage payment laws and may reduce any penalties the government decides to impose. Overtime Laws Are Tricky. As draconian as the penalties for noncompliance can be, the laws are not always easy to follow. And while an employee may be exempt from overtime pay under Federal law (for example, as a salesman, partsman, mechanic, or commission-paid employee), s/he may not be exempt from overtime pay under Massachusetts law. This is where many dealerships run into problems (and can incur significant liability). But dealerships can avoid such problems (and liability) by structuring such positions to comply with state and federal law, without really changing the total amount due to its employees. In other words, you can comply without materially affecting your www.msada.org
bottom line. Can Your Next-Door-Neighbor Understand Your Pay Plans? Pay plans should be in plain-English and easy to follow and understand, even by your nextdoor-neighbor. Dealerships should know that if a dispute arises between them and their employees about how they were supposed to compensate them, individuals not in the industry (i.e., judge, jury, investigator) will have to decide what the pay plan says. And, importantly, if the pay plan is ambiguous, it will be construed against the dealership. In other words, the judge, jury, or investigator typically will defer to an employee’s reasonable interpretation. MSADA Compliance Plan. In June, the MSADA announced its Employment Law Compliance Program, to provide certain legal services to member dealerships at a discounted and subsidized fee. One such service we offer is a Pay Plan Review, whereby we will review your pay plan and advise of any violations. If you would like to take advantage of this opportunity, please contact us at the number below, or by email at jambash@laborlawyers.com.
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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 in Massachusetts and nationally. They may be reached at 617 722 0044.
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AUTO OUTLOOK
JULY 2014
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COVER STORY
‘No Other Event Like This’
by Catherine MacDonald
Sean Bradley tells the story of a Massachusetts dealership that, for a long time, sold zero cars online. The owner hired him as a consultant, and online sales shot up. A system in place, Bradley stepped out and left the dealership to maintain sales without him. When online orders dipped, Bradley was called back in. Once again, sales skyrocketed. However, Bradley, an automotive Internet sales, business development, and auto marketing expert, can only be in one place at a time. It’s not feasible that every single dealership should have to hire outside consultants to boost sales every time they slow. A business model that includes an in-house staffer with the skills and knowledge to boost online sales would not only be more efficient, it could promise longer lasting, consistent sales success. This September in Boston, that’s what the Internet Sales 20 Group workshop aims to do. The three-day intensive workshop puts dealer principals, general managers, experts, consultants and vendors in a room together for an interactive, educational experience. The Boston event will focus on customer relations
Sean V. Bradley is a worldwide, expertly trained Consultant,
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Speaker and Trainer. He is a 4-time NADA convention speaker, Franklin Covey Certified Facilitator, National Speakers Association member and State Association Speaker and Trainer. Sean started Dealer Synergy more than 10 years ago, but has been in the industry more than 15 years. He has spoken at over 100 NCM and NADA 20 Groups. Sean learned the business from the ground up. Beginning as a sales consultant, he has since held positions at dealerships as Sales Manager, Internet Sales Manager, Special Finance Manager and Business Development Director. At his first dealership, he averaged more than 30 units per month, taking the sale from start to finish. On the heels of his success, Sean was recruited to a Dealer Group, Pine Belt Automotive, where he moved their Nissan/Kia/Cadillac store from 20 units per month online to more than 110! He repeated those results two years later when he took over the Internet Department of a major Nissan store in the Philadelphia market, and grew their volume from 27 to more than 100 units per month.
Massachusetts Auto Dealer www.msada.org
MSADA is What
CRM?
management -- a request of Toyota, which has enrolled 28 dealerships thus far. As the designer of the workshop, every attendee gets to take home a bit of Sean Bradley’s expertise. “It was very important for me to develop the curriculum,” Bradley says. “We took years to develop the curriculum.” MSADA President Scott Dube attended the recent workshop in Atlantic City, and “was so impressed with the whole thing,” he wanted to find a way to design a program that would be great for Massachusetts dealers. Dube has known Bradley for years
-- his dealership is the example that leads this story. “Everybody recognizes our business is being changed very rapidly. While the Internet has been around for quite some time, the consumer is getting an unprecedented amount of information,” Dube says. “The way dealers respond to this will make or break their futures. You can’t say, ‘Well we’re not doing that kind of business’ -- everybody is doing that kind of business, whether they want to or not, and they’d better do it well rather than poorly.” When Dube was a professional pilot, he went back to school
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‘No Other Event Like This’ “You can’t say, ‘Well we’re not doing that kind of business’ — everybody is doing that kind of business, whether they want to or not, and they’d better do it well rather than poorly.” —MSADA President Scott Dube
every year to stay on top of industry changes. This is no different, he says. “We’re constantly upgrading our skill set -- that’s how dealers view it. Like every other profession, we need to keep our skill sets relevant,” Dube said. Workshop attendees have the opportunity to hear success stories from other dealers, listen to experts, and learn how many components of their operations can bolster Internet sales. Bradley’s tried and tested methods for sales success involve everything from human resources to SEO, from recruiting to digital marketing. “There’s no magic bean; you need a holistic approach,” Bradley said. Internet Sales 20 Group event planner Anna GonGonzales says with all the valuable tools offered to dealers throughout this workshop, there is “no excuse not to go.” “If they want to sell more vehicles and see more profitably, this is where to go,” she said. Besides the wealth of information presented, the workshop is an opportunity to network and strengthen connections with industry leaders, consultants, and fellow dealers. “There’s an opportunity to connect with people for exJULY 2014
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tended periods of time that you just can’t get anywhere else. There’s no other event like this,” Dube said. While other similar events have different breakdown sessions, where attendees have to pick who to go see speak, the Internet Sales 20 Group workshop is structured to be one long session. This dynamic encourages interaction between the audience and panelists, and valuable insights as experts and panelists present varying views. “If different vendors don’t agree on topics, you get to see them hash out these issues live in front of you,” Dube said. “Their competition is there listening to them so that’s an interesting dynamic that develops.” While constructive disagreements are encouraged, there is one thing vendors are not permitted to do on stage: pitch. During their opportunity to speak, vendors are not allowed to attempt to sell their products, which Dube says is “much different than a lot of
What is CRM? Customer relationship management (CRM) is a system for managing a company’s interactions with current and future customers. It involves using technology to organize, automate and synchronize sales, marketing, customer service, and technical support.
MSADA experiences dealers have had at similar events in the past.” Including vendors in this way adds an important element to the workshop, Bradley says. “As long as people abide by the rules, why banish them? Some of these vendors, they’re not parasites, they’re subject matter experts,” Bradley said. Bradley says the time for vendors to speak freely about their products after the sessions -- during the “rockstar VIP party.” The first and second evenings of the workshop include social events for attendees, speakers, and vendors to let loose together, and Bradley promises a great time. He says at the past two events in Los Angeles and Atlantic City, workshop goers enjoyed live performances and partied at popular night clubs. For the September event, his company has booked the Spirit of Boston cruise ship. “We’re going to re-live the Boston Tea Party,” he said. “And that’s only the first night.” Dube said he encourages dealers to sign up before the event sells out. Many dealerships have already committed attendees and open seats will continue to fill with dealers from across the country. At the Atlantic City workshop Dube attended, he says every state was represented Gonzales says the opportunity to compare notes with dealers from around the country is invaluable. “The workshop is instructional, fun, and the networking is awesome,” she said. “Everyone gets into it, and everybody gets together. That’s what this is all about.”
Key IS20G Components Design: With one clear curric• Instructional ulum that has a strong beginning, middle • • • •
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and end. Dealer Interaction: Real-life dealers discuss their stories of successes, failures, trials and tribulations. Maximum Exposure: You will never miss out on a session that may be of importance to you or your store. Bench Mark Composite: The 28 Toyota stores will be evaluated, reviewed, analyzed and ranked based on 7 Key Performance Indicators Panels: After a few starter questions the panel is an open forum for free-flowing, impromptu questions, encouraging interaction between members, sponsors and speakers. Workbook: A 90-page workbook, filled with speaker information, workshop notes, and activities, and four full pages to create your custom action plan and exit strategy. The Follow Up: In addition to your Accountability Partner, IS20G provides further resources all year round for members to reference, including all PowerPoint presentations, supplemental content, videos, forums and articles www.msada.org
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NEWS
from Around the Horn
HADLEY
TommyCar Auto Group Announces 2014 Scholarship Winners The Tom Cosenzi Scholarship announced the three students that each received the $1,000 scholarship for demonstrating excellence in the classroom and in the community. The Tom Cosenzi Scholarship was established to honor the memory of Thomas E. Cosenzi. When Thomas E. Cosenzi passed away in 2009, it was not only ownership of the TommyCar Auto Group that passed to his children Carla and Thomas M., but also his legacy of giving back to the community. That legacy was evident when the three recipients of a 2014 Tom Cosenzi Scholarship were awarded their checks for $1,000. The program has expanded to Hopkins Academy in Hadley, Shepherd Hill Regional High School in Dudley, Greenfield High School, and Northampton High School. “The combination of academic achievement and community
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leadership exhibited by these students underscores the core values of this scholarship,” said Carla Cosenzi. This year’s scholarship winners include Nicholas Bernard of South Hadley, a senior at Hopkins Academy who will be attending College of Our Lady of the Elms in Chicopee and studying to become a Nurse Practitioner; Natalia Kurpiel of Dudley, who will attend College of the Holy Cross in the fall, studying to become a Physician; and Manisha Malik of Greenfield, who, following graduation from Greenfield High School, will pursue her dream of becoming a Nurse Practitioner at Mount Holyoke College.
NEWS from Around the Horn
MSADA
PLYMOUTH
AutoFair President Presented Honorary Degree Hood Last month, New England College presented Andy Crews, President and CEO of AutoFair, with a framed hood. The hood represents the Honorary Degree of Humane Letters that was awarded to Crews in January during New England College’s annual Founders Day celebration. Founders Day is a campus tradition that gathers students, parents, staff, and faculty to honor the College’s founding members and acknowledge its’ achievements. “Andy is an entrepreneur, a leader, a goal-oriented, make-it-happen type guy,” said Jason LaCroix, General Manager of AutoFair Honda. “Since joining the AutoFair Team in 2006, Andy has been the driving force in growing the business from three franchise dealerships to seven, and employing over 550 people in New Hampshire and Massachusetts. Andy is a great inspiration to all of us. He is a self-made man starting in the business as a technician and working through all the
ranks. He has become a great leader in the community working with local and statewide charities, community leaders and supporting everyone around him.” AutoFair also owns and operates AutoFair Nissan in Tewksbury and several stores in New Hampshire.
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NEWS from Around the Horn MENDON
Imperial City Featured in Providence Journal A recent article in The Providence Journal describes Imperial City’s efforts to become a destination in itself. The 52-acre campus incorporates three auto dealerships, a 1950s diner, a double-decker bus that serves ice cream, and an outdoor barbecue, to say nothing of the car rental agency, car wash and detailing, barbershop, salon, and jewelry store. The dealerships — Chevrolet, Chrysler-Jeep-Dodge and Ford — are housed in buildings that echo the design of horse barns. General manager Michael Penner told the Journal the three dealerships had a combined inventory of about 1,000 vehicles with an additional 700 used vehicles for sale. He said the work force numbers around 400, with plans to expand, he said. Meanwhile, inside, above, and around the showroom floors are hundreds of museum-quality artifacts. The Chevrolet dealership contains sports items, including life-size figures from all fields. The Chrysler-Jeep-Dodge dealership is packed with automobilia, and the Ford dealership is full of rock’n’-roll memorabilia, including a life-size diorama of the Beatles in front of the Sergeant Pepper’s Lonely Hearts Club Band album cover — featuring images of both Imperial president Kevin Meehan and Penner in the crowd of faces. “We’re definitely trying to build here a dealership where you can engage in a number of activities,” Meehan told the Journal. “There’s nothing like it in the Northeast that I’m aware of.” In addition to family outings, he said he imagined potential customers dropping by in the evening and getting hungry. “I wanted to make it fun, interesting, to create buzz,” he said. Indeed, last year Ford awarded the dealership its prestigious President’s Award for both customer satisfaction and service to the local community. GARDNER
Salvadore Auto Featured in Boston Globe A Boston Globe business feature focused on economic recovery in Gardner, and featured uplifting news from Salvadore Auto. Owner Steve Salvadore said his dealership is on track to match its prerecession sales of about 1,500 cars per year.
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MSADA He told the Globe he’s hired six employees so far this year to keep up with the increased business. “We see Gardner as a city that’s going to grow, and we’re going to work with that,” said Salvadore. The article went on to explain that Gardner still faces big challenges. The median household income, $49,000, is more than 25 percent below the state median of $67,000. Nearly one in five families with children live in poverty, compared about 1 in 8 statewide. In a knowledge-based economy, only about 18 percent of adults hold at least a bachelor’s degree, compared to 39 percent statewide. HOLYOKE
Marcotte Ford Launches Campaign Marcotte Ford has announced the launch of their new, customer-focused campaign, “We’ve Got Your Back.” Whether purchasing, financing, or servicing a new or preowned Ford, dedicated and knowledgeable staff are standing by to assist customers. Marcotte Ford is committed to their customers for life, ready and able to help people through any stage of car-ownership.
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This Massachusetts family-owned and operated business takes pride in knowing that the best products are being offered. Their sales staff stays constantly up to date on the latest trends in automotive technology and experts on Hybrid and Electric vehicles are always available. The sales department is a no-pressure team that is dedicated to finding buyers the right vehicle for the right price. Massachusetts residents know that Marcotte Ford’s customers’ satisfaction is top priority. General Manager Mike Filomeno said, “Here at Marcotte Ford, we strive to make your experience a good one – for the life of your vehicle. From purchase to repair to trade-in, we’ve got your back.” There are multiple auto service options to fit car-owners’ needs. The Quick Lane department is a fast and efficient way to have routine maintenance completed. If a customer needs more flexible service hours they can visit the Service Department, which is open from 6:00am until midnight, Monday through Thursday. They even offer their customers a complimentary breakfast on Tuesdays and Saturdays while waiting for their vehicle to be serviced at their very own LugNutz Cafe. Renting a vehicle has also never been easier. With more than 120 rental cars available, the hassle of being without one’s vehicle during longer repairs is alleviated.
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MSADA NADA Update by Don Sudbay
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Auto Credit Must Remain Affordable and Accessible for Car Buyers 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). This month our chairman, Forrest McConnell, addresses us concerning NADA’S progress in helping member dealers continue to provide affordable financing for our customers. Clearly, any move toward flat compensation will make vehicle financing more costly to the public. In September NADA will make its annual pilgrimage to Capitol Hill. Your MSADA leadership will be attending, and we will visit our representatives in Congress to gain support for H.R. 4811, “The Bureau Guidance Transparency Act.” Be assured NADA is committed to protecting dealers and our customers from the misguided actions of the CFPB.
A Special Note from NADA Chairman Forrest McConnell: “Franchised new-car dealers do much more than sell cars. We provide service for the long term. And we offer our customers competitive financing options. “Dealer-assisted financing provides great value and competitive advantages, which saves our customers billions of dollars each year. And the proof is in the numbers. Despite the fact that dealer-assisted financing is always optional, a large majority of consumers still choose to finance their vehicles through dealers. “But in March 2013—without prior notice or public comment—the Consumer Financial Protection Bureau (CFPB) issued guidance that could eliminate the flexibility that dealers have to negotiate lower auto financing rates for the benefit of consumers. Instead, the CFPB is pressuring auto finance sources to compensate dealers with a flat fee, which would weaken the ability of car buyers to secure discounted financing. “Most troubling is that the CFPB has even admitted that it has not studied how this change would impact consumers. “Members of Congress have taken notice. Rep. Marlin Stutzman (R-Indiana) introduced H.R. 4811, ‘The Bureau Guidance Transparency Act,’ which passed the House Financial Services Committee on a bipartisan vote on June 11, thanks to strong grassroots support from NADA and other JULY 2014
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industry trade groups. “The bill would require the CFPB to be more transparent by requiring prior public notice for other future guidance. The bill would also rescind the CFPB’s auto finance guidance issued in March 2013 that threatens to eliminate a dealer’s ability to offer interest rate discounts in the showroom. “To help address the fair credit risk to consumers, dealers, and finance sources, NADA released its Fair Credit Compliance Policy & Program in January. This optional program provides a dealership which adopts it with a viable means of managing its fair credit risk, while still allowing for pricing flexibility. “Chris Stinebert, the president and CEO of the American Financial Services Association, issued a statement on July 9 that strongly supported NADA’s program, calling it ‘a legitimate tool that helps provide lenders with evidence that there are legitimate non-discriminatory reasons for pricing differences.’ “NADA is working to protect dealers—and our customers—by making sure auto loans remain affordable and accessible while still addressing fair credit risks. For more information, visit www.nada.org/cfpb.”
Invite Your Member of Congress for a Dealership Visit during the Upcoming Recess Members of Congress will be in recess and return to their home districts in August through the Labor Day weekend. This is the perfect time to invite them to take a dealership tour, meet with employees, and discuss legislative priorities. Elections will be held in November and the balance of power in the U.S. Senate is at stake. Now is a critical time to engage. Advocacy is one of the most important aspects of a trade association. Despite the growth of social media, face-toface meetings at the dealership with members of Congress are even more important today and can yield enormous benefits for dealers and NADA. Congress hears from many competing industry voices every day, so it’s vital that the dealer’s voice is heard. NADA’s legislative office will assist dealers in setting up the visits as well as provide issue updates and talking points to use and share. The visits can be arranged around your busy schedules and typically last about an hour. For more information or to schedule a visit, contact Patrick Calpin, NADA Director of Grassroots Advocacy, at (800) 563-1556 or pcalpin@nada.org.
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Dale Willey Supports Community through the NADA Charitable Foundation As Ambassadors of the National Automobile Dealers Charitable Foundation, Dale Willey and his wife, Jan, provide financial support to local organizations in their hometown. “Grants through the Ambassador program are earmarked for organizations that support healthcare, emergency services, and education,” said Willey, former president of Dale Willey Automotive in Lawrence, Kansas, and former chairman of the National Automobile Dealers Association. “Supporting these types of organizations is truly critical for growth in all communities.” Willey, who is an NADA Foundation trustee, has provided grants to the Lawrence Memorial Hospital Endowment Association, Lawrence Schools Foundation, Lawrence Public Library Foundation, and the University of Kansas Business School. “The Ambassadors program is one of the most effective ways of supporting local organizations forever,” Willey added. “One gift of $10,000 does so much.” With a tax-deductible contribution of $10,000, an Ambassador can provide a $1,500 grant every three years in perpetuity. Donors with three or more gifts of $10,000 are designated Ambassadors of Distinction and can provide a $2,000 grant every year in perpetuity. Willey has also named five other family members as Ambassadors. Since 2001, they have provided 14 grants totaling $20,000 through seven Ambassadorships.
NADA Academy Grads and 20 Group Members Honored by Automotive News Seventeen out of 40 retail automotive leaders recognized this week as rising stars in Automotive News’ special 40 Under 40 list are NADA Academy graduates and/or current NADA 20 Group members. The list includes the next generation of leaders in the auto-retailing industry. “The recognition by Automotive News is a tribute to all these high achievers. We’re especially proud of the 17 ris-
We expect to see many more future dealers and managers become industry leaders after participating in NADA’s programs.” ing stars who have advanced their dealership careers after enrolling in the NADA Academy and/or becoming NADA 20 Group members,” said John Lyboldt, NADA vice president of dealership operations. “We expect to see many more future dealers and managers become industry leaders after
participating in NADA’s programs.” NADA’s Dealership Operations division provides industry-leading education and consultative services to NADA members. The NADA Academy and NADA 20 Group are programs managed by the division to help improve the operations and profitably of dealerships. The NADA Academy helps prepare dealership professionals for management roles through the combination of handson practical application in each area of the dealership and six intensive weeklong instructor-led classroom sessions. NADA 20 Groups, comprised of consultant-led groups of non-competing peers, empower dealers and managers with best practices, new ideas and financial comparisons to improve profitability and achieve best of class performance. To learn more about NADA Academy programs, visit www.nada.org/academy or email academy@nada.org. To learn more about NADA 20 Group, visit www.nada20group.org or email nada20group@nada.org.
San Francisco to Host the 2015 American Truck Dealers Convention San Francisco will host the 2015 American Truck Dealers (ATD) Convention & Expo from Thursday, January 22, to Sunday, January 25. The four-day event kicks off on January 22 with the ATD Super Workshop, “The Asking Formula.” The two-hour interactive session will teach attendees six powerful steps on how to achieve professional and personal goals by asking the right questions and being persuasive. ATD Chairman Eric Jorgensen, president and CEO of JX Enterprises Inc. in Hartland, Wisconsin, will deliver keynote remarks during the general session on Friday, January 23. New for 2015 is a networking general session on Saturday, January 24. The ATD convention runs concurrently with the National Automobile Dealers Association Convention & Expo at the Moscone Center. ATD members are encouraged to attend any of the NADA workshops and general/speaker sessions. Keynote speakers at the NADA convention include former Florida Governor Jeb Bush, NADA Chairman Forrest McConnell, Jay Leno, NADA Vice Chairman Bill Fox, and inspirational speaker Beck Weathers. Truck dealers will also have the opportunity to meet faceto-face with their manufacturer executives at eleven make meetings and shop the expo floor in the ATD Zone. The ATD headquarters hotel is the Marriott Marquis. Registration opens Monday, July 21. Attendees who register by October 6 will receive the early bird rate, which is a $150 discount off the onsite registration rate. For more information or to register, visit www.atdconvention.org.
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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 1.4 million light-vehicle sales in June 2014. This sales figure was down 11.7 percent from May 2014, and it was up 1.1 percent from June 2013.
June 2014 YTD light-vehicle sales amounted to 8.1 million, up 4.2 percent from a year ago. The June 2014 Seasonally Adjusted Annual Rate (SAAR) for light-vehicle sales was 16.9 million. The last time the SAAR reached 16.9 million was August 2005. June 2014 was the third month this year to record a SAAR value that exceeded 16.0 million. In June 2014 YTD figures, car sales held a market share of 48.0 percent with sales down 10 basis points from a year ago, while corresponding figures for light trucks put the light-truck share at 52.0 percent with sales up 8.4 percent from a year ago. For Q2 2014, there were 4.4 million light-vehicle sales, up 6.8 percent from Q2 2013. For Q2 2014, car sales, were up 3.9 percent from Q2 2013, while lighttruck sales were up 9.6 percent from Q2 2013. See Figure 1.
Companies/Brands
Companies with a geographic base in North America (Detroit 3 and Tesla) held the largest market share of light-vehicle sales for June 2014: 46.4 percent of the market. This was followed by companies based in the Asia/Pacific region at 44.7 percent and then companies based in Europe at 8.9 percent. In June 2014 YTD terms, companies with a base in North America also held the largest share of light-veJULY 2014
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hicle sales in the U.S. at 45.7 percent, which was a decline from a share of 46.2 percent a year ago. The corresponding share held by companies based in the Asia/Pacific region was 45.6 percent and that for the Europe-based companies was 8.6 percent. All
company categories by geographic bases – North America, Asia/ Pacific and Europe – experienced growth in light-vehicle sales in June 2014 YTD figures from last June with the Asia/Pacific region in the lead with 5.8 percent growth. From the Detroit 3, Fiat Chrysler experienced the most growth
MSADA in June 2014 YTD sales from a year ago at 12.2 percent, followed by General Motors (2.5 percent); Ford experienced a contraction in sales over the same period at 2.1 percent. From the group of Asia/Pacific-based companies, Isuzu experienced the most growth in June 2014 YTD sales from last June at 82.7 percent, followed by Mitsubishi at 30.2 percent. From the group of Europe-based companies, Audi experienced the most growth in June 2014 YTD sales from a year ago at 13.6 percent, followed by Jaguar Land Rover at 12.1 percent. For Q2 2014, companies based in North America held the largest share of light-vehicle sales at 45.9 percent. The corresponding share held by companies based in the Asia/Pacific region was 45.5 percent, and for Europe-based companies it was 8.5 percent. All company categories experienced growth in light-vehicle sales in Q2 2014 over Q2 2013, with the Asia/Pacific-based companies in the lead with 9.1 percent growth. See Figures 2, 3 and 4.
Segments
The cross utility vehicle (CUV) segment held the largest share of June 2014 YTD sales at 26.5 percent; this was an increase from its corresponding share of 24.9 percent last year. The CUV segment was followed by the middle car segment (19.6 percent) and the small car segment (19.2 percent), respectively, in terms of YTD market share. However, both the middle car and small car segments have each continued to experience a decline in their respective YTD market shares since last year. Within the CUV segment, the middle CUV sub-segment was the largest sub-segment holding 64.2 percent of June 2014 YTD CUV sales. Of the models in this sub-segment, the Honda CR-V was the vehicle with the leading sales number of 154,692 units, which translated into a share of 11.2 percent of middle CUV June 2014 YTD sales. This model was followed closely by the Ford Escape with sales of 152,890 units – a share of 11.0 percent of middle CUV June 2014 YTD sales. Apart from the middle car segment, all the segments experienced growth in YTD sales since last year; the large car segment experienced the most growth at 13.8 percent. www.msada.org
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NADA Market Beat For Q2 2014, the middle CUV sub-segment was the largest sub-segment of CUV sales with a share of 64.4 percent. For the quarter, in the middle CUV sub-segment, the Honda CR-V led sales with 87,044 units sold, which was 11.9 percent of the sub-segment. This was followed closely by the Ford Escape with sales of 81,585 units – a share of 11.2 percent of the sub-segment. See Figures 5 and 6.
Power source
As a power source, gasoline held a market share of 93.5 percent of June 2014 YTD light-vehicle sales, which marked no major change from its corresponding share a year ago. The market share held by the diesel category rose to 2.9 percent, in YTD terms, from its value of 2.6 percent last year. The market shares held by electrics and plug-in hybrids each grew compared to last year in YTD terms, while those for hybrids and vehicles powered by natural gas declined over the same period. For the alternative power category, in June 2014, the following light vehicles were sold: 4,862 electrics, no units powered by fuel cell technology, 41,079 hybrids, 94 units powered by natural gas and 6,481 plug-in hybrids amounting to 52,516 light-vehicle sales. For the alternative power category, in Q2 2014, the following light vehicles were sold: 14,408 electrics, 1 vehicle powered by fuel cell technology, 133,831 hybrids, 287 units powered by natural gas and 17,850 plug-in hybrids amounting to 166,377 light-vehicle sales. The Q2 2014 sales for the alternative power category were up 3.5 percent from Q2 2013. See Figure 7.
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Models
There were three pickup trucks and two cars occupying the highest five ranks of the best-selling light vehicles for June 2014 YTD. The two leading cars were models from companies based in the Asia/Pacific region: Toyota Camry and Honda Accord. The three leading pickup trucks were models from the Detroit 3 companies: Ford F-Series, Chevrolet Silverado, and Ram pickup. From the list of the 15 best-selling light vehicles for June 2014 YTD, eight out of 15 models were from the Detroit 3 companies while the rest were from companies based in the Asia/Pacific region. The June 2014 YTD list is the first list this year to not include any Hyundai models and to feature more than three Ford models. This year, from January to May, inclusive, the distribution of models amongst companies on each of the 15 best-selling YTD lists has been consistent: General Motors, Ford, Toyota, and Honda each made a contribution of three models, while one model each was contributed by Fiat Chrysler,
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