The Intersection 1-22-23

The convention of franchised auto dealers, officially called the NADA Show, later this week in Dallas gives us a good opportunity to talk in this issue about the trends and pressures auto retailers everywhere are dealing with right now.

And there’s a bucket of them.

There’s the ongoing dance between dealers and factories to set agreeable ground rules on how electric vehicles will be sold and serviced. There’s the issue of the languishing leasing market. There’s the confusion over how tax credits are going to be doled out on EV purchases. And there’s the likelihood that higher interest rates are going to turn store floorplanning back into a cost for retailers to contend with.

We delve into all that and much more this week.

These are new issues looking to be resolved. And the NADA Show is a yearly reminder that the car business is flush with resources and powerful in the wisdom of its veteran dealers.

But this year will also see a new class of dealers at the show.

Automotive News, through its rigorous tracking of dealership buy-sell transactions, has found dozens of first-time dealers who were able to buy inaugural stores in 2021 and 2022. Buy-sell reporter Jack Walsworth takes a closer look at how favorable store profits, along with new consulting and lending programs, have aided many acquisitions. He also details how some of the buyers were able to take the leap from dealership employee to owner.

It’s been one of those periods — really, for the first time in a decade — when market factors were just right for motivated buyers to get their foot in the door.

But it sure is an interesting moment to be a newcomer.

In another story on the current outlook, reporter Lindsay VanHulle highlights what might be the next hurdle: sales training.

VanHulle points out that because the past two years were so inventory-challenged, selling vehicles has been a snap. And that’s about the change as factories crank back up.

She quotes Adam Robinson, CEO of the recruitment technology company Hireology, with a sobering observation: “New hires to the industry have no idea how hard this job actually is,” Robinson says. “They’re going to find out.”

— Lindsay Chappell