NADA 2012: Sales Up, Optimism High

NADA’s Chief Economist Paul Taylor predicts sales will reach 13.945 million units this year. According to Autodata, January 2012’s seasonally adjusted annualized rate was 14.2 million – up from 12.7 a year earlier. From any angle, the forecast is clear – sales will be up. These projections make 2012 the third consecutive year of rising new car sales.

As sales rise so does optimism and the optimistic atmosphere evident throughout the halls of NADA 2012 was a welcome change from the more downtrodden mood of the recent past. This wave of positive momentum is evident in the releases and announcements made at NADA for new products, new appointments, mergers, and the growth of mobile and technological solutions. By all accounts the positives far outweighed the negatives at NADA 2012.

Innovation at Its Best

Allstate Insurance Co. and Allstate Dealer Services will have the opportunity to open full-service Allstate agencies inside dealerships. Implementation will bring the insurance agency office to inside the dealership, typically on the showroom floor and operating during the dealership’s hours of business. A licensed insurance professional and a team of support staff employed by the agency owner will be available to assist customers.

According to the company, Allstate and Allstate Dealer Services have tested and modified the program over the last two years, combining the Allstate Exclusive Agency, Good Hands Network Repair Facility and Allstate Dealer Service products with dealer F&I offerings. In addition, they have the ability to integrate Allstate Benefits into the dealer’s employee benefits platform.

Key Appointments

American Auto Guardian Inc.(AAGI), in a recent press release, announced the promotions of Kristen Gruber and Andrew Wilson. Gruber was named vice president of product development. Gruber is a CPCU with more than 20 years of product management and underwriting experience. She joined AAGI in 2007 and has been responsible for the creation of new products and coordinating the related distribution.

Andrew Wilson has been promoted to the sales team as Eastern regional vice president. With 20 years of experience in the automotive industry, Wilson’s career also includes the recruitment, development and leadership of an OEM direct sales force. He joined the AAGI team in January 2012.

In another recent release, Resource Automotive Inc., a unit of The Warranty Group, Inc., announced Steve Barrett has joined the company as executive vice president. He will be responsible for automotive reinsurance. Barrett joined Resource in 1980 as an F&I specialist before moving through the ranks to become the company’s senior vice president reinsurance.

Merger

Allegiance Administrators LLC has been formed as a result of a merger between Dimension Service Corp. (DSC) and National Administrative Service Co. (NASC). The recent announcement is anticipated to provide top-level products and more efficient operations to customers and offer a diverse and flexible portfolio of products.

Mobile Technology

This segment is exploding with faster, better, more interactive apps for those devices we all can’t live without. Here is a quick rundown of a handful of the mobile solutions being promoted at NADA.

An app for the dealer side is DealerTrack’s DealerTrack Mobile. This app utilize the iPhone and/or iPad to create an interactive experience between the dealership and the customer that enhances sales and shortens transaction time. Dealers using this app would have access to the status of credit applications and contracts, credit bureau scores, Red Flags reviews and would be able to perform OFAC checks.

For those still using the Blackberry, RouteOne has made available a free BlackBerry App that can be downloaded from their site. According to RouteOne, dealers using this new app will be able to view and manage deals and leads, access a condensed version of the Deal Manager, Deal Summary and Lead Manager solutions and request and view credit scores instantly.

On the consumer side, Dominion Dealer Solutions introduced the Be Back app and DMEautomotive introduced Driver Connect. Both of these applications are oriented to keep customer loyalty high with features such as 24/7 mobile access to dealership information, appointment scheduling, service history, vehicle recall notifications and maintenance reminders.

For the dealer, the Be Back app enables dealers to monitor and act on a customer's ability to evaluate his vehicle's equity, schedule service appointments and shop for new and used inventory. An equity alert shows the consumer the value of his trade-in and alerts the dealer to the consumer's interest in its equity. The app also enables users to search consolidated, up-to-date, new and used inventory across all a dealer group’s stores with detailed vehicle info and photos.

Driver Connect enables dealers to send targeted customer communications and also integrates the DMS and DMEautomotive Loyalty Program so users can manage and redeem their loyalty points, according to the company. Additional app tools of Driver Connect include Find My Car, Find Local Parking, My Parking Meter, Gas Station Locator and more.

Hardware Upgrade

Reynolds and Reynolds presented the refreshed docuPAD. This interactive F&I selling tool and document processing system, with a screen that is 50 percent larger than before, now sits on top of the F&I desk rather than being flush-mounted into an F&I producers work station. The latest software enhancements to docuPAD include direct integration with the Reynolds ERA and POWER dealership management systems (DMS), thereby eliminating the need for dealers to re-key deal data in the DMS, according to the company.

Distractions

This brief overview would be remiss if it didn’t address a couple distractions within the industry. One quickly became known as the “Taj Mahal” affect. According to a study by Glenn Mercer issued at a press briefing during NADA, dealers are not convinced that the upgrades expected of them to their facilities will result in increased ROI.

Mercer explained, “These programs — intended to encourage dealers to invest in store expansion, modernization and standardization — can place significant financial burdens on dealers, yet there is little hard evidence on the return of investment this spending might yield.”

Jason Stein of Automotive News writes, “In better times, margins -- rather than just survival tactics -- are on everyone's mind, which means factory-mandated dealership improvements are a touchy subject...”

Another major distraction, the controversy of TrueCar. This storm continues to brew. Mike Colias for Automotive News shared in his presentation that CEO Earl Hesterberg of Group 1 Automotive, Inc. believes TrueCar.com is harmful to dealers and automakers and questions the online shopping site's value to the industry.

Several states are probing into whether TrueCar’s business model of guaranteeing online shoppers big discounts from participating dealers violates state franchise laws. Damage to the dealer’s pricing and margins along with the concerns over the security of the data, which TrueCar has access to from the dealer’s computer systems, appear to be the main areas of concern.

As a result of feedback from dealers, TrueCar has stated that they are working on changes to its business model, moving some dealers to a subscription-based rate not related to sales volume.

Looks like 2012 has the making of another interesting year for the automotive industry!