Dealers Shake Off the Blues

Orlando, FL — Ranks of new-vehicle dealers are thinner, but their future seems clearer since the last time they met for their annual trade convention.

At last year's National Automobile Dealers Assn. gathering in New Orleans, retailers knew things were bad, what with the nation in a recession, credit in an Arctic-like deep freeze and General Motors Co. and Chrysler LLC approaching bankruptcy.

Few dealers at the time realized the ensuing bankruptcies would result in GM and Chrysler eliminating nearly 2,000 of them in 2009, a record reduction. Then there were the awful car sales.

At the NADA convention last month, dealers sense better times ahead, as the nation and the auto industry begin to shake off the recession.

NADA Chief Economist Paul Taylor predicts 2010 light-vehicle sales of 11.9 million units. That is about 1.5 million more than last year, when demand went off the road and into the thicket.

“Things will be better,” Taylor says pointing to various signs of recovery for the nation in general and auto industry in particular.

“There is a spirit of optimism, a feeling that we have gone through the gauntlet and seen the worst,” Oregon dealer Ed Tonkin, NADA new chairman, says at an American Financial Services Assn. conference held in conjunction with the dealer event.

About 15,000 dealers, auto executives, exhibitors, journalists and others attend this year's convention. Organizers had feared fewer people would show up this year.

“But attendance is up — and this is Orlando,” Tonkin says. “It's hard to get people here, because it promises 80-degree weather and delivers 50 degrees.”

Even so Orlando, once a sleepy orange-grove town and now home to Disney World, recently surpassed Las Vegas as the nation's top tourist destination.

Best-practices workshops are a convention draw, says Stephen Wade, a Utah dealer who is NADA's incoming vice chairman.

Such sessions, about 100 in all, offer invaluable information for running a modern dealership, he says. “Knowledge is power. A person in our industry is foolish not to take advantage of what's available here.”

The hard times reached a point where some dealers wondered, “Should we even be doing this anymore?” says Forrest McConnell III, an Alabama dealer and NADA board member.

He says the convention offers a chance “to get out among people with similar problems; people who have come up with some solutions and have the answers.”

In a nod to the nation's $32 billion a year aftermarket industry, the NADA convention for the first time includes a dedicated “Aftermarket Zone.”

More than 12 firms will display specialty and accessory products, as dealers still try to get a decent chunk of that market.

“The accessory business at dealerships has remained relatively untapped,” Steve Pitts, a NADA vice president says.

The Aftermarket Zone will feature products and services available to dealers to personalize customers' vehicles.

“Our goal is that dealers and their managers walk away with several ideas on how to integrate a successful vehicle accessory program at their dealerships,” Pitt says.