Upbeat Dealer Convention Reflects Auto Industry Recovery

Special Coverage

NADA Convention & Exposition

SAN FRANCISCO – Reflecting an auto industry in recovery, an upbeat mood is expected to prevail at the 94th annual National Automobile Dealers Assn.’s convention and exposition here Feb. 5-7.

An air of cautious optimism marked last year’s gathering. At the 2009 event, worried dealers spoke about surviving in an awful economy that saw auto sales plummet.

But today, dealers, as well as auto executives who will attend the big pow-wow at the Moscone Center, are feeling much better.

“The good news is we’re starting to see some real evidence that things are getting better,” outgoing NADA Chairman Ed Tonkin says. “The auto industry’s revival appears to be on solid ground.”

In another cited sign of better times, advanced registration for the convention is up 14% compared with last year. Exhibit space on the show floor is sold out.

“Participation in the NADA convention is often a bellwether for the overall health of the auto industry,” says Jack Caldwell, convention committee chairman and a dealer from Conway, AK.

Dealer-auto maker relationships are a standard topic of discussion at NADA conventions, and this one isn’t expected to be different, as the two sides try to find common ground even though their business interests can clash.

“The best way to bring shoppers into dealerships is to build stylish cars and trucks they want to buy,” Tonkin says. “And when dealers and manufacturers work together, that’s when the magic happens.”

This annual confab is a chance for dealers to speak with auto executives in person, especially at closed-door “franchise” meetings where goals, strategies and conflicts are discussed.

“Things getting better,” says 2010 NADA Chairman Ed Tonkin.

“It’s a must for dealers to attend the franchise meetings,” Tonkin says. “(They) provide dealers with access to top auto maker executives in a forum they can find no place else.”

Twenty-four such meetings are slated over two days here.

“The NADA convention provides an opportunity for us to hear directly from dealers about the issues that matter most to them,” says Jim Bunnell, General Motors Co.’s general manager-U.S. sales operations. “We are able to talk to a large number of dealers, answer their questions and share news about our business plans and performance.”

Last year, something of a stir was created when top GM executives broke precedent by not attending the convention. They were miffed at the NADA for fighting the auto maker’s widespread dealership terminations in 2009 and 2010.

But GM and NADA leaders ultimately held a make-up meeting at that convention in Orlando, FL.

Ken Czubay, Ford vice president-U.S. marketing, sales and service, says the annual gathering allows executives to spend quality time with dealers.

“Continuing to focus on dealer profitability through growing our sales and market share and enhancing the customer experience is a top priority for us,” Czubay adds.

Ford plans to huddle with Lincoln dealers to discuss life after Mercury, the brand that had been dualed with Lincoln for decades. Ford pulled the plug on Mercury last year.

“We will continue to work with dealers to execute our transformation and growth of the Lincoln brand,” Czubay says.

A prelude to the convention is today’s annual J.D. Power and Associates Inc. International Automotive Roundtable. Chrysler Group LLC CEO Sergio Marchionne is the scheduled keynote speaker.

A topic of one panel discussion is “Surviving to Thriving: What it Takes to Win (Big) at Retail.”

Panelists will include Tonkin, Mark Reuss, president of GM North America; Ernst Lieb, president and CEO of Mercedes-Benz USA; and Bob Carter, Toyota Div.’s U.S. group vice president and general manager. AutoNation Inc. CEO Mike Jackson will moderate.

“An increase in consumer demand for both new and used vehicles and parts, service and aftermarket sales all point to an improving outlook for auto retailing and the economy overall this year,” Tonkin says.

Jim Lentz, president and chief operating officer of Toyota Motor Sales U.S.A. Inc., will speak at the convention’s opening general session on Saturday.

He is expected to touch on the trials and tribulations Toyota experienced during its massive vehicle recalls and allegations that some of its vehicles accelerated suddenly.

“Jim Lentz has been through it all,” says convention committee chairman Caldwell, a Toyota dealer. “This will be a unique opportunity to hear him talk candidly about what Toyota has been through and where it is headed at a pivotal time for the company and the auto industry as a whole.”

On the expo floor, hundreds of vendors will showcase their products and services, ranging from advanced software systems to cookies for dealers to give as appreciation gifts to customers.

GM will showcase new programs and tools for dealers. The auto maker also will display two Chevrolet Volt extended-range electric cars and showcase charging stations for them.

A new exhibit this year will focus on how dealers can spearhead local driver-safety programs.

“The basic concept is for dealer groups who are already participating in safety programs to show their fellow dealers how they can begin similar programs in their own communities,” says Andy Koblenz, NADA vice president-legal and regulatory affairs.

The exhibit will focus on three areas: child-passenger safety, safe teen driving and rural-driving safety.

Another popular convention mainstay are various workshops aimed at helping dealers and their managers improve their business operations.

More than 100 workshop sessions covering 35 topics are planned, including how dealerships can increase their Internet presence using search-engine optimization, video and social media.

Other sessions focus on modern used-car selling techniques that stress fast inventory turns based on competitive pricing, in contrast to traditional methods of holding out for the highest-possible gross, even if it means cars linger on the lot because they are priced too high.

“There is a new way to be successful in the used-car marketplace,” says Dale Pollak, a former dealer and noted used-car authority.

Two high-profile, non-industry speakers will address the convention.

One is Chesley “Sully” Sullenberger III, the commercial pilot who successfully performed an emergency landing on the Hudson River in New York City in January 2009.

The other is Condoleezza Rice, former U.S. Secretary of State for President George W. Bush.

There are times when the show must not go on. One of them is when an NADA convention conflicts with the Super Bowl game.

To remedy that, the exhibit hall will close early on Sunday so conventioneers can watch the big game.

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