Despite rising interest rates, increasing transaction prices, and disruptors to the market, sales are still strong for franchised dealers across the U.S. Dealers are resilient and seem to find ways to adapt to changing conditions quickly. In this special edition of Inside Automotive, Jim Fitzpatrick and Shyann Malone speak with Mike Stanton, the president and CEO of NADA, about the current state of the automotive industry.
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Despite market challenges, franchise dealers in the U.S. continue to thrive. One significant development is the decision from Vietnamese EV maker VinFast to transition from direct-to-consumer to selling through franchise dealers. Stanton highlights past skepticism from VinFast regarding dealership networks, but their recent reconsideration underlines the efficacy of the dealership model. Stanton emphasizes the importance of a pure franchise system, rejecting any hybrid models that would blend direct-to-consumer and franchise systems.
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The conversation then shifts to the emerging dynamics of the EV market. While the demand for internal combustion engine vehicles remains robust, the days’ supply for EVs has been reported to exceed 100 days. This raises concerns about oversupply, especially as some tax credits are channeled towards EV leasing.
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The rise in interest rates hasn’t dramatically impacted the auto industry. However, Stanton points out that a further increase may exert more pressure. Meanwhile, the leasing model is becoming attractive for consumers, especially with higher-priced EVs.
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Stanton then discusses the disparity between government aspirations and consumer demand for EVs. While manufacturers are producing exceptional EVs, consumer interest has yet to catch up. A primary concern is the fast-paced regulatory push, with some targets seen as overly aggressive. Stanton argues for realistic goals, proper infrastructure, and consumer education to facilitate a transition to EVs. Additionally, he advocates for a unified national standard to replace the current patchwork of regulations.
In NADA 2024 Show news, speakers have been announced! The lineup includes:
- Jon Taffer — Business expert and executive producer of “Bar Rescue”
- Danica Patrick — Former racecar driver, author, and entrepreneur
- Kurt Warner — Hall of Fame quarterback and philanthropist
- Geoffrey Pohanka — 2023 NADA chairman and chairman of Pohanka Automotive Group
- Gary Gilchrist — 2023 NADA vice chairman and president of Gilchrist Chevrolet Buick GMC
