Independent dealers went into 2018 with an upbeat mood.
Why? The economic and retail sales growth expectations of independent dealers have improved substantially, according to the National Independent Automobile Dealers Association’s business confidence survey for the fourth quarter of 2017.
The survey of NIADA members is conducted each quarter in partnership with Equifax to gauge the viewpoint of used-vehicle dealers regarding general economic conditions and business concerns.
The association highlighted that 50 percent of the dealers surveyed said they expected economic conditions to improve in Q1 2018, up from 36 percent in the Q3 survey.
The results showed retail sales growth expectations improved from 55 to 67 percent, and the number of dealers who expected to increase their inventory investment this quarter rose 17 percentage points — a 42.5 percent increase from Q3.
NIADA pointed out that its dealer sentiment results align with a recent survey of members of the National Federation of Independent Business that showed optimism near an all-time high, at a level not seen in 34 years, according to NFIB president and chief executive officer Juanita Duggan.
NIADA determined the big drivers of that renewed positivity include expectations of tax relief from the new tax bill passed by Congress, positive consumer sentiment due to the lowest unemployment rate in more than 30 years and confidence in the current administration’s pro-growth, anti-regulation policies.
The association acknowledged used-vehicle inventory costs remain robust, with the latest Manheim Index climbing 7.8 percent year-over-year.
NIADA noted that inflationary inventory situation continues to put pressure on the business expense side of the ledger, which is one reason 57 percent of dealers expected their cost of doing business to increase, up from 45 percent in Q3.
Survey orchestrators explained that jump also reflects the significant investment independent auto dealers continue to make in their digital showroom — as reflected in the survey, which shows 56 percent planned to increase their digital marketing spend.
And like any entrepreneur might say, NIADA’s latest project to gauge dealer mindsets emphasized how the cost of doing business weighs heavily on operators.
The expectation of rising expenses also showed up in dealers’ perception of the single most important problem facing their business — 25 percent said it was the increased cost of doing business — by far the most popular choice.
The cost of doing business was followed by heightened competition from franchised dealers (17 percent), lack of customer prospect traffic/leads and lack of quality retail inventory (12 percent).
NIADA mentioned government regulations/red tape — usually one of the most popular responses — was near the bottom of the list at 6 percent.
The overall picture shows NIADA members expected business to improve heading deeper into 2018.
That optimism is bolstered by strong 3.9 percent holiday retail sales growth — well above the 10-year average of 2.6 percent — as well as rising wages, stock market strength, increasing employment and a generally positive economic outlook.
The complete survey data from NIADA and Equifax can be viewed here.
Lyft and NIADA partner to help dealers turn metal
In other association news, ride-sharing provider Lyft has joined with NIADA as its latest National Member Benefit partner.
The partnership, what NIADA contends is unprecedented in the ride-sharing industry, provides dealer members with opportunities to improve their bottom line through referral incentives and improved transportation solutions for customers while also supporting Lyft’s efforts to expand its driver community and providing economic opportunities for dealership customers.
NIADA member dealerships can sign up to be a Lyft referral partner and receive bonuses for each driver they refer. Customers who sign up for the program will also receive a bonus shortly after they begin driving for Lyft, which they can put toward their down payment and monthly costs of purchasing a vehicle.
The partnership enables dealerships to increase sales through the Lyft referral program.
In addition, Lyft’s Concierge program can offer NIADA members an easy, reliable and inexpensive way to provide transportation for customers whose vehicles are laid up in service.
Concierge can enable the dealership to request rides for its customers to get where they need to go while their car is being serviced, whether it’s running errands, going to work or heading home to take care of their children.
Increased mobility provides a better experience for the customer in a cost-efficient way, according to both Lyft and NIADA.
“We are excited to work with NIADA in a unique partnership that’s helping 20,000 independently owned dealerships increase profits and elevate their customer service while expanding our driver community and growing our Concierge portfolio,” said Gyre Renwick, vice president of Lyft Business.
“By leveraging our holistic business solutions strategy, NIADA is able to provide independent dealers across the country with referral opportunities for every driver sign-up, with the potential to lead to an increase in sales,” Renwick continued.
“Simultaneously, we’re also helping improve the overall customer experience by giving dealerships the ability to dispatch Lyft rides for customers whose vehicles are being serviced, through our Concierge platform,” Renwick went on to say.
NIADA senior vice president of member services Scott Lilja insisted teaming with Lyft provides an “unparalleled opportunity” for NIADA members to profit from the growing opportunities created by the emerging ride-sharing industry.
“Forging new, innovative partnerships that foster synergies between emerging and traditional mobility solutions while helping our membership sell more vehicles and satisfy more customers fits perfectly with our National Member Benefit partnership mission,” Lilja said.
Registration open for NIADA/NABD Conference
Now that the National Alliance of Buy-Here, Pay-Here Dealers has been acquired by NIADA, independent operators need to make only national conference trip this summer.
The NIADA/NABD Convention and Expo, set for June 18-21 at the Rosen Shingle Creek Resort in Orlando, Fla., is a product of the National Independent Automobile Dealers Association’s acquisition of the assets and operations of the National Alliance of Buy Here-Pay Here Dealers, a deal that merged NABD’s conference and educational services into those of NIADA.
“We believe the combined Mega-Conference will be the largest in the used car industry and will provide unmatched resources for all dealers and allied industry partners,” NIADA chief executive officer Steve Jordan said. “Our goal is to provide a true one-stop shop for dealer education and specialized training for any automotive dealer business model, including the BHPH-specific topics and information you’ve come to expect from NABD over the past 19 years.”
In addition to NABD’s BHPH education, attendees can look forward to sessions offering training from the industry’s best and brightest in retail operations, compliance, certified pre-owned, business operations and much, much more.
It will also include the largest Expo Hall in NIADA Convention history, packed with more than 200 exhibitors offering the latest cutting-edge technology, products and services designed to help dealers stay on top of the ultra-competitive used car market.
NIADA acquired NABD on Dec. 14, completing more than two years of review, strategic discussions and due diligence and providing a succession plan for NABD, founded in 1998 by Ken Shilson.
“Success in this industry is about working together,” said Shilson, NABD’s president. “It’s about using our collective resources to help our members succeed. And that’s exactly what we’ve done here. We’re working together for the success of the used car industry, which is what this merger is about.”
NABD’s Ingram Walters agreed the deal embodies what NABD has always been about.
“Our goal at NABD has always been the dealers’ success,” Walter said. “This combination will provide even more basis for that and an ongoing plan for their success.”
The NABD staff will transition into NIADA and continue in expanded roles to serve the needs of NABD members, NIADA members and the BHPH industry.
“NABD has provided a strong voice and specialized educational resources to more than 14,000 members over the past 19 years,” Jordan said. “I am pleased that the NABD legacy will live on within NIADA as we continue to develop new ways to serve the entire used motor vehicle industry.”
A fall conference in Las Vegas is also under development, with plans to be announced in the coming months.