Closing time: Thought starters from the final day at the show
For Dealertrack, NADA 2015 was about coming together and showing the power of our unified solution. As our own Mark O’Neil, in this closing show video, commented: “The significance of the show itself? It’s to be able to actually show the power of coming together and delivering on a unified solution that’s going to help the auto retailer transform the way they engage with their consumer.” We also put on a small party for a few of our close friends.
Ultimately, that’s what NADA 2015 was all about: transforming automotive retail. All told, it was an optimistic show with all eyes on future growth. The chatter on the show floor reflected that mood as well and seemed to revolve around three key topics:
Subprime auto loans: One dealer, when asked what he thought about the year ahead, put it thusly: “I’m just trying to do more in the subprime market, like everyone else.” And that just about sums it up. In fact, the increase in subprime loans has everyone talking, from automotive experts to major media. With confidence in the economy growing and continued increases in used vehicle inventory, the subprime market should align with overall used vehicle financing and continue to be a strong sector of growth, thanks to the following signals:
- Increases in used car inventory
- Ample credit availability, with loan supply driven by lender profitability and continued consumer demand
- Relatively flat and far from peak delinquency rates – though they did experience recent increases
Compliance, the CFPB and FTC: During his keynote speech, Jeb Bush – former Governor of Florida and might-be 2016 presidential candidate – took the Consumer Financial Protection Bureau (CFPB) to task, as did incoming NADA Chairman Bill Fox. Closer to ground level, however, dealers remain concerned about meeting compliance standards for advertising as well as F&I. Indeed, according to Randy Henrick, Dealertrack’s associate general counsel, dealers need to make sure compliance is an integrated part of their sales work flows. During this workshop series at NADA 2015, he outlined the recent actions in order to illustrate what 2015 may hold in terms of oversight:
- The FTC believes that deceptive dealer advertising is a “significant problem” and brought out 20 enforcement actions in the last three years, all but one resulting in 20-year consent decrees for dealers.
- In 2014, the FTC announced “Operation Steer Clear” a coast-to-coast law enforcement sweep focusing on deceptive TV, newspaper and online claims about sales, financing and leasing. As a result, the FTC filed 13 FTC lawsuits against dealers in 10 states across the country, all but one resulting in 20-year consent decrees.
- Henrick also outlined the CFPB’s “continuing attempts to indirectly regulate automotive dealers by putting pressure on lenders it does regulate to monitor and enforce activity of dealers under its ‘disparate impact’ theory of credit discrimination.”
Online to in-store tools and technology: While the Dealertrack booth was consistently packed with dealers, there seemed to be a special interest in the launch of our Syn:Apps initiative, as well as our work-around Digital Retailing and Digital Marketing. Many wanted to understand how to best handle the convergence of online to in-store sales operations, and others were interested in the impact of mobile technology on the online digital retailing environment. It’s of course difficult to point to booth traffic and conversation as proof of a trend toward the adoption of new technology; however, it does underline the point that progressive dealers see the value of shifting from a desk-based, tethered system of sales to a mobile-driven and nimble digital approach. In general, digital retailing and marketing was a key topic of research, but that’s no surprise. Recent results reported by Port City Nissan, in fact, underscore its effectiveness:
- Front-end profits on new vehicles sold using Dealertrack Digital Retailing are 69 percent higher than non-Digital Retailing sales.
- Overall finance penetration on Digital Retailing deals is 23 percent higher than non-Digital Retailing deals.
- 90 percent of the dealership’s Internet trade-in leads either converted to a sale or led to the purchase of a customer’s car.
Overall, the outlook coming out of San Francisco is for sunny skies and a warming business environment. It’s a year that will continue to reward dealerships that embrace technology initiatives as a part of their operations and as the preferred way to create engagement with shoppers throughout the entire customer journey. Most of all, NADA 2015 showed how automotive retail is moving quickly toward an online to in-store transformation.
See and read more of our NADA 2015 coverage:
- Day One: Transforming Automotive Retail at NADA 2015
- Day Two: Showcasing Our Innovation, and Our Appreciation at NADA 2015
- Closing Time: Thought Starters from the Final Day at the Show
- NADA Video Recap: Day One
- NADA Video Recap: Day Two
- NADA Video Recap: Day Three
- NADA Landing Page, Buzz and Events
Tags: NADA 2015
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