The Drive to Thrive: Top Three Takeaways From NADA 2024

CalendarFebruary 9, 2024
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The Drive to Thrive: Top Three Takeaways From NADA 2024

As NADA 2024 wrapped up in Las Vegas to give way to the city’s Super Bowl fever, we reflected on the issues we heard about at our booth, in the hall, at events, and at meals throughout the weekend.

Right now, as the post-pandemic sales surge wanes and interest rates rise, retail automotive faces both exciting possibilities and potential challenges that will shape the industry for the next few decades. Spearheaded by the ongoing electronic vehicle (EV) evolution, these changes will require dealerships to use both proven tactics and innovation to work their way through.

Here are our top three takeaways from the show:

Mandates vs. Demand: Fleshing Out the EV Market

After a couple years of continuously focusing on helping dealerships sell EVs, NADA has taken a stand on a new federal mandate that it says goes “too far, too fast.”

Last spring, the Environmental Protection Agency (EPA) proposed new emissions standards that would effectively require 67.5% of U.S. vehicle sales to be electric by 2032. The EPA claims these measures would accelerate the ongoing switch to a clean-vehicles future and tackle the climate crisis.

The EPA points out that the tripling of EV sales and doubling of available models since President Biden took office indicates public appetite for clean vehicles. It also notes that there are over 130,000 public chargers across the country – a 40% increase over 2020 – and that the private sector has committed more than $120 billion in domestic EV and battery investments over the past two years.

Dealerships argue that the mandate ignores real-world demand. NADA’s Legislative Affairs group says the EPA rule would repay dealers’ initial $10 billion investment in EV sales with a continuous oversupply to their lots of EVs that consumers might not be able to afford or conveniently charge. Dealers further note that the demand caused by the mandate will require a burdensome 10x increase in public chargers – and 20 million private chargers – in less than a decade.

This push-and-pull on the road to mass EV adoption remains a vital story to track as dealerships strategize how to move forward.

Not “If” but “When”: Fraud Still on the Rise

Internal fraud continues to plague organizations, and dealerships are no exception. As with most companies, instances of attempted internal fraud on dealerships are inevitable. Your dealership can help prevent opportunities for fraud with operational tactics like diligent hire screening, proper segregation of duties, and vigilance regarding schemes that involve customer credit.

But it doesn’t stop there. The year-on-year doubling of check-fraud reporting to the Treasury Department’s Financial Crimes Enforcement Network underscores the threat to dealerships. The pandemic enabled fraudsters to refine their targeting of auto groups that rely heavily on manual check processing.

AP automation introduces powerful safeguards and fraud monitoring that enable dealerships to reduce fraud risk drastically. These include virtual card payments, vendor validation and data storage, real-time detection, multi-factor authentication, and secure portals. Furthermore, leading AP automation providers also offer ongoing fraud-prevention support as part of their platform. Partnering with a payment service provider can help prevent the kind of fraud loss that can cripple your dealership.

The Multi-Generational Dealership: Reality and Potential

The American auto dealership is a product of the early 20th century – indeed, NADA itself was established in 1917. That’s a lot of history, wisdom, and evolution. Today’s dealership teams may include four to five generations in leadership, in the back office, on the floor, and throughout the company. As with many family businesses, generational dealerships are built from the ground up and passed down, along with the traditions they were founded upon. The challenge in the generational dealership is to push the status quo to continue to evolve while keeping its legacy alive.

It’s key to maintain a balanced workplace culture that accommodates personnel and leadership from the boomers through Gen Z. Dealerships can onboard and train new hires on how a dealership’s heritage involves changing with the times while maintaining tried-and-true strategies that have stayed relevant and effective. In terms of operations, younger cohorts can help challenge reluctance to change and foster innovative solutions in areas like dealership management and accounts payable efficiency.

Most critically, leadership needs to pitch in to maintain an environment of effective communication, collaboration, and team culture that can engage across generational boundaries.

The Bottom Line

Change can happen quickly for dealerships and auto groups, which need to face their challenges creatively. Whether it’s meeting the EV mandate, combating fraud with fintech solutions, or managing a multi-generational workplace, dealerships need to adapt in order to pave the road to long-term profitability.

Author

Pam Cichoke

Pam Cichoke

Vice President of Automotive Sales

Pam's experience in the B2B and B2C markets spans 22 years. With Corpay, she delivers scalable payment solutions to dealerships in the automotive retail industry.

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