NADA PREVIEW

54 • JANUARY 20, 2014

Worry about rising health care costs makes retailers cautiously optimistic this years dealers head to New Orleans forthe National Automobile DealersAssociation convention, they’relooking forward to this year.But they’re concerned about

rising personnel expenses, linked in largepart to health care costs.

That’s the message from an unscientificonline survey Automotive News conductedJan. 8-10.

Of the 145 respondents, 74 percent saidthey expect unit sales at their dealershipsthis year to be better or much better thanlast year. Only 3 percent expect unit sales tobe worse or much worse.

Although it starts from a higher sales base,that outlook isn’t quite as optimistic as the

view two years ago, when Automotive Newsconducted a similar poll.

In January 2012, 82 percent of respon-dents expected unit sales that year to be bet-ter or much better than in 2011. A similar 3percent expected unit sales to be worse ormuch worse.

Profit expectations haven’t changed asmuch. In the latest survey, 71 percent saidthey expect profits at their dealerships to bebetter or much better than the year before,compared with 76 percent in 2012.

Some dealers may be anticipating roughertimes ahead, just not soon. One respondentto the anonymous survey offered this com-ment: The Consumer Financial ProtectionBureau “could change our business model

almost overnight. When you extract financeand insurance income from our dealershipstoday most are not profitable. The goodnews is that interest rates should stay low foranother year or so. Then, watch out!”

The survey indicates that dealers increas-ingly are pinning their revenue hopes onused-vehicle operations.

This year 43 percent said they see the mostopportunity for revenue growth in used-ve-hicle sales, while 27 percent cited new-vehi-cle sales.

In 2012 new-vehicle sales were cited moreoften, by 39 percent of respondents, while33 percent pointed to used-vehicle sales.

This year 44 percent said they plan to ex-pand or renovate their dealerships. Two

years ago only 37 percent said so.This year 54 percent said they are adding

employees. That’s a sharp drop from the78 percent who said they were hiring in2012.

Costs appear to be the issue. Asked wherethey expect costs to rise the most in thecoming year, 37 percent of respondents cit-ed personnel and payroll. Their commentsmade it clear that health care costs are a ma-jor concern.

In contrast, in 2012 only 27 percent of re-spondents cited personnel and payroll. Alarger group, 36 percent, said they expectedfacilities costs to rise the most.

Here are the survey results.— James B. Treece

DEALER SURVEYA

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What is this year’s unit sales outlook for your dealership,

compared to last year?

■ Much better ..........................15%■ Better ...................................59%■ About the same.....................23%■ Worse ....................................1%■ Much worse ............................2%

Was your dealership profitablein 2013?

Was your new-car departmentprofitable?

What is this year’s profit outlookfor your dealership, compared to

last year?

■ Much better ..........................12%■ Better ...................................59%■ About the same.....................22%■ Worse ....................................4%■ Much worse ............................3%DEALER SURVEY continues on page 56

●●●

Yes96%

Yes69%

No31%

No4%

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56 • JANUARY 20, 2014

NADA PREVIEW

■ New-vehicle sales ..................27%■ Used-vehicle sales ................43%■ Service .................................21%■ F&I .........................................7%■ Parts ......................................1%■ Factory-to-dealer incentives ......1%

■ Personnel/payroll ..................37%■ Facilities, including additions,

expansions and renovations ...29%■ Marketing/advertising ............18%■ Compliance related .................9%■ Taxes .....................................7%

DEALER SURVEYWhere do you see the most

opportunity for revenue growth thisyear?

Where do you expect costs to risethe most this year?

Do you plan to expand, renovate oradd to your dealership’s facilities?

Are you increasing headcount?

■ Yes ......................................29%■ No .......................................63%■ Don’t know .............................8%

■ Yes ......................................66%■ No .......................................26%■ Not sure/my dealership is

part of a public dealershipgroup .....................................8%

■ Yes ......................................60%■ No .......................................10%■ No opinion ............................30%

If you plan to increase headcount,in what departments? (Multiple

answers allowed.)

Do you anticipate a change inownership of your dealership withinthe next two years, whether througha sale or retirement of the current

owner?

If yes, does your dealership have anownership succession plan in place?

If yes, is the next generation ofowners being properly prepared to

take over, in your opinion?

Source: Based on 145 dealership responses to an Automotive News online survey

74%New-vehicle sales

63%Service and parts

55%Used-vehicle sales

29%Dedicated online operations

28%F&I

Yes44%

No56%

Yes54%

No46%

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