Automotive News NADA Show Daily - 2023 Day 1 - 6

6 * January 27, 2023
NADA DAILY: FRID AY
AUTO NEWS
DIGEST
5 receive Northwood's
Dealer Education Awards
Northwood University will
present five Dealer Education
Awards on Saturday morning at
the Hyatt Regency.
Since 1972, the Midland,
Mich., university has recognized
dealers for contributions to
education and their
communities.
The honorees:
 Jamar Brinkley, dealer
principal of Renaissance Cars in
Roanoke Rapids, N.C.
 Rik Fregia, vice president of
Courtesy Automotive Group in
Danville, Ill.
 Chris Saraceno, vice
president of Kelly Automotive
Group in Melbourne, Fla.
 Brandon Tomes, owner of
Tomes Auto Group in
McKinney, Texas
 Kevin Vanatta, owner of
Newberry Motors in Newberry,
Mich.
Hunter Engineering shows
new tire changer, debuts
software updates
Hunter Engineering (booth
1133), the St. Louis
manufacturer of wheel and tire
service equipment, has several
product announcements aimed
at increasing dealer profit and
throughput.
In a deal with Dealerlogix, a
service scheduling software
firm, Hunter's wheel alignment
and tread inspection equipment
will be integrated. As a customer
drives into the service lane,
tread depth and alignment specs
will automatically flow into
Dealerlogix software.
Hunter is also showing its
latest tire changer, the Maverick.
It's a center clamp changer that
uses a leverless head controlled
by the technician.
Hunter executives will reveal
updates to WinAlign software
that will allow medium-duty
trucks to be inspected on Quick
Check Drive. And, Hunter's BL
Series bench lathe, which
resurfaces brake rotors and
drums, has been integrated into
HunterNet2, which means techs
can monitor performance
online.
Hyundai looks to 'Evolve' sales strategy
Lindsay Chappell
lchappell@crain.com
Hyundai will take another step in its
experimental vehicle-marketing relationship
with Amazon this year to see
if the online retailer can play a bigger
role in sales.
Hyundai believes Amazon can deliver
showroom customers, said Randy
Parker, CEO of Hyundai Motor America,
at the J.D. Power Auto Summit in
Dallas on Thursday.
" This year, we'll move that further, "
he said.
Hyundai launched its Evolve showroom
on Amazon in October 2021 -
purely as a way to display its vehicles
to online shoppers doing research.
The site gives shoppers details about
individual models, and directs them to
a dealership if they want to pursue a
purchase.
Without revealing specific plans,
Parker said he believes the Amazon
platform can do more, possibly allowing
shoppers to click on a model and
buy it. " We think that's a huge opportunity
to sell cars, " he said.
" The transaction still takes place at a
dealership, " he added.
Hyundai is preparing for
growth in the U.S. market,
Parker said, including more
sales of electric vehicles.
He said 70 percent of Hyundai's
800 dealers are in some
stage of construction on their
stores, which will include the
addition of 2,000 service bays.
Hyundai officials have made
JACK HALLAUER
At J.D. Power Auto Summit, Randy Parker, CEO of
Hyundai Motor America, touched on the brand's
collaboration with Amazon and EV tax credits.
no secret of their displeasure
over the rules contained in last
year's Inflation Reduction Act,
which render all of the brand's
EVs ineligible for the federal
tax credit of $7,500. The rules
require an EV be made in
North America to receive the
credit, and all of Hyundai's EVs
are currently built in Korea.
But a loophole in the rules
will at least permit cars designated
as " commercial " to receive
the tax credit, with the
$7,500 going to the automaker
or its finance arm. The loophole could
unleash more EV leasing.
Inventory struggles top
dealer council concerns
W
hat's foremost on the minds of dealers
at the NADA Show? The same
thing that's been there for at least the
past 18 months - inventory.
As days' supply starts to creep up from historically
low levels, most of the 26 dealer council leaders
Automotive News interviewed for a series of Q&As
mentioned some of the consequences of the inventory
situation.
 Steve Gates, whose Gates Auto Family has three
Toyota stores, said in his three decades as an auto dealer,
he never thought he could run on inventory as lean
as it was last year. " I was absolutely certain, " he said,
" when this all started, I thought I needed to jump off a
bridge because I didn't think that there was any way
we could survive with virtually no inventory. "
 Tyler Slade, operating partner at Tim Dahle Nissan
Southtowne in suburban Salt Lake City, said
valuable lessons have been learned. To overcome
tight inventories, he said, " stores advertise inventory
and post the Monroney with delivery ETAs on
showroom windows. Customers can sign their
name on the Monroney and put a deposit on the
Tyler Slade: Tight inventory led to a best practice.
car. It's efficient and has proven to be a good best
practice. "
 Don Flow, CEO of Flow Automotive Cos. in Winston-Salem,
N.C., which has four Audi stores, said
Audi " lost market share last year, but it had nothing
to do with turning the product. It had to do with
access to the product. But the headline for all
brands in 2023 is going to be the same: He who has
the chips, wins. " e
What do dealer leaders say?
Automotive News spoke with dealer representatives for nearly all
car and light-truck brands sold in the U.S. Read the interviews in
our 3 NADA Daily issues.
DAY
Acura
Audi
BMW
Buick-GMC
Cadillac
Chevrolet
Ford
Sat.
Fri.
Sat.
Sat.
Sun.
Fri.
Sun.
PAGE
10
28
8
28
32
32
24
Genesis
Honda
Hyundai
Infiniti
Jaguar
Land Rover
Kia
Lexus
Sat. 24
Sun.
Fri.
Fri.
Sun.
Sat.
Sat.
8
16
36
18
12
18
Lincoln
Mazda
Mitsubishi
Nissan
Porsche
Stellantis
Subaru
Toyota
Volkswagen
Volvo
Sat. 32
Sun.
36
Mercedes-Benz Sun. 12
Mini
Sat. 12
Sun.
16
Sun. 28
Sat.
Fri.
Fri.
Fri.
Fri.
Sun.
18
10
16
24
36
10
" It's better than nothing, " Parker said
of the loophole. " It's an opportunity
and we're going to take advantage of it.
We're going to play the deck of cards
that are being dealt. "
Parker said that a $5.5 billion EV factory
Hyundai is constructing near Savannah,
Ga., will begin turning out vehicles
in 2025. When that pipeline
opens up, a large new source of Hyundai
products will meet the requirements
for federal tax credits.
But Parker said the industry is facing
a challenging year in 2023 - despite
the good news of auto production levels
coming back and dealer inventories
being replenished.
Hyundai got down to just 15,000 vehicles
in dealer inventory at one point
last year, compared with 150,000 a
year earlier.
The company made the decision to
shift all of its business to retail, cutting
fleet sales to zero until the situation
improved.
Parker said Hyundai resumed a small
share of fleet sales late last year. e
2023 dealer
profits: Only
way is down
Larry P. Vellequette
lvellequette@crain.com
The U.S. auto industry is expected to suffer a
massive decline in total dealership gross profits
this year, but it is still expected to finish with the
third-best profit level in history as the industry
rebalances itself, says Thomas King, president of
data and analytics for J.D. Power.
Speaking Thursday at the J.D. Power Auto Summit
in Dallas, King said the U.S. retail
industry generated a record
$55 billion in collective
dealership gross and F&I profits
in 2022 as low inventories
and reduced incentives met
strong demand to push transaction
prices to record levels.
" 2022 was so stratospherically
high, the only way was
down, " King said, predicting a
decline to between $28 billion
and $37 billion for 2023. But, he said, " Even at $28
billion, that's still the third-best year in history. "
Factors that will drag down prices and profitKing:
Still the
third-best year
ability this year, King said, include falling trade
equities; potential further interest rate hikes; increased
supply leading to less dealership pricing
power; and incremental production by automakers
of lower, less profitable trims to meet demand.
King said total 2023 industry volume is expected
to increase to between 15 million and 15.3 million
vehicles, but it won't be equal among all automakers,
leading to potential pressures as some
have stock to meet demand while others don't.
" There is going to be more supply, " King said,
but " price and profit erosion this year is pretty
much inevitable. " e
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Automotive News NADA Show Daily - 2023 Day 1

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