A Message from Don Hall

March 2020

 

The General Assembly is expected to finish its 2020 session this week. To say that things are different in Virginia now is a real understatement.

With Democrats now controlling both the House of Delegates and the Senate, we’ve seen greater interest among these new legislators in social issues. Even on the national level, we’re seeing this trend from new types of elected officials who don’t fit traditional definitions of Republicans or Democrats. In my more than 30 years working with VADA in our Commonwealth, I’ve never seen anything like it, as legislators have focused on topics their predecessors never would have considered.

However, in the coming year, we can expect more attention to the heart of our business: buying, selling, and leasing vehicles as franchised dealers.

We need to be ready to defend who we are, what we do, and why we do it.

We own our industry.

There’s disruption happening in every industry. We’re no different. In fact, we’ve seen it before, with the influx a generation or two ago of businesses that specialize in speedy lubes or tire services. We didn’t act as if they were doing much disruption, but they ended up taking a good portion of dealer business.

We aren’t going to stop these new disruptors, because they will continue to look for new ideas to bring to town. What we must do, is get so good at the services we provide to our customers that there’s no need for disruptors. Remember, it’s all about the customer and their buying experience. If we don’t give them what they want, the disruptors will and - in some cases - are doing so even as I write this article.

The bottom line is we have to be the best at what we do. We have to look at our costs and how we operate.

We also need to consider how we pay our people. Consider the recent Department of Defense decision, which is allowing dealerships to once again sell gap insurance and other products. Part of why we lost that privilege for two years was the impression that we were taking advantage of consumers. My research revealed inconsistencies in dealer practices – a dangerous situation that can (and did) draw the critical attention of lawmakers in Virginia and in Washington, D.C.

It all starts with the car buying experience.

Without question, our industry is under attack.

But we have the power to protect our industry – and that starts with making the car buying experience all that a consumer could imagine.

Look at Carvana, which is making inroads in Virginia. This business sells thousands of cars nationally and is losing money. But it is making buying a car a simpler process.

Look at what’s happening in Colorado, where Rivian automotive supported legislation that would have gutted the state's motor vehicle franchise laws – and set a dangerous precedent nationwide. The bill, as originally written, would have permitted manufacturers with electric vehicles in their lineups to not only skirt long-established dealer franchise laws, but directly sell any vehicle – electric and otherwise – in the state.

We’ve done virtually everything a disruptor is doing – think about how easy it is to deliver a car to a consumer’s home – but we’ve strayed from those practices. We now tell consumers you have to come to us. You have to buy a new or used vehicle from us in the manner that we (the dealership) decide is best for you, the customer.

Then disruptors come in and say to customers, “No problem. We can do that for you.”

Against that competitive backdrop, we have a wonderful opportunity to redefine who we are and what we are going forward. We can push again to the cutting edge. What can we do better? And how can we act on it sooner rather than later? Disruptors have woken us up again to the idea of change, and we have to embrace change. More importantly, we need to act with intent.

We will keep an open dialogue.

Creating a legal and regulatory environment that supports the dealer franchise system is the cornerstone of protecting our industry.

Because of that, our legislative outreach can’t end when the General Assembly closes its annual session. This spring and summer, we’ll be working closely with our dealers to keep everyone engaged. We’ll help you arrange local meetings with the Delegates and Senators who represent you to talk about your business and continue to educate them on the benefits of the franchised dealer system.

In this issue

Every month, we bring important news and information to help you operate smartly and efficiently. Don’t miss these great articles: