Chairman’s Corner – Dealers Rally Against New Auto Tariffs

Every September HADA joins with a strong contingent of Texas dealers and TADA officials that participate with nearly 500 new-car dealers, and dealer association executives, from across the country for NADA’s annual two-day Washington Conference. It is a prime example of participatory democracy as dealers get the opportunity to hear from top congressional speakers and sit down with both our Senators and Representatives face-to-face on Capitol Hill and make our voices heard on key issues that impact our businesses.

This year the stakes were high. Franchised dealers added their voice to others throughout the auto industry who have expressed serious concerns over trade as the administration considers imposing additional tariffs of up to 25 percent on imported automobiles and auto parts.

This year’s conference was also a lot more challenging as it took place in the midst of the Senate hearings for Supreme Court nominee Brett Kavanaugh. Although I could not attend due to a scheduled factory-dealer meeting, HADA President Wyatt Wainwright reports “there were protesters and security EVERYWHERE in the Senate buildings.” He had never seen anything like it.

Despite the “craziness,” as Wyatt put it, the HADA contingent of incoming Chairman David Peacock, Tom Peacock, Joe Chastang, Stacey Gillman Wimbish, and Wyatt were able to meet with Texas Senators, Ted Cruz and John Cornyn, as well as several Houston area Representatives. All the lawmakers HADA visited were supportive of issues specific to Houston as well as NADA’s national legislative priorities.

However, Sen. Cruz recounted his alarm at being chased from a Washington restaurant by a staged protest that he said “was 100 percent out of control,” and as dangerous a situation as he had ever faced. Bearing witness to the whole thing was Dallas auto dealer Charlie Gilchrist, who is the newly elected 2019 NADA Chairman and was dining at the same restaurant.

Concerning new auto tariffs, NADA issued the following statement: “While NADA supports President Trump’s goals of modernizing our trade agreements and moving toward freer and fairer trade; steep new tariffs on autos and auto parts would hurt the auto industry and consumers. As no vehicle is 100 percent domestic and the average vehicle assembled in the United States has an international parts content of 40 percent, new auto tariffs would impact all automobile dealers due to increased prices, stifled demand for new vehicles and lost jobs.”

Other NADA legislative priorities include:
• Self-Driving Cars Legislation (S. 1885/H.R. 3388) must preserve state vehicle franchise laws to ensure automakers are not forced to build different self-driving vehicles for different states.
• Opposition to overbroad recall bills (S. 1634/H.R. 3449) that could cripple the used-car market by halting the dealer sale or wholesale of any used car under open recall, even though most vehicle recalls are not safety related and should not require the drastic step of grounding.

Sales Report: Up for the year and looking for a strong finish.

While the tariff debate continues, the good news is that Houston region auto sales are up year-over-year through three quarters among many dealers, myself included. We are optimistic that we will finish with a strong 4th quarter, traditionally our ‘selling season.’

Although both total and retail sales dipped slightly in September 2018 (-.04% and -1.4%, respectively), year-to-date total sales of 222,436 units through September 2018 were still up 8.2% from 196,672 units year-to-date September 2017, while year-to-date retail sales of 192,909 units through August 2018 were up 11.2% from 170,411 units year-to-date September 2017, according to sales numbers provided by the TexAuto Facts Report published by InfoNation, Inc. for HADA.

I’d say this was pretty good news considering that, nationally, September 2018 sales fell year-over-year -5.5% compared September 2017. We are lucky to be in a strong regional economy that shows no signs of weakening, and that’s good for auto sales!

So dealers will keep doing what we’ve been doing to operate our businesses well. But I also urge all dealers to stay informed and involved in trade, tariff and other issues that affect our businesses. As we have seen time and again, we can still impact public policy at all levels through our support of HADA, TADA, and NADA.

# # #