CHAIRMAN’S CORNER: Another Great Auto Show Builds Momentum for 2019
February 18, 2019HADA & Community Leaders Donate Custom Trucks to Houston Fire Department
August 13, 2019Springtime 2019 means it’s time to head to Austin to make sure the views and concerns of franchised auto dealers are heard at the current Texas Legislative Session, which runs through May. Spearheading that effort are HADA President Wyatt Wainwright, TADA Chairman Donnie Buckalew, and TADA Legislative Chairman Joe Chastang, as well as many other Houston dealers who are there every week to keep a sharp eye on any changes in public policy that affect dealers.
So far, it has been a good session as we push for the following legislation:
• Modern Ownership Structure (SB 1415, Hancock and HB 2940, Geren) permits market participants to own entities with interests in various segments of the motor vehicle industry, provided there is no vertical integration in which a distributor or manufacturer is selling and servicing the same type of motor vehicle.
• Loaner Insurance Coverage (HB 3420, Lambert) requires that an individual’s primary physical damage coverage carry forward to cover a temporary substitute vehicle.
• Vehicle Recall Information in Safety Inspection Report (SB 711, Hinojosa and HB 1692, Leach) would allow DPS to adopt rules providing for the inclusion of safety recall information on a vehicle inspection report.
• Auto Body Shops (HB 1348, Clardy) prohibits certain insurer practices related to auto repair claims to ensure quality parts are used to make repairs in the body shop of the insureds choice.
• Texas dealers are opposed to Cummins (SB 1267, Watson and HB 2602, Thompson) that would allow manufactures of engines, transmissions, or rear axles to own and operate dealerships.
HADA will keep its members informed on the progress and outcome of these state issues, as well as national issues such as tariffs on imported autos. I believe that all the talk of tariffs are more posturing for trade concessions than actual policy for the long term. We live in a world economy where even domestic cars have tremendous foreign content, so it is my hope that cooler heads will prevail.
A Surprisingly Good First Quarter
Despite a sales downtick in March (-4.2% total and -12.8% retail), Houston Region dealers still finished the first quarter slightly ahead of last year – up 9% total and 1% retail, according to TexAuto Facts Report published by InfoNation, Inc. for HADA.
Going into this year I was expecting a 3-4% downturn. I consider these results to be surprisingly good, particularly when compared to overall national new-vehicle sales which declined 1.7% in the first quarter, thanks largely to a 3.9% drop in retail sales. With Houston’s economy still robust, interest rates down, and sales steady, I see no reason not to be optimistic that the rest of the year can at least match this quarter.
I like to tell people that car purchases are a reflection of consumer confidence in their personal finances. You can put off a car purchase and continue driving what you have if you’re nervous about being laid off or not getting the big bonus or commission you expected. But when all those things are good – you did get the bonus or big sale – then you say to your wife, “Hey, let’s go buy a new car!” I think most folks still have that confidence.
Car sales are a leading factor on where the economy is going, whether good or bad, and right now it seems pretty stable. Even with national sales softening a bit, a J.D. Power study shows overall dealer profits rose 1.1% in the first quarter, thanks mainly to increases in F&I income and higher transaction prices that have fueled used-vehicle sales to record levels. Attention to all dealership operations seems like a blue print for 2019.
In closing, I would again like to thank former UN Ambassador Nikki Haley for making our HADA Spring Meeting a huge success! Our honored guest speaker was a delight as she related how a second-generation immigrant was able to achieve the American Dream. We expect to hear a lot more about Ambassador Haley in the future.
Finally, don’t forget TADA’s Spring Conference in Houston at the Marquis Marriott, April 28-29, and HADA’s annual fun-in-the-sun golf tournament on May 6. See you there!