Pub. 2 Issue 2

6 www.glancda.org NADA Director’s UPDATE | BY MARCY H. MAGUIRE A Good Deal For Everyone Price Competition. Public Safety. Greater Convenience for Ameri- can Consumers. We’ve said this before but now we’re showing everyone why new-car dealers are vital to the economy and to their local communities. NADA has launched a major “Get The Facts” initiative. Aimed at the media, opinion leaders and policymakers, the campaign promotes the benefits of franchised auto dealers and provides key facts about our businesses. NADA has rolled out a variety of multimedia resources and an informative new webpage, www.nada.org/GetTheFacts. The centerpiece is a must-see animated video, “A Good Deal for Everyone,” that details the value of franchised dealers in the car buying process — including the significance of per- forming warranty and safety recall work. We’re also highlighting the economic engine that is the dealer franchise network. There are 17,700 new-car dealerships with nearly 32,000 domestic and international franchises across every state in the country that employ more than 1 million people. There have been many misconceptions about the dealer business. NADA’s “Get The Facts” initiative sets the record straight about who we are and what we do. We’re making sure that the car-buying public — along with everyone else — un- derstands that what we do is “A Good Deal for Everyone.” [The above was a Commentary distributed by NADA Chairman Forrest McConnell, III] NADA Study: The Dealer Franchise System Works Best for Manufacturers A new study released recently by NADA highlights why the dealer franchise system is the most efficient and effective way for auto manufacturers to distribute and sell automobiles nationwide. Key findings from the study, “Auto Retailing: Why the Franchise System Works Best,” include: • The average dealership today requires an investment of $11.3 million, including physical facilities, land, inventory and working capital. • Nationwide, dealers have invested nearly $200 billion in dealership facilities. • Annual operating costs totaled $81.5 billion in 2013, an average of $4.6 million per dealership. These costs include personnel, utilities, advertising and regulatory compliance. • The vast majority—95.6 percent—of the 17,663 individual franchised retail automotive outlets are locally and privately owned. They generate billions in state and local taxes annually and provide significant employment opportunities that help build goodwill in the community. • Manufacturers benefit from the high return on capital invested in manufacturing vehicles, as opposed to the low margin of retailing them. • Dealers bear the cost and risks of these investments—at virtually no cost to the manufacturers—and provide a vast distribution channel that benefits the consumer.