2024-2025 ISSUE 4 Drive for the Troops Taking Place All Throughout July CATA Annual Meeting & Golf Outing Recap
Memberships in: • AUTOCPA Group • The American Institute of Certified Public Accountants • The Illinois CPA Society CERTIFIED PUBLIC ACCOUNTANTS Located in Central Illinois, we serve the entire state. Contact us today to learn how we can help your dealership thrive. Drive Your Dealership Toward Financial Success We specialize in automobile dealers in the following areas: • Dealership valuations • Automobile dealer legal support • Buy-Sells for dealerships • LIFO inventory computations • Financial statement analysis • Corporation Income Tax returns • Personal Income Tax returns • CPA prepared financial statements • Dealer estate planning • Employee theft consulting • Internal control studies and audits • Profit consulting • Training office managers/CFO’s • 401K Audits Serving more than 250 Automobile Dealers throughout the United States (309) 662-8797 Email: woodwardassoc@cpaauto.com Website: www.cpaauto.com 1707 Clearwater Avenue P.O. Box 1584 ·Bloomington, IL 61702
10 ©2025 The Chicago Automobile Trade Association (CATA) | The newsLINK Group LLC. All rights reserved. CATA Up to Speed is published four times per year by The newsLINK Group LLC for CATA and is the official publication for this association. The information contained in this publication is intended to provide general information for review, consideration and education. The contents do not constitute legal advice and should not be relied on as such. If you need legal advice or assistance, it is strongly recommended that you contact an attorney as to your circumstances. The statements and opinions expressed in this publication are those of the individual authors and do not necessarily represent the views of CATA, its board of directors or the publisher. Likewise, the appearance of advertisements within this publication does not constitute an endorsement or recommendation of any product or service advertised. CATA Up to Speed is a collective work, and as such, some articles are submitted by authors who are independent of CATA. While a first-print policy is encouraged, in cases where this is not possible, every effort has been made to comply with any known reprint guidelines or restrictions. Content may not be reproduced or reprinted without prior written permission. For further information, please contact the publisher at (855) 747-4003. CONTENTS 4 A Look Back on the Year A Letter From Jason Roberts, CATA 2024-2025 Chairman 6 Election Results Chicago Automobile Trade Association Elects New Director and Re-Elects Three Existing Directors to Its Board 8 Save the Date 2025 Chicago Drives Electric 10 Drive for the Troops Taking Place All Throughout July 12 CATA Annual Meeting & Golf Outing Recap 16 Registration Management Professional (RMP) Tax, Titling & Registration Seminar with Vitu Recap 18 Legacy, Liquidity or Something in Between How to Navigate the Next Chapter By Jamie Farley, Partner, Performance Brokerage Services 20 Driving Change With Grasstops Advocacy 22 The Key to Dealer Success in the Midwest A Strategic Perspective on a Market in Transition By DSMA 24 Reset and Retool: Dealers Meet 2025 With Resilience Tariffs and Their Impact on the Economy Will Test Dealers’ Resilience By Truist Dealer Services 20 CATA UP TO SPEED 3
Dear Dealer, As my term concludes as 2024–2025 Chairman of the Chicago Automobile Trade Association (CATA), and I prepare to take on the role of 2026 Chicago Auto Show Chairman, I am both honored and humbled to reflect on the past year of service. It has been a time marked by both challenges and progress, moments that tested our resolve as dealers, but ultimately reinforced the strength and unity of our industry. In stepping into this leadership role, I was mindful of the legacy built by those who served before me. I stand on the shoulders of generations of dealer leaders who gave their time, energy, and expertise to advocate for our businesses and protect our shared interests. Their tireless work laid the foundation that made it possible for our board to continue advancing the mission of the CATA on behalf of dealers across the Chicagoland area. The CATA standing Committees are the engines that drive the organization, so I will begin here. The Government Relations and Lobbying Committee, which I chaired, spent countless hours meeting with our representatives in Springfield to try to effectuate three very important matters to dealers. First, we are concerned that the restructured retail allowance cap is particularly burdensome to our dealers considering the volume and amounts of transactions they process, and we have sought to create a carve-out for vehicle transactions, with any lost revenue to the state more than made up by tightening the laws on taxing private sales. Secondly, we added our voice and resources in fighting for a $100 increase in the documentary fee. Finally, we advocated for an amendment to the Motor Vehicle Franchise Act which would favorably modify language on warranties and right of first refusal, while clearly providing that legacy manufacturers cannot create new entities to sell directly to the public. Sadly, for differing reasons, none of these endeavors came to fruition in this past legislative session; however, the CATA will continue to advocate for these causes in succeeding sessions for the betterment of all. The Auto Show Committee, with Kelly Webb Roberts as Chairwoman, produced a fabulous 2025 Chicago Auto Show despite continuing headwinds. Helped by Stellantis’ return, the Show resembled shows of the past, with more than 100,000 in-vehicle experiences, an all-time record. The First Look for Charity gala raised $2.5 million for participating charities. Our advertising expenditure of over $438,000 was buttressed by almost $1.6 million in bonus weight. All in all, the Show continues to be the premier consumer show in the country and a media and public relations home run for the OEMs and CATA dealers. As a prelude to the 2025 Chicago Auto Show, the CATA conducted its third Chicago Drives Electric event this past October. Included were 15 participating brands: Audi, BMW, Cadillac, Chevrolet, Dodge, Fiat, Ford, GMC, Hyundai, Kia, Lexus, Nissan, Subaru, A Look Back on the Year A Letter From Jason Roberts, CATA 2024-2025 Chairman 4 CATA UP TO SPEED
Toyota and Volvo. In February, the 2025 Chicago Auto Show’s Chicago Drives Electric track featured 12 participating brands spanning 25 different models on two test tracks totaling 100,000 square feet. Chicago Drives Electric has been an unqualified success by any measure. The Member Benefits Committee, under John Crane’s leadership, researched and vetted allied companies that could provide worthwhile programs, vendors and cost efficiencies to CATA members. Only the best of the best of these ultimately received CATA recognition. The Finance, Pension, Audit and Compensation Committee, comprised of CATA Officers, has worked diligently over the past several years to stabilize the CATA’s finances in the face of continuing pressures on the Auto Show. Not only has the Committee examined ways to increase revenue and decrease costs, but it has worked hand-in-hand with the Member Benefits Committee to expand the wide range of benefits the CATA provides to its dealers. The Civic and Dealer Relations and First Look for Charity Committee, under Emir Abinion’s leadership, ensures that the charitable aspects of the CATA continue in high gear. Whether it’s the First Look for Charity Event, which generated $2.5 million this year for charities; the BBQ for the Troops, now rebranded Drive for the Troops, which to date has raised almost $1.2 million for the USO; or the Chicagoland Dealers Care program, where the CATA provides matching contributions of up to $1,500 to charities put forth by our dealer members, these efforts combine significant community engagement with awareness of our member dealers’ continuing generosity to the communities they serve. The Employee Relations Committee, chaired by Jerry Haggerty, continued to set a path forward to provide answers to dealers’ questions in the employment arena as well as to provide a revised strategy for upcoming labor negotiations. Our employee benefits provider, SESCO, has broad experience with many state dealer associations and has shown itself to be an invaluable tool in providing answers to employment issues that arise. Regarding upcoming negotiations, the CATA has implemented a structural change wherein dealers, rather than attorneys, drive the bargaining process. With this new template, we hope to avoid bitterness and confrontation (and strikes) in the upcoming negotiations. The Drive Chicago Committee, under Jared Wickstrom’s leadership, continually looks for ways to update and refine the DriveChicago.com website in its efforts to be the definitive website for vehicle purchases in the Chicagoland area. The Media Strategy Committee, chaired by Steve Phillipos, again strategically directed $438,500 toward media on behalf of the Chicago Auto Show, Chicago Drives Electric, BBQ for the Troops, and other worthwhile events. Finally, the Nominating Committee, after reaching out for suggestions from fellow dealers, nominated five outstanding candidates to run for the four vacancies this year on the CATA Board of Directors. The Committee continues to seek out and find knowledgeable candidates of the highest integrity to serve as CATA Directors. It has been a privilege to serve alongside the 11 dedicated members of the CATA Board of Directors, fellow dealers who continue to give generously of their time, energy and insight to strengthen our industry. I especially want to recognize JC Phelan, who concludes his service on the Board after an incredible nine-year tenure. JC’s leadership across every Director role, including Chairman and Auto Show Chairman, has been marked by wisdom, steadiness, and a deep commitment to the dealer community. His presence will be missed, but his impact will continue to resonate. I also extend my deepest appreciation to the CATA staff, led by President Jen Morand in her first full year at the helm. Jen, along with Executive Vice President Chris Konecki, continues to elevate our association through innovation, energy and a deep understanding of the issues we face. Their professionalism and dedication are essential to everything the CATA accomplishes. A special thank you as well to Dennis O’Keefe, our General Counsel, whose unparalleled knowledge of the legal landscape and unwavering guidance have been invaluable, not only during my term, but to every director who has served over the years. Finally, I congratulate Ryan Kelly on his election as 2025–2026 CATA Chairman. Ryan brings not only experience and judgment, but a proud family legacy. His father, Art Kelly, served as chairman in 2004–2005. I have every confidence that Ryan will lead with distinction and vision. For a summary of the actions taken by the CATA Board of Directors over the past year, visit CATA.info. Thank you again for the opportunity to serve, and I look forward to what lies ahead. Sincerely, Jason Roberts CATA 2024-2025 Chairman CATA UP TO SPEED 5
Election Results Chicago Automobile Trade Association Elects New Director and Re-Elects Three Existing Directors to Its Board Tom Wehmeier joins incumbents Abinion, Haggerty and Kelly on the CATA board. Tom Wehmeier (Community Honda, Orland Park) has been elected to the Chicago Automobile Trade Association (CATA) board of directors. Incumbents Emir Abinion (Fox Valley GMC of St. Charles, Fox Valley Volkswagen of Crystal Lake, and Fox Valley Volkswagen of St. Charles), Jerry Haggerty (Jerry Haggerty Chevrolet, Glen Ellyn), and Ryan Kelly (Kelly Nissan, Oak Lawn) return for another three-year term. Wehmeier is a third-generation dealer following in the footsteps of his family, who has been in the automotive industry since 1919. He started selling cars in 1980 and became a dealer in 1991. Since then, he has served on both the National Dealer Council for Mazda and the National Dealer Council for America Honda Finance. This year, Wehmeier is celebrating 50 years of being a Honda dealer. Wehmeier was born and raised in the south suburbs and is a current resident of Palos Park. “I am honored to be elected to the CATA Board of Directors and look forward to giving back to our community, whether to the individual, local community or providing resources for the Chicagoland auto dealers,” said Wehmeier. “The CATA is a big part of the automotive industry and I’m ready to step in and play my part in contributing to the success of the organization, now and in the future.” The CATA also elected a new executive board: Ryan Kelly is the 2025-2026 CATA chairman; Steve Phillipos (Chevrolet of Homewood; Ford of Homewood) is vice chairman; and Jerry Haggerty is treasurer/secretary. Former CATA Chairman Jason Roberts (Advantage Acura of Naperville; Advantage Chevrolet of Bolingbrook; Advantage Chevrolet of Bridgeview; Advantage Chevrolet of Hodgkins; Advantage Toyota of River Oaks) becomes the 2026 Chicago Auto Show chairman. “On behalf of our association, we are excited to welcome Tom Wehmeier to the CATA board,” said Jennifer Morand, president of the CATA. “Tom’s history in the industry and deep roots in his community make for a great combination to serve our members, and we look forward to his contributions.” “I also congratulate Emir, Jerry and Ryan on their reelection to the CATA board,” said Morand. “We’re delighted they will continue to serve our board, each bringing immense value to the future of the association.” Election results were announced June 10 at the association’s annual meeting and golf outing at Cog Hill Golf & Country Club in Lemont. Directors can serve up to three terms. Voting was open to all CATA dealer members whose association membership is in good standing. In addition to the four directors elected this month and the executive committee, the CATA board includes John Crane, Dan Heller, Fred Marks, Dan Marquardt, Kelly Webb Roberts and Jared Wickstrom. For more information on the CATA, please visit www.CATA.info. Tom Wehmeier 6 CATA UP TO SPEED
Anticipate every turn In an industry that’s always evolving, your dealership can rely on our Dealer Financial Services team’s 90 years of experience to see what’s around the corner, forward-thinking insights to prepare you, and technology to keep you ahead of the curve. What would you like the power to do?® Diana Zamudio, diana.zamudio@bofa.com business.bofa.com/dealer ©2024 Bank of America Corporation. All rights reserved. DFS-699-AD 6942528 Investment products offered by Investment Banking Affiliates: Are Not FDIC Insured Are Not Bank Guaranteed May Lose Value “Bank of America” and “BofA Securities” are the marketing names used by the Global Banking and Global Markets divisions of Bank of America Corporation. Lending, derivatives, other commercial banking activities, and trading in certain financial instruments are performed globally by banking affiliates of Bank of America Corporation, including Bank of America, N.A., Member FDIC. Trading in securities and financial instruments, and strategic advisory, and other investment banking activities, are performed globally by investment banking affiliates of Bank of America Corporation (“Investment Banking Affiliates”), including, in the United States, BofA Securities, Inc., which is a registered broker-dealer and Member of SIPC, and, in other jurisdictions, by locally registered entities. BofA Securities, Inc. is a registered futures commission merchant with the CFTC and a member of the NFA.
4th Annual EV Outdoor Consumer Test Drive and EV Education Event Thursday, Oct. 2-Sunday, Oct. 5 Oakbrook Terrace, Illinois For more information visit ChicagoDrivesElectric.com 8 CATA UP TO SPEED
THE LOCAL AUCTION FOR CHICAGO AND NORTHWEST INDIANA DEALERS. Hundreds of cars available weekly — trade-ins and repos. Live auction every Friday at 9:30 am, or bid online. www.southchicagoautoauction.com (708) 225-2277 396 E. 147th St. Harvey, IL SOUTH CHICAGO AUTO AUCTION
Drive for the Troops Taking Place All Throughout July Throughout the month of July, Chicagoland’s new-car dealers proudly host Drive for the Troops, a fundraising campaign in support of the USO. Dealers across Chicagoland organize both community and online events to raise donations benefiting service members and their families. Twelve years ago, the Chicago Automobile Trade Association (CATA) and local dealers partnered with the USO to launch this impactful initiative. Since then, more than 700 fundraising events have taken place, generating over $1.2 million in support of USO programs and services. These funds enable the USO to lend support to more than 300,000 service members and their families annually. To learn more about the program or contribute to the fundraising efforts, scan the QR code. 10 CATA UP TO SPEED
Kicking off the 2025 Drive for the Troops events, Webb Auto Group proudly hosted the 4th Annual Ride for the Troops in June. The event brought the community together for a memorable day of cycling, giving and honoring our military. Riders chose between a scenic 10-mile cruise through Downtown Plainfield or a 20-mile countryside challenge, while attendees enjoyed delicious food, drinks and entertainment. “We’re dedicated to showing love and support for the brave men and women of our armed forces,” says Tim Gehr, general manager at Webb Chevy. “This fun event allows us to express our gratitude for our employees who serve, as well as to all troops and veterans.” https://drivechicago.com/ CustomPage/2/ drive-for-the-troops
CATA Annual Meeting & Golf Outing Recap Under clear blue skies on a perfect June day, the 2025 CATA Annual Golf Outing brought together more than 280 members at Cog Hill Golf & Country Club. It was a day filled with networking, enjoyment and, of course, a round of golf. The event kicked off with a networking reception, followed by the annual meeting over lunch, where CATA Chairman Jason Roberts emphasized the importance of relationship-building within the industry. He announced the re-election of board members Emir Abinion, Jerry Haggerty and Ryan Kelly, and welcomed new board member Tom Wehmeier of Community Honda. The association also honored outgoing directors JC Phelan and Kelly Webb Roberts for their exceptional service and leadership. CATA President Jennifer Morand recognized a successful year marked by growth, community impact and innovation. Highlights included the evolution of the BBQ for the Troops into the rebranded Drive for the Troops campaign, record participation in Chicago Drives Electric and strong EV engagement at the 2025 Chicago Auto Show. This year’s Auto Show welcomed over 217,000 attendees, while the First Look for Charity gala raised $2.5 million. After the annual meeting, golfers took to the course for 18 holes, enjoying both the sunshine and some spirited competition. Throughout the day, sponsors were stationed across the course, offering refreshments and friendly conversation. The outing concluded with the 19th Hole Happy Hour — an ideal way to toast to a successful day on the greens. 12 CATA UP TO SPEED
Prizes were awarded to those who had an exceptional golf day. Longest Putt winners: • John Crane • Bob Egyed • Jason Ruggiero Longest Drive winners: • Greg Dutra • Will Keller • Josh Wilkins Closest to the Pin winners: • Jim Fransen • Jeff Hrubil • Ivan Mahanic Scramble winners: • Course 1: Geoff Bores, James Coyle, Corey Hall and Ryan Hawley • Course 2: Andrew Ramus, Randy Ramus, Michael Shanahan and Nick Thielman • Course 3: Matt Arturi, Tim Murray, Michael Schwabe and Brian Schwardt CATA UP TO SPEED 13
THANK YOU TO OUR SPONSORS WHO MADE THIS GOLF OUTING POSSIBLE! Gold ACV Auctions Autotrader and Kelley Blue Book OPENLANE Protective Reynolds & Reynolds South Chicago Auto Auction Zurich Silver AssuredPartners Automotive Internet Media Better Business Bureau of Chicago & Northern Illinois Cars Commerce Dynatron Financial Renaissance Illinois Recovery Group Inc. Powering Chicago Select Marketing Group Bronze Excell Automotive Equipment Greater Rockford Auto Auction and Great Lakes Auto Auction Imperial Surveillance Redmond Company Shartega IT Truist and Regional Acceptance Utility Management Group Inc. Presenting Sponsor Vitu Platinum ABC 7 Chicago Brightline Dealer Advisors 14 CATA UP TO SPEED
Truist Bank, Member FDIC and Equal Housing Lender. © 2024 Truist Financial Corporation. TRUIST, the Truist logo and Truist Purple are service marks of Truist Financial Corporation. All rights reserved. Your dealership doesn’t need a bank. You need a true partner. In today’s complex auto dealer industry, access to capital is only part of the picture. To get ahead and stay ahead, you need a strategic partner expertly versed in this industry. Highly resourced, and completely invested in you. That partner is Truist. Truist.com/DealerServices
Registration Management Professional (RMP) Tax, Titling & Registration Seminar with Vitu Recap This past May, the Chicago Automobile Trade Association (CATA), in partnership with Vitu, welcomed over 100 attendees to two well-attended seminar sessions held at CATA Headquarters in Oakbrook Terrace. The RMP seminar focused on tax, titling and registration procedures and delivered essential training tailored for dealership registration professionals across Illinois. Each 90-minute session provided a comprehensive overview of the latest requirements from the Illinois Secretary of State (SOS) and Department of Revenue (DOR), ensuring participants received the most up-to-date and accurate information. Key topics included: • SOS and DOR compliance requirements. • Proper use of forms and supporting documentation. • Electronic Registration and Titling (ERT) correction processes. • Tax form completion and calculation. • Full Titles and Vehicle Services. • Handling third-party trades, transfers by heirs and Small Estate Affidavit procedures. • Special plate processing. Industry experts Ali Pouliot, Joey White and Tami Tapscott-Jones from Vitu led the sessions and remained available to answer questions, both during and after the seminar. The strong turnout and active engagement at both sessions highlighted the value of continued professional education in an ever-evolving regulatory environment. CATA and Vitu thank all who participated and contributed to the success of these educational opportunities. 16 CATA UP TO SPEED
egacy, Liquidity or Something in Between CATA UP TO SPEED 18
How to Navigate the Next Chapter By Jamie Farley, Partner, Performance Brokerage Services For many dealers, the question of what to do with the store doesn’t start with a spreadsheet. It starts around the dinner table — or maybe in the quiet moments when things finally slow down. After decades of building a business, employing people in your community and putting your name on the sign out front, the decision about what’s next is personal. And when family is involved, it’s rarely simple. Some dealers have always imagined passing the business to the next generation. Others have watched their kids build successful lives in different fields and quietly wonder if a handoff is still the right move. And often, there’s a mix of feelings — pride, uncertainty, loyalty, fear of regret. That’s normal. The emotional weight of a family business is real, and the process of transitioning it — whether within the family or outside of it — deserves careful, honest consideration. What we frequently see is hesitation to start the conversation. No one wants to create tension. Parents worry about upsetting their children. Children don’t want to seem disinterested — or entitled. But silence tends to create more confusion, not less. In families where the transition is successful, the common thread is usually clarity: an open dialogue about roles, expectations and timing well before the handoff begins. What many don’t realize is that there’s no longer just a fork in the road — sell it or hand it down. Today, there’s a broader landscape of options. Some families structure phased ownership transfers over time, others pursue internal buyouts with financial guidance. And more recently, new models have emerged that provide liquidity for the current generation while allowing family members to retain operational control and long-term equity. These approaches offer flexibility and customization that weren’t available — or widely known — even a few years ago. In other words, keeping the business in the family no longer has to mean taking on the full burden alone. There are creative, values-aligned ways to protect legacy, preserve harmony and plan for growth across generations. Still, it’s not just about structure. One of the most overlooked parts of the transition is emotional readiness — on both sides. Is the next generation ready to lead, not just manage? Is the outgoing generation truly ready to step back? And is everyone aligned on the vision for the future? These questions don’t have easy answers, but avoiding them doesn’t make them go away. The good news is that starting the conversation doesn’t commit you to any one path. It just opens the door to explore your options — with your family, your advisors and on your own terms. As buy-sell advisors, we’re often invited into these moments of uncertainty — before a decision has been made, when the road ahead is unclear. And it’s in these early conversations that the real value of planning emerges. Our role is not to push a transaction but to help dealers weigh their options, understand what’s possible and make thoughtful decisions that honor both the legacy they’ve built and the future they envision. These decisions don’t come with a playbook. But they do come with the opportunity to pause, reflect and shape the future with intention. Whether your path leads to a family transition, a sale to a third party or something in between, the most important move is starting the conversation — while you still have time to shape the outcome on your terms. After all, legacy isn’t just what you leave behind. It’s how you choose to move forward. Learn how our experienced team can help you navigate your next move with confidence by contacting Emily Bourne at (585) 957-1593 or emily@performancebrokerageservices.com or Jamie Farley at (773) 558-7703 or jamie@performancebrokerageservices.com.
Driving Change With Grasstops Advocacy CATA UP TO SPEED 20
There’s no getting around the fact that change is difficult. It’s challenging to change someone’s mind or opinion. Imagine the difficulty in getting a group of legislators to change a law or political stance. Auto dealers have the power to advocate for a better industry. The effects can make a huge difference to your teams, local communities, state, or even at times on a national level. In advocacy, especially when it comes to protecting and promoting the interests of auto dealers, two terms often come up: grassroots and grasstops advocacy. They sound similar, but they play very different roles. GRASSTOPS VS. GRASSROOTS Most people have likely heard of grassroots advocacy. This is a method of advocacy that involves recruiting ordinary people to combine their voices. The emphasis here is on the quantity of voices. Maybe you’ve donated to the NADA PAC or signed a petition to fight a bill. These efforts are significant, but sometimes, advocacy needs to go a step further. That’s where grasstops advocacy comes in. Grasstops advocacy involves individuals engaging directly with decision makers. This method relies on the quality of voices to bring about change. Have you ever personally picked up the phone to call a key legislator about an issue affecting our dealerships? Did they answer? That begs the question: How can we do better at engaging at that higher level? Grasstops advocates bring credibility, strategic influence and access — and often help open doors that grassroots advocates can walk through. A grasstops advocacy strategy isn’t just for lobbyists. In fact, as auto dealers, we are uniquely positioned to be grasstops advocates. We are community anchors, employers and, often, well-connected individuals. Grasstops advocacy taps into this influence to help shape policy outcomes from the top down. It’s about using your voice, your relationships and your credibility as an auto dealer to make a direct impact. WHY IT MATTERS A multitude of regulatory or legislative issues affect dealers, such as EV mandates, franchise laws and tax policies. In addition, it’s no secret that legislators have packed inboxes and receive many phone calls. Cultivating a relationship with a legislator can help your chances of having your email opened and your voice heard. Picture this: It’s the legislative session. A legislator is receiving a high volume of emails and calls. Everyone wants to talk to them, meet with them, and be heard. The legislator opens his or her email and scrolls through the names. A familiar name stands out. The legislator opens the email from the individual they know — in this case, you — thus marking the winner of the legislator’s attention. This is a classic scenario reflecting a simple truth: The attention of someone in power will be caught first by a familiar name. This is why grasstops advocacy is so effective. You want the lawmakers to know your name and your story, so your voice can be heard and your cause can be advanced. HOW TO BUILD A GRASSTOPS STRATEGY Knowing where to start when it comes to a grasstops approach to advocacy can be intimidating. You may feel like you don’t have the time to make a difference, or maybe you’re uncomfortable reaching out to lawmakers and afraid of pushback. The easiest approach is to view the process as actionable steps. 1. Map Your Network: Identify any relationships or connections you have with local, state or federal officials. You may have more connections than you think. 2. Grow Your Network: Put yourself in situations to create relationships with individuals in the industry. Visit lawmakers, make connections and let those connections lead to more. 3. Engage Regularly: It’s important to regularly make contact with your network of legislators. You can achieve this by calling them a few times a month, interacting on social media, hosting events or inviting them to visit your dealership. 4. Tell Your Story: When talking to legislators, you want them to remember you and your story. Personalizing the relationship and showing them why you care about your dealership, the industry, and what is happening on the legislative front can help them understand your point of view and, in turn, help. CONCLUSION Grasstops advocacy is a powerful tool that more association members need to use. By crafting personal relationships with legislators, we can effectively fight for our industry. Grassroots and grasstops advocacy strategies should be used in tandem to champion our industry effectively. Grassroots efforts provide the quantity through widespread public engagement, while grasstops deliver the quality by leveraging the power of an influential individual to shape decision-maker perspectives. Together, they create a balanced and powerful approach that combines broad support with strategic influence. Remember, it just takes one dealer with the right connection to make all the difference. So, take the first step. Start a conversation, attend a legislative event, or contact the association about getting involved. CATA UP TO SPEED 21
The Key to Dealer Success in the Midwest A Strategic Perspective on a Market in Transition By DSMA In today’s complex automotive landscape, dealership owners face rapidly shifting factors that affect their business’s value. From evolving U.S. tax policies and tariffs to changing manufacturer distribution models, the Midwest market is experiencing significant transformation. Subsequently, understanding the real worth of a dealership has never been more important for strategic planning and growth. According to Jennifer Rafael, Vice President and Partner of DSMA Midwest, USA, a common misconception in the retail automotive space is that valuations are only relevant at the point of exit. In reality, she shares, “Market trends, performance KPIs, brand strength and consumer behavior all play a role in shaping goodwill.” Jennifer explains that many dealership owners still rely solely on their accountants for this type of information, often unaware that typical accounting reports overlook intangible assets. “Your accountant is focused on taxes and financial statements,” she says. “They’re not assessing what your business is worth in the market right now. And they’re definitely not calculating goodwill.” She compares an annual valuation to a health check for a business. Just as owners meet with lenders for credit reviews every year, Jennifer emphasizes that a valuation should be part of a routine business process. “Smart business operators do this regularly. In our industry, it’s still not common enough,” she notes. Looking specifically at the Midwest market, Jennifer points out that retail car sales slowed in June due to lower consumer confidence. Despite this, she observes that “service departments are performing well, used car prices remain strong, and inventory is lean because of ongoing trade-related constraints.” She adds that dealers are adapting by shifting focus to the strongest departments, especially fixed operations. “We’re seeing dealers pivot to where there’s strength,” she says. “There’s still a lot of opportunity, especially compared to last year.” An up-to-date valuation provides dealers with insight into where revenue is coming from and where improvements can be made. Jennifer stresses that year-over-year analysis of KPIs by department reveals areas of growth and untapped potential. “Every opportunity you uncover is more value added to your business, and more money in your pocket.” Jennifer also highlights the impact of manufacturer-driven shifts on dealership value. “Some brands have seen their trading multiples drop from four to three and a half, while others have gone from three to two and a half,” she explains. “These changes directly affect goodwill, and at DSMA, we track these numbers in quarterly intelligence reports that break down trends by brand.” (They are available for free on DSMA.com.) This data allows dealers to stay informed and make better capital and growth decisions. In regions like Chicago, where dealer groups are expanding, Jennifer emphasizes that valuations are critical tools. “Whether you’re growing, diversifying or divesting, knowing your accurate, current value helps guide your strategy.” She also points out a frequently overlooked area: cash-on-cash return on investment. “Dealers often have capital frozen in their business that could be better used elsewhere. We help owners model ROI so they can decide if reinvesting, restructuring, or selling is the best option.” DSMA’s valuation service includes a complimentary 24-month review period, during which Jennifer’s team of expert M&A CPAs provides ongoing support. “It’s not just a one-time report,” she says. “Our clients can update their valuation as market conditions or performance change, ensuring their decisions are based on the most current information.” This approach has helped several dealer groups make strategic pivots, such as growing into stronger platforms while divesting from brands they no longer believe in. Jennifer describes this as a form of brand diversification and capital optimization. “In the end, knowing your value isn’t just about preparing for a sale,” she concludes. “It’s about running your business smarter and making informed decisions every day.” To receive a valuation or learn more about DSMA’s valuation services, contact Jennifer Rafael at (312) 927-9561 or jennifer.rafael@dsma.com, or visit www.dsma.com. 22 CATA UP TO SPEED
For more information, or to learn more about our 100+ opportunities, visit DSMA.com. OUR MIDWEST TEAM MIKE FUNK M&A Associate michael.funk@dsma.com 312.674.4556 JENNIFER RAFAEL Vice President, Partner jennifer.rafael@dsma.com 312.927.9561 JONATHON MORONI M&A Associate jonathon.moroni@dsma.com 312.674.4556 GREG BROWN M&A Associate greg.brown@dsma.com 312.674.4556 CHRIS HAWLEY M&A Associate chris.hawley@dsma.com 312.674.4556 SHINTHYA SILVA M&A Associate shinthya.silva@dsma.com 312.674.4556 NOLAN KLUG Bus. Dev. Manager nolan.klug@dsma.com 312.674.4556 DSMA IS THE #1 GLOBAL AUTOMOTIVE MERGERS & ACQUISITIONS FIRM. SCAN THE QR CODE OR CALL 1-833-650-4188. SINK YOUR TEETH INTO YOUR NEXT DEAL WITH OUR M&A EXPERTS. THE MARKET IS READY. ATTACK YOUR NEXT OPPORTUNITY.
For auto retail dealers hoping for a return to normal conditions and predictability in 2025, disruption has once again taken the driver’s seat. As trade dynamics shift and their impact on the economy remains unclear, auto retailers will need to call upon their adaptability to adjust to a new set of conditions. Strong profit growth since 2019 and resilience through COVID suggest that dealers are ready to reset and retool to address today’s market. Thankfully, dealer average profitability has stabilized at nearly double the rate achieved in 2019. The most successful auto retailers will be able to maneuver to build value without shortchanging growth strategies or slowing their work. As you reset your plans for the coming years, consider the following industry trends. CONSUMER DEMAND WILL CARRY ON Auto retail demand depends on the strength of the consumer, and by most measures, the U.S. consumer is relatively healthy. Savings rates are up, as are wages. Consumer spending patterns haven’t changed. Auto financing is holding strong. The percentage of people not paying their credit card bills is low. Taken together, consumer measures point to steady demand for vehicles. Additionally, millennials and Gen Z are entering their prime years for buying cars and trucks, surpassing the baby boomers as drivers of demand. Consumers have adjusted to vehicle prices that have risen 30% over the past seven years, with a marked increase in new, used and fleet sales that have carried over from 2024 into the first part of 2025. STRENGTH IN THE USED CAR MARKET OFFERS GOOD NEWS FOR DEALERS There’s been a surge in used car demand, and we can expect even more as the year unfolds. For some time now, we’ve seen that consumers are especially interested in buying late-model used cars and trucks, keeping these values high. Higher new car prices, combined with rising insurance premiums for more expensive vehicles, nudge more buyers toward the used vehicle market. With the threat of expanding tariffs, inflation or supply chain disruptions, new car prices will be pressured further, pricing more customers out of the new car market and driving them to buy used. Enterprising dealers are already starting to get ahead of the demand surge by boosting their strategies to acquire used vehicles. Dealers can look to gain a competitive edge by sourcing a favorable mix of cars at an attractive price and marketing them Dealers Meet 2025 With Resilience Tariffs and Their Impact on the Economy Will Test Dealers’ Resilience By Truist Dealer Services Reset and Retool: 24 CATA UP TO SPEED
to consumers who have become more accustomed to purchasing in the used car market. Combining vehicle sales in a hot and profitable used market with financing or protection products will provide even more support for dealer margins. PRICING TRANSPARENCY BENEFITS BUYERS AND DEALERS ALIKE The spike in digital shopping and purchasing has catalyzed the longer-term shift toward more transparent pricing. Retailers have tried to make it easier for customers to see exactly what a vehicle will cost them so they can determine how it will fit within their budget. That transparency applies to used car trade-ins as well. With a better understanding of the value of their current vehicle, consumers know in advance how much they can contribute toward their next car purchase. Clearer and more precise, “no-haggle” pricing also helps dealers consistently protect their margins. These policies build trust in the buying process, which bolsters consumer relationships that extend beyond the initial sale, ideally into servicing. EVS PERSIST, ESPECIALLY IN 12 STATES EV sales will continue to grow, albeit not at the pace some predicted a few years ago. Currently, buyers of commercial vehicles (e.g., Amazon vans) are the fastest adopters of EVs. Over time, we expect this trend to drive down EV prices, which will encourage more widespread adoption. Hybrid vehicles, including plug-in hybrids, are a popular alternative that helps bridge the move to fully electrified vehicles, which we expect to represent 40% of the market within the next five to 10 years. Continued headwinds to EV adoption include lagging development of charging infrastructure, consumer anxiety around trip planning due to battery range and subpar battery performance in cold climates and disaster situations (e.g., floods, hurricanes and evacuation scenarios). The used car market for EVs has been marginal at best, but some 70% of EV buyers report plans to purchase another one. In fact, 92% of EV owners in a recent survey by Global EV Alliance said they would never own another internal combustion vehicle.1 The interesting growth story will be in the 12 states phasing in EV vehicle mandates starting in 2026, 2027 or 2028. Given the current climate, we can expect many of those requirements to be reduced or rescinded, but California, Colorado and possibly Oregon are expected to stick to their commitments. These mandates will require much of the EV and hybrid output to be directed to states with EV mandates, leaving a shortage of those vehicles in the remaining states. SERVICE BUSINESS RISES AS A ROBUST CENTER OF PROFIT AND CASH FLOW The service business is driving profitability and boosting cash flow to a greater degree than many people anticipated. It’s true that vehicles are better built than they were just 10 to 15 years ago — and last longer — but they still need service and parts throughout their extended lifespans. And OEMs will have warranty issues and recalls that require servicing, a meaningful source of revenue, particularly for dealers who maximize their warranty reimbursement rates. An invigorated used car market closely links customer acquisition and rising service needs as a vehicle ages. Focusing on reaching the rising number of used car customers and fulfilling their needs could add critical service volume. Also, contrary to expectations, EVs are contributing to added profitability due to higher average costs for service visits. OEMS ARE PRODUCING AT OPTIMAL LEVELS TO DRIVE ORGANIC GROWTH While many dealers should see solid, organic growth in the coming years, with variation based on brand and individual store performance, the trade policy uncertainty adds a few twists to the story. If the economy avoids a downturn and tariff issues don’t flare up, demand for new and used cars, along with a more normalized market, bodes well for profitability. Manufacturers are building for overall market demand rather than production capacity. Our data shows that the sweet spot for a healthy margin on new car sales is a 65- to 75-day supply of vehicles, and April 2025 closed with a 66-day supply — 16 days lower than a year ago.2 (Compare that to the 110- to 115-day supply in 2019.) At the low end of the ideal new vehicle supply range, dealers enter the summer with inventory levels that should help protect margins. We expect total dealership profit to stabilize at around 4% of sales — twice the historical pre-COVID levels. BRAND DYNAMICS ARE SHIFTING, AND VALUE OFFERINGS ARE EMERGING Brand value is typically quite stable, something retailers can take as a given. However, recently, Nissan, Chrysler, Dodge, Jeep and Ram have dropped in blue-sky multiple values. Subaru and Ford are down as well, while Toyota has increased significantly. Besides several outstanding products that generate high-volume sales, Toyota now offers a hybrid-heavy lineup to better meet shifting demand, along with a transparent dealer-manufacturer relationship that provides a clear rationale behind their strategy. These factors combine to bring Toyota to a premium brand value level. Mazda, Volvo and Audi blue-sky values are recovering from recent slippage, with Honda moving up as well. Chevrolet, on the other hand, has never lost ground but is enjoying rising brand value based on a superior product mix and go-to-market strategy. Each brand’s strategy in handling tariffs and vehicle affordability pressure in the current market could lead to additional shifts in brand value. For example, Ford has stated they will raise prices on all vehicles produced in Mexico, while Toyota has stated they will not raise prices because of tariffs, instead absorbing a 21% hit to next year’s profits. When it comes to affordability, some brands are introducing value platforms to maintain vehicle affordability and market share in the face of cost increases from tariffs or inflation. Look at the F-100 version of Ford’s F-150 or the Enterprise Edition of the Dodge Ram. These are stripped-down, commercial-looking vehicles with a few nice features in the interior to link to the more expensive offering. They allow a buyer to access a brand where they might otherwise be priced out and keep the brand top of mind with the customer. CATA UP TO SPEED 25
M&A SURGES TO EVEN HIGHER LEVELS We anticipate even more dealer transactions this year than we saw in 2024, one of the top three years from a volume standpoint. The forces driving M&A to new highs in recent years are still in play, bolstered by new geographic trends. • Dealers are sitting on capital amassed through the COVID-19 boom times, and they’re motivated to grow. In this consolidating market, they can see the urgent need to scale for maximum efficiency. • Both international and large domestic institutional investors have renewed their interest in automotive retail. A number of financial investors, including marquee private equity firms and family offices, see opportunities in franchised auto retail and are pursuing dealership investment strategies. • Leadership teams are stronger. After years of struggle to fully staff management positions, most owners finally have capable executive teams to facilitate efficient expansion. • Technology supports the efficient addition of locations. While dealers have traditionally aimed to scale for five to 10 stores in a specific market, technology now enables multi-store efficiency gains beyond a contiguous geographic area. In response to that new capability, we’re seeing a definite trend toward less-localized growth, with dealership expansions finding scale in systems and processes. • Less favored markets are in. California, Minnesota, Illinois and the Northeast are now becoming M&A targets. Reduced dealership values in California make it an enticing market for M&A value investors. Thirty-nine million Californians still need to buy and service vehicles. MARKET CONDITIONS OFFER AN IDEAL WINDOW TO MONETIZE YOUR BUSINESS If you’d rather go than grow, now should provide ample opportunity to make your exit. With M&A activity having accelerated to an even higher level, owners who choose an off-ramp rather than facing the challenges of another business reset will have an opportunity to move on. With growth-minded dealership groups coming off strong-performing years and capital available for promising acquisitions, you couldn’t ask for a better time to explore offloading nonstrategic stores or putting your transition plans into motion. WHAT MAKES A DEALERSHIP ATTRACTIVE FOR ACQUISITION? Stores with specific strengths will command a premium in the rush to snap up solid auto dealerships. Whether they’re private investors, growth-focused auto retailers or other interested parties, buyers are looking for stores with the characteristics that pair maximum potential for continued growth and profitability with the resilience to handle market shifts and downturns. That translates to strong service retention rates following vehicle sales, fully staffed and highly capable management teams, desirable brands and updated facilities that meet manufacturer standards for image and capacity. Businesses that know how to tap the potential of F&I programs to generate profits will have an edge. Dealers who deferred capital investment, or can’t meet these buyer expectations for any reason, will have to sell their stores at a discount. 1. Global EV driver survey 2024, Global EV Alliance, December 2024. 2. Consumers Face Challenges as New-Vehicle Inventory Drops 7.4% in April Amid Tariff Uncertainty, Cox Automotive, May 15, 2025. Truist Bank, Member FDIC. ©2025 Truist Financial Corporation. Truist, the Truist logo and Truist Purple are service marks of Truist Financial Corporation. Equal Housing Lender. 26 CATA UP TO SPEED
This magazine is designed and published by The newsLINK Group LLC | (855) 747-4003 18W200 Butterfield Rd., #096 Oakbrook Terrace, IL 60181 DEALER SERVICES Helping Write the Future of F&I We’re a performance improvement company helping to author the next evolution of the F&I business and are dedicated to helping build tailored solutions for your dealership. Our network of providers helps develop your F&I program – maximizing upfront sales and profits while providing a personalized customer ownership experience and creating wealth-building opportunities downstream. Who We Are Brown & Brown Dealer Services has access to a comprehensive line of transitional F&I protection products from A-rated and tenured carriers, with knowledgeable trainers that specialize in F&I to help you meet the unique needs of your business. How We Can Help We start with F&I and stay with you for your commercial insurance needs as well — garage keepers liability, open lot, cybersecurity, workers’ compensation, employee benefits and more. Our Continued Commitment 2023 Dealers’ Choice Awards – Diamond – F&I Training Top-Rated F&I Training Company 19 Years in a Row To learn more about how Brown & Brown Dealer Services can help deliver value to your dealership, contact Francis Fagan today. Francis Fagan Regional Training Director francis.fagan@bbrown.com (312) 608-4979 BBDealerServices.com | BBrown.com Brown & Brown of Kentucky, LLC
www.thenewslinkgroup.orgRkJQdWJsaXNoZXIy MTg3NDExNQ==