NADA Director’s Report By Michael Joe Cannon, NADA Director Serving as Mississippi’s NADA Director is an honor. There are no shortages of issues that we are working on that are of major importance to franchised dealers across the country. DIRECT-TO-CONSUMER SALES BY SCOUT MOTORS You may have seen the news about Volkswagen-owned Scout Motors’ decision to bypass its dealer network and sell vehicles directly to consumers. Many states, including Mississippi, have laws preventing manufacturers from establishing retail operations that would unfairly compete with local dealerships. This situation is sure to evolve in interesting ways. Mike Stanton, president and CEO of NADA, expressed disappointment at Volkswagen’s decision, stating, “Volkswagen’s decision to attempt to sell Scout vehicles direct to consumers and compete with its U.S. dealer partners is disappointing and misguided, and it will be challenged.” FTC VEHICLE SHOPPING RULE NADA, alongside the Texas Automobile Dealers Association (TADA), is currently challenging the FTC’s Vehicle Shopping Rule. A hearing was held on Oct. 9 in the U.S. Court of Appeals for the Fifth Circuit. We aim to prevent this rule from taking effect, as it was unlawfully issued without required advance notice. Key issues with the rule include: • Lack of connection between findings and the decision to impose such an extensive rule. • Unreasonable evaluation of the rule’s benefits and costs. CONGRESSIONAL EFFORTS AGAINST THE RULE NADA is advocating for the FTC REDO Act (H.R. 7101/S. 3014), which aims to block the Vehicle Shopping Rule and require the FTC to follow standard regulatory procedures, such as advanced notice and cost-benefit analysis. Additionally, NADA supports a provision in the FY25 Financial Services and General Government appropriations bill (H.R. 8773) to temporarily stop the rule’s enforcement. While this bill is currently stalled, we remain committed to seeing it included in any year-end spending bill. WHY THIS MATTERS The Center for Automotive Research’s recent study highlights the rule’s significant impact: • Will add at least an hour to the vehicle purchase process due to new disclosures and documentation. • Will cost consumers and dealers $24.1 billion over 10 years. • Will impose an average compliance cost of $31,450 per dealership and an annual cost of $39,862. It’s clear that a unified voice in Washington is essential to protect the interests of franchised automobile dealers. Thank you for your ongoing support, and please reach out if I can assist you in any way. 6
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