A MESSAGE FROM THE PRESIDENT Reflecting on 2024 BY COULTER McMAHEN, PRESIDENT/CEO, LADA STATE-LEVEL SUCCESSES: DEFENDING THE FRANCHISE MODEL At the state level, LADA has been active. This year, Louisiana held three special sessions addressing redistricting, crime and tax reform, in addition to a regular legislative session. I’m proud to share that LADA secured a significant victory by defeating legislation that could have drastically altered the dealership landscape in our state. The proposed bill aimed to permit zero-emission vehicle manufacturers to bypass independent dealers and sell and service vehicles directly — a clear threat to the independent dealer model that has been the backbone of our communities for generations. Thanks to your unified efforts and strong advocacy, we successfully safeguarded against manufacturer-owned dealerships, with the bill failing in the House Transportation Committee. However, the fight is far from over. The Volkswagen Group’s recent announcement that its wholly-owned Scout brand will bypass its U.S. dealers underscores the ongoing threat to the franchise model. For decades, Volkswagen and Audi dealers have been trusted partners, advocating for products aligned with American consumers’ needs. Instead of investing in its dealer network, Volkswagen AG chose to fund Scout’s development as a direct competitor. This highlights the critical importance of defending the franchise model. THE VALUE OF THE FRANCHISE MODEL: DATA-DRIVEN INSIGHTS This growing trend emphasizes the need for data-driven insights to showcase the undeniable advantages of the franchise model. A recent analysis by the globally respected consulting firm Oliver Wyman, commissioned by NADA, confirms that the dealer franchise system is the most efficient and cost-effective way for automakers to distribute and sell vehicles in the U.S. Here’s how the net cost of distribution compares across different models: • Traditional Franchise Model: $2,910-$3,240 • Hybrid Model (a mix of franchise and direct sales): $3,115-$3,585 • Direct Sales Model: $3,080-$3,350 The findings debunk claims from manufacturers that direct-to-consumer As I reflect on this past year, I am filled with immense gratitude for the unwavering support, engagement and commitment of our dealer body. Serving as president and CEO of the Louisiana Automobile Dealers Association (LADA) has been a privilege. Working alongside such a dynamic group of leaders — dedicated not only to their own businesses but also to the success and future of our industry — has been inspiring. Your involvement has driven our progress, and together, we have achieved significant milestones critical to our shared success. When I stepped into this role, I knew no two days would be the same, and 2024 has more than lived up to that expectation. Our industry is in a constant state of transformation, grappling with challenges on multiple fronts at both the state and national levels. From continued attacks on the franchise model and critical tax policy debates to mounting federal regulations, such as the Federal Trade Commission’s (FTC) Vehicle Shopping Rule and the Environmental Protection Agency’s (EPA) greenhouse gas emission standards, the stakes have never been higher. These challenges directly impact your businesses, but rest assured, LADA remains steadfast in its mission to advocate for policies that protect, empower and sustain dealerships through these complex and dynamic times. A Year of Challenges and Achievements for Louisiana’s New Car and Heavy Truck Dealers 4
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