OFFICIAL PUBLICATION OF THE GREATER LOS ANGELES NEW CAR DEALERS ASSOCIATION PUB. 11, ISSUE 3 | GLANCDA.ORG WHY AUTO SHOWS ARE MORE IMPORTANT THAN EVER
Business Transactions • Buy-Sell Agreements • DMV, BAR, and other governmental approvals • Lender flooring and capital loan agreements • Entity formation and structure • Shareholder Agreements • Manufacturer approvals and relations • NMV non-profit association representation Estate Planning • Succession planning for businesses • Trust Agreements including lifetime benefit trusts • Gift and Estate Tax planning Tax • Property Tax planning, audits, and appeals • Federal estate and gift tax controversy audits • EDD Audits BUSINESS LAW | LITIGATION | ESTATE PLANNING | REAL ESTATE | TAX | EMPLOYMENT PRACTICES FERRUZZO & FERRUZZO, LLP | A Limited Liability Partnership, including Professional Corporations 3737 Birch Street, Suite 400, Newport Beach, California 92660 | PH: (949) 608-6900 | ferruzzo.com Business Litigation • Consumer Legal Remedies Act lawsuits • Sales and Service Agreements • Disputes before the CA New Motor Vehicle Board • Consumer claims regarding the sale of automobiles • Manufacturer audit disputes • Hearings before the AQMD, RWQC and OSHA Real Estate • Dealership site acquisition and dispositions • Lease agreements • Lender Opinion Letters Employment Practices • Wage and hour class action lawsuits • Private Attorneys General Act (PAGA) claims • Arbitration Agreements • Employer Handbooks and Employer Compliance Procedures Ferruzzo & Ferruzzo, LLP began providing legal representation to new car and truck dealers over four decades ago. Over the course of that time, one of the central goals of the firm has been to remain rooted in our client relationships. With the strength of over 25 attorneys, we provide a spectrum of legal services to support every aspect of running and owning your new car and/or truck dealership. We have practice groups in each area of the law that service the needs of you and your dealership.
©2024 Greater Los Angeles New Car Dealers Association | The newsLINK Group LLC. All rights reserved. Los Angeles Dealer is published four times each year by The newsLINK Group LLC for GLANCDA and is the official publication for this association. The information contained in this publication is intended to provide general information for review, consideration and dealer 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 GLANCDA, 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. Los Angeles Dealer is a collective work, and as such, some articles are submitted by authors who are independent of GLANCDA. While GLANCDA encourages a first-print policy, 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. We are GLANCDA 4 President’s Message The Collective Strength of Members By Howard Tenenbaum, President, GLANCDA, Keyes Automotive Group 6 Ask Alison How To Help Attract and Retain Top Talent for Your Dealership By Alison McCallum, Principal, EPIC Insurance Brokers and Consultants 8 Manning Leaver Legal Lane Lemon Law 101 By Timothy D. Robinett, Esq., Partner, Manning, Leaver, Bruder & Berberich LLP 12 Why Auto Shows Are More Important Than Ever By LA Auto Show and AutoMobility LA 16 Safe Driving at Work By Sam Celly, BChE MChE, JD CSP, Celly Services Inc. 20 When Saying Less Gets You More 22 Los Angeles Auto Outlook October 2024 26 Upcoming Events Originally founded in 1907, the Greater Los Angeles New Car Dealers Association provides valuable educational and philanthropic benefits to the Los Angeles Community. The association believes that involvement with local charitable organizations makes a positive difference for everyone involved. PRESIDENT Howard Tenenbaum Keyes Automotive Group VICE PRESIDENT Jeanne Brewer Acura of Glendale SECRETARY/TREASURER Evan Ellis FIAT and Alfa Romeo of Glendale IMMEDIATE PAST PRESIDENT David Ellis Ellis Family Stores - Glendale GLANCDA DIRECTORS Tim Smith Pete Smith Ian Thomas Robb Hernandez Brad Mugg Rinaldi Halim Charles Ma Peter Browning 700 N. Central Ave., Ste. 320 Glendale, CA 91203 (213) 748-0243 | fax (213) 748-0245 GLANCDA BOARD OF DIRECTORS 3
PRESIDENT’S MESSAGE As we enter the final stretch of 2024, I want to take a moment to express my gratitude for the strength and unity of our dealer community. The Greater Los Angeles New Car Dealers Association (GLANCDA) is proud to represent over 150 dealer members who tirelessly work together to advocate for our collective interests. This solidarity has never been more crucial than in recent years, as we’ve faced significant legislative challenges that directly affect our industry. One of the most important recent victories was our collaboration on reforms to the Private Attorney General Act (PAGA), a law that, while intended to protect workers, resulted in unintended consequences that disproportionately impacted new car dealers. GLANCDA, along with dealers across California — with a significant portion coming from the Los Angeles area — played a pivotal role in pushing for reform. Through our advocacy efforts, we were able to mitigate some of the burdens this law placed on our businesses. By working together, we helped ensure that the reforms protect both the interests of employees and the economic vitality of dealerships. This achievement underscores the power of a unified voice in navigating the complex regulatory environment we operate in today. I want to thank each and every one of our members for their contributions to this success. This time of year is also particularly exciting as we look forward to one of the most attended automotive events in the world: the Los Angeles Auto Show. Running from Nov. 22 to Dec. 1 at the Los Angeles Convention Center, this iconic event has long been endorsed by GLANCDA and serves as a showcase for the latest innovations in the automotive industry. For many years, the Auto Show has been a cornerstone event, providing our dealers with the opportunity to connect with manufacturers, display the newest models and engage with the public in a way that truly celebrates the spirit of our industry. This year is no exception. With electric vehicles and cutting-edge technology taking center stage, there has never been a more exciting time to be a part of the auto industry. GLANCDA is proud to support this event, and as a token of our appreciation for our loyal dealer members, we will be providing complimentary ticket packages to those whose memberships have been active in both 2023 and 2024. It’s a small way for us to say thank you for your continued involvement and support, and we hope you will take full advantage of the opportunity to attend this year’s show with your teams, friends and families. Beyond advocacy and major events like the Auto Show, GLANCDA remains committed to nurturing the future of our industry. One of the ways we do this is by partnering with local community colleges that offer automotive programs. These partnerships are essential for ensuring a steady pipeline of skilled workers to meet the growing demands of our dealerships. In the next few months, we will continue to host events with these partners, offering our dealer members a chance to connect with the next generation of automotive technicians and professionals. At each of these events, we are proud to award tool scholarships in the amount of $1,000 to five recipients. These scholarships will be granted to students who have demonstrated the highest level of academic achievement and have excelled in work experience. By supporting these hardworking and talented individuals, we not only recognize their dedication but also help equip them with the tools they need to succeed in their future careers. By investing in these programs, we are supporting the future of our industry and contributing to the economic health of the communities we serve. These partnerships reflect GLANCDA’s broader commitment to education and workforce development, which are critical components of our long-term vision. As we move forward, we will continue to explore new ways to enhance these collaborations and create opportunities for both our dealers and aspiring automotive professionals. In closing, I want to extend my heartfelt thanks to all of our members for your ongoing dedication and engagement. The success of GLANCDA is built on the collective strength of its members, and together, we are able to navigate challenges, seize opportunities and continue shaping the future of the automotive industry in Los Angeles. I look forward to seeing many of you at the Los Angeles Auto Show and at our upcoming events with our community college partners. Let’s continue working together to ensure that our industry remains vibrant, competitive and ready for whatever the future may bring. Thank you for your continued support. Howard Tenenbaum President, GLANCDA The Collective Strength of Members Howard Tenenbaum, President, GLANCDA, Keyes Automotive Group 4
LOS ANGELES | SAN DIEGO | SACRAMENTO | SAN FRANCISCO | scalirasmussen.com Avoiding litigation when it’s possible. Protecting you when it isn’t. •Labor & Employment •Regulatory & Licensing •Complex Litigation •General Counsel Services •Mergers & Acquisitions AV® and AV Preeminent® are Certification Marks used under license in accordance with the Martindale-Hubbell® certification procedures, standards and policies.
ASK ALISON By Alison McCallum, Principal, EPIC Insurance Brokers and Consultants How To Help Attract and Retain Top Talent for Your Dealership contributions based on salary levels, with lower contribution rates is one option. Sometimes, one-off solutions seem easy but drain resources and cause disengagement. Point solutions intended to help manage specific chronic health conditions or address modifiable lifestyle factors may not be worth their anticipated value. Some tips to consider: • Analyze your claims data to validate whether the solutions improve outcomes and reduce costs through increased engagement. • Ongoing data validation is required to ensure point solutions continue delivering value. • Less is sometimes more. Too many point solutions can dilute engagement and add to administrative costs. Consolidating vendors may help improve coordination and communication. • Effective employee communication is critical when making changes to point solutions to ensure members understand available programs and how to participate. As you plan your 2025 benefits strategy, your broker is an indispensable partner. An approach to integrated benefits, tailored to your specific needs, can help you bridge gaps in your current offerings and align with your broader dealership and financial goals. EPIC’s tools and strategies can help you Attracting and retaining top talent requires a strong employer brand and a competitive benefits package. The past decade has seen soaring healthcare costs, legislative complexities and renewal pitfalls. This market puts immense pressure on dealerships to manage benefits costs without sacrificing employee satisfaction. Having the right partner alongside you is a must — you do not need to navigate this alone. Healthcare inflation impact is inevitable. Utilization and increased unit costs will likely impact your renewal, whether your plan is fully insured or self-funded. A good broker can work with your dealership to navigate this challenging benefits landscape and design a cutting-edge benefits strategy that is: • Competitive: Attract and retain top talent with a plan that offers value through benchmarking, innovative offers and plan designs that align with your dealership’s goals and objectives. • Sustainable: Manage costs effectively to achieve your long-term goals. Review underwriting workups, enrollment strategy, utilization patterns, cost drivers and targeted investments. One size does NOT fit all. One way to lower costs is by providing targeted benefits to specific employee populations. While you may offer certain perks to leaders and hard-to-recruit groups, some strategies could help lower costs for lower-wage employees. Implementing tiered employee 6
evaluate the value you’re getting from your plan and your vendors, delivering efficiencies and effectiveness that are well worth the effort. If you would like more information, or a benefit strategy and cost review, EPIC will provide details to GLANCDA members at no cost. EPIC ranks among the top 15 retail insurance brokers in the United States and is the largest insurer of auto dealers in the state. Alison McCallum has been in the employee benefits industry for over 20 years and personally works with more than 80 California dealerships. She is a principal with EPIC Insurance Brokers and Consultants. With this partnership EPIC offers unique dealership expertise and services available to GLANCDA dealer members at no cost. If you have questions or would like further information, please feel free to contact her at (949) 417-9136 or alison.mccallum@epicbrokers.com. Attracting and retaining top talent requires a strong employer brand and a competitive benefits package. EPICBROKERS.COM ©2024 Edgewood Partners Insurance Center. All rights reserved. | CA License: 0B29370 EPIC Insurance Brokers & Consultants is proud of its partnership with more than 300 California dealerships and is the CNCDA’s only licensed broker for health insurance and employee benefits. As the dealers’ consultant, experience what EPIC can do for you, including: • A team producing significant results with decades of experience understanding the specific needs of dealerships • Fully insured and unique alternative funding options to best fit your needs and generate the best possible costs • Full compliance services and HR support for your team LEARN MORE ABOUT OUR SERVICES BY CONTACTING: Alison McCallum (949) 422-6431 alison.mccallum@epicbrokers.com 7
There has been a dramatic spike in the number of lemon lawsuits filed in California over the last few years, and the recent trend has been for plaintiffs’ attorneys to name the selling and/or repairing dealerships as defendants. According to recent reports, there were 22,655 new lemon law cases filed in California in 2023, which represents an increase of 52% over 2022.1 According to a study performed by manufacturer defense counsel Bowman and Brooke, filings in Los Angeles County’s local branch courthouses alone saw a dramatic increase of 1,400% in the number of filings between 2021 and 2023. By all indications, this trend is not slowing down, and dealers need to be aware of the impact on their stores and the steps they can take to best protect their interests. History of California’s Lemon Law California first enacted the Song-Beverly Consumer Warranty Act in 1970 to protect consumers from defective goods, including motor vehicles, and required manufacturers to repurchase or replace new vehicles that could not be repaired after a reasonable number of attempts. California’s lemon law has been amended several times since the original law was enacted to clarify the definition of what constituted a reasonable number of repair attempts, to expand the law to include the sale or lease of used vehicles that were still covered under the manufacturer’s new vehicle warranty, to apply the law to vehicles purchased and used primarily for business reasons (provided the vehicle weighed less than 10,000 pounds and the business had five or fewer vehicles registered in its name), and to create a presumption that a vehicle qualifies for repurchase or replacement if there have been four or more unsuccessful repair attempts (or two or more failed attempts if the defects presented a significant safety hazard), or if the vehicle has been at the dealership for more than 30 days for repairs within the first 18 months or 18,000 miles, whichever occurs first.2 The California lemon law further states that if the buyer can establish that the failure to comply with the provisions of the statute was willful, then the buyer may be entitled to a civil penalty of up to two times the amount of his/her damages.3 A buyer that prevails under the lemon law is also entitled to recover his or her attorney’s fees and costs. Not surprisingly, it is often the buyer’s attorneys’ fees and costs that are the driving force in the prolonged litigation and increasing numbers of filings of lemon law claims. Why Are So Many Dealerships Now Being Named in Lemon Lawsuits? While lemon lawsuits were traditionally a manufacturer’s issue, plaintiffs’ attorneys are now regularly naming the selling dealer and/or the repairing dealer in their lawsuits. There are various reasons why dealers are now being included in the lawsuits, including plaintiffs believing they have an extra potential pocket to pick for the recovery of damages (or a settlement), the ease in obtaining the dealership’s sales/lease and service records and depositions of dealer personnel through traditional discovery methods without having to subpoena the dealerships, and perhaps most importantly, to block the manufacturers from having the lemon lawsuits removed from state court into federal court. Most manufacturers prefer to defend lemon law claims before a federal judge (as opposed to state judges), because federal courts typically streamline the process and timeline, keep the plaintiff’s counsel on a tighter leash by limiting the number of depositions the buyer’s attorney may take, and significantly reducing the length of the trial by giving each side an allotted time to present their case and not allowing witnesses that will simply repeat what has already be presented to the court. Therefore, plaintiffs’ attorneys will often include the repairing dealer(s) MANNING LEAVER LEGAL LANE Lemon Law 101 By Timothy D. Robinett, Esq., Partner, Manning, Leaver, Bruder & Berberich LLP 8
in order to attempt to destroy the federal diversity jurisdiction (which allows federal courts to hear cases involving “citizens” of different states). By naming a California dealership in the lawsuit, filed by a California plaintiff, the diversity of citizenship requirement cannot be met, and the case will be sent back to state court. The result is that plaintiffs’ counsel now regularly name dealers for “negligent repair” causes of action with no real evidence of any actual negligent by the dealership in diagnosis or repairing the vehicle, and with no real intent to actually litigate against the dealers since plaintiffs are not able to recover attorneys’ fees on a negligence claim. What Should a Dealer Do When It Is Served With a Lemon Lawsuit? Dealerships should immediately forward any lemon lawsuits in which they are named to their manufacturer and request defense and indemnification. Both dealer sales and service agreements and California law provide dealers with potential rights on lemon law claims. Specifically, Vehicle Code Section 11713.13(f) (1) provides that it is unlawful and a violation of the Vehicle Code for a manufacturer/distributor to fail, upon demand, to indemnity an existing or former dealer from claims resulting from “(A) The condition, characteristics, manufacture, assembly or design of any vehicle, parts, accessories, tools or equipment, or the selection or combination of parts or components manufactured or distributed by the manufacturer or distributor.” If a dealer doesn’t know where to send the lawsuit and its tender, it should review its dealer sales and service agreement (which often provides the specific address and/or department where the lawsuits should be sent), ask its manufacturer/ distributor’s regional team, or forward it to its manufacturer/ distributor’s legal department. It is important to forward the lawsuits as soon as possible since the manufacturer may take upwards of a couple of weeks to a couple of months to review and respond to the tender. In the meantime, the dealership will, in most circumstances, only have 30 days from its receipt of the lawsuit to file a response to the complaint. It is very important for a dealer to make sure it timely responds to the complaint, or else it risks having the plaintiff’s counsel obtain a default against it. Because many of the newer breeds of lemon lawsuits include a negligent repair claim against the dealer, some of the manufacturers may deny the tender outright and tell the dealer it will have to defend itself in the lawsuit, which will require the dealership to hire its own attorney to respond to the complaint and defend the lawsuit. Other manufacturers agree to defend and indemnify its dealers on lemon lawsuits with negligent repair claims, but will propose an indemnification agreement with a carve-out for those claims alleged solely against the dealer. What is Next on the Lemon Law Horizon? New Legislation (AB1755) Assembly Bill (AB1755) passed by the Legislature in 2024 and signed by the Governor will change some of the processes in how lemon law cases are litigated. While it is not entirely clear from the current language whether dealers that are named in the lemon lawsuit are covered by the changes (which predominantly refers to the manufacturer/distributor), the new law will place limits on early discovery procedures, require mediation, and limit the buyer’s ability to recover a civil penalty if the manufacturer timely offers to repurchase or replace the vehicle. Rodriguez v. FCA US LLC Appeal to California Supreme Court In addition to AB1755, there is currently a case pending before the California Supreme Court that will have a significant impact on lemon law cases for used vehicles sold with a remaining factory warranty. The California Supreme Court heard oral arguments on Sept. 4, 2024, and must decide whether California’s lemon law statute applies to used vehicles that were not sold as CPO units but were purchased with a remaining new vehicle warranties. The lower court in the Rodriguez case found that the lemon law did not apply. While that result seems favorable, if the California Supreme Court upholds the prior ruling it may lead to an increase in litigation against the selling dealers without any protection or indemnity from the manufacturer. We reasonably anticipate that if the Rodriguez decision is upheld by the Supreme Court, plaintiffs’ counsel will shift their focus to the selling dealer for claims related to the implied warranties that accompany the sale of a vehicle, fraud or negligent misrepresentation regarding the condition of the vehicle at the time of sale and the representations made by the sales staff, and Consumers Legal Remedies Act (CLRA) claims regarding the condition of the vehicle. Manning, Leaver, Bruder & Berberich LLP is a Los Angeles law firm that practices throughout California and has been in existence for over 100 years. It has a strong automobile dealer practice covering all areas related to the automobile dealer industry, including dealership buy-sells, real estate transactions, business and consumer litigation, regulatory compliance, dealer association law and franchise law. See www.manningleaver.com for more information and areas of practice. Nothing in this article may be considered as legal advice. Contact legal counsel for legal advice. Endnotes 1. California’s Lemon Law: A Sweet Deal for Lawyers, Sour for Consumers by Kyla Christoffersen Powell, published in the Los Angeles Daily News on July 17, 2024. 2. Civil Code Section 1793.22. 3. Civil Code Section 1794(c). 10
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Why Auto Shows Are More Important Than Ever By LA Auto Show and AutoMobility LA T he automotive world is undergoing a transformation like never before, driven by rapid advancements in technology, shifting consumer preferences and an increasing focus on sustainability. At the heart of this transformation is the electric vehicle (EV) revolution, which is changing how people perceive cars and the automotive industry. However, as the focus shifts toward electric mobility, it’s essential to remember that gas and hybrid vehicles remain crucial components of the automotive ecosystem. In this context, auto shows are more important than ever, serving as critical platforms for educating the public, showcasing innovations and fostering connections between manufacturers, consumers, dealers and the media. The Impact of Auto Shows on Market Trends Beyond education, auto shows have a profound impact on market trends. The buzz generated by these events can influence consumer behavior and drive demand for new technologies. When a manufacturer unveils a new electric vehicle at a major auto show, it garners significant media attention, which in turn raises public awareness and interest in the model. For example, when Ford unveiled the Mustang Mach-E at the Los Angeles Auto Show in 2019, it marked a significant moment in the history of the Mustang brand and the EV market. The Mach-E was not just another electric vehicle; it was a bold statement that even iconic, performance-oriented brands were embracing electric mobility. The positive reception it received helped to shift perceptions of what an EV could be and played a role in accelerating the adoption of electric vehicles across a broader segment of the population. Auto shows also allow consumers to experience new technologies firsthand. Interactive displays, test drives and virtual reality simulations give attendees a taste of what it’s like to own and drive an electric vehicle. This experiential approach is crucial because it helps to break down the barriers to adoption. Many people are hesitant to make the switch to an EV simply because they are unfamiliar with the technology. By providing a space where consumers can engage with these vehicles directly, auto shows help to build confidence and enthusiasm for electric mobility. 12
Similarly, auto shows offer valuable opportunities for consumers to explore the latest advancements in gas and hybrid vehicles. 71% of attendees intend to buy a new vehicle within 24 months, and their experiences at these events can significantly accelerate or influence their purchasing decisions. This highlights the importance of auto shows as not just exhibitions but as pivotal moments in the consumer journey. The Changing Perception of Electric Vehicles Just a decade ago, electric vehicles were often viewed with skepticism. They were seen as niche products, suitable only for consumers willing to sacrifice performance and convenience for the sake of reducing their carbon footprint. Recently, however, this perception has changed, thanks in large part to technological advancements that have addressed many of the early concerns about EVs. Today, electric vehicles are no longer a compromise. They offer impressive performance, with many models boasting acceleration times that surpass their gasoline-powered counterparts. Battery technology has improved, resulting in longer ranges and faster charging times. Further, the infrastructure for EVs has expanded with charging stations becoming more ubiquitous across cities and along highways. This perception shift is supported by data. According to a report from the International Council on Clean Transportation, U.S. EV sales reached over 1.4 million units in 2023, a sharp increase from the 1 million sold in 2022. This surge reflects growing consumer confidence driven by the realization that EVs are not just a viable alternative to traditional vehicles but, in some cases, the superior choice. The Continuing Relevance of Gas and Hybrid Vehicles While electric vehicles are at the forefront of automotive innovation, gas and hybrid vehicles remain an essential part of the industry. These vehicles offer versatility and reliability that continue to meet the needs of consumers. Gas-powered cars, with their extensive refueling infrastructure and long-established technology, still dominate the market in many 13
regions. Meanwhile, hybrid vehicles serve as a bridge between traditional internal combustion engines and full electric powertrains, offering a practical solution for those seeking improved fuel efficiency without full reliance on an EV. The Role of Auto Shows in the EV Revolution and Beyond Auto shows have always played a crucial role in the automotive industry as the stage upon which manufacturers unveil their latest models, concept cars and technological innovations. However, as the industry shifts towards electric mobility, the role of auto shows has become even more significant. One of the key reasons auto shows are more important than ever is their ability to educate the public about electric vehicles. Despite the growing interest in EVs, there is still a considerable amount of misinformation and confusion surrounding them. For many consumers, an auto show is their first opportunity to see, touch and learn about electric vehicles in a hands-on environment. They can compare different models side by side, speak with experts and gain a better understanding of what it’s like to own and operate an EV. The impact of auto shows is underscored by recent statistics from a 2023/2024 consumer market survey conducted by the LA Auto Show, NY Auto Show and Toronto Auto Show — three of the largest and most influential auto shows in North America. The survey revealed that 74% of attendees attend to see the new vehicles and products, indicating the importance of these events in introducing consumers to the latest automotive innovations. Moreover, 82% of attendees reported being more likely to consider an EV after visiting an auto show, highlighting the significant role these events play in shaping consumer attitudes toward electric mobility. Auto shows also provide a platform for manufacturers to address the concerns that potential buyers may have about electric vehicles. Whether it’s range anxiety, charging infrastructure or the overall cost of ownership, these events allow automakers to present the facts and dispel myths. For instance, many people are unaware that the total cost of owning an EV, including maintenance and fuel savings, is often lower than that of a traditional gasoline vehicle. Auto shows provide the perfect venue for communicating this information directly to consumers. At the same time, auto shows play a critical role in showcasing the latest gas and hybrid vehicles. As the automotive world embraces a multi-faceted approach to mobility, these shows ensure that every type of vehicle — from fully electric to hybrid to traditional gasoline — gets the attention it deserves. 59% of attendees add exhibiting brands to their consideration set, demonstrating the influence these events have on consumer decision-making. On the flip side, 45% of attendees report a decline in their perception of absent brands, showing the potential risks for manufacturers and dealer groups representing those brands who choose not to participate. The Future of Auto Shows in a Digital World In the digital age, consumers can now research vehicles online, watch virtual unveilings and even configure their dream car on a manufacturer’s website. However, while digital tools are valuable, they cannot replace the unique experience of attending an auto show. There is something irreplaceable about seeing a vehicle in person, sitting behind the wheel and experiencing its design and build quality firsthand. Auto shows offer a sensory experience that digital platforms simply cannot replicate. Moreover, they provide a social experience, allowing attendees to connect with other enthusiasts, industry experts 14
and even the people who designed and built the vehicles on display. Auto show attendees are a true cross-section of the cities in which they live, representing the ideal demographics for prime car buyers and showcasing unrivaled diversity. This diversity makes auto shows not only relevant but also indispensable for manufacturers looking to connect with a broad and varied audience. As the automotive industry continues to evolve, the format of auto shows may change, but their importance will not diminish. In fact, they may become even more vital as the industry navigates the complexities of electric mobility, autonomous driving and connected vehicles. Auto shows will need to adapt to these trends, perhaps by incorporating more interactive and digital elements, but their core function as a platform for education, engagement and excitement will remain unchanged. Conclusion Auto shows are more than just exhibitions of the latest and greatest in automotive technology; they are essential events that shape public perception, drive market trends and foster connections within the industry. As electric vehicles become an increasingly important part of the automotive landscape, the role of auto shows will only grow in significance. However, it is equally important to recognize that gas and hybrid vehicles will continue to play a vital role in the automotive ecosystem for many years to come. In an era of rapid change and technological advancement, auto shows are not just relevant — they are more important than ever. For manufacturers, consumers and especially dealer groups, these events are indispensable in navigating the future of mobility. The 2024 Los Angeles Auto Shows runs for 10 consecutive days — Friday, Nov. 22 through Sunday, Dec. 1 — at the Los Angeles Convention Center and is preceded on Thursday, Nov. 21, the globally impactful media and industry day, presented by AutoMobility LA. Global Vehicle Debuts | Press and Media | Networking 15
Safe Driving at Work By Sam Celly, BChE MChE, JD CSP, Celly Services Inc. Background: Millions of workers drive or ride in vehicles to work, and some of us must drive as part of a work activity. According to the U.S. Bureau of Labor Statistics, transportation accidents accounted for more than 2,000 fatalities in 2022. Transportation fatal occupational injuries are almost three times the next nearest cause. According to the National Institute for Occupational Safety and Health (NIOSH), the total cost of motor vehicle crashes to U.S. employers is over $39 billion annually, with an average cost of $75,000 per non-fatal injury and 10 times that at $751,000 per fatality. All workers are at risk of crashes, whether driving is the main or incidental job duty. Qualifications: All employees driving dealership vehicles must have a valid state driver’s license and provide DMV records to their HR manager. Based on the driving record, the employer may deny driving privileges. Any changes to the driving record, such as a speeding ticket or DUI, must be communicated to your manager immediately. Your Mindset: Before getting in front of the driving wheel, ask yourself if you are ready to drive in a safe manner. Have you had a good night’s sleep? Are you rested and fully alert to drive a vehicle? Is there any mental anguish that is disturbing you and compromising safe driving? Your ability to drive safely is best answered by you. If you are not ready, let your manager know and do not drive a vehicle. Safety Checks: Before entering the vehicle, always walk around the vehicle. Are the tires properly inflated? Are there any visible fluid leaks? Are the front and rear windows clean? Are there any loose packages or items on the seats or dash? These can become flying projectiles during turns or if the vehicle is suddenly halted and can distract you from emergency maneuvers. Check the glove box for company papers, including insurance papers. Keep an Accident To-Do List that includes emergency phone numbers. The list is a ready referral of the information you must gather if you are involved in an accident. Once seated, start the vehicle and check: Are the wipers working properly? Are there any fault messages on the dashboard? Dealer drivers must ensure all in the vehicle are belted. Do not move the vehicle until all are secured. Infants and children must be secured per state law in infant car seats or boosters as selected and installed by the parents. 16
Traffic Laws: All employees must follow the mandated traffic laws, such as staying within speed limits, wearing seat belts and following the prohibition of texting and talking on the cell phone: • Do not drive under the influence of alcohol or drugs. Driving under the influence is illegal and prohibited. • Obey all speed limits and traffic signs and signals, such as stop, slow, yield, bicycle and pedestrian lanes and traffic lights. Reach a complete stop at stop signs. • Yield to other drivers who have the right of way at an intersection. • For children in the vehicle, you must use the appropriate child safety seat or booster seat for their age and weight. Be sure to ask the customer with a child to install their own seat in your vehicle. Do not do it for them, as this is a liability for your employer and you. • Keep a safe distance from other vehicles and pedestrians. • Always use your signals and mirrors when changing lanes or turning, even if there appear to be no other vehicles or pedestrians. • Yield to pedestrians and bicyclists, even when they are not on a crosswalk. • Always pull over to let emergency vehicles pass. • Do not pass a school bus with flashing red lights unless you are on the opposite side of a divided highway. Other Considerations: Following traffic laws is only the beginning. Also note the following: • When entering/exiting a vehicle, parking or pulling away, be aware of others and be cautious, especially in an active driveway. • While backing up, use your rearview mirrors and turn your head to ensure there is no traffic in your intended pathway. • Keep a minimum of a two-second distance from the vehicle in front of you. If the vehicle were to stop suddenly, you should have enough time to brake. Increase the distance to at least double (that is, four seconds) when at higher speeds and in conditions of rain, sleet, ice, snow, poor visibility and high winds to allow for more reaction time. • When an area is congested or has crowded conditions, slow down and exercise extra caution while driving. • Despite less traffic after dark, the death rate from accidents at night is three times higher. Lights from oncoming traffic, especially LED lights, can have a blinding effect, so slow down. Human vision diminishes with age, especially at night. When you can see only a few feet ahead, there is less time to react. • Stay alert to other drivers who may be driving at high speed or erratically. “Tolerate and separate” is the best policy. Remember, your objective is to get to your destination safely and on time. A driver may not be licensed to drive and, worse, may be under the influence of alcohol or other drugs. Stay alert and distance yourself. • Every year, hundreds die in road rage-related accidents. When involved with possible rage, keep your cool and let the other driver(s) have their way. If they override your right of way, let them go to avoid a fender bender or worse. 17
• Avoid aggressive driving and keep your cool in traffic! Be patient, stay calm and be courteous to other drivers. Do not take other drivers’ actions personally. • Reduce stress by planning your route ahead of time, even with automated mapping systems, and allow plenty of travel time. Take the maps and directions along. • Avoid distractions, such as loud volumes, adjusting the radio or other controls, eating or drinking and talking on the phone. Dual earphones are not permitted. If you have a hands-free device for your phone, you may use the phone only if the dealership policy permits. Talking on the phone while driving, even with a hands-free device, causes distraction, and hence it is a safety concern. Again, follow the dealership policy on cell phone use. • Be aware of your surroundings. Continually search the roadway to be alert to situations requiring quick action. If the vehicle in front slows down, you must slow down. If the vehicle ahead is a big truck, your frontal visibility is compromised. You must slow down and increase your distance. If possible, change lanes so you can see ahead. Scan your mirrors frequently. Watch out for animals, bicyclists, motorcyclists and/or pedestrians. Anticipate traffic issues and be ready to respond quickly. • Stop about every two hours for a break. Get out of the vehicle, stretch, take a walk and get refreshed. Set realistic goals for the number of miles you can drive safely each day. Accidents: Report all accidents to management immediately. If you have a cell phone, pull over safely and call your manager. Use your phone to document the accident details. The Accident To-Do List in the glove box may help you document as well. Do not be forthcoming in acknowledging your fault for the accident. During and immediately after an accident, your judgment is likely to be incorrect. Later investigation may show otherwise. Conclusion: Developing safe driving habits and following safe driving protocols help keep you and your vehicle safe and protect others’ lives, health and property. Driving safely is a condition of employment. Employees involved in at-cause accidents can be subject to disciplinary action up to and including termination. Safety is not only a personal responsibility but also a legal obligation! Note: There is a separate training memo for test drives. This is a general safe driving training course for all employees to take at work. DISCLAIMER: The contents of this newsletter are for informational purposes only and are not to be considered as legal advice. Employers must consult their lawyer for legal matters and EPA/OSHA consultants for matters related to environmental health and safety. The article was authored by Sam Celly of Celly Services Inc., who has been helping automobile dealers in Arizona, California, Hawaii, Idaho, Nevada, New Mexico, New York, Texas and Virginia comply with EPA and OSHA regulations for over 35 years. Sam is a Certified Safety Professional (No. 16515) certified by the National Board of Certified Safety Professionals. Sam received his BE (1984) and MS (1986) in Chemical Engineering, followed by a J.D. from Southwestern University School of Law (1997). Sam is a member of the American Chemical Society (No. 31176063), American Industrial Hygiene Association (No. 124715), and National Association of Dealer Counsel (NADC). Sam also serves on the Board of the Orange County American Industrial Hygiene Association and on the California Industrial Hygiene Council (CIHC). Our newsletters can be accessed at www.epaoshablog.com. Your comments/questions are always welcome. Please send them to sam@cellyservices.com. 18
“Less is More” is a popular phrase that has been tossed around for years, even dating back to the ancient Greeks. You may have heard it in various settings — perhaps the Minimalist Movement comes to mind. “Less is More” is a simple yet powerful concept that can greatly impact your life. The essence of the principle is this: Instead of always striving for more, sometimes focusing on less and simplifying things is better. By doing so, you can reduce stress, increase clarity and achieve greater satisfaction in your daily life. This principle can be applied to many different areas of life — from home organization to cooking and more. You wouldn’t want to ruin a nice steak by putting too much salt on it! So, why not try embracing the idea that less can sometimes be more? This premise may be more valid in the sales business than any other. We often teach salespeople that in order to excel, they need to be product-knowledge experts on each vehicle model the dealership offers. And while this is true — product knowledge can be a catalyst for growth, confidence and professional development — it must be relayed in moderation. F&I managers are also encouraged to become experts in their product, or it could reflect badly on their business. Nobody wants to be sold anything by someone who doesn’t know what they’re selling. If the salesperson or F&I manager has put forth the effort to become a product expert, they should be prepared and ready to share what they’ve learned in response to a customer’s question. The issue is that some people tend to share excessive information about a product when asked a question, instead of providing a direct answer. This can turn their extensive product knowledge into a negative rather than a positive. Whether prompted or not, sharing everything you know is usually not the best course of action. A direct response that is clear and concise trumps the volume of information just about every time. Why waste time and energy using 10 words when one will do? It takes skill, awareness and experience to know how to answer and when to stop answering. Most customers are probably not interested in the details; instead, they want their answers and they want to get on with their day. So why is it so hard for some salespeople and F&I managers to get to the point? It’s possible that they don’t have a point. Perhaps they haven’t thoughtfully considered the question and how to answer it before they start talking, or maybe they lack experience or confidence, which can lead to over-answering. When Saying Less GETS YOU MORE 20
People speak at about 150 words per minute but process words at about 750 words per minute. Providing too much information without getting to the point can bore your customer and come dangerously close to a lecture or history lesson nobody asked for. Over-answering can harm your credibility and erode trust, potentially resulting in a quick “No, thank you” or silence when you stop talking — which is not ideal. If salespeople and F&I managers can learn to give direct and concise answers, this can prompt customers to ask more questions. Each question can provide valuable insight into the customer’s needs and problems, which the salesperson or manager can address in a clear answer that showcases the products’ benefits and features. Remember: Speaking less leads to better listening. In sales, actively listening can be more influential than words. Effective listening gives you a better idea of how to respond, allowing for more targeted, specific, concise and direct communication. When handling a customer concern, less is more. Salespeople and F&I managers often over-empathize with the customer by offering a lengthy response, trying to show understanding or similarity with the customer’s issue. When asking for business, less is more. If a customer raises one of three common concerns — such as cost, need or urgency — offer a solution and then ask for action. The old tried-and-true method still works: “If that works, I just need your approval.” If we can learn to talk less and listen more, it will lead to more yeses from our customers. Remember: Speaking less leads to better listening. 21
383,471 424,044 429,600 442,000 2022 Actual 2023 Actual 2024 Forecast 2025 Forecast YTD '23 YTD '24 % Chg. Mkt. Share thru Sep. thru Sep. '23 to '24 YTD '24 TOTAL 320,851 320,676 -0.1% Car 111,837 99,330 -11.2% 31.0% Light Truck 209,014 221,346 5.9% 69.0% Domestic 97,195 90,327 -7.1% 28.2% European 60,986 59,669 -2.2% 18.6% Japanese 131,720 139,422 5.8% 43.5% Korean 30,950 31,258 1.0% 9.7% Third Quarter 2024 Released October, 2024 Market Summary Forecast for County New Retail Light Vehicle Registrations Domestics consist of vehicles sold by GM, Ford, Stellantis (excluding Alfa Romeo and FIAT), Tesla, Rivian, and Lucid. Data sourced from Experian Automotive. The graph above shows annual new retail light vehicle registrations in 2022 and 2023, and Auto Outlook’s projections for all of 2024 and 2025. Historical data sourced from Experian Automotive. DOWN 14.0% vs. ‘20 UP 10.6% vs. ‘21 UP 1.3% vs. ‘22 UP 2.9% vs. ‘23 Los Angeles Auto Outlook Comprehensive information on the LA County new vehicle market FORECAST County New Vehicle Market Predicted to Increase 2.9% in 2025 Los Angeles County new vehicle market is stuck in neutral » As shown on the following page, U.S. equivalent SAAR levels in the county stood at a middling 14.0 million units in 3Q ‘24. » Lower interest rates, falling inflation, increasing employment, and rising incentives are helping with consumer affordability. » As mentioned in the previous release, heightened anxiety due to the election and geopolitical unrest has impacted consumer confidence. This is keeping some new vehicle purchasers on the sidelines. » Longer term determinants are positive. Pent up demand from five years of below average sales is significant and affordability will continue to improve, but the sales recovery will likely be gradual. Small increase is predicted in 2025 (see graph). Below is a review of key trends in the Los Angeles County new vehicle market. County market has under-performed the Nation so far this year County new light vehicle registrations were essentially unchanged during the first nine months of 2024 vs. year-earlier levels. National retail market was up 2.2%. New vehicle registrations predicted to improve 1.3% for all of 2024; small increase likely in 2025 Registrations for all of this year are predicted to approach 430,000 units and improve slightly from 2023. Market is expected to increase by less than 3% next year (see graph below). Battery electric vehicle market share increased from 2Q to 3Q ‘24 Higher incentives have given a boost to county BEV sales. Electric vehicle market share increased from 24.9% in 2Q ‘24 to 26.7% in 3Q. Franchised dealerships post big gains in BEV market Franchised dealership BEV sales increased 45.8% during the first nine months of this year versus year earlier. Sales by direct sellers were off 2.5%. Hybrid and plug-In vehicle sales out-pace industry so far this year Combined market share for hybrids and plug-in vehicles is 17.7% so far this year, up from 14.0% in 2023. Hyundai, Lexus, Land Rover, GMC, and Honda have largest gains in 2024 New vehicle registrations for each of the five brands were up by more than 10% in the first nine months of this year versus year earlier. Tesla registrations fell 5.6% (see page 4). Registrations increased by more than 5% for six brands during the past five years The overall market declined 13% from January through September of this year versus the total in 2019. Ten brands outperformed the market during the five year period. (See page 5 for long term sales analysis.) Tesla, BMW, and Hyundai are top sellers in BEV market; Toyota and Honda are hybrid leaders. Tesla accounted for 53.4% of the county BEV market so far this year, BMW and Hyundai were second and third highest, but combined share was just 12.3%. Toyota and Honda accounted for 71.1% of the hybrid vehicle market (see page 7). 22
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