Pub 20-2021-2022 Issue 1

N E W J E R S E Y C O A L I T I O N O F A U T O M O T I V E R E T A I L E R S 13 new jersey auto retailer W W W . N J C A R . O R G Factory measurements of customer satisfaction in ever- changing forms of customer satisfaction indices ( CSI ) are not reliable gauges of “true” satisfaction. But they are not going away. in attorneys’ fees and “corrected” the “offending” websites. It is incumbent upon every dealership to have “cyber-savvy” employ- ees and ensure the dealership has continuous access to updates in relevant technology and associated legal developments. Threats to the Auto Dealer Franchise Model For decades, franchised dealers have witnessed growing and creative efforts by auto manufacturers and other entities to invade the franchised retail auto business realm. The NADA, state associations and others have done a stellar job in making the case that franchised dealers are indispensable to fairness, honesty and excellence in retail service and sales and best serve America’s consumers. Dealer associations and other industry supporters will need to continue emphasizing the franchise system’s consumer benefits, including price competition, easy access to warranty, recall and general repairs, a commitment to improving public safety, local accountability and more. Race, Gender and Identity in the Workplace After George Floyd’s death, while in police custody on May 25, 2020, there was a dramatic and instantaneous change in policies throughout America. These changes did not just affect police conduct but also impacted businesses, schools and more. New policies proliferated that will alter how dealers operate with their employees and customers. Further, we can expect to see auto franchisors’ accelerated efforts to recruit and place more minority owners and managers of dealerships. The #MeToo movement seeks to end the mistreatment of women in the work- place and elsewhere, and Congress is also expected to consider “equity-based” legislation. Dealers may have to cope with a bevy of new laws and regulations in this area. Consumerism Look for a resurgence of the Consumer Financial Protection Bureau ( CFPB ), a more active Federal Trade Commission ( FTC ) and more laws and a heavy enforcement hand by the Biden ad- ministration. Dealers are already pro-consumer but need to be wary of an overly aggressive FTC and state regulators who, all too often, target dealers who have done nothing wrong. In 2021, expect to see more government legislation, regulations, and enforcement activities to proactively protect consumers from allegedly unfair or discriminatory sales practices. Factory Sales Performance Standards Dealers mostly acknowledge the wisdom of factories that push them to retail more cars — and incentivize them to do so. At the same time, the Covid era might have caused some factories to consider whether facilities requirements should be overhauled. They recognize the growing emphasis on off-site and virtual retailing, but some factories do act as though their image requirements should not be challenged. Dealers should be vigilant to not enter into commitments that cost more than a program is worth or sign agreements that commit to unreason- able future performance or renovations. International Trade Trade relations are a high priority for President Biden. This emphasis could lead to smoother movement of imported vehicles and higher costs to dealers and consumers. Look for moves to, essentially, erase hard lines and financial penalties/ tariffs/sanctions. Regulatory Overreach The Biden administration embraces a robust regulatory scheme, and dealers should expect some increased expenses for compliance purposes. Dealer Advertising Dealer advertising in 2021 faces a minefield of potential haz- ards. Both the FTC and state/local agencies scour the media to find deviations from advertising requirements. It is incumbent on dealers to assure compliance with all advertising laws and regulations to avoid potentially harsh penalties. Customer Satisfaction Factory measurements of customer satisfaction in ever-chang- ing forms of customer satisfaction indices ( CSI ) are not reliable gauges of “true” satisfaction. But they are not going away. The importance of such scores to dealers remains a fixture in fran- chisors’ supervision and measuring of dealer performance. Recalls The annual multimillion vehicle recall trend is now common- place in the U.S.. For decades, millions of cars are recalled to address factory defects, both large and small, significant or not. Factories should make dealers whole for their costs attributable to extra f loor plan expense and other incidental losses. Dealers and state associations should press franchisors to expedite the deliveries of necessary parts. Autonomous Vehicles Although the public fanfare at the prospect of widespread self-driving vehicles has faded, the reality of their development is still moving forward. This phenomenon dovetails with a new reality for the way people travel by vehicle all across America. It is only a matter of time until autonomous vehicles will be routinely available to consumers for hire or purchase. But that will not happen in a big way in 2021. Dealership Succession It is surprising that many dealers still have either no succession plan or one that lacks detail. Every dealer should have a legacy LEGAL TRENDS continued on page 14