PUB. 4 2023 ISSUE 3 VADA Goes to Washington Meet the Leaders of VADA and the State’s Automotive Associations
1 Dealertrack User Timing report through Google Analytics 1/1/21 to 12/31/21. 2 Based on average industry timeframe for vehicle title release and vehicle payoff process of 18+ days, as determined by 2021 Dealertrack data One Partner For All Your Virginia Reg & Title Needs Streamline your Reg & Title process from trade-ins to vehicles sold. • Virginia In-State Reg & Title: Submit in-state transactions in under 4 minutes1, saving your dealership time and money. • Dealertrack Accelerated Title®: Streamline payoffs and gain lien and title release 70% faster2 on trade-ins. • Dealertrack RegUSA®: Simplify out-of-state registration and title process for customers in any state. Registration & Title Make the move to electronic registration & titling. Call Kim Haddaway at 757-985-6940 or visit us.dealertrack.com/VADA23 to schedule a demo today. Proud partner of
© 2023 Virginia Automobile Dealers Association (VADA) |The newsLINK Group, LLC. All rights reserved. Virginia Auto Dealer is published four times each year by The newsLINK Group, LLC for VADA and is the official publication for the association. The information contained in this publication is intended to provide general information for review and consideration. 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 specific circumstances. The statements and opinions expressed in this publication are those of the individual authors and do not necessarily represent the views of the association, 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. Virginia Auto Dealer is a collective work, and as such, some articles are submitted by authors who are independent of VADA. While VADA and the newsLINK Group encourage 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 newsLINK Group at 855-747-4003. 4 A Message From President and CEO, Don Hall The PAC Is the Way Virginia Dealers Lead From the Front 6 The Federal Issues Impacting Virginia Dealers — For Better or Worse VADA Leaders Attend Annual NADA Washington Conference; Here Are the Top Issues 8 Virginia Auto Dealers Partner With FreeWire for EV Charging Partnership Will Bring Ultrafast, BatteryIntegrated EV Charging Stations While Minimizing Grid Impact 10 Hall Heeds Call To Go West, Young Man By Don Hall, VADA President and CEO 11 All In 2023 PAC Campaign Contributors 12 Save the Date VADA ‘24 13 6 Dealers on Virginia Business Power List 500 14 VADA Election Center Vote Early. Vote Remote or In-Person. Just Vote. 16 Save the Date Hampton Roads International Auto Show 16 Save the Date Virginia International Auto Show 17 Exclusive: DMV Commish Gerald Lackey High Octane 18 Driving Virginia’s Economy 19 Leadership 20 Dealership Facility Design Adapts to Shifts in Auto Retailing By Jason W. Smith, Head of Truist Dealer Services, and Joe Pella, head of National Commercial Real Estate at Truist. Written in partnership with Ryan Stancill, Principal at Praxis3 Architecture Design Firm. 23 Cox Automotive Forecast With New-Vehicle Inventory at a TwoYear High, August Auto Sales Expected to Increase Nearly 19% Year Over Year By Cox Automotive 24 Thank You VADA Program Partners 26 Thank You VADA Allied Members 6 10 23 Cover Photo: (L to R) Dan Banister, Vice Chairman, Banister Automotive; Eley Duke, Secretary, Duke Automotive; Roger Keller, Treasurer, Sheehy Auto Stores; David Dillon, Chairman, Southern Team Auto Mall; Don Hall, CEO & President CONTENTS Pub. 4 2023 Issue 3 vada.com 3
EElections are in November, and elections have consequences. Despite what the current political climate may have you believe, most politically active organizations and individuals have great friends on both sides of the aisle: Democrats and Republicans who, in VADA’s case, have supported the foundations of the franchise system and Virginia’s auto dealers over many years. But here’s the political reality in the Commonwealth: The entire General Assembly — 100 seats in the House of Delegates and 40 in the Senate — are up for election this fall. Virginia’s 2021 redistricting process has intensified this election season. In the Senate, 16 members (and some of VADA’s fiercest advocates), along with 31 members in the House, will no longer be with us when the legislative session begins in January. We are looking at more than 50 new legislators at that time. This is a historic turnover; we need to build allies — and we need your help. We do this through the Virginia Auto & Truck Dealers Political Action Committee. Your PAC contributions are an investment into your business and continued success. Contributions are used to educate legislators, attend fundraisers, and back those who are supportive of Virginia’s franchised new automobile dealers. Since we launched our 2023 PAC campaign in August, many dealers have already stepped up, and I want to call attention to a few of them: • VADA Board Member John Altman from Beyer Auto. He was the very first to send a PAC contribution for our campaign, delivering $12,000 that will go toward key races. John is a shining example of “leading from the front.” • Dave Perno, Vince Sheehy and Geoff Malloy also stepped up big in our early campaign days, delivering a combined total of over $50,000 to the PAC. • Andy Budd, a longtime VADA supporter who regularly encourages every person in our industry to give, matched his 2022 contribution with another $10,000. • Battlefield Auto and Southern Auto Group, led by VADA Chair David Dillon, gave nearly $21,000 combined. Eley Duke at Duke Chevrolet GMC, Ron Kody and the team at Richmond Ford Lincoln, Conrad Aschenbach, Charlie Obaugh, Page Auto Group, Dan Banister and several other individuals and dealers have already added their names to our list of contributors. See the full, growing list by scanning the QR code. vada.com/pac/2023-pac-campaign-contributors Please join these leaders and help us continue advocating for our dealerships. Visit vada.com/pac to give to the PAC now. Speaking of Elections, both Republicans and Democrats have embraced the idea of absentee and early voting. To that end, we have built a dedicated VADA Election Center, complete with the resources you and your employees need to vote by mail (absentee) or vote early in person. This is a great resource for your employees to make it easy to vote without standing in line or taking time off on Election Day. To learn more, see pages 14-15 or visit vada.com/elections. Please use it. And while we can’t tell you who to vote for, I do encourage you to look across party lines and do your research to support candidates who support businesses and auto dealers. Early voting began on September 22. Election Day is on Tuesday, November 7. The PAC Is the Way Virginia Dealers Lead From the Front A MESSAGE FROM PRESIDENT AND CEO, DON HALL 4 Virginia Auto Dealer
We’re more than a financial partner. We’re an invested one. True relationships matter. We don’t take this lightly. The best are built on a deep understanding of your short- and long-term goals and always backed by thoughtful, strategic advice in support of your vision. With full-service financial solutions and a deep bench of industry expertise, we’ll build a team around your organization to focus on your success. So, let’s drive further—together. To learn more, contact Jason W. Smith, head of Dealer Commercial Services, 407-237-4011 or Jason.w.smith@truist.com. Truist.com/DealerServices © 2022 Truist Financial Corporation, Truist, Truist purple and the Truist logo are service marks of Truist Financial Corporation. All rights reserved. Truist Securities is the trade name for the corporate and investment banking services of Truist Financial Corporation and its subsidiaries. Securities and strategic advisory services are provided by Truist Securities, Inc., member FINRA and SIPC. | Lending, financial risk management, and treasury and payment solutions are offered by Truist Bank. | Deposit products are offered by Truist Bank, Member FDIC.
O The Federal Issues Impacting Virginia Dealers — For Better or Worse VADA Leaders Attend Annual NADA Washington Conference; Here Are the Top Issues One of the benefits of working out of Richmond is our proximity to Washington, D.C. Such short distance to the nation’s capital makes it easy for VADA staff to attend NADA’s Annual Washington Conference. This year’s event, held in mid-September, saw dealer association leaders from across the U.S. gather to discuss the myriad developments and challenges of the industry and world economy. The VADA team in D.C. included Legislative Affairs Director Ralston King, General Manager Steve Hoffman, Field Representative Pat Martin, and Mike Suttle of Suttle Motors, who serves as NADA Director for Virginia. The group had numerous positive interactions with various Congressional members from both political parties. This included U.S. Rep. Lisa Blunt Rochester (D-DE), Rep. Roger Williams (R-TX) and a dealer himself, and Sen. Katie Britt (RAL). Dealers also heard from Ali Zaidi, the National Climate Advisor under President Biden. VADA’s own Geoff Pohanka, who serves as NADA Chair, also spoke to attendees. Leaders also lobbied with Congressional representatives and their aides on a number of key federal issues impacting dealerships. See this article on vada.com/news to find issue pages for more detail. FTC REDO Act (NADA Position: Support) The Federal Trade Commission (FTC) proposed a “Vehicle Shopping Rule” that would overwhelm car buyers and small businesses with additional paperwork and needlessly lengthen the sales process. Among other issues, the rule increases the complexity of the car-buying process, adding more paperwork to an already paperwork-intensive process for consumers while also creating inconsistent and unnecessary rules and burdens for small businesses. The rule was proposed without credible data-driven analysis or the necessary time for public comment to avoid unintended consequences for consumers and small businesses. A comprehensive study by the Center for Automotive Research found that the 10-year cost of the rule would be over $38 billion. Overall, the FTC’s proposed rule would make the auto buying experience worse, not better, for consumers. The “FTC REDO Act” directs the FTC to “redo” its flawed Vehicle Shopping Rule, but this time with basic regulatory safeguards the agency should have properly undertaken in the first place. NADA’s Ask: Cosponsor the soon-to-be-introduced House and Senate FTC REDO Act. EPA Requirements (NADA Position: Oppose) The Environmental Protection Agency (EPA) proposed new emissions standards that would effectively require 67.5% of U.S. car sales to be electric by 2032. New car and truck dealers are essential to sell and service EVs and have already invested $5.5 billion of their own capital in the tools, equipment, training and recharging infrastructure, which are critical to laying the foundation to move from early adopters to mass marketing EVs to the average consumer. Despite federal incentives, customers are not purchasing electric vehicles in the quantities required for automakers to meet these different government mandates. The current EPA proposal ignores real-world consumer demand and, as a result, “goes too far, too fast,” NADA says. Consumers are not moving as fast as the proposed regulations, largely because of the other changes needed to make EVs broadly attractive to consumers: affordability, a sufficient and reliable charging infrastructure, and acceptable charging speeds. 6 Virginia Auto Dealer
A single national standard for achievable greenhouse gas regulations that leverages consumer demand is needed to produce the fleet turnover necessary to deliver environmental benefits. NADA’s Ask: House and Senate Republican members are encouraged to sign a letter led by Rep. Lisa McClain (R- MI), addressed to Republican congressional leadership, opposing EPA's 67% EV mandate. ADDITIONAL ISSUES Supply Chain Disruptions Relief Act (NADA Position: Support) Under existing law, the Treasury Department has the authority to allow businesses that utilize the last-in first-out (LIFO) accounting method extended time to replace inventory if a “major foreign trade interruption” makes inventory replacement difficult or impossible. Pandemic-related global disruptions and reduced auto production made it impossible for dealers to replenish new vehicle supply. Despite broad bipartisan support for the Treasury’s use of its existing authority regarding vehicle inventory, the Treasury declined as it believes additional legislative authority is needed. Under the “Supply Chain Disruptions Relief Act” (H.R. 700/S. 443), Congress would determine that the conditions necessary to grant additional time to replace vehicle inventories under existing law due to pandemic-related foreign trade interruptions have been met. NADA wants legislators to cosponsor the “Supply Chain Disruptions Relief Act” (H.R. 700/S. 443) and urge House and Senate leadership to pass this technical and noncontroversial legislation at the earliest opportunity. Fight Rising Catalytic Converter Theft (NADA Position: Support) As many Virginia dealers know, catalytic converters are being stolen at increasingly higher rates due to their valuable metals, such as rhodium, platinum and palladium. Thieves can easily steal catalytic converters from unattended vehicles, and since catalytic converters are not readily traceable, there is a lucrative market for these stolen parts. These thefts are costing millions of dollars to businesses and individual vehicle owners alike. In addition, replacing a catalytic converter is costly and often difficult due to the part’s skyrocketing demand and supply chain shortages. NADA is asking Congress to pass H.R. 621/ S. 154, the “Preventing Auto Recycling Theft Act” (PART Act), which would help law enforcement combat catalytic converter theft by marking catalytic converters and creating a more transparent market that deters its theft. The So-Called “Right to Repair” Bill, which actually raises serious privacy, security and safety issues for consumers (NADA Position: Oppose) Advocates for “right to repair” legislation claim that independent automotive repair shops do not have access to the parts or data necessary to repair vehicles. However, this concern was rectified years ago, and today, the information independent shops need to repair vehicles is readily available from every auto and truck manufacturer. The latest iteration of “right to repair” legislation (H.R. 906) has little to do with repairing a vehicle. Instead, the bill compels auto and truck manufacturers to provide any “aftermarket parts manufacturer” the information necessary “to produce or offer compatible aftermarket parts,” i.e., parts not made by the auto or truck manufacturer. This legislation would also give any third-party access to sensitive consumer data from vehicles, which raises consumer privacy, vehicle security and automotive safety concerns. This bill regulates only vehicles and does not apply to other equipment or products, such as farm equipment or mobile phones. NADA is asking Congress to oppose the REPAIR Act legislation, H.R. 906, which raises serious vehicle privacy, security and safety issues for consumers. TowneBank.com/DealerServices Kevin Bonniwell Executive Vice President Director of Dealer Services & Finance Member FDIC It’s your vision... your dream. And we’re your bankers. Business_Va_Auto_Dealers_Assoc_VADA_3.625x4.625_4c_Ad.indd 1 3/17/23 10:10 AM vada.com 7
Virginia Auto Dealers Partner With FreeWire for EV Charging The Virginia Automobile Dealers Association (VADA) recently announced a partnership with FreeWire Technologies to offer ultrafast, battery-integrated electric vehicle (EV) chargers to franchised new car and truck dealerships across the Commonwealth. FreeWire’s Boost Charger™ 200 is a flexible “Level 3” DC station that uses a battery within its design to lessen the impact on the electrical grid while charging EVs. One of the biggest hurdles to EV adoption in the U.S. is both the availability of charging stations along with the impact on an already-taxed electrical grid. Typically, auto dealers wanting to upgrade their facilities to supply charging stations must not only purchase a charger but also work with an electrical utility to review power requirements and rates. FreeWire’s Boost Charger connects seamlessly to existing electrical infrastructure without construction costs, delays, or permitting. It uses an internal 160 kWh battery that recharges overnight and supplies power to vehicles during the day, virtually eliminating electricity demand charges with peak-shaving and load-shifting capabilities. With energy requirements nearly 10 times lower than traditional chargers, the Boost Charger can power around 20 vehicles daily, adding up to 200 miles of range in 15 minutes. Standard EV chargers do not use internal battery storage and use direct power from the grid. With no requirement for extensive electrical upgrades, Boost Chargers can be installed in hours and also relocated as necessary, offering a simple solution for initial ultrafast charging deployment without large-scale infrastructure investments. “While dealers are all-in on electric vehicles, the investment required to upgrade their facilities to support them takes time and money, so we need innovative ways to help dealerships make the investment at a moment when Washington is mandating electric vehicles and electrical utilities are working hard to keep up with rising electricity demand,” said Don Hall, President and CEO of the Virginia Automobile Dealers Association. “FreeWire is a smart option for both the short- and long-term for dealers who want to invest in EV without major investments and utility commitments.” VADA is the first state retail automotive association to partner with FreeWire to deploy its chargers to members. Under the terms of the company’s agreement with VADA, FreeWire will offer a number of products to all association members. The package includes: • The FreeWire Boost Charger 200, a Level 3, DC ultrafast charging station with an integrated battery for energy storage • Mandatory three-year, onsite warranty or optional fiveyear warranty package, including parts, labor and both annual and corrective maintenance through FreeWire’s in-house field service team and FreeWire’s network of authorized service partners • Access to FreeWire’s Asset Management Platform (AMP™), a software system to manage charger installation, commissioning, and technical support • Access to EV service partner networks as needed and available, such as Ford’s BlueOval network • Vinyl-wrapped branding on each charger, as requested by the dealer To download the Boost Charger product sheet please scan the QR code. https://vada.com/wp-content/uploads/2023/08/ FreeWire_Boost-Charger-150-and-200_datasheet_2023.pdf Partnership Will Bring Ultrafast, BatteryIntegrated EV Charging Stations While Minimizing Grid Impact T 8 Virginia Auto Dealer
“FreeWire’s Boost Charger is a perfect fit for dealerships because it can be deployed quickly and more easily than traditional solutions,” said Ethan Sprague, Senior Vice President of Sales, Marketing and Policy at FreeWire. “By using existing power available on site, Boost Charger offers the ability to scale according to each dealership’s growing need.” Tax Credit Information Qualified purchasers of the Boost Charger may be able to subject up to 25% of applicable deployment costs under the EV Charging tax credit (section 30C, MACRS Asset Class 36.0), which allows for a 30% tax credit on those costs. However, to be eligible for this credit, the EV charging station must be deployed in a low-income, rural or “fuel community” location and only allow up to 30% of applicable costs to be claimed as tax credits. Unlike other solutions, FreeWire’s battery-integrated technology qualifies for the Standalone Energy Storage Tax Credit (section 48, MACRS Asset Class F). Qualified purchasers may be able to subject up to 74% of applicable deployment costs under this credit, which contains no geographic restrictions and includes domestic content criteria that can increase the allowable tax credit from 30% to even 40% or 50% of eligible costs. About FreeWire Technologies FreeWire Technologies was founded in 2014 and is an industry leader in ultrafast EV charging and energy management solutions, solving grid infrastructure constraints and supporting the global transition to electric vehicles. FreeWire’s network of battery-integrated Boost Chargers™ transforms the way energy is distributed and bridges the gap from legacy infrastructure to future technology. FreeWire products are used by Fortune 100 companies, commercial and utility customers, fleets, retail locations, and gas stations across North America and Europe. To learn more, please visit www.freewiretech.com. Statements regarding eligibility or applicability of tax credits have been prepared for informational purposes only. These statements are not intended to provide, and should not be relied on for, tax, legal or accounting advice. FreeWire’s Boost Charger recharges overnight and supplies power to vehicles during the day, virtually eliminating electricity demand charges. Its energy requirements are nearly 10 times lower than traditional chargers and can power around 20 vehicles daily, adding up to 200 miles of range in 15 minutes. The Boost Charger uses an internal, 160 kWh battery that recharges overnight. Standard EV chargers do not use internal battery storage and use direct power from the grid. vada.com 9
In late July, I, along with Richmond Delegate and soon-to-be Senator John McGuire, was invited by Tazewell Senator Travis Hackworth to pay a true visit to Southwest Virginia and really experience all the region has to offer. In our 48 hours with Senator Hackworth, we experienced the growing “adventure tourism” industry that Southwest is becoming known for, including riding ATVs off-road. We also heard the Senator’s own vision for the region, where he fights to protect coal, create jobs, improve roads and secure funding for education. Here in the state capitol, many of us are guilty of concentrating our political and economic discussions around Central Virginia, Northern Virginia and Hampton Roads. But Southwest contributes mightily to our state and to our dealers. So that is my plea to you: Go west. I encourage Virginia’s auto dealers to consider hosting your next management meeting in Southwest. Hall Heeds Call To Go West, Young Man By Don Hall, VADA President and CEO I 10 Virginia Auto Dealer
2023 PAC Campaign Contributors Governor’s Club Groups giving at least $10,000 Loyalty Automotive: $25,000 Loyalty Chevrolet Cadillac Loyalty Nissan Loyalty Toyota Loyalty Volkswagen Sheehy Auto Stores: $15,000 Sheehy Buick GMC of Fredericksburg Sheehy Ford Ashland Sheehy Ford Lincoln Sheehy Ford Of Springfield Sheehy Ford Of Warrenton Sheehy Honda Sheehy Infiniti Of Chantilly Sheehy Infiniti Of Tysons Corner Sheehy Lexus of Richmond Sheehy Nissan Of Manassas Sheehy Subaru of Fredericksburg Sheehy Subaru of Springfield Sheehy Toyota of Fredericksburg Sheehy Toyota of Stafford Sheehy Volkswagen Beyer Automotive Group: $12,000 Beyer Subaru Don Beyer Volvo Don Beyer Volvo Dulles Don Beyer Volvo Volkswagen Winchester Land Rover Alexandria Malloy Automotive Group: $11,500 Malloy Chevrolet Cadillac Malloy Ford Alexandria Malloy Ford Charlottesville Malloy Ford Of Winchester Malloy Toyota Southern Auto Group: $10,750 Genesis of Roanoke Valley Greenbrier Dodge of Chesapeake Southern Buick GMC Kia Greenbrier Southern Buick GMC Kia Virginia Beach Southern Chrysler Jeep Greenbrier Southern Dodge Chrysler Jeep Ram Southern Team Hyundai Nissan Subaru Southern Team Nissan of New River Valley Southern Team Volkswagen Southern Volkswagen Greenbrier Country Chevrolet: $10,000 Country Buick GMC of Leesburg Battlefield Auto: $10,000 Battlefield Toyota Battlefield Ford Culpeper Battlefield Ford Madison Battlefield Chevrolet Lindsay Automotive Group: $10,000 Lindsay Buick GMC Lindsay Cadillac Company Lindsay Chevrolet Lindsay Chevrolet of Front Royal Lindsay Chrysler Dodge Jeep Ram Lindsay Ford of Wheaton Lindsay Lexus Of Alexandria Lindsay Lexus Service & Parts Lindsay Volkswagen Of Dulles Lindsay Volkswagen of Manassas Lindsay Volvo Cars of Alexandria Senate Club Group giving at least $5,000 Cavalier Ford Lincoln: $6,500 Robert Woodall Auto Mall: $6,500 Robert Woodall Chevrolet Buick GMC Cadillac Hyundai Nissan Duke Chevrolet GMC: $5,000 Richmond Ford Lincoln: $5,000 Richmond Ford West West Point Ford Aschenbach Auto Group: $5,000 Aschenbach Chevrolet GMC Wytheville Aschenbach Ford Wytheville Front Royal Buck GMC Front Royal Ford Blake Ford Moore's Chevrolet Miller Toyota Scion: $5,000 Warrenton Toyota Group Charlie Obaugh Chevrolet Buick GMC Kia: $5,000 Page Auto Group: $5,000 Audi Richmond Mechanicsville Honda Mechanicsville Toyota West Broad Honda West Broad Hyundai West Broad Volkswagen/Kia Banister Auto Group: $3,000 Banister Nissan of Chesapeake Banister Nissan of Norfolk Dulles Subaru Kia: $3,000 Dulles Chrysler Dodge Jeep RAM House Club Groups giving at least $2,500 Johnson Family Chevrolet Mercedes-Benz of Arlington & Mercedes- Benz of Alexandria Patron Club Groups giving at least $1,500 Crabtree Buick GMC Kern Motor Co. Radley Acura VW Dick Strauss Strosnider Chevrolet Suttle Motor Corp. Individual Contributors Jamie Davis, Loyalty Toyota: $1,000 Wade Schick, Chrysler of Culpeper: $1,000 Jeff Kelley, Kelley & Co.: $300 Saluting the dealers who have given to the Virginia Auto & Truck Dealers political action committee in 2023. VADA relies on a strong, united voice to tell our story to elected officials who craft the regulatory rules of the road impacting our industry. Our Political Action Committee supports Virginia candidates, regardless of party affiliation, who value the work you do every day to keep customers on the road, create jobs and serve as an economic engine for Virginia.
SAVE THE DATE VADA ‘24 JUNE 9-12 Isle of Palms, SC vada.com/convention
In our own industry, it's no secret that Virginia dealers lead from the front. Our 455 dealerships in Virginia drive $27 billion in annual sales and contribute to $1.2 billion in state sales tax. Those are big numbers for retail, so it's no wonder that Virginia Business magazine has placed six Virginia dealer leaders on their "Virginia 500" 2023 Power List. Congrats to all our dealer members — you make us proud! 6 Liza Borches President and CEO, Carter Myers Automotive in Charlottesville Dennis Ellmer CEO, Priority Auto Group in Chesapeake Dealers on Virginia Business Power List 500 Jim Koons Owner, Jim Koons Automotive in Vienna Vince Sheehy IV President and CEO, Sheehy Auto Stores in Fairfax Geoffrey Pohanka Chairman, Pohanka Automotive Group in Vienna James Gramm President, Safford Automotive Group in Springfield To read the full write ups scan the QR code: https:/ vada.com/blog/2023/09/07/6-dealers-onvirginia-business-power-list-500/ vada.com 13
Just Vote. Election Day is Tuesday, Nov. 7, 2023. We need every member of VADA to vote to elect pro-dealer, pro-business candidates. Skip the long lines on polling day and vote early! This year, all 140 seats in the Virginia General Assembly are up for grabs, making 2023 the most consequential election of your lifetime. Here are the resources you and your employees need to find out who is on the ballot, how to vote by mail (absentee) or how to vote early in-person. VOTE EARLY VOTE REMOTE VOTE INPERSON VADA ELECTION CENTER Who is on Your Ballot? Our friends at the Virginia Public Access Project have a handy tool for you to figure that out. Scan the QR code and enter your address. vpap.org/local-politics/ Request Absentee Ballot Register to vote by absentee, meaning you don't need to vote in person at a polling place. You can register to vote absentee online or by mail. Once you submit your information, you will be mailed your absentee ballot. The deadline to apply for an absentee ballot to be mailed to you is Oct. 27, 2023. Your request must be received by your local voter registration office by 5:00 p.m. on that date. After you receive your ballot, fill it out and return it back to your local registrar at the address provided. By Mail: Download your Absentee Ballot Application Form by scanning the QR code. elections.virginia.gov Online: Register to vote, update your current Virginia voter registration, apply to vote absentee by mail, or view your polling place, election district, absentee ballot status by scanning the QR code. elections.virginia.gov 14 Virginia Auto Dealer
Track Your Ballot Scan the QR code and complete all fields to track your absentee ballot request. vote.elections.virginia.gov/ VoterInformation/Lookup/status Track your ballot through the whole process with Ballot Scout by scanning the QR code. app.ballotscout.org/virginia/ search/state Return Your Ballot If you requested an absentee ballot, here are the three ways to make sure your vote is counted. 1. In Person: Return your ballot to your local general registrar’s office by 7:00 p.m. on Election Day. 2. Drop Box/Satellite Location: Refer to the instructions mailed with your absentee ballot. 3. By Mail: The ballot must be postmarked on or before election day and received by your general registrar’s office by noon on the third day following the election. Find Early Voting Location Registered voters may vote early, beginning 45 days before Election Day until the Saturday before Election Day. Find your location by scanning the QR code. tinyurl.com/vadavote Key 2023 Election Deadlines in Virginia September 22: First day of in-person early voting at your local registrar's office. October 16: Deadline to register to vote or update an existing registration. *Voters may register after this date, through Election Day, and vote using a provisional ballot. October 27: Deadline to apply for a ballot to be mailed to you. Your request must be received by your local voter registration office by 5 p.m. October 28: Voter registration offices open for early voting. November 4: In-person early voting at your local voter registration office ends at 5 p.m. November 7: Election Day! Polling places are open from 6 a.m. to 7 p.m., and anyone in line at 7 p.m. will be allowed to vote. vada.com 15
JAN. 12-14, 2024 FEB. 16-18, 2024 Save the date 16 Virginia Auto Dealer
FFresh off his first 100 days in the role, new Virginia Department of Motor Vehicles Commissioner Gerald Lackey, Ph.D. sat down with VADA for a wide-ranging interview. Stacked with a Ph.D. in social psychology and a career background in business transformation and uncovering efficiencies, Gerald discusses his vision for the state agency, the challenges it faces and how he's working to “unlock” talent around the newly energized 2,000-employee statewide organization. We talk electrification, DMV tech, the history of state DMVs and even digital license plates. Finally, Gerald touched briefly on topics pertinent to dealers — and, of course, you’ll learn what kind of car he drives. Meet Gerald on High Octane, the official podcast of the Virginia Automobile Dealers Association. To listen now, please scan the QR code. teamvada.libsyn.com Subscribe and listen on Apple Podcasts, Spotify, online, or your podcast platform of choice.
Source: Center for Automotive Research, NADA, S&P Global, Taxfoundation.org, U.S. Bureau of Labor Statistics, U.S. Census Bureau $2.5B $27B 2.2% Includes income taxes paid for direct, indirect and induced jobs. PAYROLL TOTAL SALES (all dealerships) REGISTRATIONS STATE SALES TAX PAID NATIONAL AUTOMOBILE DEALERS ASSOCIATION NADA Industry Analysis | 8484 Westpark Drive, Suite 500, Tysons, VA 22102 | 800.557.6232 | economics@nada.org NADA Legislative Affairs | 412 First St. SE | Washington, DC 20003 | 800.563.5500 | legislative@nada.org 455 DEALERSHIPS (new car) 60,464 TOTAL JOBS (created by dealerships) Includes 30,155 direct jobs and 30,309 indirect and induced jobs. 66 EMPLOYEES (average per dealership) Driving Virginia’s Economy Annual Contribution of Virginia’s New-Car Dealers Numbers reflect annual economic activity during 2022. $82,940 Average Annual Earnings $780M State and Federal Income Taxes Paid Virginia’s Share of Total U.S. New-Vehicle Registrations $1.2B 18 Virginia Auto Dealer
VADA Executive Committee David Dillon Chair Southern Team Auto Group Dan Banister Vice Chair Banister Automotive Roger Keller Treasurer Sheehy Auto Stores Eley Duke Secretary Duke Automotive Don Hall President Liza Borches Immediate Past Chair Carter Myers Automotive Tim Pohanka Legislative Chair Pohanka Nissan Hyundai Chris Lindsay PAC Chairman Lindsay Automotive VADA Board of Directors John Altman Beyer Automotive Group William Baker Hall Automotive, LLC Daniel Banister Banister Nissan of Chesapeake Liza Borches Carter Myers Automotive Gardner Britt, III Ted Britt Ford Lincoln of Chantilly Andy Budd Country Chevrolet Harry Carrion Haley Automotive Mark Dalton Terry Volkswagen Subaru David Dillon Southern Team Auto Group Eley Duke Duke Automotive Eric Flow Flow Motors Don Hall Virginia Automobile Dealers Association LEADERSHIP Tanner Hulette Mechanicsville Toyota Cameron Johnson Magic City Ford Lincoln Isuzu Roger Keller Sheehy Auto Stores Steve Klimkiewicz Cavalier Ford Lincoln Ashton Lewis, Jr. First Team - Automotive Christopher Lindsay Lindsay Chevrolet Ross Luck Luck Chevrolet Thomas Mohr Highway Motors Michael Patrick Patrick GMC Dave Perno Loyalty Automotive Tim Pohanka Pohanka Nissan Hyundai Rachel Pullen Safford Brown Jake Sodikoff Steven Nissan Michael Suttle Suttle Motor Corp. Robbie Woodall Robert Woodall Chevrolet Buick GMC Cadillac Hyundai Nissan Virginia Motor Vehicle Dealer Board RJ Robinson Parks Chevrolet Ron Kody Richmond Ford Lincoln Thomas Bates RK Chevrolet Subaru M. Gardner Britt, Jr. Ted Britt Ford Lincoln Dennis Ellmer Priority Auto Group Geoffrey Malloy Malloy Automotive Group Daniel Banister Banister Nissan of Chesapeake VADA Group Self-Insurance Association Board of Directors Michelle Radley Radley Automotive Group Chris Brown Haley Automotive Burt Brenner Lindsay Lexus of Alexandria Penny Burch Magic City Ford Lincoln Isuzu Fred Kirschbaum Checkered Flag Motor Car Co. Chris Strosnider Strosnider Chevrolet Donald Hall Virginia Automobile Dealers Association Gerald Duncan Duncan Ford Chrysler Dodge Jeep Adam Johnson Johnson Family Chevrolet Thaddeus Nowak Ted Britt Ford Lincoln Ralph Mastantuono American Service Center Associates Rich Tritel Carter Myers Automotive Cole Balderson Ourisman Automotive of Virginia HRADA Officers Rebecca Wilson President Checkered Flag Honda Pat Fields Vice President Wynne Ford Volvo Gerry Reust Treasurer Cavalier Ford Heath Wynn Secretary Hall Auto Group David Pickett Immediate Past President Hall Auto Group HRADA Board of Directors Brian Clark Charles Barker MB Ken DeBerry, Cavalier Mazda Jim Hernandez Priority Honda Dave Lawson Classic Hampton Auto Mall Mike Owen Southern Auto Group Cameron Shaw Southern Auto Group Larry Stevenson Classic Hampton Auto Mall Tom Ellmer Priority Auto Group Jarryd Carver Winners Circle Auto Group Allied Member Bruce McGeorge ACV GRNCDA Board of Directors Keith Hightower Chairman Pearson Honda Zach Cochran Vice Chairman Whitten Brothers Harry Carrion Secretary/Treasurer Haley Automotive Michael Patrick Immediate Past Chairman Patrick Buick GMC Brenton Evans Audi Richmond Ed Hartoonian Hart Nissan Kayla Kody Richmond Ford RJ Robinson Parks Chevrolet vada.com 19
AAuto retailing is in the midst of a construction boom fueled by favorable cash flow, upgrades after ownership changes and the pent-up demand for facility updates to keep up with customers and serve them efficiently. To review current construction and design trends, we talked with Joe Pella, head of National Commercial Real Estate at Truist, Jason W. Smith, head of Dealer Commercial Services at Truist, and Ryan Stancill, Principal at architecture and multidisciplinary design firm PRAXIS3. How has the rise of mixed-use development in major metro markets affected the way dealers approach the best use of their property? Smith: As urban sprawl extends to dealerships that were once on the outskirts, developers have started approaching dealers about their valuable real estate. Dealers often sit on large, contiguous pieces of land in densely populated areas. With vehicle inventory projected to remain at lower levels, this opens dealership space for redevelopment. For dealers with the population density and location attractiveness to support it, why not monetize the excess land and bring in more retail traffic, integrating the dealership into the community at the same time? Rethinking how much land you need and how that land can be used can point you to opportunities to unlock additional value, whether you develop the property yourself, partner with a developer, or sell a portion of your land. Stancill: We’re seeing a lot of mixed-use projects being discussed, and it’s often the municipality pushing dealers in that direction. We’ve studied several projects where a mixed-use component was a requirement for project approval. Mixed-use developments can bring resources and amenities closer together to create a more sustainable and walkable community. With these developments, dealerships can maintain a central presence in the community while blending residential, retail and commercial uses to fit site and local market needs. Also, if you want to put valuable land to its best and highest use, you might By Jason W. Smith, Head of Truist Dealer Services, and Joe Pella, head of National Commercial Real Estate at Truist. Written in partnership with Ryan Stancill, Principal at Praxis3 Architecture Design Firm. Dealership Facility Design Adapts to Shifts in Auto Retailing 20 Virginia Auto Dealer
consider vertical development along with mixed-use instead of a freestanding, dealer-only facility. Pella: Given the increased density of their surrounding areas, dealerships can remake how they utilize their existing footprint by consolidating their dealer operations and creating available land to build commercial real estate. They’re sited next to existing infrastructure with roads, utilities and, in many cases, public transportation. As a dealer, you’ve got the opportunity to think about how your dealership can become part of today’s lifestyle while tying into the surrounding community. Consider experiential retail: people shopping, sitting outside, having a meal, enjoying live music — a place where things are happening. Experiential retail recognizes that the most successful mixed-use developments are fully activated spaces that provide a variety of amenities. Smith: As land gets more valuable and density becomes a requirement, Manhattan may be the place to look for models of what dealerships can look like. BRAM Group’s Toyota and Lexus of Manhattan have a high-rise presence with new cars on the fourth floor, used cars on the roof and a second lot in New Jersey to hold additional inventory. On the West Coast, Toyota of Hollywood has partnered with Houstonbased Hines and announced its plans for a mixed-use project, including a high-rise residential tower, a residential village, an office building and a public plaza with green space along with retail and dining. What’s being done in dealership design today to address where the automotive marketplace is moving and ensure that dealers are best positioned to meet tomorrow’s needs? Smith: In major metro markets, vertical development is starting to take hold in auto retailing, and that helps counter high land prices. Dealers are also re-evaluating the space devoted to service versus sales. In select, densely populated, urban areas, we’re seeing lifts used to put service bays on the second, third and fourth floors, with mixed-use residential on top and parking somewhere in between. In coastal areas, parking decks can help protect against hurricanes, and in areas prone to hail damage, they can help you save on insurance costs. Stancill: Online sales, lower vehicle inventories and consolidation all make it easier for dealers to downsize their variable operations while building out their fixed operations. It costs less per square foot to build service and parts space than showroom space. In fact, a lot of dealers who’ve completed recent facility initiatives are ready to further expand their fixed operations — in some cases, more than doubling the size of a service department built just a few years ago. We’re being very thoughtful about putting infrastructure in place as we plan dealerships, thinking about the location of utilities and how the building components are set up to make future expansion easier and less expensive. Planning dealerships for service growth from the ground up is a smart approach. For example, we always try to work with the dealer to think about future parts and service expansion during the initial design to make tomorrow’s expansion as painless as possible. We’re also seeing a greater investment in technician spaces, such as larger and more comfortable locker rooms and break rooms. The goal is to look at anything that will help attract and retain top tech talent in a highly competitive labor market. There’s also a focus on designing parts and service departments to accommodate EVs, with particular attention to the safe storage and handling of EV batteries. The “skateboard” batteries in EVs are almost the size of a car. They’re exceptionally heavy, and the parts area in a typical dealership isn’t designed to receive or store them. Plus, batteries pose additional safety and fire hazards that need to be considered in facility designs. What challenges are dealers facing today when they undertake dealership construction projects? Smith: We know EVs have fewer moving parts than internal combustion engines, but with the unknowns about EV service patterns and adoption rate, deciding on the optimal number of service bays may be a bit of an educated guess. In select instances when you’re moving service areas higher, you’ll also need to plan for additional infrastructure to support the added weight of EVs. The faster chargers that OEMs are requiring dealers to install have much higher power needs and will require more investment. A Level 2 charger may cost $30,000, but installing Level 3 chargers can cost $500,000-700,000 from start to finish. Coordination with utility companies can be a lengthy process — the fastest chargers draw enormous amounts of electricity, and local utilities sometimes require a dealership to upgrade its power-handling capacity first. Sometimes the utility provider can’t provide enough power without a line extension or other major work. After learning what’s required, getting the permits and components lined up for a charger installation adds significantly to your project timeline. Also, solar panels could carry some of the load, and depending on where you’re located, there could be tax rebates or grants to offset the cost of installation. Stancill: One of the big problems now is scheduling projects. Everything takes longer than expected because the construction world has such limited availability, whether it’s people, products or services. With architects backed up for months, it’s often impossible for dealers to complete a facility by the dates specified in their OEM agreements. Hard bidding, which many dealers strongly prefer, makes it more difficult to complete a project on time. These days most contractors simply won’t bother hard bidding a project — even a very lucrative one. They’d rather be a partner in figuring out how to compress the schedule and lower project costs without the risk of a fixed price. Dealers should be flexible in negotiations and be prepared to make their case for extended project timelines to OEMs. vada.com 21
How should dealers think about engaging the right resources and expertise — from planning and design to financing and construction — to get the most from their development investment? Pella: Reimagining the dealership space mandates conversations with partners and municipalities about what’s already there and what the real estate market fundamentals are telling them. We see positive fundamentals for commercial real estate over the long term. Higher interest rates have slowed the market, but there are still good opportunities for certain asset classes in the right market. It’s all about connecting with a partner that knows the local market to help you navigate the overall development process, including planning questions — particularly for mixed-use developments — that cover everything from zoning and parking to individual ownership arrangements and dealership access easements. Stancill: The considerations needed to make sure a deal is supportable, marketable, financeable and profitable can seem overwhelming. A lot of dealers may be interested in mixeduse development but hesitate to get out of their lane. They know dealerships, not commercial real estate. What can their land support, and how do they meet future spatial needs? Thinking through these questions — with the right team at the outset — helps get a project designed, zoned, developed, managed and financed. Pella: In the mixed-use space, you’ve got to consider factors like market rents and lease-up trajectory (for commercial space), along with ground-up construction risks and various proposed uses. Compared to standard dealership buildouts, mixed-use developments require a more complex financing structure for the construction phase and an active commercial real estate oversight during each phase. The ownership structure and capital mix could provide your dealership — or your family — with opportunities to diversify your portfolio and generate additional returns. Smith: Truist can connect dealers with commercial real estate specialists to help determine the best way to enhance the value of your property and to work with your municipality on zoning and permitting. We’ll look at various ways to structure financing to achieve your project goals, minimize risk and cover all the angles — at each stage. If you’re thinking about a construction project, talk to someone on the Truist Dealer Services team who can assemble Truist resources to bring you the perspective and expertise you need. Visit us at Truist.com/DealerServices. Truist Bank, Member FDIC. ©2023 Truist Financial Corporation. Equal Housing Lender. Tax Planning and Preparation Cost Segregation Analysis Mergers and Acquisitions Audits, Reviews and Compilations Business Process Review Succession Planning About Us Councilor, Buchanan & Mitchell (CBM) has an experienced team of tax, personal financial planning and advisory professionals devoted to the automotive retail industry. Since 1921, we have specialized in new vehicle and heavy truck dealerships, as well as motorcycle and RV dealerships. Investment management, financial planning and retirement planning services are provided by May Barnhard Investments, a subsidiary of CBM. John R. Comunale, CPA Partner | Director of Automotive Dealership Services JComunale@cbmcpa.com Keith A. Laudenberger, CPA Partner | Director of Automotive Dealership Services KLaudenberger@cbmcpa.com our CPAs and advisors have been driving automotive dealership success. 301.986.0600 Councilor, Buchanan & Mitchell, P.C. CPAs & Business Advisors 7910 Woodmont Ave, Suite 500, Bethesda, MD 20814 https://www.cbmcpa.com For more than 100 years, Our Expertise LIFO Inventory Fraud Prevention Business Valuations Financial Planning Investment Management Services Retirement Planning 22 Virginia Auto Dealer
With New-Vehicle Inventory at a Two-Year High, August Auto Sales Expected to Increase Nearly 19% Year Over Year August’s sales volume was expected to rise 18.8% from one year ago and reach 1.37 million units. This is a 3.2% increase from July, which had two fewer selling days than August’s 27 days. The annual new-vehicle sales pace in August was expected to finish near 15.4 million, up 2.2 million from last August’s 13.2 million pace but down slightly from July’s 15.7 million level. Economic headwinds from high interest rates and still-high prices are likely to slow the new-vehicle sales recovery in the back half of the year. New-vehicle sales, when announced by automakers, were expected to once again show big gains over last year but a slight decline in the sales pace from July. A key reason for the volume gain is new-vehicle inventory hitting its highest level in more than two years. Stronger fleet sales are also expected to support higher sales volumes. The August seasonally adjusted annual rate, or SAAR, was expected to finish near 15.4 million. This is a mild decrease in sales pace from July’s 15.7 million level. Although the pace was expected to dip slightly from last month, much of this decline can be attributed to statistical adjustments as this month has one more selling day than August 2022 and two more than last month. Compared to August 2022, August’s sales volume was expected to show nearly a 19% gain over last year’s supply-limited market. In addition, new-vehicle sales were expected to rise more than 3% from July. Pentup demand from consumers and businesses — especially in the form of rental fleet sales — continues to be fulfilled as new-vehicle supply and pricing improves. According to Charlie Chesbrough, Senior Economist at Cox Automotive, “The supply recovery continues to improve across the country, and this is leading to the market’s sales gains this year. In addition, the return of supply is also bringing back more discounting from manufacturers. But rising interest rates, and their impact on affordability, remain strong headwinds against a more robust vehicle market.” The new-vehicle market has seen improving or stable affordability and sales strength so far this year. However, economic headwinds from high interest rates and still-high prices will likely create some slowdown in the second half of the year. In addition, while some pent-up demand has been fulfilled, higher incentives and more fleet sales should continue to provide support. Cox Automotive is the world’s largest automotive services and technology provider. Fueled by the largest breadth of first-party data fed by 2.3 billion online interactions a year, Cox Automotive tailors leading solutions for car shoppers, automakers, dealers, retailers, lenders and fleet owners. The company has 25,000+ employees on five continents and a family of trusted brands that includes Autotrader®, Dealertrack®, Kelley Blue Book®, Manheim®, NextGear Capital™ and vAuto®. Cox Automotive is a subsidiary of Cox Enterprises Inc., a privately-owned, Atlantabased company with $22 billion in annual revenue. Visit coxautoinc.com or connect via @CoxAutomotive on X, CoxAutoInc on Facebook or Cox-Automotive-Inc on LinkedIn. Cox Automotive Forecast By Cox Automotive August 2023 U.S. New-Vehicle Sales Forecast 1Cox Automotive Industry Insights data 2Grand Total includes segments not shown Sales Forecast1 Market Share Segment Aug-23 Aug-22 Jul-23 YOY% MOM% Aug-23 Jul-23 MOM Mid-Size Car 75,000 67,798 74,473 10.6% 0.7% 5.5% 5.6% -0.1% Compact Car 95,000 71,878 89,741 32.2% 5.9% 7.0% 6.8% 0.2% Compact SUV/Crossover 210,000 172,148 204,526 22.0% 2.7% 15.4% 15.5% -0.1% Full-Size Pickup Truck 185,000 166,442 180,654 11.1% 2.4% 13.6% 13.7% -0.1% Mid-Size SUV/Crossover 215,000 193,927 205,723 10.9% 4.5% 15.8% 15.6% 0.2% Grand Total2 1,365,000 1,148,948 1,322,578 18.8% 3.2% vada.com 23
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