2017-12-06 / News

Kiwanis Club learns state of auto dealerships in N.C.

Pictured from left are speaker Robert Glasser, and guests Barbara Day and Doug Day. 
submitted Pictured from left are speaker Robert Glasser, and guests Barbara Day and Doug Day. submitted At the Sept. 25, meeting of the Roxboro Kiwanis Club held at La Piazza restaurant in uptown Roxboro, former Lt. Gov. Doug Day and his wife Barbara, who is a current candidate for governor elect of the Carolinas District, were guests.

They are both members of the Chapel Hill Kiwanis Club.

The program was presented by Robert Glasser, the current president of the NC Automobile Dealers Association.

While there he has coordinated a number of charitable endeavors for the association.

As an example, he shared that NC auto dealers worked on the Flight of Honor, flying 800+ WWII veterans to Washington, D.C. These included a Pearl Harbor survivor, who was 18 at the start of the war. There was also a veteran of the battle of Iwo Jima, who was wounded there.

In North Carolina when he started 22 years ago, there were 725 dealers, many family owned. There are now only about 575 dealers, so consolidation is impacting the industry. It employs about 35,000 direct employees, and another 40,000 indirectly.

The state has about $26 billion in total automotive sales annually.

When a car is sold today, the state makes more than the dealer. Gross profit is about 1.5 percent, whereas the state receives 3 percent.

Glasser informed that an auto technician can now make $85,000 a year. The dealer will pay for the training after high school. Two years of community college are also a plus.

In 1999-2000, 483,000 units were sold. Sales remained strong until 2008- 09, when about 185 dealerships were lost. The factories pay nothing to support a dealer, but many were terminated during the recession.

Only 269,000 units were sold in 2009, but the recovery has continued thereafter. This year, 2017, is expected to be about even with the record from 2016.

Ford dealers’ relationship with the factory is tenuous. A lot of cost shifting down to the dealers is occurring.

Internet disrupters like True Car are also becoming a problem, and Glasser pointed out that its information is not always accurate.

Also many favored dealers in other states are selling in North Carolina with units that some local dealers cannot get.

Consolidation remains an issue for the auto industry.

Hendricks, Leith, and Capital Group are buying up a number of small dealers. Those in danger are the ones just outside a major metropolitan area.

The industry continues to adjust to customer satisfaction demands, so treatment and technology continue to improve.

The age of vehicles on the road today is 11.5 years, an all time high. This means that some will be buying a car soon.

Glasser noted that today’s vehicles have more technology than the lunar lander in 1969, and are the cleanest and safest ever.

He contended that population growth is driving vehicle sales in North Carolina, and that the recovery since 2008 in the auto industry has not been uniform. There are many counties in the state that are still experiencing challenges, despite the fact that unemployment is the lowest in 17 years.

The lost jobs are now being replaced with lower paying jobs, however.

U. S. government policy and regulation and global uncertainty are concerns.

Glasser is bullish on the auto industry for the next 18 months, and he cited a forward looking acronym — FACES (Future, Autonomous, Connected, Electric and Shared).

In response to a question, he indicated that he does not believe autonomous vehicles will be widely used within the next 10 years. Trust, security and liability are all issues, and liability responsibility will be a nightmare. Hacking may become an issue as well, so he does not think this will be common in his lifetime.

However, he predicted that the vehicle dashboard will take on more and more in the next few years, with safety or maintenance warnings.

Cars connected to infrastructure are also coming, with technology such as lane departure avoidance.

About 1,000 electric vehicles are sold annually in North Carolina, which is only about 0.4 percent of total sales.

He sees the most potential for this in major metropolitan areas, because they are too hard to charge in less populated locations.

The battery technology has to continue to improve, and he sees the future of electric vehicles being driven by governmental mandate.

This is being actively discussed in countries such as China and France.

When asked about shared vehicles, he suggested watching Lyft and Uber, since most electric vehicles will go here.

He also contended that auto dealers do not perceive these services as a threat.

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