Article

NADA's Razzle Dazzle Convention: Profitability Heads to the Bay

January 2008, Auto Dealer Today - WebXclusive

by John Carroll - Also by this author

Every year for the past 20 years, Joe Verde has been careful to keep his schedule open for the National Automobile Dealers Association’s huge annual convention and exhibition. When this year’s industrial-strength conference gets underway at San Francisco’s Moscone Center on February 9, you can be sure that the nationally-known trainer will be cutting a wide swath in the thick of the crowd.

Once he gets in the meeting room reserved for his presentation, Verde expects to see a big group of people he knows very well, along with some new faces he’d like to get to know better. “It’s kind of like a reunion,” said Verde, one of the best-known personalities at the annual convention and a regular at packing the house. “The classes will be filled with people who know us, like us and trust us, and want some tidbits on increasing sales.”

For the auto business, NADA’s annual convention is part Oscars, part MBA, with plenty of shopping mixed in. This year, the NADA will pay a record amount to bring in some of the biggest names in the country to entertain the dealer crowd, while hosting dozens of workshops each day over the 4-day event to better prepare dealers for what’s shaping up as one of the most challenging years the auto retail business has seen in decades.

Stephen Pitt, executive director of NADA's Conventions and Expositions Group, is the NADA’s show man. It’s, in part, up to him to make sure that the marquee attractions have the kind of 1,000-watt star power that can brighten a big crowd. When you’re trying to attract a big-tent audience, the 91st annual dealership event can’t show its age. It has to dazzle like a celebrity teenager.

Thirty years ago, when Pitt helped organize his first annual NADA convention, he counted about 7,000 paid attendees with 125 exhibitors occupying 80,000 square feet of convention space. Last year in Las Vegas, NADA drew an audience of more than 30,000, including more than 20,000 paid registrants. Exhibitors crowded into 400,000 square feet of space – enough space to squeeze in seven football fields.

“These guys eat, breathe and sleep auto industry 24 hours a day,” said Pitt, who’s looking for a record number of exhibitors to come out to tout their wares by the Bay.

Confronting the Crisis
There’s an impressive lineup of talent on tap to get dealers into their seats, from the Tonight Show Host Jay Leno to California Governor Arnold Schwarzenegger. Aside from the headliners, there are roughly 150 workshops and seminars covering everything from succession planning to business development, boosting sales, fixed operations and more. The entire event is structured around one common theme: The path to profitability. This year, that’s a topic weighing on the minds of dealers. “We found that more and more, dealer profitability is eroding for a multitude of reasons,” said Pitt.

One increasingly frequent question, said Pitt, is, “How do you manage a business with a profit margin of two or three percent? We created a workshop where dealers can bring in their financial statements. It’s run by NADA professionals and we will try and help them manage their expenses and costs and help them be more profitable. It’s really a crisis for dealers right now.”

There is serious business to attend to this year, said Annette Sykora, who will formally take the reins as NADA chairman in San Francisco. With the industry gathered in one place, the convention is a prime-time format to marshal the national group behind NADA’s legislative campaign. Congress is preparing to tinker with Corporate Average Fuel Economy (CAFÉ) standards, she said, which could significantly affect dealers’ business. Everyone in the auto industry will be keenly interested in making sure that “manufacturers can build cars that our customers want,” said Sykora.

She would also like to make sure that lawmakers take extra steps to prevent consumers from buying cars they don’t want. One proposal backed by NADA calls for a national database for insurers to post ‘total loss’ vehicles so they can be easily identified. “It’s so unfair that these vehicles declared a total loss continue to end up in consumers’ hands and in other countries,” said Sykora, dealer principal of Smith Ford Mercury in Slaton, Texas.

“Beyond CAFE, I’m looking at the whole picture and how we’ll contribute to the global warming and energy consumption solution,” she added. “We also have to do a better job of attracting high-quality people to the industry and show what a great career it can be.”

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