GLOBAL DEALERS FIND COMMON GROUND AT INTERNATIONAL ROUNDTABLE

Roundtable: Global dealers explore universal problems.

February 13, 2006—Some dealer concerns are universal: Profitability is a problem in Europe and Latin America as well as the U.S., said attendees of NADA’s International Roundtable on Monday. Dealers from 13 countries—including the U.S., Argentina, Australia, Austria, Brazil, Denmark, Ecuador, Finland, Germany, Italy, Mexico, the Netherlands, and the United Kingdom—came to hear NADA chief economist Paul Taylor’s outlook for 2006 and discuss dealer problems and progress back home.

In the United Kingdom, new-car sales will likely slip at least 5 percent this year, said Matthew Carrington, chief executive of the Retail Motor Industry Federation. But “the real problem for dealers is a decline in profitability… [they] are losing money on new-car sales.” Jurgen Creutzig, president of the European Council for Motor Trades and Repairs, agreed: Dealers in Europe make just 0.6 percent pretax profit on average. And in the Netherlands, the luxury tax of some 60 percent on car sales cripples profitability, dealers said, and is a problem not likely to be solved soon.

As in the U.S., keeping flood vehicles off the market is a problem in Mexico and Australia. NADA president Phil Brady told Mexican Automobile Dealers Association president Andres Ocejo Gomez that his association would share with the Mexican group NADA’s tips on recognizing water-damaged cars. Sue Scanlan, deputy executive director of the Motor Trades Association of Australia, said that her organization has worked to tighten state laws on flood vehicles.

Unlike dealers here, German dealers often face contract renewals with automakers, said Axel Koblitz of the German Federation of Motor, Trades and Repairs. Nissan recently ended hundreds of dealership contracts there, and offered new contracts with different terms.

Several dealers said they looked forward to working more closely with NADA through its international affairs office, to open this spring. It will provide analysis and serve as an information resource for NADA by monitoring and tracking international developments affecting the auto industry.