CATA News

[from Automotive News] Ford's U.S. dealers must invest as much as $1.2 million and adhere to rigorous sales standards if they want to sell electric vehicles beyond 2023 as the brand tweaks its retail model to better compete with direct-sales startups.

Dealers have until Oct. 31 to opt into one of two EV certification tiers that cover varying investment levels in fast chargers and staff training. Those who choose not to invest will be limited to selling internal-combustion vehicles and hybrids from the Ford brand.

EV dealers must sell the products at nonnegotiable prices, and those who choose the lower-priced certification tier won't be allowed to carry them in inventory, instead having customers order exactly what they want for later delivery.

Read more here: https://www.autonews.com/dealers/ford-dealers-must-set-no-haggle-prices-invest-12-million-keep-selling-evs

Buick will offer to buy out any of its U.S. dealers who do not want to make the investments necessary as the brand transitions to an all-electric lineup by the end of this decade.

A spokeswoman for the brand confirmed the plan to offer buyouts, which Duncan Aldred, vice president of global Buick and GMC, is outlining to dealers during a virtual meeting Friday. The Wall Street Journal first reported the buyout plan Friday, citing an interview with Aldred.

Buick had 1,963 U.S. dealerships at the start of 2022, according to Automotive News' Dealer Census. Only 13 of those were standalone stores — the majority have dual showrooms with GMC — so virtually all dealers who take a buyout likely would continue with other General Motors brands.

"Not everyone necessarily wants to make that journey, depending on where they're located or the level of expenditure that the transition will demand," Aldred told the Journal. "So if they want to exit the Buick franchise, then we will give them monetary assistance to do so."

Buick does not plan to introduce any new internal combustion vehicles after 2024, when its first full-electric vehicle is scheduled to arrive. The brand is reviving the Electra name for the planned EV lineup in combination with an alphanumeric code to distinguish the various models.

Read more here: https://www.autonews.com/dealers/buick-offer-buyouts-all-us-dealers

The Chicago Automobile Trade Association (CATA), the area’s new-car dealer association and producer of the Chicago Auto Show, is plugging into the electric vehicle (EV) revolution by hosting its first-ever Chicago Drives Electric event, Sept. 29-Oct. 2, aimed at educating media and consumers on the topic and how franchised new-car dealerships play a critical role in widespread EV adoption. The event will also serve as a forum for policy makers to share their EV adoption and infrastructure plans around the initiative.

In alignment with National Drive Electric week, Chicago Drives Electric will help raise awareness of the many benefits of all-electric, hybrid and plug-in hybrid vehicles and help consumers understand how EVs can fit individual needs and lifestyles. In addition to putting interested parties behind the wheel of some of the latest EVs, event organizers are bringing in a variety of experts to help break down the various aspects of EV ownership and tackle complex topics such as range anxiety; at-home charging solutions; on-the-go charging and infrastructure; tax credits and incentives; and where people can begin their search. On-hand experts will include Cars.com, CHARGE Enterprises, ComEd and Powering Chicago.

Automakers will have product specialists on hand throughout the event who will field consumer questions and as they relate to the vehicle brands they represent. Participating automakers include Alfa Romeo, Chevrolet, Chrysler, Ford, Hyundai, Jeep, Kia, Volkswagen and Volvo showcasing a variety of EVs like the Ford F-150 Lightning, Kia EV6 and Volkswagen ID.4, among others.

Registrations for the event were limited to a first come, first served basis. The consumer interest and initial response has been overwhelming; all registration timeslots were filled in less than 12 hours from a single email invitation to the Chicago Auto Show attendee database.  

The CATA plans to carry the Chicago Drives Electric branding and name over to the 2023 Chicago Auto Show with the Chicago Drives Electric Indoor EV Track. To help the burgeoning EV market grow faster than it already has, the Chicago Auto Show debuted its first indoor multi-brand EV track during the 2022 Chicago Auto Show last February. Next year, organizers say the track will triple in size and the area will be enhanced as an EV education destination for show-goers, featuring panel discussions with experts available throughout the show to address consumer questions.

“Hosting Chicago Drives Electric this fall will be a great way to test drive the programs we want to implement during the 2023 Chicago Auto Show, while making essential connections in the EV space,”
said Jennifer Morand, co-president of the Chicago Automobile Trade Association and co-general manager, Chicago Auto Show. “This next stage of EV adoption will mean getting everyday consumers into mass-market vehicles, and new-car dealerships will be critical to this process.”

In the largest and most comprehensive survey ever conducted of prospective EV buyers in the U.S., the independent analytics firm Escalent presented future EV buyers with a factory sales model and a franchise dealership model. The study found 57% of potential EV buyers prefer the traditional approach to car buying.

In addition, most of the 30,000 people Escalent surveyed said they prefer to have many of the phases of the car-buying process, including test driving, completing the transaction and getting the EV services, take place in-person at a dealership.

This research proves that the franchised dealership model works just as well for EVs as it does for gas-powered vehicles.

“The EV customers of yesterday can’t be compared to today’s EV buyer,” added JC Phelan, CATA chairman. “With game-changing technology like EVs, personal service and education is needed now more than ever before. Plus, the customer wins. Because local dealerships compete for customers on sales and service, the result is that pricing is competitive, and service is plentiful with a nationwide network of local new-car dealers.”

To Register, visit: Chicago Auto Trade Association - Chicago Drives Electric - Dealer Session (cata.info)

For more information, visit: https://www.chicagoautoshow.com/about-the-show/chicago-drives-electric-2022. Chicago Drives Electric test drives are reserved exclusively for the public who pre-registered for the event. A waitlist has opened at ChicagoAutoShow.com.

Interview and b-roll opportunities available on Thursday, Sept. 29 at the CATA headquarters, 18W200 Butterfield Rd., Oakbrook Terrace, Ill. 60181. Additional media opportunities can be arranged with Mark Bilek (mbilek@drivechicago.com) or Hayley Feichter (hfeichter@drivechicago.com).

The NADA released a new animated video explaining how the FTC proposed rule would dramatically complicate the car buying process for American consumers. (Watch the video here.)

The video shows how the regulation, first proposed by the Federal Trade Commission in June, would force consumers who finance their vehicles to sign new forms and disclosures each time they ask about the price of vehicles on the lot.

The FTC, which is fast-tracking the proposal, last week denied NADA’s request to extend the deliberation period. NADA and state dealer associations are filing detailed comments to the FTC opposing the proposal.

The FTC has yet to field test the proposal, and has provided no quantitative data showing how the proposal would help consumers. Dealers are encouraged to submit a comment on the proposed rule before the Sept. 12 deadline. Also, tell the FTC in a short letter that this rule is unwarranted and unnecessary. Your comments are critical and can be submitted online here.

Charities and civic organizations know that Chicagoland new-car dealers are an integral part of their communities and are often deeply involved in charitable causes. However, dealers rarely receive the recognition they deserve for their efforts. The Chicago Automobile Trade Association created Chicagoland Dealers Care in 2008 to raise awareness of dealers' local charitable efforts and, in many cases, assist with the programs.

When it comes to donations, the Chicagoland Dealers Care program, the CATA will match your local, charitable contribution up to $1,500 to maximize the impact dealers make in your community. Grant requests can be made every three years for a variety of causes: academic programs, cultural arts, performing arts, medical research, and even humanitarian needs, to name just a few.

Since its inception in 2008, the grassroots Chicagoland Dealers Care program has donated more than $123,000 to local charitable organizations. Additionally, since 1992, the association has raised more than $59 million for significant Chicago-area charities during the annual First Look for Charity black-tie event, traditionally held the evening before the Chicago Auto Show opens to the public. Learn more about the Chicagoland Dealers Care program and how you can get involved. To submit a match request, download this form and email it to Hayley Feichter (hfeichter@drivechicago.com).

New-car dealers are in desperate need for auto techs, parts counter employees, service writers and managers. Though many offer scholarships and paid training, there is also another pool of scholarships available through aftermarket parts organizations.

These scholarships are available for: Full time students at an accredited U.S. college or university or an ASE/NATEF Certified post-secondary automotive, heavy duty, or collision repair school, graduating high school seniors planning to be full time students at the previously mentioned schools. According to the website, in 2021, 427 scholarships were awarded for a record of $706,2500 and 881 complete applications were considered for scholarships by more than 40 donor organizations.

Click here for more information about these scholarships: https://automotivescholarships.com/.

Cook County Sherriff Tom Dart kicked off the CATA’s recent seminar focused on preventing dealership theft underlining the importance of dealers doing everything they can to make their vehicle inventory less vulnerable to criminals. 

The seminar was presented by law enforcement officials from his office, Chicago Police Department, Illinois State Police, the state’s Auto Theft Task Force and the Hinsdale Police Department.

The presenters have been working toward a more cooperative and coordinated effort to preventing car theft at dealerships and carjackings of individuals which both are at or near all-time highs. They suggest dealers do the same thing.

“Dealers and dealership managers should establish a text chain or use an app like ‘Whatsapp’ to stay in immediate contact with neighboring dealers on their street or in close proximity,” said officer Lou Hayes from Hinsdale. “Report any suspicious activity or individuals you see in your dealership to one another so they can be alerted or tell you if they see the same person acting suspicious in their store.”

The officers also asked that dealers report theft to the CATA (after law enforcement has been notified), so that CATA officials can circulate the information among its membership and alert this law enforcement group, as well. The sharing of information is critical to taming this criminal activity, they said.

Chicago Police Department Sergeant Kevin Sellers warned that all these offenders should be considered armed. “Whether they are breaking into a dealership or stealing a catalytic converter, they have guns,” he said.

Other helpful tips from the presentation included:

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The Illinois Environmental Protection Agency is implementing a Charging Infrastructure Grant Program. The primary goal of this program is to substantially offset the installation costs of electric vehicle charging infrastructure, beginning July 1, 2022, and continuing as long as funds are available. The Agency will award grants in accordance with Section 45 of the Electric Vehicle Act, to public and private organizations and companies to install and maintain Level 2 or Level 3 charging stations. 

For more information on this grant program, you can download the 2022 Illinois Register of Rules of Governmental Agencies, Vol. 46, Issue 34.

President Biden signed the signed the Inflation Reduction Act into law on August 16, fundamentally changing the way EV tax credits are handled. For the past few days, government agencies, auto manufacturers, the NADA, and industry news providers have been scrambling to make sense of the new law and detail the changes for new-car dealers. Key takeaways include:

1. The old $7,500 credit is no more. However, customers who took delivery or entered a binding purchase contract for a qualifying PHEV or BEV prior to Aug. 16, 2022, are still eligible to claim the old credit on their taxes.
   
2. From Aug. 16, 2022, to Dec. 31, 2022, only one requirement applies for a PHEV or BEV to get the $7,500 credit. The vehicle must be assembled in North America.
   
3. Starting Jan. 1, 2023, additional requirements are added for a PHEV or BEV to be eligible for the $7,500 credit.
   

Providing a little detail on each of the requirements:

The U.S. Department of Energy has provided a list of vehicles with final assembly in North America. That list is located here: https://afdc.energy.gov/laws/inflation-reduction-act. It should be noted that simply being on this list does not guarantee that the vehicle qualifies for the credit because some vehicles are built in multiple locations. The build location of a particular vehicle should be confirmed by referring to its Vehicle Identification Number (VIN) using the VIN decoder or an information label affixed to the vehicle.

The MSRP qualifications are clearly specified in the legislation:

The income thresholds are also clearly defined in the legislation:

Like the income threshold and MSRP limitations, the battery component and battery minerals production requirement does not kick in until 2023. At that time, 40% of the critical minerals used to create a vehicle's battery must be extracted or processed in the United States, or a country that has a free trade deal with the US. By 2027, that number will rise to 80% of the battery minerals. The battery component requirement calls for 50% to be manufactured or assembled in North America starting in 2023 and 60% in 2024 and 2025 with the number gradually growing to 100% in 2029.

Also, the amount of credit available for a specific vehicle depends on several factors. For the remainder of 2022, new vehicles that meet the guidelines set up in the Inflation Reduction Act receive up $7,500. Starting in 2023, a vehicle will receive $3,750 if it meets the battery minerals requirement and $3,750 if it meets the battery component requirement.

The Inflation Reduction Act also defines a new credit for some buyers who purchase a used electric vehicle of up to $4,000. However, the credit may not exceed 30% of the vehicle's sale price.

Starting Jan. 1, 2024, the federal tax credit can be assigned to the seller (new-car dealer) by the buyer, resulting in a purchase price reduction. However, prior to that date, the customer must claim the credit when filing federal taxes or assign it to the leasing company.

Keep in mind that the new law does not affect the current Illinois EV tax rebate. You can get more information on that here.

From an advertising perspective, it is advisable for dealers to follow these guidelines:

For the ninth year, the Chicago Automobile Trade Association partnered with the USO Illinois to host Barbecue for the Troops fundraisers. This summer, 63 local new-car dealerships fired up their grills to host community Barbecue for the Troops events featuring everything from patriotic ceremonies, classic car shows, live music, games for kids of all ages and, of course, barbecues. The dealerships rallied their communities once again, bringing in more than $78,000 for local military and their families.

“CATA dealerships are committed to giving back to their communities, and the USO Barbecue for the Troops initiative is one great example of dealers helping people in need – right in our own backyards!” said CATA Chairman JC Phelan. “This year is especially wonderful because of the $1 million fundraising milestone we achieved and I am so proud to present this check to USO Illinois on behalf of all participating dealers.”

This year’s fundraiser brought the grand total of the nine-year program to more than $1 million overall, supporting the USO Illinois initiatives with nearly 700 fundraisers. These funds enable the USO Illinois to lend support to more than 326,000 service members and their families annually.

“We are overwhelmed with the amount of support we have seen this year from our partners at the Chicago Automobile Trade Association and the local new-car dealerships,” said USO Illinois Executive Director, Christopher Schmidt. “What started as a grassroots effort has now turned into more than $1 million in support for our local service members and their families.”

In addition to the community fundraisers, awareness spread via social media. The CATA and USO Illinois ran a #BBQ4Troops social media contest where people could nominate individuals they deem worthy of winning the Ultimate Backyard Barbecue. Entries poured in throughout the month of July; wives nominated husbands who served overseas, parents nominated children who are active duty military and friends nominated deserving friends and neighbors.

The CATA and USO Illinois are already planning for next year. The USO Barbecue for the Troops fundraising events are set to take place at local new-car dealerships on Sat., July 15, 2023. 

“This program could not have been a success without the incredible support of our media partners,” said Phelan.  “Many thanks are due to all of our partners in TV, radio and outdoor advertising media who helped us promote this worthwhile program.  And a special thanks to ABC 7 for producing the TV spot that aired throughout the market.”

The daughter of Lonnie Johns, assistant service Manager at Elgin Toyota and her entire family were involved in a tragic accident along I-90 recently. Tom and Lauren Duboz and their four children were killed in the accident

A GoFundMe has been set up by Lonnie and Eva Johns and the owner of Elgin Toyota and the Bob Loquercio Auto Group has pledged to match the first $10,000 in donations. If you are interested in donating, please visit https://www.gofundme.com/f/tom-and-lauren-dobosz-family.