CATA News

The Illinois attorney general’s office is suing a north suburban Chicago dealership for unfair and deceptive advertising and business practices, the office announced Aug. 12.
 
The dealership, which six years ago entered into an Assurance of Voluntary Compliance with the AG’s office over another matter, faces extensive civil penalties over the recent alleged practices.
 
Attorney General Kwame Raoul said the dealership violated its AVC by continuing to engage in acts or practices that violate the law, and the lawsuit seeks to rescind all contracts entered into with consumers when unlawful methods were used.  The dealership also would have to pay full restitution to the customers.
 
"(The dealership) knowingly and repeatedly took advantage of people through deceptive advertising — even after entering into an agreement with the attorney general’s office to stop using unlawful practices," Raoul said. "I am committed to seeking enforcement against businesses and individuals who violate the law to take advantage of Illinois consumers."
 
Raoul alleges the dealership further violated the Illinois Consumer Fraud and Deceptive Business Practices Act by deceptively using fake checks and coupons in its advertisements, failing to disclose a consumer’s potential responsibility for negative equity on a trade-in, failing to promptly pay off a loan on a traded-in vehicle, and advertising loan opportunities to those facing bankruptcy.
 
The dealership advertises through various media including its own website, third-party websites, newspapers, and direct mailers. The attorney general’s office opened an investigation into the dealership in 2014 after receiving complaints from consumers who were unable to purchase vehicles advertised by the dealership.
 
Consumers alleged that upon visiting the dealership to buy a vehicle seen in advertisements, sales representatives would say the advertised vehicle was already sold, then try to sell customers a different vehicle instead. In addition, consumers alleged that they continued to see the same vehicle in advertisements for weeks afterwards.

 

E. John Potempa, the father of longtime CATA staffer Sandi Potempa, died July 28. He was 91.
 
A proud U.S. Navy veteran, Mr. Potempa served as a police officer in Skokie and Rosemont, and as police chief in Bloomingdale. His passion for investigation led him to open his own firm, PPI: Potempa Private Investigations.
  
Mr. Potempa was involved with many fraternal and political organizations, including the DuPage County Chiefs of Police Association; the Illinois Association of Chiefs of Police; ASIS International, the world’s largest association for security management professionals; the American Legion; the Bloomingdale Township Republican Party; and the DuPage County Republican Party.
 
Mr. Potempa also was a past commander of the Alvin W. Koehn 5813 VFW, and of the Bloomingdale Township Republican Party. For many years, he was president of the homeowners association at his Bloomingdale subdivision.
 
In addition to Sandi Potempa, Mr. Potempa is survived by a son, Michael Fracaro. Donations appreciated to The Hundred Club of DuPage County.

Max A. Madsen, who at his height operated four family-owned dealerships, died July 26 at age 91.
 
Mr. Madsen was raised in Park Ridge, the son of first-generation Scandinavians who ran a family farm. He served as a 1st lieutenant in the U.S. Air Force from 1952 to 1954, then began a more than 50-year career in the automotive industry, beginning in the 1960s at Ed McKeown Chevrolet in Glen Ellyn. He later moved to Hanley Dawson Cadillac in Chicago, advancing to a managing partner.
 
The first Max Madsen Mitsubishi opened in Downers Grove in 1987, and it became one of the country’s most successful Mitsubishi franchises. The dealership currently is in Aurora.
 
Mr. Madsen enjoyed playing competition bridge, and he reached the prestigious level of Gold Life Master. Notable opponents included Charles Goren, the leading American bridge personality in the 1950s and ’60s; and actor Omar Sharif, one of the world’s top 50 contract bridge players. He continued to win national championships into his 80s.
 
Mr. Madsen was a regular supporter of local farmers markets, a trait he took from his mother, who baked as many as six pies a day to feed workers on the family farm during the decade after the Great Depression.
 
Survivors include Robin, his wife of 43 years; sons Terrance and Kevin; a daughter, Jody; step-sons Scott Grove and Adam Grove; 10 grandchildren; and four great-grandchildren. Services will be private. Memorials appreciated to the Air Force Aid Society.

 

Olaf Gjøvik, proprietor of seven new-car franchises in Sandwich and Plano, died peacefully July 22 at age 98.
    
Mr. Gjøvik served in the U.S. Navy during World War II, then he and his wife developed a 22-acre autoplex that employs more than 100 people. General Motors recognized his 50 years as a franchisee in 2018 at a special ceremony with multiple awards and citations.
 
Through the years, the towns surrounding Sandwich and Plano felt the benefit of Mr. Gjøvik’s generosity as he sponsored sports teams, donated cars to charities, and supported countless charities. He was a founding member of the Sandwich Rotary Club and held various positions including as president.
 
Renowned for his great storytelling and sense of humor, Mr. Gjøvik was a man of deep faith and was devoted to his church. He loved woodworking, boating and camping, hunting, and riding motorcycles (well into his 80s), and he often hopped into his motorhome to visit family around the country.
 
Mr. Gjøvik’s first wife, Florence, died in 2010 after a 64-year marriage. Survivors include his second wife, Candy; daughters Judy, Jan and Dawn; sons Mark and Scott; nine grandchildren; 12 great-grandchildren; and three great-great-grandchildren.
 
When appropriate after COVID-19 issues subside, the family plans to hold an event to celebrate Mr. Gjøvik’s life. Donations appreciated to the Open Door Rehabilitation Center in Sandwich; Fox Valley Older Adults, also in Sandwich; the Fox River Lutheran Church in Norway, Illinois; or the Salvation Army.

 

Two more nonprofits favored by area new-car dealerships were recent beneficiaries of the CATA’s Chicagoland Dealers Care program. The Young Entrepreneurs Academy in Palatine and the Children at the Crossroads Foundation in Chicago each received $1,500.
 
The CATA has been a longtime supporter of local charities. Since its inception in 2008, the Chicagoland Dealers Care program has donated more than $100,000 to local organizations supported by CATA member dealers. The CATA matches a dealer’s donation up to $1,500.
 
Hyundai of Palatine is a supporter of the Young Entrepreneurs Academy. Formed five years ago by the Palatine Area Chamber of Commerce, the Academy helps coach middle and high school-aged children on how to build and run their own businesses. In September of each year, up to 30 students have the opportunity to apply to a 25-week program. Students are paired with personal mentors who work with them every step of the way through the final phase of forming a business plan.
 
"When Hyundai of Palatine first submitted the Young Entrepreneurs Academy’s Chicagoland Dealers Care application to the CATA, we took one look at it and said ‘This is right in our wheelhouse,’ " said CATA Chairman Kevin Keefe. "The concept is wonderful, arming these young students with the education and resources for them to build and run their own businesses."
 
Similar to ABC-TV’s hit show "Shark Tank," the students have the chance to pitch their business ideas to local business leaders and investors. One student qualifies each year to present at a national level in Rochester, New York, in front of a panel of judges at the conclusion of the program. All students are pledged some funding to launch their business, and some have even reaped the benefits of receiving offers from local investors.
 
"To think that these young students are receiving legitimate offers from major investors is incredible," said Steven Gaus, executive director of the Palatine Area Chamber of Commerce. "We are so thankful for local businesses like Hyundai of Palatine and organizations such as the CATA who help fund our programming so that these students can achieve these extraordinary goals." 
 
"As a business owner myself, I couldn’t pass up the opportunity to help these young students who have similar passions," said Hyundai of Palatine/Leader Auto Group President Tamara Darvish. "The Young Entrepreneurs Academy does tremendous work within the Palatine community, and we’re committed to continuing to support their efforts."
 
Elgin Toyota has been a supporter of the Children at the Crossroads Foundation for five years. The Foundation was created in 1990 on the belief that economic circumstances should not predict the future. Maggie Daley, then Chicago’s first lady, founded the Frances Xavier Warde School in 1989 with the vision that it would be would be a place where all families would embrace and accept each other’s faiths and racial and socioeconomic backgrounds. Her goal was to have 30% of the school’s students benefit from financial assistance, a hope that became a reality with the inception of Children at the Crossroads Foundation.
 
Since then, the Foundation has changed the lives of more than 700 children by providing more than $15 million in financial aid.  Ever true to the foundation’s mission, 30% of the students who attend the Frances Xavier Warde School receive either full or partial financial assistance.
 
"We applaud the Children at the Crossroads Foundation for its tremendous work to help enrich these young students’ lives," said Keefe, the CATA chairman. "The Chicagoland Dealers Care program helps stretch our member dealers’ dollars a little further for wonderful organizations like this foundation, and it also helps shine a spotlight on new-car dealers’ positive impact within their communities."
 
Elgin Toyota is part of the Bob Loquercio Auto Group. Bob Loquercio, the group’s president and chief executive, said: "I was hooked on the Foundation’s mission from the first moment I attended one of its fundraising events. I knew I had to get involved, and here I am (as a board member), five years later."
 
Sarah Frick, director of advancement at the Foundation, said, "We’re so humbled by the Bob Loquercio Auto Group’s generosity as well as the contribution from the area’s new-car dealer association, the CATA."

 

The American Bar Association on Aug. 3 approved a resolution that, in part, urges governments at all levels to adopt laws and policies that promote the adoption of an enhanced nondiscrimination compliance system for dealer compensation for arranging and/or originating a vehicle finance contract by offering a safe harbor against pricing discrimination claims for dealers that faithfully implement the NADA/NAMAD/AIADA Fair Credit Compliance Policy and Program.
 
The resolution, which was co-sponsored by the ABA Section of Civil Rights and Social Justice, Section of State and Local Government Law, and the Commission on Homelessness, recommended "safe harbor" protection to dealers who faithfully adopt the NADA fair credit program in lieu of a recommendation that governments consider requiring dealer finance compensation to be in the form of a non-discountable fixed fee. This was one of several significant improvements to the original resolution, which sought to impose a series of new duties and restrictions on the dealer finance office. 
 
Officials of the National Automobile Dealers Association said the action represents the latest recognition by a diverse and growing number of public and private groups of the value of the optional NADA fair credit program as an effective mechanism to address fair credit concerns while preserving competition in the marketplace. The program, along with supporting materials, is available at nada.org/faircredit.
 
The NADA continues to encourage dealers to consider, in consultation with their counsel, whether to adopt the voluntary approach to fair credit compliance.

 

New light-vehicle sales improved for the third consecutive month in July. The July SAAR totaled 14.5 million units, a decline of 14.4% compared to July 2019 but up from the SAAR of 13.1 million units for June 2020.
 
In terms of raw volume, July sales were up by just over 120,000 units from June. And through the first seven months of the year, new light-vehicle sales were off by 22.1% compared with the same period in 2019. American consumers continue to choose light trucks over cars, with light trucks representing 76% of all vehicles sold in July and 75.4% of all new vehicles sold so far this year.
 
Similar to May and June, fleet sales fell more than retail sales did in July. According to Wards Intelligence, retail sales were off by 10% year over year, while fleet sales declined by a substantial 60% year over year. Vehicles have been selling quickly once they reach dealer lots. According to J.D. Power, 41% of all vehicles sold in July spent fewer than 20 days on the lot, up from 35% a year ago. Inventory constraints in popular segments may have limited some sales in July and, according to Wards Intelligence, final inventory numbers are expected to register an eight-year low for the month.
 
Because of such robust demand, incentive spending was dialed back in July. Preliminary estimates from J.D. Power pegged incentive spending per unit at $4,236, down from June 2020 but up by $166 compared with July 2019.
 
The NADA’s outlook has not changed much since last month, with forecasters expecting new-vehicle retail sales to continue to recover for the rest of the year, while fleet sales continue to struggle.
 
Inventory constraints in popular segments will be a headwind for new-vehicle sales for the rest of the summer. But barring any unexpected parts delays or vehicle plant shutdowns stemming from new COVID-19 outbreaks, forecasters expect that vehicle inventory levels will be at close to normal levels by the end of the summer. For 2020, they expect new light-vehicle sales to fall to between 13 million and 13.5 million units.

 

Drivers all have a list of features they’d like when it comes time to buy a new car. Perhaps a heated steering wheel or onboard Wi-Fi. Or, maybe a hands-free driving system.
 
According to a new study by research firm AutoPacific Inc., the most popular feature is a built-in dash cam. Fully 70% of the car buyers who participated in the annual Future Attribute Demand Study listed that as a must-have.
 
That probably shouldn’t come as a surprise. The firm’s research analyst, Deborah Grieb, said: "Consumers have experienced an influx of personal video in social and news media in recent years and are very familiar with the potential security benefits of camera footage from dash cameras, body cameras, cell phones and doorbell cameras. It’s really not surprising to see such high interest in an in-vehicle recording device."
 
What was significant about the study was the finding that interest in dash cams was broad, covering essentially all buyer groups, no matter their age, the type of vehicle they were interested in, or how much they planned to spend.
 
About 79% of those planning to spend at least $79,000, for example, want a dash cam in their next vehicle, but even among those looking for something under $30,000, the figure came in at 59%.
 
The new study looked at 16 different features in categories including safety and security, self-driving, comfort and convenience, and connectivity. It showed that safety and security-related features were overwhelming favorites among the 1,000 car buyers who responded.
 
Vehicle airbags came in at a close second, with 66% putting that at or near the top of their list. But another camera system wasn’t far behind, with 64% of the respondents listing perimeter camera systems, including ones that could monitor what’s in a pickup’s bed, where applicable.
 
The study appears to reflect the uncertain times we live in, but also reflects the fact that camera-based technologies, as Grieb noted, are becoming a familiar part of our daily lives.
 
The study also found strong interest in over-the-air updates, listed by 64% of those surveyed. That’s something offered on virtually every new smartphone, though only now starting to become available in the automotive community.
 
Automakers can use the feature to download software revisions that can improve a vehicle’s function, add features and remotely resolve problems that previously might have required a visit to a dealer service shop. OTA, as it’s also known, is expected to become widely available by mid-decade.

 

 

Throughout these trying times, the Chicago Automobile Trade Association has received tremendous support from its media partners. When the COVID-19 crisis first hit, the CATA worked swiftly to develop a commercial to communicate the ways in which Chicagoland’s new-car dealers are positioned to provide vital and essential transportation services to consumers and also come to the aid of their communities during the COVID-19 crisis through goodwill.
 
Most recently, the CATA launched a new advertising campaign to share the reasons that now is a great time for consumers to visit their local new-car dealer for service and to have open safety recalls addressed. The message continues to run across local media outlets.

 The CATA wants to send a special "thank you" to the following media partners that helped the association stretch its budget further. These outlets understand just how important and essential dealers are for our market and local communities.    

 

 Radio
 • Entercom Radio: WUSN-FM, WBBM-AM, WBBM-FM, WBMX-FM and WXRT-FM
 • Nexstar Media Group: WGN-AM
 • IHeart Radio: WEBG-FM, WGCI-FM, WGRB-AM, WKSC-FM, WLIT-FM and WVAZ-FM
 • Weigel Broadcasting: WRME-FM (ME TV)
 • Cumulus Radio: WLS-AM and WLS-FM
 • Hubbard Radio: WTMX-FM, WDRV-FM and WSHE-FM

 

Television
 • WLS-TV
 • WBBM-TV
 • Weigel Broadcasting (WCIU/WMEU/HCIU/EWME)
 • WFLD-TV/WPWR-TV
 • WGN-TV
 • WMAQ-TV

 

Cable
 • EffecTV / Xfinity-Comcast
 
Also, a special thank you to Select Marketing Group, which has helped champion media support for the CATA in a relationship that dates back more than 20 years.

 

Mike Anderson Chevrolet of Merrillville (Indiana), Phillips Chevrolet of Frankfort, and Ray Chevrolet in Fox Lake are winners of the 2019 General Motors Dealer of the Year award.
 
Five Illinois dealerships are winners of J.D. Power’s 2020 Dealer of Excellence award: Audi Westmont, Mercedes-Benz of Naperville, Napleton’s Valley Hyundai (Aurora), Phillips Chevrolet of Frankfort, and the Porsche Exchange (Highland Park). It was the third straight win for Mercedes-Benz of Naperville.