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Hey Mac What's Up? - NADA Tackles Hot Dealer Issues


By Mac Gordon
Editor at Large
Michigan Bureau
The Auto Channel


Orlando Feb 12, 2013; Every ten years or so, NADA forgoes the charms of Las Vegas and San Francisco to hold its annual convention and Exposition in one of the Sunshine State's star resort towns, Orlando.

Vegas and SF do not seem the appropriate locations to take on the automakers with front-burner issues which shred dealer profits, notably dealers in rural one-point or two-point towns.

The struggle between 'country' and 'big city' dealers has been a fact of life ever since NADA was founded nearly 100 years ago.

Factory allocations of new vehicles are notoriously skewed towards metropolitan big-city markets, for one thing. Dealer groups, whether publicly-owned or privately-owned, command the favoritism of the larger dealers on who gets more 'hot' new vehicles.

Other issues, such as costly renovations of showrooms, two-tier pricing, juggling of profit margins and discounts, and outright demands to expand with unneeded body shops or insert factory-owned stores, keep alive the antagonism of 'country' dealer's towards urban points and especially the collections of publicly-owned groups.

Over the century of NADA's existence, the Washington, D.C.-based association has been headed from year-to-year mostly by rural dealers outside urban suburbs.

Past activist presidents include: Billy Mitchell, Ron Tonkin and Jack Kain.

Tonkin, based in Portland, Oregon, was one of the few NADA leaders from an urban background. His central issue-cost shifting from factories to dealers-is alive today-and the Tonkin 'family of dealers' is one of the few groups which has sourced a chairman (NADA's president once was a franchised dealer member, but the role of leader was changed and the chairman now is called president.

Most of the elected leaders have come from rural stores for the simple reason that more rural dealers are NADA members and prefer to be headed by a 'country dealer' than a groupie.

The new chairman of NADA, installed at the Orlando convention, is taking charge with a 'redhot' issue-two-tier pricing and a new president/manager, Peter Welch, longtime general manager of the California New Car Dealers Association, who persuaded the state's courts and legislature to relax enforcement of the statutory ban on new same-brand dealers being at least 10 miles apart.

The proximity issue made it difficult to locate new points in desirable locations due to local zoning rules.

Ironically, the Orlando convention is taking place in Florida, another state with problems concerning dealers being too close together.

NADA's new and outgoing chairman both follow the pattern. They are rural dealers, concerned with cost-shifting and two-tier pricing, not fearful of rubbing the factories the wrong way.

The new leader is David Westcott, owner of a Buick-GMC-Suzuki store in Burlington, NC. Westcott replaces William Underriner, a Buick-Honda-Hyundai-Volvo dealer in Billings, MT.

Having chosen Welch to take over the position of NADA president and general manager, Underriner and Westcott take office even as two knotty lawsuits confront him.

They are Florida dealer Norman Braman's suit against two-tier pricing and Tesla's defense of its factory-owned stores in states whose franchise laws forbid it.

Staging the convention in Florida gives new chairman Westcott a flying start in office.