The first quarter of 2024 has already seen historic regulations and market trends in the automotive industry. Hosted by NADA, J.D. Power and the New York International Auto Show, the 2024 Automotive Forum New York addressed these changes and concerns, including the push towards electrification, economic conditions, forecasts and OEM updates.

“I urge us all to avoid getting hung up on a lot of the ‘noise’ that’s out there about the auto retail industry,” says Rob Cochran, president and CEO of #1 Cochran, Western Pennsylvania's largest automotive retailer. “Let’s try to direct our focus to what’s really important, and that’s the customer, our relationships with our customers and the overall customer experience.”

The Electricity in the Room

After the EPA’s recent announcement of its vehicle emissions rule setting emissions standards for model years 2027 through 2032, it is no surprise that AFNY conversations focused on vehicle electrification.

NADA Chairman Gary Gilchrist shared the perspective of the nation’s franchised new car dealers, who have been experiencing firsthand decreasing consumer demand for EVs.

"NADA believes that the EPA’s final rule remains too aggressive, and far ahead of consumer demand,” Gilchrist says. “Our experience working with customers, every day, makes us highly skeptical that they will adopt EVs anywhere near the levels required now."

According to J.D. Power’s data, not only is consumer demand in EVs slowing, but consumer interest is also softening. New vehicle shoppers “very likely” to consider purchasing an EV has declined in the past five months, while those “very unlikely” to consider an EV has increased.

Dealers on the Front Line

The manufacturer executives echoed the same theme throughout the day: their dealer networks are critical to the success of their business and the happiness of their customers.

In their words: 

• “We can’t move forward without dealers. We need them.” – Elena Ford, chief dealer engagement officer at Ford Motor Company
• “If we continue to listen to our dealers, we’ll have the right answer.” – Jack Hollis, executive vice president of sales at Toyota Motor North America
• “Dealers are a competitive advantage.” – Marissa West, president of General Motors North America

John Casesa, Guggenheim Partners senior managing director, predicted more manufacturers engaging a franchised retail network.

“When I see VinFast, probably BYD using the dealer network, it makes all the sense in the world,” he says. “It is a tremendous amount of distribution, relationships and expertise overnight.”

The Road Ahead

The point of comparison for the automotive market remains the pre-COVID years. Asbury Automotive Group CEO David Hult says that the industry continues to benchmark against 2019, but the cost to sell a vehicle is much more expensive now.

When inventory was low due to supply constraints, dealers became adept at fixed operations. Now, as inventory returns, industry leaders think that strength will remain. The concern is finding the right match of inventory to consumer demand as interest rates and inflation hurt vehicle affordability.

“We have a strong labor market and households are in a good position to spend,” says Patrick Manzi, NADA chief economist. “I expect consumer spending is going to continue to pick up and grow this year.”

Thomas King, chief product officer of J.D. Power, agrees and also projects steady sales, increased incentive spending and lower transaction prices for the remainder of 2024.

Save the date for the 2025 Automotive Forum New York: April 15 at Javits Center.