Fellow Dealers and ATAEs,

Auto dealers have a rich history of innovating. Technology changes, and we embrace those changes to serve consumers. The economy rises and falls, and we evolve to keep our businesses strong. And now, as we face challenges from all directions, we will meet those challenges and thrive, so that we can continue to sell and service the vehicles our customers want and need. 

First, an issue that is front and center for many of your businesses: the cyber incident that shut down CDK’s dealers’ systems. I do not need to emphasize the impact this has had on auto retailers across the country.

This is a forceful reminder to the automotive retail industry – including dealers, ATAEs and the vendors we work with – to remain vigilant and proactive in the protection of our data. NADA has numerous resources for strengthening compliance in data protection, including the recently updated NADA Safeguards Driven Guide. 

While dealers work to manage these challenges, one positive development is the FTC’s recent acceptance of NADA’s proposal – made in coordination with CDK – to allow CDK to file a consolidated breach notification with the FTC on behalf of its dealer clients if CDK determines that this new federal notification requirement has been triggered.

While dealers still must contend with state breach notification requirements, as explained in a recent NADA all member e-mail, dealers now have no obligation to file a breach notification with the FTC related to this matter.   

Next, most of you are well-informed about NADA’s strong opposition to the Federal Trade Commission’s (FTC) Vehicle Shopping Rule (VSR), which was finalized in Dec. 2023. 

NADA is actively challenging the onerous VSR on multiple fronts and we have progress to report. NADA commissioned an updated study from the Center for Automotive Research, which found that the final VSR will require at least an additional hour to complete the vehicle purchasing process and generate a net cost to consumers and dealers of $24.1 billion over 10 years. 

Armed with this information, NADA has been able to push a provision in the House Financial Services and General Government appropriations funding bill for Fiscal Year 2025, which would stop the FTC from implementing or enforcing the VSR until Sept. 30, 2025. This bill passed the House Appropriations Committee and is scheduled to be considered on the House floor at the end of July. 

Meanwhile, NADA and the Texas Automobile Dealers Association continue to challenge the rule in the U.S. Court of Appeals for the 5th Circuit. Our arguments here are that the FTC failed to follow its own rules when it issued the rule, the record it assembled does not support the rule’s new mandates, and the FTC failed to adequately consider the rule’s costs and benefits to consumers and dealers. The case will be assigned to a three-judge panel, and oral arguments could begin as soon as September. 

Since the rule’s announcement, it has been unclear whether the VSR applies to commercial truck dealers, as they are not mentioned in the text of the rule. After six months and a congressional inquiry, the FTC stated that the rule does cover commercial truck dealers, despite the FTC’s failure to perform any cost-benefit analysis on commercial truck retailers. This is just one example of how the FTC does not understand the full reach and impact of its own rule. NADA is pursuing additional clarification from the FTC on the matter. 

Finally, I’ll turn to the emissions regulations, which are now coming from two regulatory bodies: the Environmental Protection Agency (EPA), through its final greenhouse gas rule released in March, and the National Highway Traffic Safety Administration (NHSTA), through its final Corporate Average Fuel Economy (CAFE) standards released in June. These rules align along the same percentages for zero-emissions new vehicles that will need to be sold from 2027 through 2032. 

I emphasize sold as the key word. Not developed, not advertised, not even manufactured. Sold. 

A vehicle sold requires a customer, which is how we are approaching these regulations – through the eyes of the consumers we work with every day. NADA’s position is that these rules are far ahead of the market and consumer demand. 

While dealers have supported the move to electrification with billions of dollars in investments and the purchase of EV inventory, the requirements must be achievable. The charging infrastructure is not ready, the current incentives are not sufficient and high EV prices will price out millions of consumers – particularly low-income Americans – from the new car market. 

While near term improvements were made to the proposed greenhouse gas rule due to the efforts of NADA and thousands of our dealer members, NADA urges the administration to track actual EV sales – not projections or estimates – and to make necessary adjustments to its requirements to reflect actual consumer demand.

NADA has supported joint resolutions as part of the Congressional Review Act to disapprove of the final EPA rule and stop it. We will support similar measures disapproving the NHTSA CAFE rule. 

Through my spring residency in Tysons, I have been able to see the NADA staff in action and I can assure you that they, with the support of the NADA directors and members, have been diligently working on each of these priorities – and many more issues. My job is to remind everyone that we will accomplish so much more when we are aligned in our position and message. 

That means we need your voice and your help in promoting and sharing that message. Support the hard work of your ATAEs. Stay in touch with your Members of Congress and Directors. And utilize the many valuable resources included in your NADA membership. 

Remember – we have faced challenges before. NADA is here to help you grow and succeed into the future. 

Many thanks,
Gary Gilchrist
2024 NADA Chairman