During his tenure as 2019 chairman of the National Automobile Dealers Association, Charlie Gilchrist brought conversations about vehicle affordability, the technician shortage and dealer involvement in NADA to the forefront. He counts pushing those three issues among his greatest accomplishments while at the helm.
Gilchrist sees a healthy 2020 for dealers, as long as they tap into multiple revenue streams and strengthen relationships with customers and automakers.
Gilchrist, 64, is president of Gilchrist Automotive, which sells 10 brands at nine dealerships in the Dallas-Fort Worth area. He spoke with Staff Reporter Hannah Lutz about auto sales, affordability concerns, the tariff threat and the need for technicians at dealerships. Here are edited excerpts.
Q: What was your biggest accomplishment as chairman?
A: When I started last January, I wanted dealers to not just be a member of NADA, but to be NADA. That means getting involved, joining an NADA 20 Group or sending one of your key people to the NADA Academy for training, meeting with your elected officials, whether it's city or state or even federal, and getting involved with your OEMs and developing a relationship.
Did more dealers participate in NADA initiatives in 2019?
Our 20 Group membership — we had a record-setting year. And we actually had 540 dealer employees graduate from NADA Academy.
When an issue comes up, if we have one more person that is involved and can make a difference, whether it's with the OEM or regulators or federal or state officials, then we've succeeded. And I think we have made progress in that area.
How has NADA worked with automakers on vehicle affordability?
The affordability issue is an ongoing issue. As we put more technology, safety, autonomous features on these cars, it absolutely drives the price up.
We had over 60 meetings with the OEMs last year, and we discussed affordability of vehicles for our consumers. Our average transaction price has risen. Fortunately for us, interest rates have kind of fallen a little bit or at least stabilized. But as we talked to the OEMs, we stress putting technology on the cars that the customers want. And we have to keep entry-level vehicles in our portfolio. If we can achieve those two things, we're in good shape.
We also have to work with our regulators and encourage them to make sure that the fuel economy standards can be achieved affordably to our customers. We can't set standards that will price our customers out of the market.
How has NADA worked with dealers to ensure that their new-vehicle departments can be sustainable long term?
We've made some progress with a couple OEMs. They're taking a look at some of the complex incentives, and I think they're rolling some of those back.
We have to continue to talk to the OEMs about that and stress how important it is that a dealer can profitably sell a vehicle so we have a long-term, sustainable business model.
Are stair-step incentive programs still an issue? If so, what progress has been made?
Stair-step incentives, overly complex incentives, incentives that aren't available to every customer, every dealer or even every vehicle in the vehicle line — they destroy customer confidence in dealers and destroy our profitability. It's something that we work on all the time. We are making some progress.
There are a couple of OEMs that are taking a hard look at that and trying to simplify it. As our business stabilizes or even slightly declines, I think each OEM wants to get a little bit more of the business, and some think that stair-steps are the way to go. But it's actually damaging to the brand, and we're stressing that. I think the OEMs understand that a little bit more.
In January 2019, NADA launched a technician hiring initiative. What were the results?
Our website is up and running. We have had over 50,000 page views. That website tells prospective technicians where they can find training centers, where they can find scholarships. It provides some examples of techs and their careers and lifestyles.
We have OEMs talking about it, tech schools talking about it. Even at our auto shows, we're now stressing tech competitions. We have really opened up everybody's eyes to this issue. It is something so critical to us because our future really depends on our ability to recruit and train and then keep these techs long term. Based on our numbers, we're going to be short almost 40,000 techs each year. We have to have the ability to bring techs into our fold, get them trained and get them to the dealership. We're gaining a lot of ground there, but again, it's a work in progress.
What were your top legislative initiatives in 2019?
Tariffs are right at the top. Two years ago, we weren't even talking about tariffs. Now that's the single thing you hear all the time. With the affordability issue, tariffs are a huge problem for us. We want to make sure that [the Trump administration] understood the data, the complexity of what tariffs mean to the automobile business.
We talked to the Department of Commerce, the Department of Transportation, even the White House, in making sure they understood how much damage could be done not only to dealers but to the economy. I think we've done a good job there. We came out in support of the [United States-Mexico-Canada Agreement]. And we stood to potentially lose 117,000 dealership jobs if tariffs were levied across the board. There is a lot more work to be done.
We have to get the other trade negotiations completed so we can have affordable vehicles for our consumers.