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Editor's note: This is Part I of a special preview, available only to CMG Premium subscribers, of Auto Remarketing's "2022 Used Car Kickoff" issue. This two-part piece focuses on the National Automobile Dealers Assocation, National Auto Auction Association, American International Automobile Dealers Association and International Automotive Remarketers Alliance.

The issue will also feature the National Automotive Finance Associaton. Receivables Management Association International, National Independent Auto Dealers Association and the American Financial Services Association.

During an episode of the Auto Remarketing Podcast this fall, National Automobile Dealers Association president and chief executive officer Mike Stanton recalled a funny story told by a dealer friend.

In a head-scratching moment, the dealer saw a Facebook post from a customer thanking him for his service and congratulating him on his retirement.

“He's not out of business,” Stanton said. “He was just out of cars.”

Many dealers, auto auctions and vehicle consignors can probably relate.

Such vehicle supply shortages are top-of-mind for industry trade organizations like NADA, where “inventory is No. 1” on the “laundry list” of needs from its dealer members, Stanton said.

National Auto Auction Association CEO Tricia Heon finds car supply to be among the top priorities among NAAA members, as well.

“If I hear anything from our members, it’s, ‘I need cars and i need talented employees,’” Heon said in a December interview. “We’ll be working hard on that in 2022.”

Tackling vehicle supply is just one of several items on the to-do lists of NADA, NAAA, the American International Automobile Dealers Association and the International Automotive Remarketers Alliance.

Auto Remarketing connected with leaders from these organizations to get a sense of what’s top-of-mind for their respective memberships.

Chip shortage impact drives importance of used cars

The microchip shortage and production issues have led to a cascade of impacts to the auto industry, beginning with a new-car scarcity, which trickles down into a tightening of used-car supply and dramatic rise in prices.

Used cars have traditionally depreciated in value, Stanton said, but, “now people are having to pay what they never thought. And they're worried. They're worried that there's going to be some kind of a bubble. It just doesn't seem right.”

However, based on the analysis from NADA’s chief economist and other industry experts, “there is no bubble,” Stanton said.

“This is kind of where it's at right now, and dealers have found creative ways to acquire inventory,” Stanton said. “Some dealers that had kind of been on the fence (about the used-car business) and been more new-car focused have sort of been gently forced into this business and I think that that's paying off for them, without a doubt.”

AIADA chairman-elect John Connelly echoed a similar sentiment.

“If you're not in used cars right now and you're a new-car franchised dealer, you're in trouble,” he said. “You need to be able to sell used cars.”

As such, AIADA works with sponsors/vendors to help educate dealers on the best routes to finding used-car inventory.

That’s especially important during times like these when new-car inventory is uncharacteristically short.

Connelly points out that, “when you only have a handful of cars on the lot, with the vast majority on order, you need to have good used cars on your lot.”

Finding them, however, can be a problem.

“It’s become a very challenge for our dealer partners, NIADA, people like that, to source their vehicles,” said Tony Long, executive director at IARA, which represents the vehicle consignors. “They're looking to us to see how can they better source the inventory that they need to keep the supply line running.”

He added: “We know that the supply and demand will catch up, once we get this chip shortage solved. It's going to be a different market than what we've seen the last two years eventually, but for the short term, we're going to have to learn how to deal with this.”

That means dealing with acquiring used cars at a premium.

Heon, the NAAA CEO, anticipates continued high prices for used cars.

“The used-vehicle prices are going to be remaining high. We're going to see the decreased volume from the off-lease vehicles,” she said. “I think it's really important that our auctions continue to do what they do best. And that is focus on the needs of the customer.”

Workforce concerns remain

And whether you’re an auto auction, consignor or dealer, meeting those needs of the customer requires a strong team, so finding enough employees has been a priority for the auto industry.

In recent years, the auto industry at large has been challenged by technician shortages.

“But now just keeping employees overall has been a concern for dealerships,”  NADA’s Stanton said.

It’s a concern for auto auctions, too.

As such, the remarketing industry can expect a lot this year from the NAAA Workforce Initiative, says Heon.

“We want to help those interested in pursuing careers in the auto auction industry — we want to help them find jobs — but also really assist our members in honing their skills in recruiting skilled, talented employees,” she said.

NAAA is launching a live job board on its website and providing additional resources like webinars. In fact, the association hosted a webinar in December on “How to Attract and Retain Top Talent, led by WrenchWay president Jay Goninen. A recording of the webinar is available on the association’s website.

In essence, NAAA is aiming to be a “clearinghouse” for auctions to find information on recruitment and training. 

Along similar lines, IARA has put a major emphasis on not just driving membership, but getting members more involved in the alliance.

That is accomplished through increased communication, which IARA has prioritized, and when a new member is onboarded, “we really ask them to try and give us some kind of area of interest that might be conjoined with our committee meetings and say, 'What kind of committee would you be interested in? What are the things that are important to you?'” said IARA president Jeff Bescher.

“And we get them involved in that part of it, and that really is the meat of our organization — what is happening within those committees. And the information that they can both give as a member as well as that we can report out to everybody else,” he said.

One of the important topics that has come out of such meetings has been the emergence of electric vehicles, which have an impact far beyond the new-car side of the business

For more on that, see Part II of this feature.