Earlier this year, the National Automobile Dealers Association (NADA) released its annual NADA Data 2014 report on dealership trends and financial performance. Sales at new car dealerships reached 16.43 million units in 2014.
Were there any surprises in this year's report?
Not really. The most surprising thing for me was that we've got this rising car market with better than a 9 percent compounded annual growth rate since 2010, but profitability is still flat. The increase in competition has really contributed to that.
How has the role of service and parts changed at dealerships?
Dealers really need to look at service and parts as more than just a cost absorption center. It's a profit center. Service customers are future new vehicle purchasers. It's important to look at them holistically and say, “This is a part of the customer relationship management process.”
You changed the data collection methodology this year. How does that affect comparisons with previous year's information?
We re-benchmarked all the data and readjusted the sample for demographic changes, revenue sales size and brand changes. There were a lot of background methodology changes. If you compare the information to last year's data, it looks like there were big swings in some categories, but almost all of those were due to the different methodology.
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