Electric vehicles, OEM/Dealer relations and economic outlook tackled during online CADA Summit.
Because of the on-going COVID-19 virus and limits placed on attendance for indoor events, the Canadian Automobile Dealers Association (CADA) went online again with its 2022 CADA Summit, which took place on Feb. 16, 2022.
Billed as Canada’s Automotive Summit, and sponsored exclusively by TD Auto Finance, the event happened the same week Prime Minister Justin Trudeau invoked the Emergency Measures Act for the first time in Canadian industry to stop truckers and protesters from blocking traffic at Canadian/U.S. borders. The protest hamstrung Canada’s automotive sector by preventing goods from being shipped.
CADA Chairman Peter Heppner opened the Summit with an overview of the trying times caused by the pandemic over the past two years and how it has impacted every part of the industry.
He said CADA is committed to advocating for its more than 3,200 dealer members, and that the national and provincial dealership associations have truly delivered by ensuring dealers were classified as “essential services” and included in government and economic support programs.
He outlined the 2022 Summit would focus on strategic changes happening in the industry, such as the transition to electrification and the evolving business models that are being implemented in different jurisdictions around the world.
“We hope by the end of the day you will come away with perspective, ideas, thoughts and tools that will assist you in navigating in turbulent times,” he said. “As you do, rest assured you are not alone. You can count on the CADA and your provincial association.”
The opening session, titled Quick Takes, had a panel discussion on various issues and was moderated by Jason Stein, host of the SiriusXM radio show Cars & Culture. The panel included Don Romano, President/CEO, Hyundai Auto Canada Corp., Larry Hutchinson, President/CEO, Toyota Canada Inc., Don Durst, Senior Vice President, Subaru Canada; Vito Palladino, President, Audi Canada; and Howard Thompson, VP Sales and Distribution, TD Auto Finance.
Durst’s comments on the inventory problem generally spoke for all the OEMs.
“We’re going to be managing it throughout all of 2022 and there will be lingering effects in 2023, but overall every month is getting better,” he said.
When asked by Stein where the industry is headed, Romano joked: “Physically or mentally? Things are challenging, but we’ve seen challenges before and we’ve always been able to address them and we rise to the occasion.”
On the subject of electrification, Palladino said: “As far as the transition, it’s extremely important that we need to ensure we are carrying the conversation to our customers and our dealers are in the centre of that journey…There’s a lot of excitement and it’s more of a learning environment.”
Huw Williams, President, Impact Public Affairs Corp., interviewed TD Bank Group Chief Economist & Senior Vice-President Beata Caranci, who said the auto sector is sensitive to interest rates. She said that historically when there’s been a 1 per cent rise in interest rates over a five-year term it has equated to a 2.5 per cent decline in sales. But she added because of pent-up consumer demand, it may be lower this time.
She said the federal government’s goal to have 100 per cent zero emission vehicle sales by 2035 is “a bit on the ambitious side.” She said getting to 50-60 per cent by 2030 would still be a “significant shift” in demand.
Canadian auto dealer publisher Niel Hiscox followed that up with a panel discussion on how electrification is causing a seismic shift in the auto industry. The panel included Brian Kingston, President & CEO, Canadian Vehicle Manufacturers’ Association; David Adams, President, Global Automakers of Canada; Flavio Volpe, President, Automotive Parts Manufacturers’ Association; Jerry Dias, National President, Unifor; and CADA President & CEO Tim Reuss.
Looking at the global ZEV targets, Adams said: “We’ve got a long way to go in a very short period of time to ramp up to that number…We need to look at a comprehensive suite of tools to ensure we are able to reduce emissions from transportation and frankly getting some of the older vehicles off the road.”
Reuss said dealers are excited about the opportunities to retail electric vehicles, but the conversion can’t be accomplished with “a few boutique brand lounges and a couple of urban centres.”
He stressed the CADA membership must collectively provide consumers with information and knowledge about EVs and provide them with comfort that they have a reliable and extensive network with qualified service people.
He said the primary question dealers are getting from consumers considering adopting an EV is “where in hell do I charge them?” He added politicians in all levels of government generally don’t understand this.
“I would like to challenge the politicians making the proclamation about zero emission vehicle adoption to actually use an EV themselves every day,” he said. “By that I do not mean that they have their drivers charge them up themselves every day—most Canadians don’t have that luxury—and use that EV to drive around the city suburbs or road areas where your constituents live and have a look yourselves for the different circumstances people face.”
He said what is needed is a concerted effort between the federal, provincial and municipal authorities that have control over such things as building codes.
“It’s not sufficient to make a proclamation and then wish upon a star,” said Reuss. “Hard and continuous work is required.”
Reuss moderated a dealer panel about embracing electrification with Hugo Jeanson, Co-owner/Manager of Bourgeois Chevrolet, Rawdon, Quebec; Bill Harbottle, President, Jim Pattison Auto Group, B.C.; and Amin Tejani, Vice-President Operations, Weins Auto Group, Ontario. Jeanson has been one of the most active dealers in Canada in terms of embracing electrification, beginning about 10 years ago and selling about 400-500 every year.
“What we did is keep everything simple,” he said. “A lot of dealerships see a lot of barriers, but we just went in by simply trying the electric vehicles, falling in love (with them) and obviously trying to get the customer into the electric vehicle.”
Harbottle said the B.C. Government has been very focused on its EV programs with various rebates that have “fueled the EV business considerably” and made them more affordable to the consumer.
Tejani said the move toward electrification will be “the biggest fundamental change” for dealers. It has been impacted in Ontario since the newly-elected Conservative Government ended provincial rebates in 2018.
Tejani said there is a need to get “better and clearer” dialogue from the OEMs to dealerships retailing their brands.
“They’re trying their best, but there’s a lot of information and across the OEMs it’s different,” he said. “One of the biggest challenges from (the) millions that we have to invest is what is the future going to look like? Right now we’re kind of in that crawl-walk-run stage. It’s going to happen sooner than we think.”
Reuss had some strong words of encouragement for CADA members in a panel discussion about the OEM/Dealer relationship that featured leaders from dealer associations in Europe, Australia and Brazil. He said CADA has developed some guiding principles over the last few months. “CADA opposes any unilateral action from OEMs that ignore the interest of dealers and will actively support its members in protecting their rights,” he said.
The CADA Summit also featured an update on the buy/sell marketplace for dealerships from Erin Kerrigan, from Kerrigan Advisors, and a closing question and answer session featuring Jason Stein interviewing Mark Reuss, President of General Motors for his popular SiriusXM radio program Cars and Culture with Jason Stein. The episode made its debut at the CADA Summit and was later replayed on SiriusXM and on a host of podcast platforms.
The Summit also announced the winners of the 2021 Dealer Satisfaction Awards and presented a video honouring the 2021 CADA Laureate Award winners, Mike Stollery, AutoIQ Dealership Group; Michael Rawluk, AutoCanada Inc; and Michelle Melendy, Western Kia, Corner Brook, Newfoundland.
