By Keith Crain, Crain News Service Automotive News
DETROIT (Jan. 20, 2014) — The U.S. auto industry has just finished what has to be one of the best years in its history.
But a lot of factors must be addressed if we want to see the recovery continue. So this week's National Automobile Dealers Association (NADA) convention is an important opportunity to encourage vehicle manufacturers and car dealers to continue the business practices that have allowed the industry to flourish.
Right now the temptation for many manufacturers to increase production and market share may be too great to resist.
NADA can encourage American vehicle retailers not to get swept up by the notion that a few market share points are readily available to anyone who cranks up production and adds some incentives.
This is a very competitive environment and always will be. Every car company and every dealer wants to sell as many vehicles as possible—sometimes even to the detriment of the profitability of the brand and its dealers.
These days, the relationship between manufacturers and automobile retailers is quite good, with few exceptions. Of course, it is easier to get along when everyone is making money.
The prosperity creates an opportunity for manufacturers to push their retailers to upgrade. The challenge is for manufacturers to know what to ask for and when to ask for it.
"Moderation" would seem to be the watchword at NADA this year. It's a message that NADA leaders can preach from their pulpit. I'm not sure whether the message will be heeded, but I think it's an important role for the association's leaders to play.
There also is an opportunity for NADA to play an important role in Washington, as the federal government seems to be interested in increasing the regulation of both manufacturers and auto dealers.
No one else has the clout in Washington that dealers do. It takes resolve to stand against runaway regulation. It's up to NADA to harness that powerhouse for the good of the industry, for the good of everybody.
There will be plenty of time for socializing and enjoying the hospitality of New Orleans during this important convention.
But it is also a great chance to get the message across that this is no time for either the industry or regulators to kill the golden goose.
NADA has never had a more important set of tasks before it. The association has never been more important.
This opinion column appeared on autonews.com, the website of Automotive News, a Detroit-based sister publication of Tire Business. Keith Crain is editor-in-chief of Automotive News and chairman of Crain Communications Inc., TB's parent company.
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