By Alysha Webb, Editor and Publisher
I am at the Los Angeles Auto Show this week and both our stories stem from talks I had with people linked to the 2014 NADA/J.D. Power Western Automotive Conference, which took place the day before press day.
The first looks at NADA’s forecast for the economy as a whole and the car business in particular, and its implications for the buy sell environment. NADA chief economist Steve Szakaly is full-on optimistic. Demand for cars will remain strong despite a possible small interest rate rise, he figures, and dealership prices will stay high. There will be plenty of buyers, some from non-traditional sectors.
John Humphrey, head of global automotive at J.D. Power, sees a slightly different picture. He sees economic growth as “tepid.” Combined with a potential interest rate increase, “I think dealers on the edge are going to be in trouble,” he told me.
J.D. Power forecasts 70 new, all-new, or re-designed model launches in 2015. That is good news for dealers who are doing well, but a lot to handle for those who are wobbly. Humphrey figures now is a good time to sell for dealers that don’t think they can handle the onslaught.
I also chatted with a Kia Motors America executive who is on the board that reviews potential dealership buyers. Kia is seeing a lot of buy sell activity in its dealership body, and the buyers are other dealers, he said. We talked about the qualities Kia looks for in a dealership owner. I was struck by his repeated emphasis on issues related to employee retention.
Also check out this week’s Transaction News for the latest deals.
Enjoy!