Q&A talks about the state of CT's retail auto industry with James Fleming, president of the CT Automotive Retailers Association.
Q: According to some projections, auto sales this year will be flat or below last year's record numbers. What are you seeing in Connecticut? How will sales be this year?
A: Connecticut's auto sales this year are very good and will likely push Connecticut's new car sales well into the $11-billion range surpassing the $11.4 billion in sales recorded for 2015. Franchised new car dealers accounted for 20 percent of all retail sales in our state in 2015, which is the last full year for which I have figures from the National Auto Dealers Association.
Q: How does an event like the Connecticut International Auto show being held Nov. 18 to Nov. 20 at the Connecticut Convention Center in Hartford help sales? Do attendees turn into customers? Are auto shows still relevant?
A: This year, 27 car manufacturers will showcase their latest models throughout the floor of the Convention Center. In addition, Harley-Davidson, Indian, Victory, and BMW motorcycles will be on display for the first time. Exotic cars and antique cars will also be on display. A variety of cars will be available for test drives. In addition, the Auto Show is excited to announce there will be an opportunity to test drive electric cars on Friday, Nov. 18 from 10 a.m. to 2 p.m. Plug in America and the Connecticut Department of Energy and Environmental Protection are partnering with the show to offer this event.
Auto shows are very relevant. National studies by the Association of Auto Shows for North America (ASNA) confirm that attendees at auto shows are directly influenced by the show when purchasing a car: 64 percent of attendees say they are in the market to buy a car or truck in the 12 months after the show (up from 57 percent in 2014).
Fifty-six percent of attendees who purchased new vehicles post show said the show influenced their decision (from 51 percent two years ago). Over one in four auto-show attendees who planned to purchase a car had their mind made up which brand to purchase when leaving the show.
Dealers in Connecticut support auto shows because it gives consumers the opportunity to see hundreds of vehicles at one time and in one place, and then compare and contrast the vehicles without any sales pressure. The nice thing about our auto show is there is no selling allowed on the floor, so it is an easy and relaxed place to see lots of great vehicles. We do believe that auto shows are still very relevant.
Q: How goes the battle against Tesla? As its sales get stronger, will more be done to allow the electric-vehicle manufacturer to sell directly to the public? Does it hurt the retail market when people have to go out of state to buy Teslas?
A: Tesla could sell with local dealers under existing laws in Connecticut. However, they choose not to. Dealers have invested millions in a franchise system and the physical dealership structures that go in that system through a deal with manufacturers and regulators. This system protects the consumers if something goes wrong with the car, fosters local competition amongst dealers, and creates a balanced system between manufacturers and local dealerships.
Connecticut residents are able to buy the newest vehicles including zero-emission vehicles and hybrids from dealers across Connecticut, at all price ranges, and that are backed up by the best warranties. The Chevrolet Bolt, Nissan Leaf, fuel cell Toyota Mirai, Honda Fit, Chevy Volt, Mercedes B-Class, Ford Fusion, and the BMW i3 are currently in dealerships or will be shortly. The dealerships have the trained mechanics to work on these cars.
Q: Speaking of electric vehicles (EVs), how is the market doing in Connecticut? The state has invested heavily through the rebate program, known as CHEAPR, to offer rebates on electric-vehicle purchases. Would there be a market for EVs without the federal and state subsidies?
A: Dealers in Connecticut see the evolution to EVs coming and want to be part of it. They stepped up and provided free EV chargers for their customers to counter range anxiety, which is a real concern for Connecticut consumers and drivers. Even with highly cost-effective home charging, we need a safety net of chargers that might be developed and operated by the electric distribution operators with prices set by the state to assure viability and cost effectiveness for consumers. Connecticut dealers make their charging stations available to the general public and do so at no cost.
Dealerships are working hard to sell cars and educate consumers, but it is still a market in need of significant development. Only a small fraction of cars sold and driven are EVs and the dealers need help to effectuate this change until the technology gets cost competitive.
Connecticut dealers recognize their state is a low-emissions state and are committed to addressing climate change; they want a bright and clean future for Connecticut. Even though there is no profit in zero-emission vehicles and there is a limited market and awareness, dealers recognize they are a key in helping Connecticut's clean-energy policies and therefore partnered to build CHEAPR and EV Connecticut.