Johannesburg, 20 July 2023 – The National Automobile Dealers’ Association (NADA), with nearly 1500 members representing the majority of franchised motor dealers in South Africa, continues to champion industry discussions and advocate for the creation of a better environment for all stakeholders. Through active participation in shaping proposed legislation, engaging in dialogues with key industry players including naamsa | The Automotive Business Council (naamsa) and collaborating with finance houses, NADA strives to address the pressing issues affecting the automotive sector.

 

“Our purpose is to create a better environment for all role players in the automotive industry. By engaging in discussions, advocating for our members, and actively collaborating with key stakeholders, we aim to address the challenges that hinder growth and sustainability,” said Ryan Seele, member of the NADA National Executive Committee (NEC) speaking at the NADA Dealer Satisfaction Awards (DSI) event last week.

“Over the past 12 months, the industry has encountered a myriad of challenges, hindering its recovery from supply chain disruptions caused by the COVID-19 pandemic. The relentless rise in interest rates has not only slowed down the market but has also added significant costs to trading activities.

 “Additionally, there has been a correction in used car pricing, impacting tradability. Amidst these difficulties, political uncertainty further complicates the landscape. Against this backdrop, NADA acknowledges the significance of the outcomes presented today,” he added.

 The NADA (DSI) awards serve as an essential indicator of not only dealer satisfaction but also as a yardstick for investment. “While a score alone cannot ensure sustainability, it reflects the willingness to work together. Those partners who actively engage with their councils to achieve mutually beneficial outcomes will witness increased dealer investment and, consequently, the success of both the brand and its network,” added Seele.

Seele went on to say that making investment decisions is becoming increasingly challenging as dealers strive to strike a balance between returns and the ever-growing statutory requirements. Setting up a franchise dealership from scratch costs approximately R25 million, without factoring in the acquisition of premises. To embark on such an endeavour, a long-term view with sustainable returns is necessary. However, it often takes years for new dealerships to break even, discouraging potential investors. Consequently, a growing trend has emerged, with dealerships being passed down within families instead of being sold to new investors.

A refreshing change in perspective is evident as industry professionals recognise that success does not solely hinge on selling new cars from pristine showrooms. While electronic interventions, such as digitised screens and configurators, are gaining traction, those who invest in fostering genuine human connections alongside these technological advancements position themselves for long-term success.

 “We believe that investing in human connections alongside technological advancements is crucial for long-term success in the automotive industry. People buy from people, and nurturing genuine relationships will undoubtedly contribute to a thriving dealership,” continued Seele.

 The industry continues to grapple with attracting the right talent, making it imperative for NADA and naamsa to focus on this challenge, said Seele. While various training programmes, academies and apprenticeships are available, the key obstacle lies in recruiting individuals who possess the necessary technical skills, sales acumen, and administrative expertise. The ability to understand the technical aspects of the industry while effectively communicating this knowledge remains a paramount concern.

The transformative power of dealerships extends far beyond salesmanship. Today’s dealerships are hubs of cutting-edge technology, offering diverse career paths from sales to management, finance, and technical workshop skills. This challenge aims to reshape perceptions among young individuals and attract them to an industry with tremendous growth and earning potential. Much like a self-contained company, it provides the ideal environment for professionals to explore their potential across different departments.

Seele added that attracting future leaders into the industry however, seems an even bigger challenge, with successful leaders seeming to leave the industry unless they are personally invested.

“We need to come up with an industry master plan to address this. By focusing on attracting and developing the right people, we can ensure a sustainable and prosperous future.”

For years, the NADA Dealer Satisfaction Index awards have served as a valuable indicator of dealer satisfaction and a measure of investment potential.

 “We encourage dealers to objectively assess their performance, collaborate with their channel partners, and strive for continuous improvement,” concluded Seele.

 

ENDS

 

ABOUT NADA

The National Automobile Dealers’ Association (NADA) is a professional body representing the interests of business persons who own, operate and manage new passenger and commercial vehicle franchise motor dealerships and qualifying used vehicle only outlets in South Africa. There are currently 1,380 NADA members. NADA members make up 85% of all new franchise dealerships in South Africa. South Africa currently has approximately 1,600 new franchised automotive dealerships comprising approximately R50-billion worth of investment. It employs 58,000 personnel directly and a further 25,000 indirectly.

NADA is a proud constituent association of the Retail Motor Industry Organisation (RMI) and has affiliations with a number of similar organisations world-wide. NADA is committed to enhancing the image of the retail motor business; facilitating the interface between dealers and the motor manufacturers and importers who supply them; building rewarding relationships between dealers and their customers; and bringing relevant issues facing its members to the attention of government at all levels.

As a major role player in the automotive industry, NADA and its members are strong supporters of complying with the Retail Motor Industry Organisation and the Consumer Protection Act’s Codes of Conduct for the Automotive Industry. In all forums, NADA is the fully representative and respected voice of the retail motor industry in South Africa.

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Meropa Communications

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Ilana Salant – Meropa Communications

E-mail: ilanas@meropa.co.za