NADA 2013: Auto Industry in Full Recovery Mode
Published February 20, 2013 | Updated March 27, 2019
We attend the NADA (National Auto Dealers Association) Convention and Expo every year. This massive NADA convention is where over 20,000 car dealers and allied industry people flock together to network and sell their wares to the dealers. This convention can be a good barometer of the overall car industry. So how do we know the industry is back on the upswing, and how does this benefit you?
The NADA convention is the mother of all gatherings and is attended by every possible type of allied industry related to car buying, from auto lenders, to car insurers, to extended car warranty companies, car makers, companies that sell car washes, car dealership lot lighting, and monogram products. There's also, marketing services, customer management software, digital advertising agencies, social media management companies, and so much more.
You could stock your brand-new dealership by attending this show. We usually see all the big names like Cars.com, AutoTrader, eBay Motors, GM, Ford, Chrysler, Toyota and more. It's a large collection of a who's who of the car industry.
Starting in 2008 when the worldwide financial crisis began, we noticed probably before many others that something was wrong in the auto business. The online lenders were dropping like flies, as buyers defaulted in record numbers on mortgages and car loans. This proved to be the first litmus test and a warning sign of the trouble that was about to beset the financial world markets and put the skids on lending for a few years.
Buyers could not get a car loan, and lenders could not lend money because all the investment dollars to the banks had stopped flowing. Money stopped moving across the financial markets, people were finding it almost impossible to get a car loan. There were many high-profile financial institution crashes and burns such as Washington Mutual, the nation's largest bank, with many companies going out of business, or simply getting out of online auto financing and direct lending.
Companies like Auto Credit Finders, First Again, E-Loan, and LendingTree came to a halt laying off hundreds of employees and shuttering affiliate programs. Some finance sites were taken over later on by finance lead generators. GM, Ford, and Chrysler all stopped writing vehicle leases; the whole industry was trapped in a standstill.
In 2009 we saw the NADA show starting to dwindle. Gone were many of the finance companies of old. Other lenders were merging or changing their names to hide their shady past, and the paper prime lending market screeched to a halt, because the money which investors pour into lenders to lend out in the form of auto loans dried up, seizing the worldwide markets.
As we walked the barren floor of the NADA convention, we noticed a remarkably much lower attendance at NADA, the crowds were thin, and there were fewer booths and some no-shows at reserved booths. We joked that you could roll a bowling ball down the aisle and not hit anybody.
Then by 2010 in Orlando, we were shocked to see the show was almost reduced by half the normal size. I feared that NADA was about to go the way of COMDEX, the once-dominant computer shows from the 1980's that fizzled out in later years. Attendance at NADA in 2010 dropped to maybe 15,000, but I suspect it was even less, as that was just official registrations. Many people who already had purchased their NADA ticket likely did not attend NADA and it was noticeable.
The aisles at the expo were empty. GM, who received a lot of bad press for fiscal irresponsibility and spending tens of thousands of dollars on sports executive suites was a no show in 2010. Their booths were empty. That's how bad it was folks. There were only 32 aisles at NADAs 2010 Expo, as opposed to well over 40 aisles at previous conventions, but many booths were abandoned facades of no shows.Many of these empty no show booths were stuffed with landscaping trees and classic car collections so that no one would notice the checkerboard pattern across the convention center of empty booths from companies that bailed on NADA. We had a hard time finding lenders there because many had faltered. We found only 8 possible finance-related companies, and not all of them were lenders, most were just sales lead collectors posing as lenders.
Fast forward to 2013, the auto industry had adapted and improved inventory management, the car manufacturers had increased profitability mostly by laying off employees and making their processes more efficient and cost-effective. Most automotive industry brands enjoyed 2012 sales that were the best since 2008.
Fast forward to 2013 back in Orlando, we saw NADA Expo had 45 aisles, which is a 40% increase over 2010, and there were no facade booths that we could see. It was a much more jovial atmosphere, and parties were in full swing.
The normally-long weekend show dropped Monday from the calendar, so attendees have one less night of expenses which they would have to spend at their hotels. The NADA convention was once again much more crowded and we heard there were 21,000 attendees this time. This time we counted 17 finance companies, double what we saw in 2010.
What does this mean for us car buyers?
Certainly, we can see the money is flowing once again, deals are flowing once again, dealers are getting more profitable as they save money in numerous areas, including the super bright and energy efficient LED lot lighting for sale that we saw everywhere at the NADA show.
Lenders are testing the murky car loan waters again, and since 2013, we have seen a marked increase in car dealerships spending millions to completely redesign newer state of the art modern fancy dealership showrooms.
Money has been poured into finance companies and mergers and new brand names have evolved. Interest rates are nice and low and with lending money flowing once more. This means it is easier for us to get car loans, and at more favorable terms such as lower APR. However, the pendulum is now swinging the other way, and lenders have greatly tightened up their requirements making it hard for you to get approved for a car loan, compared to many years past.
With new car sales rising back to their 2008 levels, dealers can no longer cry on your shoulder how bad things are, and you once again have alternatives to financing your car new car purchase, so use this to your advantage when negotiating. Surely in 2014 through 2016, we saw car manufacturers breaking sales records, year over year, proving the car market is back.
About The Author: Jeff Ostroff
A lifelong consumer advocate with over 20 years of unparalleled expertise, Jeff is the Founder, CEO and Editor-In-Chief of CarBuyingTips.com. As chief consumer advocate, he oversees a team of experts who cover all aspects of buying and selling new and used cars including leasing and financing.
For decades, Jeff has been the recognized authority on vehicle purchasing, sought out often by the media for his decades of experience and commentary, for live call-in business radio talk shows and is cited often by the press for his expertise in savvy car shopping methods and preventing consumer scams and online fraud. Jeff has been quoted in: CNN, MSNBC, Forbes, New York Times, Consumer Reports, Wall Street Journal and many more.