NJ CAR and its dealer members are used to adapting to unexpected challenges, but, as always, we remain focused on our core mission of advocacy, education, training, and member service. As I wrap up my tenure as Chairwoman, I’d like to look back at some of the issues that have shaped the automotive retail business this year and take a peek at some of the things Incoming Chairman Michael DiFeo will have on his plate.
The COVID pandemic has lasted far longer than any of us expected. Closures and shutdowns at the beginning of the pandemic eventually led to mandated precautions and sanitization requirements when the Governor finally allowed New Jersey dealerships to reopen for in-person sales in May 2020. Soon after, the Coalition launched the NJ CAR Clean program, designed to keep dealership employees and customers safe and demonstrate to public policymakers that we could operate without risk to public health. The ongoing vaccination of the public continues, but the ongoing threat of a resurgent, mutated version of the virus is a real possibility. NJ CAR Clean is the one thing dealers can do to push back against another possible shutdown.
While vehicle inventories shrunk due to pandemic-related shutdowns, microchip shortages and other unforeseen challenges, New Jersey rolled out a generous cash-on-the-hood incentive for qualified electric vehicles. In July, the Board of Public Utilities (BPU) launched Phase 2 of the Charge Up New Jersey EV incentive program. Ten weeks later, the program abruptly stopped, again, as consumers grabbed another $23 million of incentive money. The State appears ready to throw another $20 million into the program. NJ CAR is encouraging the BPU to work with stakeholders to analyze where the first $60 million of incentive money has gone during the first two years of the program to identify the most efficient way to modify the program and make it successful for the long-term. Anyone with even a little business experience knows it makes no sense to offer incentives when demand is high and supply is low. Incentives drive the market when supply is high and demand begins to wane.
Direct Factory Sales
EV manufacturers Tesla, Rivian, Lucid and others continue to push the direct-sales model, but New Jersey franchise laws stand as a legal obstacle for good reason. I believe automakers will eventually see their franchised dealers as a strategic advantage over the direct sales model. In time, consumers and public policymakers will realize that the franchise model best serves the public interest. We can’t stop fighting to defend the franchise system, but we can’t rely on the State House or the Court House. We must win in the marketplace. Customers who come looking for an EV have very different needs than your typical customer, which is why NJ CAR partnered with Plug-In America to create the PlugStar program. This program will train and certify our employees to ensure EV customers get the answers they need.
NJ CAR was awarded a $900,000 state Workforce Development grant in 2019 to create an auto technician apprenticeship program. We made great progress in standing up a program for recruiting and training a new generation of auto techs, but then COVID hit, and we were forced to “pause.” We’re working on picking up where we left off and hope the State of New Jersey will continue to fund the effort. Even if they don’t, I still believe NJ CAR has a pivotal role to play in recruiting and training auto techs.
NJ CAR helped pass legislation to allow dealers to better serve customers, requiring the Motor Vehicle Commission to accept e-signatures on certain transaction documents and allowing only licensed new car dealers more freedom to conduct remote and online sales. The legislation, which sits on the Governor’s desk, awaiting his signature, also tightens restrictions on unlicensed businesses selling new and used cars online, particularly online brokers.
The Coalition has also organized a committee of dealers and lawyers to look at potential new legislation to upgrade and clarify certain key provisions in New Jersey’s Franchise Practices Act.
Our ability to protect the franchise system, fend off bad legislation and promote good bills depends on our ability to get our message across, and CAR-PAC, the Coalition’s political action committee, is critical to our success. We expect to raise and spend more than $300,000 this election cycle to support our friends in the Legislature up for reelection this November.
It has been an honor serving as NJ CAR Chairwoman. Thank you to everyone who helped us reach our $500,000 goal with The Valerie Fund. Finally, join me in wishing Mike DiFeo every success leading the Coalition in the coming year.