Pub. 1 2012-2013 Issue 1

N E W J E R S E Y C O A L I T I O N O F A U T O M O T I V E R E T A I L E R S 23 new jersey auto retailer W W W . N J C A R . O R G EisnerAmper LLP Accountants & Advisors Independent Member of PKF International www.eisneramper.com Charles A. Diegel Partner, Automotive Dealerships Group charles.diegel@eisneramper.com 215.881.8800 GROW. WISELY. Auto dealerships today are looking to drive growth. How can you safely steer your business through the demands of a turbulent marketplace? How can you plan effectively for the future? And what assistance do you need today to reach your financial goals? To grow wisely, you need an advisor who really knows the automotive business...and knows you. Who can deliver tailored solutions that create opportunities, maximize efficiency and help your bottom line. EisnerAmper is that advisor. We roll up our sleeves to get to the bottom of your toughest challenges, so you get the advice and strategies you need to create sustainable growth. 99 Wood Avenue South ▪ Woodbridge, NJ 07095 ▪ 732.549.5600 75 Livingston Avenue ▪ Roseland, NJ 07068 ▪ 973.535.1600 www.greenbaumlaw.com We bring comprehensive knowledge and decades of experience to the task of advising and representing clients in the automotive industry. — Lead Counsel — Alan E. Davis Hal W. Mandel Joseph M. Oriolo Eric H. Melzer WE UNDERSTAND MORE THAN JUST OUR BUSINESS…WE UNDERSTAND YOURS . Sales & Purchases of Dealerships Facility Upgrade Disputes Financing Shareholder Agreements Business Succession Planning Management Transitions Distressed Dealerships Protests Franchise Terminations Compensation and ERISA Employment Law Contract Negotiations Tax and Estate Planning Real Estate and Land Use Environmental Compliance Regulatory Law Class Action Lawsuits A lot has changed since Karl Benz engineered one of the first gasoline powered vehicles in 1885, Ransom Eli Olds built the first U.S. automobile factory in 1899 and Henry Ford initiated the first assembly line in 1908. Over the decades, advancements have been made in how vehicles are designed, developed, engineered, manufactured and sold. The list of predictions over the years is littered with fantastic failures. Where are the flying cars everyone was expecting us to be “driv- ing” in the 21st century just a few decades ago? An article looking back over the entire history of automotive retailing would take up a book, never mind a 32-page magazine. We looked back 15-20 years ago to see what predictions were being made for the automotive retail industry in the 2010s and how they played out. We’ll also take a peek ahead and look at the predictions being made today about what the industry might look like in the 2020s and 2030s. However, analyzing past predictions and outcomes reveals that they don’t always come true and predictions in any industry should not be viewed as gospel. Looking Back to Look Ahead Forecasting in the automobile industry is much like any forecasting; projecting months and years ahead is never more than an educated guess based on past experience. That means the best way to predict what will happen in the industry is to look back. LOOKING BACK… Public Ownership In the 1990s, there was a lot of talk about public ownership of dealerships. Edsel Ford predicted that public companies would soon own 40% of all franchised dealerships in America and manufacturers would own 40%. That would have left 20% for family-owned, private capital ownership. By 1996, every major auto manufacturer in the country, one- by-one, abandoned their opposition to public ownership of dealerships and it seemed to be a rising trend that dealerships were issuing stock or were bought by publicly-traded companies. Manufacturers were starting to buy franchises and take control. It was even rumored that it could be the beginning of a consolida- tion of the 21,000 dealerships in the nation. These new trends certainly did not transform the industry, as predicted, and while there are some publicly-owned dealership groups and a few manufacturer-owned dealerships, neither has remotely approached the predicted 40% of the marketplace. looking back to look ahead  continued on page 25