The Canadian Automobile Dealers Association (CADA) made their first foray into the world of online events with this year’s annual CADA Summit, which took place on Feb. 3, 2021 from 1:00 p.m. until 5:30 p.m.
It was a jam-packed agenda that featured a mix of pre-recorded presentations, videos, some live sessions, and live questions and answers with some of the presenters. The event kicked off live with opening remarks from Michael McGhee, Senior Vice-President and Head of TD Auto Finance Canada — the event’s exclusive sponsor.
“It’s my great pleasure to welcome you all to the online CADA Summit 2021,” said McGhee, who said he never would have believed a year ago, when he delivered remarks at the 2020 event, that he would be now doing it virtually. “What a difference a year makes. The pandemic has turned our world upside down.”
McGhee said the bank was proud to remain the exclusive sponsor of the event, and gave a brief talk about its efforts to stay connected to dealers during the pandemic. “We have experienced the highest of the highs and lowest of the lows,” said McGhee.
CADA Chairman Trevor Boquist offered some remarks and introduced a provincial roll call featuring video greetings from provincial dealer association leaders from coast-to-coast. This added some levity and a sense of community at a time most attendees were likely watching from their homes, or from businesses operating amid a lockdown.
Tim Reuss, CADA President and CEO thanked TD Auto Finance for its sponsorship, and kicked off the day’s events by giving a preview of the lineup.
First up was Jeremy Gutsche, the CEO of Trend Hunter and New York Times bestseller; he spent two decades studying chaos and another doing consulting work helping brands, billionaires and CEOs accelerate innovation and adapt to change.
He delivered a high-octane exploration of how the pandemic has accelerated change globally, and how this is shaking up entire industries — including the automotive industry in Canada. The main concept brought forth was that chaos is more predictable than we think.
“It’s slightly different from a crisis, because chaos is what happens once we emerge,” said Gutsche. “And once you start to see all the new business models and all those empty retail storefronts, the failed businesses get refilled — and what fills them? Well, the types of businesses that were already starting to trend well, the trends continue.”
In the case of the COVID-19 pandemic, some of those trends revolve around digital and e-commerce. Gutsche said existing trends begin to speed up for businesses already riding them forward, and now that the crisis has forced a shift, retail businesses already taking steps in this direction have leapfrogged ahead.
As dealers think about their experience amid the pandemic and how to accelerate change, Gutsche said the great ideas that dealers come up with are likely closer within their grasp than they think. They just need to take action.
Gutsche’s presentation was followed by an economic update from Thomas Feltmate, Senior Economist at TD Bank Group, who offered an outlook on how to navigate uncertainty amid the pandemic.
Feltmate started with a macro overview of the Canadian economy that showed an unexpected dip in the early part of 2021, due mostly to the resurgence of the virus and lockdowns across Canada.
The good news is that the bank sees a sharper recovery starting in the second quarter of 2021, as the vaccines get distributed and administered across Canada. The labour market is recovering but “scarring is also evident,” said Feltmate.
One interesting twist is that household incomes have risen during the pandemic, despite job losses. Federal government programs like CERB more than offset the lost revenue from these jobs, which had a net benefit. Canadians also amassed $200 billion in savings, as they were unable to spend money on tourism, travel, and other activities like dining out. Economists are now trying to predict how consumer spending will evolve over the next two years.
Feltmate said new vehicle sales for 2020 were about 1.6 million units, or about 20 per cent off 2019 numbers. For 2021, he said first quarter sales were sluggish but he expected they would pick up in the second quarter, and could even reach up to the 1.9 million-level for the year.
The CADA Summit also included a number of panels, one of which tackled the issue of whether or not the pandemic triggered a temporary blip or a permanent flip within their industry.
The Dealer Panel that tackled the topic included Susan Gubasta, President and CEO of Mississauga Toyota in Ontario; Steve Chipman, President and CEO of Birchwood Automotive Group in Manitoba; Kim Day, President and COO of Steele Auto Group in Atlantic Canada; and Charles Saillant, Vice President of Groupe Saillant in Quebec.
Saillant’s focus during the discussion was on developing a process to manage both online and in-person sales, with an emphasis on the latter. He offered four key areas to focus on:
- the ability to have a person (and not a machine) answer any consumer requests 24/7;
- to avoid written responses whenever possible, and focus more on using the phone or texting, and then emails;
- to customize as much as possible so that the customer feels like they are being treated as a unique case (avoid pre-packaging templates, as customers feel the “artificial” flavours; and
- to build a team solely devoted to handling those customer requests —by phone and internet.
Saillant said a small segment of consumers want to do the whole car-buying process online. Even if that segment is small compared to the alternative, dealers need to be flexible and that segment needs to be addressed.
“You have to learn and play by the rules as they come to you,” said Saillant.
Another panel on digital finance tackled the idea of how the automotive industry plans to manage fraud and privacy risks with fully digital finance.
John Carmichael, CEO and Registrar, Ontario Motor Vehicle Industry Council (OMVIC), said they wanted digital transactions to occur but first had to find a resolution between the finance and auto retail industry. Things like electronic signatures and vehicle deliveries impacted their ability to move faster on this file.
“When you look at Ontario legislation, there are three levels alone,” said Carmichael. “In terms of connecting dots, we have to find our way through all these regulations.”
Howard Thompson, VP of Sales and Distribution at TD Auto Finance, said the company has been involved with OEMs over the years regarding the digital onboarding of customers.
He recognized that if dealers want to stay ahead of the curve, they need to invest in things like remote/at-home car-buying. But he added that “We finance nationally, but are beholden to provincial regulations.”
Andrew Ojamae, President and CEO of the Auto IQ Dealership Network, said all the details are not smoothly stitched together yet, but dealers are progressing on projects such as e-contracting with digital customers.
“I think we need to get active and be collaborative as an industry,” said Ojamae, adding that the panel was a good start to a conversation to drive change.
A third panel about the reset of the Canadian Automotive included Dennis DesRosiers, President, DesRosiers Automotive Consultants (DAC), Jerry Dias, National President, Unifor, and Flavio Volpe, President, Auto Parts Manufacturers Association (APMA).
That discussion explored the idea that there is opportunity in Canada’s automotive industry, in new agreements to manufacturer vehicles in the country and also in technology and electric vehicles — although questions remain around mass consumer adoption.
Political and social commentator David Frum was among the last speakers of the day, delivering a presentation meant to help dealers understand the mood in Washington and how the continued political divide in the U.S. will impact Canada-U.S. relations on everything from trade to climate change.
He discussed the mood across the border, where Joe Biden has now been named the 46th President of the United States after the now infamous Capitol riots, and the Democrats now control both the House and the Senate, making the situation for Canada somewhat better than it was with former U.S. President Donald Trump.
With respect to some good news, he said the global pace of vaccine distribution is going to make a big difference in getting life back to normal post-pandemic. “Humanity is winning this race,” said Frum. “Canada has been a little laggard. Everyone has been riding a wobbly bicycle.”
He believes we will see remarkable things from the U.S., and that there is some good news for Canada as well. But when it comes to trade, there may be some concerns. Biden’s approach to trade is less belligerent than with Trump, but he expects that America’s turning away from global trade will continue under Biden.
Until 2004, he said Biden voted in favour of every trade deal that came before the Senate. After 2005, he voted against every single one of them. “Biden was never a particularly trade-focused Senator,” said Frum, adding that he shifted to the centre of his party.
Biden’s “Buy America” could also become a larger issue. “This is a big concern for Canadians,” said Frum.
However, Canada generally receives exemptions from these measures and Frum expects the country to dodge some provisions.
The last speaker of the day was Stephen Poloz, former Governor of the Bank of Canada, who offered his insights and analysis on the Canadian, U.S. and global monetary policy — current and post pandemic.
He explored the idea that COVID is more of a natural disaster, and that the second wave of the pandemic could be similar to the first wave but with some differences. Household savings, for one, have increased significantly since the first wave — although spending has as well, while auto retail sales have picked up.
Poloz is also expecting the vaccine rollout to improve the overall situation, and said the economy could normalize much sooner than anticipated.
During the CADA Summit, the Dealer Satisfaction Index Survey (DSI) award winners were also announced, and two videos — one honouring the CADA Laureates and a tribute video to TD’s Gino Cozza — was also included in the event. TD Auto Finance is the CADA Summit’s Exclusive Sponsor, and Cozza is a well-known figure in the finance industry that retired in January after decades of working in the industry.
More details will be provided in the March issue of Canadian auto dealer.