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BCBusiness: Start your engines: BC’s new-car market revs up

BCBusiness: Start your engines: BC’s new-car market revs up

March 19, 2015

Two reports reveal the significant impact New Car Dealers Association of BC members have on our province

Ask anyone on the street to name what industry in B.C. is generating the following figures: total retail sales of $10.7 billion in 2013; a Provincial GDP contribution of $1.9 billion in 2013 (a five per cent increase from 2010); an average weekly employee earnings of $1,004 per week, which is about $461 more than average weekly retail earnings; and the support of 36,198 full-time jobs.

You may get a lot of answers, but in a province where so much attention is paid to the film and tourism industries, chances are the respondents wouldn’t guess that the automobile dealership sector is responsible for these remarkable numbers. But a recent report by MNP on the economic impact of the New Car Dealers Association of BC (NCDABC), combined with a new report on renovation and construction expenditures, may elevate the industry to new heights of public prominence.

At least, that’s what NCDABC president Blair Qualey hopes for. “We’re a silent giant in this province, and I think one of the reasons our industry tends to be overlooked is because misconceptions about who we are and what we do still abound. Forget past stereotypes you may have had about a new car dealership. Dealerships are sophisticated businesses and their salespeople are licensed and well trained. Vehicle quality has never been better. We are a true profession and a high-tech business. It’s all about creating a better experience for our customers.”

Qualey adds, “The reports, which we retained the MNP consulting firm to undertake, give credence to our position that we aren’t the car business of your father’s generation. Equally important, the reports reinforce our contention that in terms of upcoming career opportunities, the car dealership sector merits serious consideration.”

The NCDABC was established in 1995 to assemble all B.C. new automobile dealers who had previously been members of the Motor Dealers Association of BC and the Automobile Dealers Association of Greater Vancouver.

The Association is comprised of 360 dealers from across the province. It advocates for the interests of the retail automobile industry, and its main areas of action relate to the legal, environmental and consumer issues associated with new automobile sales in B.C.

The MNP’s study of the economic impacts of NCDABC members was released last October. In addition to the numbers already mentioned, MNP found that of the $10.7 billion in 2013 retail sales, $6.7 billion was for new cars and $4 billion was for used ones, parts, accessories and other services.

The industry is remarkably resilient, according to the MNP findings: new car sales by dealerships declined following the 2008-09 recession (reflected in decreased operating revenues from $10.9 billion in 2007 to $8.5 billion in 2009), but vehicle sales have since fully bounced back to pre-recession levels (for the record, about 193,798 vehicles were sold by new car dealers in B.C. in 2014).

There’s more good news. Spending by Association members generates $378 million in annual revenues to the federal, provincial and municipal governments. Better still are the spinoff benefits generated by members, such as the creation of business partnerships; training opportunities for new workers; the creation of visitor and tourism events (such as the annual Vancouver International Auto Show, now in its 95th year); community support; and sponsorship of Special Olympics BC, which over the past 30 years has raised over $4.2 million for the organization.

But how does all this compare with other B.C. industries? Again, the MNP’s findings are startling. For example, the 36,198 full-time equivalent (FTE) jobs supported by Association members is larger than that of our agriculture industry (which supports 31,726 FTEs), and our film and television industry (which supports 34,700). In fact, automobile-related jobs are almost on par with those of the resource industry (45,703 jobs in 2010), which is touted as our main economic driver of the future.

Not bad for an industry in which vehicle manufacturing is largely confined to eastern Canada.

The second report, which explores the NCDABC members’ renovation and construction expenditures, was released in February of this year, and shows that almost 55 percent of respondents undertake renovations every five to 10 years, and 21 per cent undertake them annually. About $195 million was spent on new construction between 2010 and 2014, and another $357-million is expected to be spent in the next five years.

Based on this survey’s responses, MNP estimates that the total direct, indirect and induced economic impacts of NCDABC members are approximately $169.2 million, with employment of 991 FTEs. By comparison, the filming of a 16-episode high-end television series in B.C. by a major network supports 585 FTEs.

It’s anyone’s guess if these findings will improve the reputation of the automotive dealership industry, but Qualey thinks they might inspire young people to consider a career in the sector. “For one thing, you can’t ask for a more stable industry,” he says. “We fully bounced back from the worst downturn in our 100 year history. As for the product itself, technology is resulting in dramatic improvements every year.”

Qualey adds that with the ‘grey tsunami’ of retirement in the offing, opportunities for young people abound: “Once they check out what we’re really about, they’ll realize that this is a sophisticated, exciting and fun business to be in.”

The NCDABC president adds: “We’re enthusiastic about the MNP findings, but we’re not at all surprised as they’re consistent with past reports. Our goal now is to make more people aware of the ‘silent giant.’ There are lots of good stories to tell about us, and I think the time has come to be properly recognized for everything we contribute to this province.”

Read this article at BCBusiness (click here)…

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