Texas Automobile Dealers Association (TADA) – The driving voice for change

May 2, 2022

Texas Automobile Dealers Association (TADA)

The driving voice for change

Business View Magazine interviews Darren Whitehurst, President of Texas Automobile Dealers Association (TADA), for our focus on Top U.S. Auto Retailers

As the statewide trade association for nearly 1,400 franchised automobile dealerships in nearly 300 communities throughout the State of Texas, the Texas Automobile Dealers Association (TADA) represents the dealer body before the Texas Legislature, Congress, and all regulatory agencies. TADA members are part of the National Automobile Dealers Association (NADA), the organization representing all franchised automobile dealers in the U.S.

TADA is the voice of Texas’ franchised automobile dealers (cars and heavy trucks) in public policy and regulatory matters, advocating on behalf of its members for fair and ethical business practices to better serve consumers in Texas. Members rely on TADA as a valuable resource, providing access to business best practices, educational training programs, legal support, and an annual conference. The association also supports programs for the resolution of consumer complaints – prioritizing consumer welfare by promoting motor vehicle and driver safety, and a safe highway system. By supporting laws that benefit franchised dealers, the automobile industry, and consumers, TADA nurtures a business climate that stimulates growth, opportunity, and financial stability.

TADA has existed for more than a century and over time embraces the franchised dealer laws that exist in the state today. Darren Whitehurst, President of TADA, explains, “The franchised dealer system in Texas was put in place to prevent monopolistic behavior on the part of manufacturers selling vehicles directly to the consumer to make sure consumers are getting the best possible deal on the vehicles they are purchasing. Members have an interesting relationship with the manufacturers who supply the vehicles to dealers and regularly have a great relationship with the consumers in providing both the sale and the servicing of vehicles that are sold to them.”

Whitehurst has been with TADA for two years and has the utmost respect for his predecessor, Bill Wolters, who worked for TADA for 40 years and “put together a fantastic team.” The association focuses on three areas: The legislative side (franchise laws that are established by the legislature), the enforcement side (regulatory), and the legal side.

Texas Automobile Dealers Association

When Bill Wolters retired, Whitehurst inherited a seasoned team with a wealth of knowledge and experience in the franchised dealer system. “And we have some of the most fantastic dealers in the country, here in Texas,” Whitehurst boasts. “The association had built a lot of good will, particularly at the local level regarding community involvement. That’s one of the reasons they are successful at the Capitol, because all politics ultimately are local and so that really benefits dealers because they are so generous and involved with their communities.”

When it comes to policy concerns of chief importance, dealers are most likely to start off with the direct sale issue, and what’s going on in the EV marketplace. Dealers appreciate the technology, but any desire to sell their vehicles directly is not legal in Texas and would move the automobile industry toward monopolistic behavior, costing the consumer more money and limiting service and warranty protections. According to Whitehurst, “for the dealers, the relationship goes beyond just selling the initial sale of the vehicle—it extends to what happens after the customer takes the vehicle home and something goes wrong or there is a recall.”

Another issue is the chip shortage, which is resulting in the lack of inventory and what dealers have available to sell. Beyond chips, parts are incredibly important to servicing these vehicles and there is a severe shortage of parts. Additionally, there are issues relating to warranty work that dealers perform on vehicles which are under a manufacturer warranty. “Often there are disagreements on what the manufacturer should be paying to the dealer as far as warranty,” says Whitehurst. “Our statute does spell out what Manufacturers are supposed to be paying but it doesn’t always happen. Ultimately the dealer serves as an advocate for the consumer in dealing with the manufacturers.”

Texas automobile dealers are licensed to provide ‘temp tags’ for vehicles until they get their permanent plates. But there has recently been significant fraud and abuse that has occurred on the used car side. People who are not actually dealers are being licensed as used car dealers and then printing thousands of tags that are being used for criminal activity. TADA is working with the regulatory agency on solutions to curtail giving temporary tag access to these individuals while not burdening the legitimate dealers who are providing a service to the customer

According to Whitehurst, “The county Tax Assessor-Collectors are responsible for titling and registering vehicles. During the pandemic, we ran into problems, especially with some of the larger counties, in getting them processed in a timely manner. They’ve tried to set up a system that allows the dealers to go outside of their county of origin to try to get those tags quicker from another county if they are willing to accept and process the transaction.”

Texas Automobile Dealers Association

TADA also worked on legislation that would require insurance companies to pay for manufacturer parts, rather than aftermarket parts that may not be as effective. From a consumer perspective, if you put an aftermarket part that does not meet manufacturer specifications on a vehicle, you may be decreasing the value of that vehicle as well as making it less safe.

The Texas legislature only meets every other year, so TADA’s legislative committee will continue talking about the priorities they see for the association and what they believe it should be focused on for the next legislative session in 2023. The actions TADA takes in the legislature are driven by the association’s legislative committee and board of directors.

Whitehurst acknowledges, “We have a lot of multi-generational dealer families in the state that have ownership interest in dealerships. In all, there are about 1,400 dealerships in Texas ranging from large public organizations like Group 1, Berkshire Hathaway, AutoNation, and Lithia that have multiple dealerships, to family-run dealerships. We support them all.  We operate a Texas Dealer Academy that focuses on developing younger dealers and providing them with a forum to build relationships and obtain insights and tools they can use in their daily work.  At the end of the day, we’re going to work on issues that are important to our dealers and we take input from all of our dealer groups. That’s how we’re trying to create a collaborative atmosphere for sharing information on best practices and what’s going on at the grassroots level.”

The onset of COVID caused the association to cancel a couple of their conferences and go virtual for networking, which the membership wasn’t thrilled about, but they took it all in stride. As Whitehurst reports, “Our dealers are what I would call a great group of extroverts and businesspeople. They are ultimate competitors in the marketplace they share, but at the same time a lot of them are good friends. The virtual setting worked to some extent, but they really wanted to get back together in-person. Like their customers who want to come in and put their hands on the vehicle and go for a test drive, the dealers couldn’t wait to get back in the same room, share ideas, and enjoy the experience of working together.”

Looking to the future, Whitehurst believes that what is important to the association now will continue to be so going forward. He shares, “The franchise dealer system in Texas has evolved over many years.  Every session, we’ve faced opportunities and challenges. We’ve seen attacks from some who want to prioritize profits over people and sell directly.. This will continue to be an issue. But I am confident that manufacturers recognize the importance of dealer networks and their ability to deliver product most efficiently to the consumer, as well as service them when there are problems. Technology is moving so fast, and we’ll be seeing lots of advancements. For Texas dealers those advancements are exciting, and we see great opportunity to ensure the customer can safely travel for fun or work around this great state.”

AT A GLANCE

The Texas Automobile Dealers Association (TADA)

What: A statewide trade association representing nearly 1,400 franchised automobile dealerships

Where: Based in Austin, TX

Website: www.tada.org

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April/May 2022 Business View Magazine issue cover

April/May 2022

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