National Automobile Dealers Association chairman David Westcott said Wednesday that the government shutdown that started Oct. 1 likely has hurt consumer confidence and auto sales.
Westcott, who runs a Buick GMC dealership in Burlington, N.C., said traffic at his dealership, including online sales leads, has been down for the past 30 to 40 days. Speaking before the Automotive Press Association in Detroit, he wouldn’t say how much his sales have dropped, though he said it wasn’t much.
“The uncertainty of what will occur is the primary theme: Let’s postpone, let’s wait,” he said of car consumers. “They’ve sort of taken the government approach and kicked it down the road.”
Westcott also attributed some of his store’s sales decline to lack of product, including not having enough of General Motors Co.’s all-new 2014 GMC Sierra pickups.
GM has said that a prolonged government shutdown lasting two weeks or longer would start to negatively affect consumer sentiment and could hurt sales. Earlier this week, Hyundai Motor America CEO John Krafcik told Bloomberg News that the shutdown is eroding consumer confidence and could push auto sales down by 10 percent this month compared to September.
Westcott addressed the media on threats to automotive dealers and stressed the importance, consumer choice, competition and economic benefits that dealers provide.
For example, Tesla Motors Inc. sells cars directly to consumers instead of through franchised dealerships. The company operates Tesla stores where prospective customers can view the luxury electric vehicles and take one for a test drive.
Westcott said he has met with Tesla’s CEO Elon Musk a few times before.
“The car’s wonderful. The only thing we differ on is the distribution system and how it works,” Westcott told reporters, adding that he would be interested in being a franchised Tesla dealer. “He’s even said himself that once his volume gets to a certain point, that he’s probably going to have to embrace the franchise system. Long-term we probably don’t disagree.”
The dealers association also fears that some Chinese automakers who want to sell vehicles in the U.S. may try to bypass the structured franchised dealer network and sell cars directly to consumers.
Westcott said states should have the final call on who can sell vehicles, but noted the current franchise system works.
The association represents more than 16,000 new car and truck dealerships.