2015 Economic Impact of Franchised New Car Dealers

ECONOMIC IMPACT OF FRANCHISED NEW CAR DEALERS in the New York Metropolitan Area

table of contents 2015 ECONOMIC IMPACT OF FRANCHISED NEW CAR DEALERS

Summary of Key Information .

page 3

page 4

Industry Conclusions .

Executive Summary Average Dealership Profile

page 6

Employment in the Metro Area .

Employment Numbers Total Employee Compensation Dealership Employment by County/Borough

page 8

Vehicle Sales in the Metro Area .

Metro Area NewVehicle Sales Retailing in New York

page 9

Sales Tax & Collections .

page 10

New York International Auto Show .

page 11

Center for Automotive Education & Training .

page 12

Methodology .

page 13

About GNYADA .

Greater New York Automobile Dealers Association 18-10 Whitestone Expressway, Whitestone NY 11357 • 718.746.5900 • www.gnyada.com

As Chairman of the Greater New York Automobile Dealers Association, a 105-year- old trade organization representing over 400 franchised new car dealers in metro New York, I am pleased to share with you the results of our latest research into auto dealerships and the local economy. LETTER FROM THE CHAIRMAN

The 2015 Economic Impact of Franchised New Car Dealers report highlights the enormous impact auto dealers have on jobs, tax revenues, and philanthropic endeavors, in communities across this region. In 2014, New York’s metro area franchised new car dealerships had an annual economic impact totaling over $39 billion. Dealers employ 37,200 full- and part-time employees with annual payroll of $2.5 billion. Automotive retailing is big business here in our area, and I am proud of the contributions my fellow dealers make in the overall health and well-being of our local and state economies. I am also proud of the immense work this Association does on behalf of its members and the communities in which they serve. Since 1910, the Greater NewYork Automobile Dealers Association has represented this complex industry and the needs of its members. Through its Center for Automotive Education & Training, the organization promotes ongoing learning among industry personnel and creates job opportunities for young people interested in pursuing careers in the automotive business. Each year, the Association is responsible for millions of dollars in student scholarships, stemming from its annual National Automotive Technology Competition, which promotes high school vocational education across the country. However, it may be that you’re most familiar with our Association because of an event we produce annually in Manhattan. The New York International Auto Show—America’s first and largest-attended auto show—is owned and operated by GNYADA. Like dealers, the Auto Show is also an important economic engine, producing over $300 million in local economic benefits in 2015. Representing this vast industry is both an honor and a pleasure. I hope you find the results in the following pages helpful and informative.

Franchised New Car Dealers

Respectfully yours,

Bob Vail, Chairman Greater New York Automobile Dealers Association

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summary

Annual Total Economic Activity in Metropolitan New York by Franchised New Car Dealers $39.6 BILLION

65,100

$33.0 BIL

Total earnings for area residents attributable to dealership operations (2014) $3.62 BIL

Total jobs in area attributable to franchised new vehicle dealerships (2014)

Total area dealership sales

Total state, payroll and real estate taxes collected or paid by area dealers (2014) $2.11 BIL

Total dealership contributions to charitable causes $19.3 MIL

Total dealership expenditures on capital improvements in 2013 and 2014 $480 MIL

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SUMMARY OF KEY INFORMATION

GNYADA members also accrued approximately $444 million in 2014 advertising expenses , in numerous media categories, including internet, newspaper, direct mail, television, radio, social media, and mandatory contributions to manufacturer ad programs. On the infrastructural front, dealers spent $480 million on capital improvements , expenditures on new dealerships and upgrades to existing facilities. This construction accounted for additional jobs with contractors in the New York Metro Area. Ultimately, franchised new car dealers directly and indirectly accounted for more than 65,000 jobs and $39,643,300,000 in economic activity spread throughout greater NewYork’s down state counties. These counties include; Manhattan, Brooklyn, Queens, Bronx, Staten Island, Nassau, Suffolk, Westchester, Rockland, Dutchess, Putnam, and Orange Counties.

The NewYorkMetropolitan Area’s franchised newcar dealers continued to be significant economic generators in 2014. Total new car sales increased for the fifth consecutive year. In 2014, sales were up 21.89% versus 2012, for a total amount of $33 billion . New York Metro new car dealerships accounted for 66.4% of all vehicle sales made by franchised new car dealers in New York State. With 37,200 full- and part-time employees and a payroll of $2.5 billion , franchised new car dealership accounts for roughly 7% of all retail employment in the metro New York area. In the two-year period from 2012 to 2014, direct employment among metro area dealerships grew by 7,480 jobs, an increase of 13%. 2014 payroll and employee benefits averaged more than $6 million per dealership. New car dealers also accounted for more than $2.1 billion in state payroll, and real estate tax revenues . This greatly helped to offset lingering joblessness in the region, caused by the recession. Collectively, New York Metro franchised new car dealers made $19.3 million in charitable contributions in their communities to local hospitals, organizations, schools, colleges and universities and many other causes.

Franchised New Car Dealers

Effective in June of 2014, GNYADA expanded its territory to include franchised new car dealerships in Dutchess, Putnam, and Orange Counties. Estimated economic impacts for 2014 include these three counties, while 2012 figures covered the nine county/borough area only (Bronx, Brooklyn, Manhattan, Nassau, Queens, Rockland, Staten Island, Suffolk, andWestchester).

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industry conclusions

Executive Summary

2014

2012

%

Total sales dollars

$33.0 Billion

$27.1 Billion

21.8%

Jobs generated (direct and indirect *)

65,100

57,620

13.0%

Employee earnings (direct and indirect *)

$3.6 Billion

$2.9 Billion

24.1%

Taxes (state, payroll and real estate)

$2.1 Billion

$1.83 Billion

14.8%

Charitable contributions

$19.3 Million

$17.2 Million

12.2%

New vehicle retail sales

550,000

429,000

28.2%

Advertising expenses

$444 Million

$388 Million

14.4%

Committed estimated capital improvement

$480 Million

$468 Million

2.6%

to dealership facilities

(2013 and 2014 combined)

(2011 and 2012 combined)

*Figures cited in this report refer to direct and indirect economic impacts. Direct economic benefits include employment and compensation that occur at automobile dealerships. Indirect benefits include employment and compensation that occur elsewhere in the economy, but are attributable to dealership operations. For example, dealership employees spend a portion of their salaries on goods and services in the area, which results in additional “indirect” benefits that occur in other economic sectors. Indirect economic benefits were estimated utilizing the RIMS II (Regional Industrial Multiplier System, version 2, developed by the U.S. Department of Commerce, Bureau of Economic Analysis).

28% Growth in area new vehicle sales over two years

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Average Dealership Profile 2014

Facts on Greater New York Metro Area Automotive Retailing

2014

2012

% Change

Total sales

Over $80,000,000

Over $69,410,000

15.3%

New and used vehicle sales

>2,200 units

>1,900 units

15.8%

Dealership payroll

$6,090,000

$5,125,000

18.8%

Sales tax collected

$4,350,000

$4,050,000

7.5%

Vehicles serviced

over 22,000

over 20,500

7.3%

Average dealership employees

90 people

83 people

8.4%

Advertising expenses

$1,075,000

$995,000

8.0%

(including contributions to manufacturer ad programs)

37,200 Employees hired by New York Metro dealerships

Franchised New Car Dealers

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employment in the metro area

Employment Totals for New Vehicle Retailing Industry

Observations • In 2014, metro area new vehicle dealerships employed a total of 37,200 individuals. • An additional 27,900 individuals were employed as a result of the indirect impact of dealership operations. • Automobile dealership employment accounts for 7% of total retail employment in the metro area.

Indirect 27,900

Direct 37,200

Dealership Contribution to Total Retail Employment in the Area - 2014

Total employment resulting from auto dealerships

65,100

Dealership employment as a % of total retail employment in the area

7.0%

7,480 JOBS Since 2012, direct employment among area dealerships grew by

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Total Employee Compensation

2014 Estimates

Direct

Indirect

Total

Payroll

$2,234,330,000

$983,105,200

$3,217,435,200

Fringe Benefits

$280,840,000

$126,378,000

$407,218,000

TOTAL

$2,515,170,000

$1,109,483,200 $3,624,653,200

2014 Estimates

Per Dealer

Observations • Average dealership total payroll expense during 2014 exceeded $6 million. • Total employee compensation in the metro area attributable to franchised new vehicle dealers was over $3.6 billion.

Payroll

$5,410,000

Fringe Benefits

$680,000

TOTAL

$6,090,000

Dealership Employment by County/Borough

Su olk Nassau

9,230

7,630

Putnam Staten Island Rockland Manhattan Bronx Dutchess Orange Brooklyn Queens Westchester

5,280

3,960

3,120

1,960

1,540

1,390

1,040 1,020

Franchised New Car Dealers

700

330

0

2,000

4,000

6,000

8,000

10,000

Employment at new vehicle dealerships

Observations • Estimated dealership employment was highest in Nassau County (9,230 individuals). • Dealership employment in NewYork City’s five boroughs was 10,210. • Dealership employment in the region was 37,200.

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vehicle sales in metro area

Metro Area New Vehicle Sales

600,000

Observations • Since 2009, the area new vehicle market has been an engine of growth for the area economy. • New vehicle sales declined to less than 385,000 units in 2009, but increased to more than 554,000 units by 2014.

500,000

554,054

531,573

400,000

501,070

450,850

452,076

449,172

432,032

300,000

384,763

200,000

100,000

0

2007 2008 2009 2010 2011 2012 2013 2014

Source: IHS Automotive.

554,000 New vehicle sales in 2014, marking fifth straight year of growth

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sales tax & collections

Retailing In New York

$49.7 billion

Total sales by franchised new vehicle dealerships in New York State were $49.7 billion last year. Of that number, $33.0 billion is attributed to new car dealerships in the metropolitan area, accounting for 66.4% of all sales made by franchised new vehicle dealers in the state. This impressive economic contribution, made by predominantly small business owners in communities across our area, demonstrates the importance of automobile retailers in boosting the economic health of every county in the metro area. Total Sales Summary

total sales by franchised new vehicle dealerships in New York State

$33.0 billion total sales by franchised new car dealerships in metro area

Metro area franchised new car dealers account for 66.4% of vehicle sales in New York State

Tax Collections

Tax Category

Average

Metro Area

per Dealer*

Total

State Sales Taxes Collected

$4,350,000

$1,796,550,000

State Payroll Taxes

$410,000

$169,330,000

Real Estate Tax

$230,000

$94,990,000

Other

$120,000

$49,560,000

Franchised New Car Dealers

AREA TOTAL

$5,110,000

$2,110,430,000

* Total number of Dealers: 413

Observations • In 2014, dealers collected or paid a total of more than $2.1 billion in state and local taxes. • Dealers collected or paid nearly $1.8 billion in state sales taxes.

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new york international auto show

Total Economic Impact of the 2013 New York International Auto Show

NYIAS Producer $9,282,90 (4%)

Non-Local Press $4,369,600 (2%)

Public Relations & Special Events $26,582,500 (10%)

The New York International Auto Show boasts record numbers of new vehicle announcements, high attendance, and massive media attention. Combined with the city’s energy, and the fact that metro NewYork is one of the nation’s largest markets for new car and truck sales, the Show is one of the most important automotive events in the world. In addition to its place as one of the world’s greatest public shows, the Show has become a world-class trade and industry event. As a result, the New York International Auto Show generates a quarter billion dollars in direct and indirect impact to the city and state annually. The New York International Automobile Show is owned and operated by the Greater New York Automobile Dealers Association. $300 MIL * Total economic impact created by the New York International Auto Show *Estimated for 2014

Non-Local Employees $13,565,300 (5%)

Exhibitor Spending $126,588,700 (48%)

Non-Local Attendees $82,924,300 (31%)

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center for automotive education & training

Knowing the economic value of a well-trained and high functioning workforce, GNYADA built the Center for Automotive Education & Training in 2005, to serve as a prime driver of automotive learning and recruit more top talent to the Metro New York auto industry. Here, state-of-the-art, hands-on training is delivered to every aspect of dealership personnel, from salespeople to receptionists to managers and more. Now in its tenth year of operation, the Center’s unique mix of seminars draws participants from all around the metro area and well beyond. With a top-notch roster of nationally recognized instructors, the Center’s industry focused space allows manufacturers to deliver advanced training to employees. The location has been used for product introductions and also for training programs by industry suppliers, drawing hundreds of dealership employees to the Center each week. Dealership investments in education and training undeniably helps employees flourish — they earn more, they remain with the organization longer and they perform better overall. The return on investment in committing to education and training is seen both in the business profits and the employee earnings that accrue as a result.

5,678 Dealership employees

attended training sessions at the CAET in 2014

Franchised New Car Dealers

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methodology

Methodology Dealership financial data (and other information cited in this report) was collected from a detailed survey sent to all new vehicle automotive retailers in the greater New York metro area. Effective in June of 2014, GNYADA expanded its territory to include franchised new car dealerships in Dutchess, Putnam, and Orange Counties. Estimated economic impacts for 2014 include these three counties, while 2012 figures covered the nine county/borough area only (Bronx, Brooklyn, Manhattan, Nassau, Queens, Rockland, Staten Island, Suffolk, and Westchester). The response rate was more than sufficient to form a statistically reliable database of financial and operational indicators. Economic impact is separated into two main categories: direct and indirect. Direct impact comprises economic activity at automotive dealerships themselves, such as dealership employment and compensation to employees. Indirect impact occurs away from the dealership and takes into account the extended contribution dealerships and their employees make to the area’s economy. Independent Research Auto Outlook, Inc. is a national automotive market analysis firm providing market research services to automotive dealers. Jeffrey Foltz, the President of Auto Outlook, Inc., holds an MS in Economics from the University of Delaware, and has conducted many research projects analyzing state and regional economies.

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For more than 105 years, the Greater New York Automobile Dealers Association (GNYADA) has been a critical resource for franchised new car dealers throughout the metropolitan New York area. GNYADA’s mission is to encourage and ensure excellence in business practices, ethics, standards and service among its members, to benefit both the consumer and the automobile retail industry overall. We strive to promote and support the passage of positive legislation, and to create a cooperative regulatory atmosphere at all levels of government. The Association provides important and useful services for franchised new car dealers that include: assistance with employee healthcare and benefits, helping with regulatory compliance, keeping members up to speed on the latest laws that affect their business, training and education for all personnel, among other dealer advocacy efforts. GNYADA also produces the New York International Auto Show, which injects an additional $250 million into the area’s economy each year.

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HEADQUARTERS

GOVERNMENTAL AFFAIRS OFFICE

PUBLIC AFFAIRS OFFICE

Greater NewYork Automobile Dealers Association, Inc. 18-10 Whitestone Expressway, Whitestone NY 11357 718.746.5900 • www.gnyada.com Mark Schienberg, President

Wilson, Elser, Moskowitz, Edelman & Dicker, LLP 677 Broadway, Albany NY 12207 518.449.8893 Cynthia Shenker, Esq.

Sams Crispe Communications 27 West 20th Street, Suite 502, New York, NY 10011 212.560.9494 Nick Crispe, Chris Sams