Louisiana Automobile Dealers Association head talks EVs | Business

Coulter McMahen may have spent five years working as an attorney before he was picked to serve as president and CEO of the Louisiana Automobile Dealers Association, but his history with cars and trucks goes back to high school.

McMahen’s first job was at the Chevyland dealership in his hometown of Shreveport, where he cleaned cars and worked as a porter.

“I grew up among car dealers. So I know a little bit about the industry from just having worked the different areas within the dealership,” said McMahen, sitting back in a sparsely decorated office — the auto dealers association moved into the downtown Baton Rouge space in October and he took over as president and CEO in December.

McMahen had been a lawyer with Taylor Porter since 2018, representing a range of clients including public utilities, education, health care, insurance and financial institutions.

He replaced Will Green, who left in September to take over as CEO of the Louisiana Association of Business and Industry.

The association represents about 350 new car and big truck dealerships around the state that are responsible for nearly 15,500 direct jobs.

In this week’s Talking Business, McMahen discusses the state of the Louisiana automobile market, consumer demand for electric vehicles and what his goals are as head of the association.

Interview has been edited for length and clarity.

What’s the state of the industry right now in Louisiana for dealers?

I would say it’s stable to strong. Obviously inventory is now at a place where our dealers feel comfortable. I mean, if you can remember driving by dealerships during COVID-19, the lots were empty. Our dealers are starting to see an increase in inventory, which is good for the dealers and the consumer. So for 2024, I think stable to strong is where the industry is headed.

How are prices looking for consumers right now?

Where we were in 2023, prices have dropped about 3.1%. So there’s been a slight decline in price, but the cost of vehicles has just risen with the different parts and technology associated with those vehicles.

How much are interest rates affecting dealers right now?

I mean obviously higher interest rates are not great. But I’ll tell you the great thing about the franchise model is the fact that the different dealers throughout Louisiana have different institutions they can go to, to try to get the best rate for the consumer. Our dealers are equipped to find the best rate for your specific needs.

Supply chain issues were so big a couple of years ago. Has that been worked through?

Inventory is now in a very good place. Our dealers are getting vehicles, whereas that wasn’t always the case, certainly a year or two ago.

How are sales forecasts for 2024 running compared to 2023?

I read a report not too long ago that they expect a 1% to 2% increase in sales, which is not just a staggering number, but it’s not nothing.

How are electric vehicle sales going right now in Louisiana?

The demand in Louisiana as we see it currently just simply is not there. And that could be for a number of reasons. I mean, a lot of Louisiana is rural — farmers, agriculture. You’ve seen the reports on EVs in terms of reliability during the storm in Chicago with the battery issues. You obviously have range issues. How far can these vehicles make it? And so right now we’re seeing that the demand for EVs just is simply not there. I mean, some of my dealers will tell me that they’ve had a specific EV sitting on their lot for months, and that’s not a good thing.

Our dealers will sell what the consumer wants, whether that’s EV, whether that’s hybrid, whether that’s diesel or whether that’s a gas powered engine.

A federal appeals court will hear a case next month that Tesla filed against the LADA and several dealers, arguing that they have used the state’s motor vehicle commission to block direct customer sales by the carmaker. What could that mean to car dealers in Louisiana?

I don’t want to specifically comment on active litigation. But I will say that the value that our dealers provide under our franchise laws, it only benefits Louisiana because they’re active in their communities. If you have a complaint, you can go to your specific dealership and actually tell that person what is wrong. And under a direct sale model, that’s not the case. And so the franchise laws in place in Louisiana not only benefit the dealer, but benefit consumers. And so you have the lawsuit, and I won’t get into the details like I said, but the lawsuit is essentially an attack on Louisiana’s franchise model.

Do you worry that might be stifling innovation in a way?

I don’t, because our dealers are at the forefront of innovation as well as the manufacturers. What it would stifle is the contributions to different communities that our dealers provide.

You’re representing an industry with very tough competition between members. How do you juggle all that?

They’re competitors during the day, but what’s so great about our dealers is that after hours, they’ll get together to pick each other’s brain about what works for them, what doesn’t work for them, because at the end of the day, the most important thing to them is ensuring that their interests are protected. So they compete during the day, but they’re friends in the evening.