Inside Automotive with Jim Fitzpatrick, powered by CBT News

Don Hall on What Dealers Should Expect in 2026

• Jim Fitzpatrick • Season 1 • Episode 56

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As the industry looks toward 2026, Don Hall, president and CEO of the Virginia Automobile Dealers Association, joins Inside Automotive to help dealers put market conditions and legislative priorities into context. Hall shares why Virginia’s vehicle sales remain a bright spot, with fleet purchases from businesses and government agencies playing a significant role in supporting overall volume. He reflects on how shifts in federal EV policy have affected demand, why hybrids continue to gain traction, and why consumer choice—not mandates—should guide powertrain adoption. The conversation also addresses rising inventory levels, margin pressure from volume-driven OEM strategies, and the growing threat of direct-to-consumer sales models. Looking ahead, Hall outlines advocacy priorities, workforce challenges, and the critical role dealer associations play in protecting the franchise system as economic and regulatory conditions evolve.

Key discussion points include:

  • Fleet sales and their impact on Virginia’s market performance
  • EV policy changes and consumer-driven powertrain adoption
  • Rising inventory levels and dealer profitability concerns
  • OEM volume strategies and franchise system risks
  • Direct-to-consumer sales threats and dealer value
  • Legislative priorities and workforce investment for 2026

Inside Automotive with Jim Fitzpatrick is powered by CBT News, your go-to source for the latest news, trends, and insights in retail automotive. Subscribe for more interviews with top industry leaders, dealership innovators, and experts shaping the future of automotive.

For more content, visit CBTNews.com and follow us on your favorite podcast platform.

Jim Fitzpatrick:

Welcome to Inside Automotive with Jim Fitzpatrick. Hey everyone, Jim Fitzpatrick. Welcome into another edition of Inside Automotive right here at CBTnews.com. We're looking ahead to what 2026 may bring from market conditions to legislative priorities. Joining us now to help us put it all in perspective is Don Hall. You've seen him here before on CBT News, the CEO and president of the Virginia Automobile Dealers Association. As you all know, Don is an incredible voice for our industry and an incredible advocate. So we're so happy to have you, Don, join us once again on the show. Thanks for taking the time.

SPEAKER_00:

Jim, it's always great to be with you, and I enjoy chatting with you and your audience as well. Thank you very much. Yeah.

Jim Fitzpatrick:

I don't know where 2025 went, but here we are now at the end of the year talking about um all the things that have happened, and then maybe you'll look forward and get we'll get some of your predictions uh about the industry and what we can look forward to in in the year to come. From all indications, it sounds like 2026 from the people that I speak with anyway, uh, from Cox Automotive and and Edmonds and what have you, that it's going to be another good year in automotive. Have you found that to be the case as well?

SPEAKER_00:

You know, interesting. In Virginia, the answer is yes. Uh but let me say that fleets have played a large uh role in in making our numbers very strong. Our numbers have been good overall, but the fleet business has has been good in Virginia. So we're selling fleets to all kinds of businesses, which is a good sign, but also to government agencies and so forth. So the fleet business has has made a huge difference in our total numbers. But um, you know, one of the beautiful things, Jim, and you know this as well as me, if not even better, and that is that no matter what's going on, we're an industry that always uh has a positive outlook and was always looking for a better day uh than even a great day today. We wanted even better tomorrow. That's right. And uh it's a great thing.

Jim Fitzpatrick:

Yeah. Let's talk about some of the things that we saw in 2025. Um, obviously they put to bed the you know, the president said no more uh tax benefits for EVs, which a lot of people thought, uh-oh, there goes the entire EV market if in the event we're not giving$7,500 tax incentives and such. And we found that actually maybe not to be the case so much. EVs are still being sold, especially in California and some of the uh coastal states and what have you, but uh that was the right move, right, for the president to make.

SPEAKER_00:

Yeah, I I I think so, but I think probably something I'd rather focus on a little bit and your background as well, and that is Toyota. Toyota, you know, during this whole EV, you're gonna have to sell EVs, become all about EVs. Toyota, to its credit, sort of drug its feet, and a lot of us wondered what in the heck was going on. But, you know, once again, this OEM who's the best of the best. Yeah. Toyota Alexis is the best of the best. Hybrids are driving the day. Yep. And Toyota, you know, moved uh rapidly in the hybrid arena long before others were thinking about it. And uh, we're selling a heck of a lot of hybrids uh in Virginia, and uh Toyota certainly has has the market share of those. And it's to their credit. I think that people uh want EVs, they want hybrids, they want ICE engines, but they want them as they choose to have them based on their family needs, their driving conditions, and so forth. Right. And that's the way it should be. So I congratulate uh this current administration for understanding the concept. It's difficult to sell cars that government is mandating versus cars that people would like to buy, and there's a market for all those cars I just mentioned.

Jim Fitzpatrick:

Yeah, for sure. Um it looks as though the the OEMs are are kind of back to the old, you know, idea of load up dealers with cars. I think there's some 3.4 million vehicles sitting on car on car lots now. Back in 2019, as you know, there was over 4 million. Uh I thought we learned our lesson a little bit through COVID where it was less inventory, higher gross profits, uh, lower floor plan for dealers, but man, OEMs just keep shoving that inventory down our throats, right? And and then it looks like we're probably headed back to that four million number of vehicles sitting on lots. Talk to us about that.

SPEAKER_00:

Yeah, Jim, it it is a concern for all the obvious reasons. The costs go up and so forth when cars sit on the ground for a lengthy period of time. Most consumers have no idea that the dealers of this country own those cars long before they're actually delivered to the lot and they're sitting there and they're costing money to be sit, you know, to be sitting there during that time. Um again, I I am an optimist in this business. I know you are as well. And no matter what's going on, we we tend to come out of it, we tend to survive and make things work. However, I am deeply concerned about what the OEMs are doing and forcing the vehicles down. Um the incentives are not there the way they should be, the way historically they have been. Consumers are waiting for that to happen. You even got Stellantis as an example, you know, dealing with Carvana and wanting to set them up because Carvana will take whatever they seem to have a deep uh well to draw money from, so they don't seem to care. It's unique. I don't understand it, but I understand people like Stellantis and others will do whatever it takes to make their numbers, regardless of the harm they do in the marketplace or the harm they do to the franchise system. Yeah. And so those kinds of things do give me great concern. Uh dealers at the same time have got to understand clearly that we have a fickle partner at our side, the OEMs. We tend to be the way we've always been, that's good and bad. But but we're gonna have to sell these cars and move on and get creative. And I think with some marketing strategies and some enthusiasm and and so forth, I think that you know we can come out on the other side of this because that's just the nature of car dealers.

Jim Fitzpatrick:

Yeah, for sure. Um, it looks like uh, you know, we're still dealing with this uh VW Scout thing. Um that that's uh that's a priority for I think every state association leader, right? To fight this and and uh get Scout N VW to to honor the franchise uh system out there and say, look, we're gonna sell scouts, we're gonna we want to do it through our franchisees, right? Whether it be through Audi, VW, what have you. So talk to us about that. Where does that stand currently in your state of Virginia?

SPEAKER_00:

Well, to begin with, Jim, I respect you greatly, but I would change your words and say this. Uh it my peers are all about this, and my peers care a lot. It's the dealers that concern me. Yeah. The dealers are not paying attention. Well, I'm not a VW dealer, so it doesn't matter. Or I'm not worried about it. You know, it's just, you know, if they end up selling direct, it's okay. Ladies and gentlemen, you need to get off your ass on this one. This is a big deal. Because the game right now is this OEMs want to be able to sell direct. They want to use you to make courtesy deliveries, if you will, and service the vehicles for sure. But they want to sell the vehicles and they want to take out what the consumer perceives as the middleman. As I looked at this lawsuit being filed as an example in California, there was an article written in one of the big magazines in California about this. And I was interested in the article for obvious reasons, but I was more interested to see what people's comments were online. Over a hundred comments with a following general message. I look forward to dealing with the manufacturer direct. I don't know why I have to deal with a local dealer. They play games with me, they do this, they do that. Yep. Dealers, you need to wake up. VW is not going to give up on this. And the and the OEMs are not going to give up. They're watching and they're going to see what's going to happen because deep down inside, they want to reduce even more so your role in the franchise system. And they would love to sell cars direct and then have people just pick them up. Sort of like Amazon's getting ready to do or is doing now as we speak with used cars through the Ford Dealer network. It all sounds great. It sounds very pretty. We're going to sell a lot of new, or excuse me, used vehicles right now. It's great. Don, we're going to we're really going to knock out of the ballpark. Long-term wise, these folks are only out there for one reason to change your business.

Jim Fitzpatrick:

That's right.

SPEAKER_00:

And to make what you do very difficult to do and less profitable to do it.

Jim Fitzpatrick:

That's right. That's right. What is your suggestion for the dealers that are listening, not just in Virginia, but around the country? Uh, what what would you like to see them do to make an impact and have influence in in this particular area?

SPEAKER_00:

Jim, uh, my comment is based on the minority of dealers in the country rather than the majority of what I'm saying right now, and that is this. The most important asset you have in your dealership are your people. It is your people that give great buying experiences. Right. It is your people that take care of those service lane customers that come in. It is your people that do everything for you. Make sure your staff is a happy staff. Make sure you're doing things above and beyond. Look at working uh you know different hours as an example. Look at taking care of your people when they need time off. Look at the what you do for retirement, for medical insurance, and how you comp them. Because at the end of the day, they're the folks that determine whether or not your customers, Mr. Owner, Mr. Dealer, Ms. Dealer, they're the ones that determine whether your customers are going to have a great buying experience. If they're not gonna have a great buying experience, then the manufacturers continue to make the argument and others, and that is we can do it better. Give us a shot. We're the ones that can give a great buying experience. That's BS. We are the ones that will and do and have. But let's make sure that we're essentially that we're making a big deal about that, and that we're also learning, uh, listening to your shows, going to the NADA convention uh, you know, next uh month of February. Make sure that you're picking up ideas that using embracing technology that make you better at what you do, but understand it's about your people, and by and large and doggone it, it's about the customer. Yeah. Make it about the customer. Sure. Do that, we win. Do that, we lose, do that, we change, and we're gonna have to have a long-term philosophy to make this work.

Jim Fitzpatrick:

Sure, sure. To play devil's advocate for for just a moment, what do you say to those that say, well, we're in a free market system here in the U.S. and companies should be able to sell their products and services any way that they see fit to win over market share, and why should franchise dealers be protected with some sort of a law that says you've got to go through a dealership to acquire a car? What what what do you say to those individuals?

SPEAKER_00:

Well, first and foremost, if you want competition, the franchise system is your answer. If you're looking for a free market, it truly is the free market. Now, to those dealers in that free market selling, you know, to consumers, again, it's all about the customer. It's all about your staff. Treat them right, and the consumer will have an incredible buying experience and an incredible service experience. Treat them right. But this is the the the very definition of the free market, the franchise system is in fact competition is good, it's healthy, we've got it. Take what take us out of the scenario, then you have a Tesla model. You pay our price, we give you whatever we give you, we finance it the way we want to finance it, and so forth. That's not competition, that's not free market. We are we are absolutely the free market, and that's why we need to continue to exist, but it's up to us to make that happen. We've got to make sure we're making changes, and again, making it about the customer and about our staffs.

Jim Fitzpatrick:

Yeah, for sure. Um, let's switch gears a little bit and talk about what's on your agenda as the head of the Virginia Auto Dealers Association. What are some of the things that you'll be working on next year?

SPEAKER_00:

Well, first and foremost, we've got a brand new, we're we're only two states that had elections in November this year, New Jersey and Virginia. So we have a brand new governor, a brand new lieutenant governor, a brand new attorney general. We have a bunch of brand new members of the House of Delegates. The House of Delegates are controlled by the Democrats in Virginia. The Senate is already, which was not up for election, is controlled by the Democrats. And the elected uh executive branch are all Democrats. So we're in a situation where things like um various laws pertaining to unions and so forth will be on the agenda, dealing with workers' comp, health insurance, minimum wage. And we've got to make sure that we're out explaining to our Democrat friends, you know, why we're important in the scheme of things, why business people make a difference, why the taxes and the revenue we bring in matters. And in our case, the 60-some thousand people that work indirectly and directly for car dealerships in the Commonwealth, Virginia matter. And so we'll spend a lot of our time telling our story, but also making sure that we're telling them about how we are evolving with the times and that we're making things even better for consumers and for those who work in those dealerships. Um it is going to be uh a big question in Virginia as it will be in other states. Uh when one party controls everything, it does uh make for some changes. My hope, my prayer, and my efforts will be to make sure that those changes are positive changes as it affects the auto industry and the Commonwealth of Virginia.

Jim Fitzpatrick:

Yeah, yeah, for sure. Those are that's uh you you know, for for dealers that are out there listening to this, and you know, you wonder, you know, we we have a state association. What what what are they up to? What are they doing? Are they really fighting for us? I I think Don Hall is probably a perfect example as to how you want somebody like Don. And of course, every association has somebody out there fighting, rolling up your shirt sleeves, their shirt sleeves every day, and fighting, you know, in the state legislature for all kinds of rights for dealerships, right? I mean, it's it's so vitally important to be part of your state association and to become active in it, right, Don?

SPEAKER_00:

And not only that, Jim, but but look, I don't own the VADA. I've been here for about 38 years. I don't own it. It belongs to the dealers of Virginia. And the dealers in each state own your your statewide trade association. It's yours. Yeah. Make it work for your advantage. If the if my peers are not doing the job, then it's time to make a change. And my peers need to understand that. If I'm not doing my job, then it's time to make a change. You own these associations. They are the only thing you've got out here that can fight, who don't lose, we don't, I don't lose a franchise. I don't lose the ability to get bigger in terms of franchise and so forth. We are your voice, we're the ones that can do things for you that you cannot do. But frankly, a lot of times we get busy, caught up, God, I'd like to be involved, but you know, I'm on five other boards back home, and I I do this and I do that. All those things are great and wonderful. It is your trade association that matters the most in your life. Most of you take for granted the laws that have been passed and will be passed, and you ought not to do that. Shame on you. You own your association, get engaged, and if you can't put a general manager or a key manager in the association, make sure they're involved, make sure they're telling your staff, bring us out to speak to your staffs in sales meetings and so forth. So they understand the value. We can't form a union, but we're as close as you can get it. And in Virginia, we represent everybody who works in the car business, not just the owners, everybody. Yeah. We fought for techs this past year, passed a number of bills that helped techs on warranty work. Techs mattered to us a lot. The service drive matters to me a lot. It's an important part of our business. And you own your association, and and you need to require us to stand up and do what's right. And if we're not, then get rid of us and get someone who can and will. It's your association.

Jim Fitzpatrick:

I love it. I love it. I love that enthusiasm. Hey, before I let you go, talk to us about uh the the proposal um that uh took place and uh and the the president signed uh from the pre the chairman of the NAD, uh NADA, they were all around him, uh Bernie Moreno, Senator Bernie Moreno, and others that were pushing for this CAFE standard to change, which we all knew in this country it had to change, or at least in the industry. Um talk to us about that and and its impact down the road.

SPEAKER_00:

Well, I was like everybody else, I was impressed with really the comments that many of the OEMs are making about it. That the price of cars, I think they had a Ford, you know, Mr. Farley made those comments as well. The price of cars should go down at minimum$1,000, if not more. Look, I I I tell people all the time we can we can we can get get you at 50 miles per gallon, uh, we can get you, you know, the safest cars in the world. Everything cost money and a lot of it. The average new car today is fifty thousand dollars. They cost a lot, not because we're all making more. Those in this business know that is not true. Right. But the reality is that for everything we do and everything that bureaucrats in Washington or in your statehouse does to require, there is a cost associated with it. So I'm grateful. The only thing I will tell you after being involved in politics for a very, very long time is you know, it happens in the governor's uh office, it happens in the presidential. You get a president, they come in, they get rid of these things, they change these things, everybody takes a deep breath. Wow, it's finally, you know, we don't have to do that anymore. And then exactly three years from now, we have a new president, or in Virginia, we have a new governor, and things change. And as a result, it's not wow, it's oh my God, here we go. We've been down this path before, we're gonna be regulated in this, that, and so forth. And so that's the nature of politics. So enjoy it while we can, but understand your elections have consequences. And one more comment about that, and that is make sure your people are voting. Make sure people in the dealership understand the differences between candidates in terms of what they offer and don't offer, whether they're pro-business or anti-business, whether they're good for your business or not good for your business. Can't tell you how to vote, but I sure as hell can tell you who would help the auto dealers of Virginia and who have helped the auto dealers of Virginia from that standpoint.

Jim Fitzpatrick:

Yeah, for sure. One last thing, and and and then I'll let you uh move on with uh your day. Uh tariffs. We don't talk a lot about tariffs right now in the in the industry. It seems to it seems to have come in, you know, earlier in the year, and uh and now it doesn't seem to be that big of an issue on showrooms and among dealers and and such. Talk to us, talk to us about that. Do you think things are getting back under control in that area, or is that a is that going to be a threat for the industry going into 2026?

SPEAKER_00:

You know, I I initially when when uh President Trump did a lot of his tariffs, I thought, well, this is probably a good thing. Uh the unfair, unlevel playing field that goes on and so forth. Sure. And then and then I heard a you know a very bright individual uh on a talk show talk about tariffs, and he'd made the comment that the president has been sort of pro-tariffs for probably 40 years. Yeah. Or anti-tariffs, rather, for about 40 years. He's wanted to get rid of them for a long, long time in this country. And, you know, this other individual made this comment and it resonated with me, and that is like we are the biggest, uh, most profitable, uh, advanced nation in the world. We are Americans. We are different, and our lives are different. We don't uh feel the pain that many feel in other countries throughout the world. We just don't have that to a degree. Not that we don't have our poverty, not that we shouldn't be better with our medical issues that are going on these days, but we are still so advanced. And in some cases, some of these countries that we want to hit with large tariffs, it's difficult for them to survive. For us, we will always survive. We are a blessed people and a blessed nation, for sure. As an industry, I think because we are, we are, we because we have been blessed, and we and we're very optimistic, they have not done what we thought or worried they might do. I listened to the President even over the weekend talk about tariffs, and it sounds like long-term-wise, meaning in 26 or 27, we may see some great effects uh that help us as a nation. But I am concerned, uh, frankly, about what it does to other uh countries in other parts of our great world. Um, and I'm concerned when it affects us selfishly. So I want to say that. us to be able to sell our vehicles, and we do produce a hell of a lot of cars uh that are made uh uh overseas and at the same time we're bringing back a lot of manufacturing to the U.S. and that's a good thing. So I I I think it's not that we've forgotten about it. I think we're letting, you know, the the the the decision take its course and we seem to have weather that tide within reason for now and then and we'll see what the results are in in 26, 27.

Jim Fitzpatrick:

Yeah, yeah for sure. The OEM's absorbed a lot of it as you know uh this year but uh that's not sustainable right I mean they they've something's got to give on this uh moving forward because you you're not gonna get manufacturers that you know are gonna say well we're we're gonna give all of this money up and and uh and and protect the tariff so to speak it it's gotta it's got something's got to give there right yeah I I agree uh at the same time uh uh Trump has a unique style in fact frankly and honestly Jim I I I think a lot of the car dealers that I've known over the years sort of have some Trump ism inside of them in terms of how they problem solve and how they address and talk and deal with people.

SPEAKER_00:

And so you know dealers relate well to Trump uh as President of the United States. And I you know I I I again uh I I'm gonna keep my fingers crossed and and hope whether it's the OEMs uh or the people of this country or the dealers of this country that that we look back exactly a year from now and go, wow, that really wasn't so bad after all and we're so much better off with manufacturing in this country now. It seems to be we're on the on the right path. But again politics elections have consequences and trust you me things will change no matter what and you can count on change and that's what makes us a great industry we're used to dealing with change and we will survive.

Jim Fitzpatrick:

That's right that's right. Don Hall, president and CEO of the Virginia Auto Dealers Association thank you so much for stopping by sharing your thoughts about 2025 and as we look ahead to 2026. Thanks so much really appreciate it.

SPEAKER_00:

Thank you Jim and have an outstanding day and happy holidays to you and all your viewers you as well thank you with Jim Fitzpatrick