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Automobile Sales Workers

History

By the 1920s, nearly 20,000 automobile dealerships dotted the American landscape as the "Big Three" automobile makers—Ford, General Motors, and Chrysler—increased production every year to meet the public's growing demand for automobiles. Automobile sales workers began to earn higher and higher wages. As automobiles became more popular, the need for an organization to represent the growing industry became evident. In 1917, the National Automobile Dealers Association (NADA) was founded to change the way Congress viewed automobiles. In the early years, NADA worked to convince Congress that cars weren't a luxury item, as they had been classified, but vital to the economy. The group prevented the government from converting all automotive factories to wartime work during World War I and reduced a proposed luxury tax on automobiles from 5 percent to 3 percent.

During the lean years of the Depression in the early 1930s, automobile sales fell sharply until President Franklin Delano Roosevelt's New Deal helped jumpstart the industry. Roosevelt signed the Code of Fair Competition for the Motor Vehicle Retailing Trade, which established standards in the automotive manufacturing and sales industries. By 1942, the number of dealerships in the United States more than doubled to 44,000.

Automobile sales workers have suffered an image problem for much of the career's history. Customers sometimes felt that they were pressured to purchase new cars at unfair prices and that the dealer's profit was too large. The 1958 Price Labeling Law, which mandated cars display window stickers listing manufacturer suggested retail prices and other information, helped ease relations between sales workers and their customers. However, in the fiercely competitive automobile market, sales workers' selling methods and the thrifty customer remained at odds.

When it came to used vehicles, there was no way for customers to know whether they were getting a fair deal. Even in the automobile's early history, used vehicles have been popular. From 1919 through the 1950s, used car sales consistently exceeded new car sales. Despite the popularity of used vehicles, the automobile sales industry didn't quite know how to handle them. Some dealers lost money on trade-ins when they stayed on the lot too long. After debating for years how to handle trade-ins, dealers finally began today's common practice of applying their value toward down payments on new cars.

The industry suffered personnel shortages when the armed forces recruited mechanics during World War II. This affected the service departments of dealerships, which traditionally have generated the biggest profits, and many dealers had to be creative to stay in business. During these lean times, sales gimmicks, such as giveaways and contests, came into increased use. According to a history of NADA, one Indiana dealer bought radios, refrigerators, freezers, and furnaces to sell in his showroom and sold toys at Christmas to stay in business.

The energy crisis of the 1970s brought hard times to the entire automotive industry. Many dealerships were forced to close, and those that survived made little profit. In 1979 alone, 600 dealerships closed.

In recent years, dealerships have faced many challenges as a result of the restructuring of the U.S. automotive industry. The number of dealerships continues to decline from historical post-World War II highs. As of 2014, according to NADA, there were 16,396 new car dealerships nationwide (down from 47,500 in 1951) employing more than one million people. Most dealerships today sell more makes of cars than dealerships of the past. Still, they face competition from newer forms of automobile retailers, such as automotive superstores, the automotive equivalent to discount stores like Wal-Mart. Also, automotive information is becoming more widely available on the Internet, eroding the consumer's need for automobile sales workers as a source of information about automobiles.

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