Pub. 55 2014-2015 Issue 3

20 Angelos Angelou Reports T ADA commissioned Angelou Economics to perform a study on Texas franchised dealers. Here are some of the findings. Introduction Texas auto dealers contribute more to the Texas economy than any other industry group. Auto dealers throughout the state employ 91,385 people. More than $5.33 billion was paid out as wages to dealer employees in 2013. In that same year, the direct contribution of taxes and fees by dealerships exceeded $3.5 billion. Unlike any other industry group, the vast majority of franchise dealers are family owned and operated. The primary beneficiary of dealerships are the communities in which they serve. All revenues and profits remain in the community, rather than being transferred to headquarters, which may be out of the region or even out of state. Allowing manufacturers to sell directly to consumers would threaten the motor vehicle franchise system, a system that effec- tively and efficiently serves Texas drivers. If the Franchise Laws in Texas are threatened, then the significant investments and contributions made by auto dealers in local communities would also be threatened. The question being posed is valid: why shouldn’t auto manu- facturers be allowed to sell directly to consumers when so many other industries have moved in that direction? The answer is simple: what Texas stands to lose is far greater than what it would gain in return. There are a total of 1,257 dealerships, located in 284 cities throughout the state. Aside from the jobs, wages, and tax revenues that dealers provide, they also contribute much in the way of phi- lanthropy. On an average annual basis, dealer owners and their employees donate more than $49.5 million and volunteer more than 135,000 hours to local charities and philanthropic causes. AngelouEconomics (AE) was retained by the Texas Automo- bile Dealers Association (TADA) to conduct an economic impact analysis of Texas auto dealers. The purpose of this study is to measure the impacts of dealer- ships to their local communities and to the state as a whole. Which is to say, this study measures what the state – and its many com- munities – stand to lose if dealers are threatened. Key Findings • Texas auto dealers have generated more than $415 billion in economic impacts over the past 5 years. • There are 1.1 million jobs associated with auto dealers throughout the state. • Those jobs have paid out $113 billion in wages over 5 years. • Retail sectors, excluding vehicle sales, benefited by more than $6.2 billion over 5 years. • Jobs relating to those retail sectors reached 91,400, surpass- ing total employment for dealers in the state. • Texas auto dealers account for 18% of all retail sales in Texas. • State & local tax revenues totaled $43.2 billion. • Federal tax receipts totaled $25.2 billion. • 420 business sectors experienced positive economic impacts as a result of Texas auto dealers. • The most highly impacted sectors, excluding vehicle sales, include: • Real Estate Establishments: $11.7 billion • Financial Institutions: $8.5 billion • Wholesale Trade: $6.6 billion • Advertising: $6.3 billion • Food Services: $5.1 billion • Insurance Agencies: $3.9 billion Key Findings  Texas auto dealers have generated more than $415 billion in economic impacts over the past 5 years.  There are 1.1 million jobs associated with auto dealers throughout the state.  Those jobs have paid out $113 billion in wages over 5 years.  Retail sectors, excluding vehicle sales, benefited by more than $6.2 billion over 5 years.  Jobs relating to those retail sectors reached 91,400, surpassing total employment for dealers in the state.  Texas auto dealers account for 18% of all retail sales inTexas. 5-Year Economic Impact of Texas Dealers Impact Jobs Incomes Output Direct 91,385 $62,755,000,920 $274,474,083,294 Indirect 491,321 $25,014,135,617 $68,901,919,305 Induced 551,081 $24,952,484,937 $71,798,318,893 Total 1,133,788 $112,721,621,474 $415,174,321,492 5-Year Impact to Retail Sectors Total Impacts Retail Employment 91,371 Retail Spending $6,227,262,768 5-Year Tax Impacts State & Local Federal * Retail impacts include benefits to all retail sectors outside of the automobile industry. on the Value of the Franchised Dealer