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Unconventional Convention Observations

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A new wind is blowing, and we will see dealers and their associations rise against some of the abuses being inflicted on them.

Debbie and I have attended every National Automobile Dealers Assn. convention since 1987, and I have given a speech or conducted a workshop at almost every one of them.

Since I first walked into a dealership in 1976 and told the sales manager I’d like a job as a car salesman, I’ve seen a lot of changes, especially in recent years.

Some of these changes have been natural while others are being forced by auto makers and vendors furthering their own agenda.

I always smile when they piously point to the customer experience as an excuse for their actions. You’ll hear buzz words like ‘transparency’ and other new-speak.

This year’s NADA convention in Orlando, FL, was exciting for me because of the high-energy attitude and dealer optimism rising like the phoenix from the ashes of despair from the last five years.

I had the opportunity to attend press briefings (yes I have press credentials), conversed with NADA executives including 2013 Chairman Dave Westcott, met with auto maker representatives and had private conferences with the heads of some of the biggest vendors in our industry.

The best part was seeing dealers and old friends, new friends and coming face-to-face with some of the industry villains that I write about.

Here are some of the things I got out of the convention from a Ziegler perspective.

A new wind is blowing, and we will see dealers and their associations rise against some of the abuses being inflicted on them.

To get tuned up, I just watched one of my favorite movie rants of all time from the 1976 movie “Network” when actor Peter Finch playing TV anchorman Howard Beale gave one of the most famous movie rants in history. Take a moment and watch “I’m Mad as Hell” on YouTube before you read on.

http://www.youtube.com/watch?v=WGiX5tbLKiY

Data.Big data is a trending topic on every vendor and OEM agenda. I was pleased to see NADA appears to have awakened to realize data misuse is out of control and poses a real threat to the dealers and our customers.

I predict you’ll see more attention to just who is extracting transaction and identifiable data from dealer management systems, causing liability exposure.

I have been screaming about this for years and now it’s coming to a head as the industry catches up to what is being done. The data-aggregators are about to feel industry pushback.

Dealers and auto makers.Dealers and NADA have had enough of manufacturer intrusion and interference in retail operations. Without exception every manufacturer needs to back off and build cars and trucks, not meddle into the affairs of businesses they don’t own.

They do not understand retail. They’ve tried it repeatedly and failed miserably because they’re bad at it.

They went too far with over-bearing facility requirements and discriminatory stair- step incentive programs that result in 2- and 3-tier pricing. What they call objective-based Incentives are little more than forcing dealers into a race to the bottom.

When I said optimism was running high, I mean over-the-top euphoria. J.D. Power and Associates, NADA and even those rascals at TrueCar and Edmunds seem to agree that we’re going to see more than 15 million to 15.5 million new-vehicle sales this year.

But if you add up what each auto maker predicts it will sell this year, we’re going to see more than 35 million deliveries. Of all of the claims and projections manufacturers made to their dealer body at the convention, a few rang out with credibility. Others seemed like pipe dreams.

Nissan rocks. Nissan announced a clear and aggressive 15-month plan to continue to gain market share and get on more consumer shopping lists.

Friend Jon Brancheau, who used to be my neighbor in Georgia when he was with Saab, now is Nissan North America’s vice president of marketing. He is heading up a marketing initiative, and I believe it’s the real deal.

With five totally redesigned new model introductions in the next 15 months, these guys are serious players in the game to rearrange the order of the top10 brands.

Europe.Don’t shoot the messenger, but the European economy is going to crash and do much damage. General Motors and Ford with huge presences in the European arena will continue to lose money there, as will the home-turf auto makers.

I urged GM long ago to divest itself of Opel. Even in good times, who wants to deal with those whiny European unions?

China. China was a huge topic of conversation in many convention circles, mostly conjecture. I went on record years ago saying Chinese cars were not coming to the U.S. market. Guess what? They still haven’t arrived, Malcolm Bricklin or no Malcolm Bricklin.

Of course, I never said never. Someday, they may actually land some proprietary product here. But what I am seeing (as I also predicted) is an increase of the Chinese buying American companies for their technology.

The U.S. government bailed out electric-vehicle maker Fisker last year to the tune of $200 million, which appears to be swirling down the toilet if something doesn’t happen to salvage this train wreck.

It appears Fisker is actively seeking a buyer and there are several players bidding. The frontrunner appears to be Dongfeng Motor of China with a bid of $350 million for an 85% majority ownership stake.

In that Fisker has proprietary high-technology most similar to Chevy Volt, this is what I have envisioned for nearly 20 years. Chinese businesses traditionally buy and assimilate innovation, they rarely create it.

There’s a lot of conversation in the automotive world about the Chinese buying into any number of manufacturers.

Ford’s better idea. While other auto makers are beating their dealers into submission, Ford offers theirs up to $750,000 matching funds for any facility upgrades and other dealership improvements as long as they are within Ford’s extremely flexible guidelines.

Well, there you have it. There were a lot of convention reunions, parties and a million other things I’d love to write about. But these are the ones that come to mind right now.

Keep it coming with emails, phone calls, messages and Facebook posts. I want to hear from you.

Jim Ziegler, president of Ziegler Supersystems, is a trainer, commentator and public speaker on dealership issues. He can be reached at zieglerss@aol.com.

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What's Retail Front?

Blogs about automotive retailing, commenting on news impacting the business of selling vehicles.

Contributors

Steve Finlay

Steve Finlay is the editor of WardsAuto Dealer Business magazine. His journalism career started 40 years ago as a crime reporter. A Michigan native, he likes fast cars, big lakes and cold days.

Jim Ziegler

Jim Ziegler, president of Ziegler Supersystems, is a trainer, commentator and public speaker on dealership issues.
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