Auto makers seem clueless about the industry's future
With all the uncertainty in the car business, dealers are struggling to get a handle on something real to believe in.
Manufacturers, equally unsure how to create a win-win product proposition, instead are bartering franchises for dealers' commitments to invest in better facilities.
In spite of little connection between customer satisfaction and shiny new dealership buildings, auto makers are betting that nothing trumps a huge mortgage payment for forcing a dealer to stock and sell more cars.
When all else fails, you can always count on the fear of foreclosure to keep a retailer focused.
But consumers today are harder than ever to influence no matter how desperate the dealer and no matter how palatial his or her showroom.
With anchors attached to our industry, economy, state governments, local courts, and the franchise system itself, it's near impossible to buoy consumer confidence.
Today's would-be owners have to consider that their purchase might be disposable for lack of service well before its time.
Most vividly, this comes from having witnessed dealers being shuttered without any consideration for their orphaned customers, and manufacturers using bankruptcy like a quick shower to wash away unwanted obligations only to emerge a few weeks later as less burdened.
Smart buyers can't help but conclude that their dealer may not last much longer than the time to prep, plate, and paper their purchase. The nicer he is, the more likely he won't last. The more you like him, the less you can rely on the manufacturer supporting him
This quirky market is why a tongue-in-cheek question recently was posed on public radio as to who could best answer today's toughest questions: a professor, a stock broker, a psychic or a monkey?
Of course the answer was the monkey on the theory that that, if no amount of logic seems to be working, a monkey throwing a dart at a board is as accurate as a professor, and maybe less bothersome.
We're all trying to pick which retail strategy best might lead to prosperity.
Will it be the “value” trail, paved with thrift, economy, and efficiency? Or the technology highway lined with electric cars, battery breakthroughs, hybrids, and alternative fuels?
Or the world wide web, bumper to bumper with global telemarketers? Or something totally new?
Since consumers are so extraordinarily well informed, deals are no longer born in showrooms; it's the real-time street cred of a brand and a dealer that matter most.
Making this even more complex is that consumers are researching brands and dealers at company water coolers and their blog equivalents, not by test drives or by reading ads and brochures.
The right price to pay, where the inventory is and the insider scoop on manufacturers, dealers and service departments are vetted in gossip.
I would advise that before the very first pencil of a deal, customers are more interested in the dealer's warranty expense per unit, than in the salesman's enthusiasm over what a great deal is on the desk.
Customers have always known that dealers were motivated to cram them into what was on the lot, so the existence of what pressures might keep them away from free warranty repair is just the next step undermining trust.
How are you to choose your path? My recommendation is that you trust the same logic that has always been the bedrock of retail: The gang with the best handle on what customers want will prosper longest and most.
Given a choice of palatial showrooms versus value oriented service facilities, I'm betting more consumers will support the Wal-Mart value approach every time.
Desperate dealers enslaved by crushing expenses doing everything possible to sell cars are the last dinosaurs. Survivors will be those with brains big enough to cater to customers.
Peter Brandow is a veteran dealer in Pennsylvania and New Jersey.
Questions or comments about this column? Send us an e-mail at Dealers@wardsauto.com.