No all "A" students, but no flunkies either Manufacturers constantly are grading dealer performance in sales volume, customer satisfaction and a plethora of other areas. Ward's Dealer Business decided to give the dealers a chance to grade their manufacturers.

One might expect the retailers to slam the factory when given an opportunity to do so anonymously. But the dealers who participated in this exercise, which we hope to do annually, were pretty even-handed overall, although no one got straight "As."

"These companies' products have made these dealers rich," remarks David E. Cole, director of the Center of Automotive Research at the Environmental Research Institute of Michigan in Ann Arbor. "I would rate pretty highly the guys who made me rich."

Yet as a group, the manufacturers managed the equivalent of a high C grade, which isn't bad, but won't put them on the dean's list, either.

"It's very clear that the manufacturers we deal with have their own agendas and it's doubtful that will ever change," says one dealer. "Manufacturers tend to have a dictatorial, selfish agenda and appear not to have any regard for the dealer's situation," says another retailer.

"We're less able to make decent profits," says another survey participant. "It has a lot to do with the Internet and the fact that manufacturers do not protect our invoices. We now do, in the dealership, the majority of what the factory used to do for us and they charge us more to do it."

Individually, Toyota is the standout student with a high B, just three points shy of an A.

"It's a little bit of a surprise because they've not done very well on the J.D. Power surveys of dealers," says Mr. Cole. "They worked their dealer organization very hard. And it's a smart company. Once they get an idea, they are the masters of execution."

Don Esmond, senior vice president and general manager of Toyota Division, says, "We're pleased (with the dealers' grade). We try hard to work hand in hand with our dealers. Everyone knows the business is changing. We work together on change.

"Other manufacturers throw stuff on the wall and see what sticks," Mr. Esmond continues. "We're taking a step at a time."

Honda, Mitsubishi, Dodge, Jeep, Volkswagen/Audi and Chrysler got low Bs from their dealer graders. Nissan and Mazda landed high Cs.

Like Mr. Cole, A.T. Kearney Automotive Practice Vice President James A. Mateyka also is surprised by the performance of the high-volume Japanese brands.

"It's very positive news for Toyota, Mitsubishi and Honda," says Mr. Mateyka. "Their weak link has been the dealer relationship, not product.

"To a great extent it's a matter of numbers," Mr. Mateyka continues. "It's easier to have a relationship with 400, 500 or even 1,000 dealers than it is with 4,000. That's the challenge of the domestic makes."

Buick, Ford, Lincoln Mercury, Pontiac-GMC and Chevrolet were in the mid-C range and Cadillac and Oldsmobile managed low C grades.

"A C grade is not acceptable," says GM's dealer relations chief Darwin Clark. "We're going to improve our dealer relations, but you can't change it overnight."

Mr. Clark says GM has shown improvement in the last three NADA dealer surveys, but insists the manufacturer is continuing to make progress. (GM's sales vice president Bill Lovejoy outlines the company's march toward improved dealer relations on page 44.)

Thirteen other brands, including Saturn, BMW and Mercedes-Benz, were included in the survey but the response rate was too low to offer a statistically sound grade. Each of the 13 brands has a relatively small number of dealers.

Grading was done by Intertec Planning and Research, which surveyed 586 dealers late last year. Dealer participants were asked to assign letter grades (A through F) to their manufacturers performance in 11 categories: Franchise Value, Handling Warranty Claims, Assistance from Factory Representatives, Communications, Advertising/Marketing, Respect for Franchisees, E-Commerce Initiatives, Facility Planning, Product Styling, Product Availability and Ordering Process.

Toyota received the top grade in eight of the 11 categories, including rare A grades in Franchise Value and Handling Warranty Claims. "Toyota believes that dealers are the future of the franchise system," says one dealer grader. GM brands, meanwhile, were among the lowest-graded in almost every category.

Despite GM's low grades, some dealers see improvement. "GM seems to be finally recognizing that the dealer is a partner, although they're not totally there, yet," says one GM dealer. "I have noticed that GM is trying harder to accommodate our problems," says another. One more chimes in, "GM is trying, as hard as it is for them, to treat dealers as partners."

Honda joined Toyota on the honor roll for Franchise Value. "American Honda works closely with dealers to promote sales and service," says one dealer. "It also has a clear understanding of the automotive retail marketplace."

VW/Audi, Jeep, Mitsubishi, Dodge, Chrysler and Nissan got B's in the Franchise Value category. Everyone else received Cs, with Oldsmobile, understandably, scoring lowest. Although they did not receive final grades, Lexus, Jaguar, BMW and Mercedes-Benz scored very well in this area.

While Toyota got the only A awarded in the course on Handling Warranty Claims, Ford, Nissan and Mazda received Cs and the rest of the pack got Bs.

Once again, Toyota took the top spot in the Assistance from Factory Representatives category. While the entire industry scored either a B or a C, Cadillac and Oldsmobile tied for the lowest C grades.

Although Toyota scored best, DaimlerChrysler's Chrysler Group dealers were the most generous in handing out praise. "Chrysler and Dodge's traveling sales, parts and service reps are in our store monthly for problem solving," says one dealer. "I really have to give Chrysler reps an A+," says another. "They're in constant contact with us."

Which company was atop the Communication with Dealers category? Toyota. The lowest? Oldsmobile.

Toyota also received high B's in Advertising/Marketing, Respect for Franchisees, E-Commerce Initiatives and Facility Planning.

Cadillac and Oldsmobile were slapped with rare D grades in Advertising/Marketing. The GM duo also received D's in Respect for Franchisees, but were joined by Lincoln Mercury and Ford in that category.

Honda was awarded the only other B in Facility Planning. The rest of the industry received Cs.

VW/Audi grabbed an A grade in Product Styling. "Volkswagen's styling has been very fresh," says Mr. Cole. Chrysler and Mitsubishi were one point back with high Bs.

Dodge, Jeep and Mitsubishi share top honors in Product Availability. Surprisingly, the highest-volume producers, Ford and Chevrolet, scored lowest in product availability. "I would bet it's all based on trucks," says Mr. Cole.

"After being a Ford dealer for 33 years I have never seen so much unfairness in new product distribution," says one dealer. "And cost transfers to the dealers are getting unbearable."

Jeep, Dodge and Chrysler had the top three scores in the Ordering Process category. The five GM brands received the lowest grades. Dealers still are not impressed with the VOM system.