THE U.S. AUTOMOBILE INDUSTRY IS HIGHLY COMP-etitive with manufacturers' design departments working overtime to create products that will give them a competitive edge.
There have been many cases in recent years when new product designs have succeeded in capturing the fancy of consumers giving their organizations a significant advantage over other makes.
For example, when Ford introduced the Mustang in 1964 the entire industry was caught flat-footed.
Also when Chrysler introduced the mini-van 15 years ago the industry was left at the starting gate as Chrysler brought a whole new transportation concept to U.S. consumers
With all these exciting new offerings from Detroit and the imports one would think dealers' sales departments would intently focus on their product design advantages.
Dealer sales organizations should be required to significantly increase salespersons' interest, enthusiasm and professionalism in product design advantages rather than leaping head-long into price jockeying with prospects.
Last month, this column expressed an opinion that the mandatory Monroney price label was significantly responsible for directing car shoppers' attention to negotiating price as a prime objective in purchasing a new vehicle.
And the entire retail industry has taken this cue and fallen into the bargaining trap with consumers. The retail automobile industry has become paranoid about negotiating the price of new vehicles as demonstrated by the promoters of one-price selling as if a negotiated price was a sin.
On a recent trip on a major airline I realized there were probably a dozen different passenger fares, and the people who pay them could be sitting next to each other. Airlines are a prime example of manipulative pricing, yet there is no hue and cry by consumers for one-fare price for all passengers.
A few examples of airline discriminatory pricing:
1. Ripping off business passengers with a major fare charge for not staying over a Saturday night on their respective itineraries.
2. Allocating fewer low-cost coach fares earlier, then increasing the number of lower fares as they get closer to departure.
3. Requiring non-refundable tickets be paid for within 48 hours of reservation even though departure is several weeks (even months) away.
Applying similar federal pricing regulations as are currently found in the retail automobile industry, it would be required that the suggested list price for each seat on an airliner be conspicuously posted for consumer information.
It's time for the retail automobile industry to get the current price albatross off its back, a hindrance that many dealers believe negates their positive images and reputations in the business community.
Many dealership sales departments do not regularly schedule product training sessions except for newly recruited salespersons.
Aggressive salespeople become impatient to get into the swing of things and close some deals. Also, management pay plans are based on gross profit, so they're anxious to get as many salespeople into the action, thereby shortening product training periods.
Selling high-ticket items (like automobiles) in volume with the same profit attitude as selling a dozen bagels denigrates the entire automobile marketing process. Sales staff turnover is one of the biggest challenges facing dealers and their managers, which is caused by inadequate compensation due to short gross profits.
Factory pressure on dealers to push sales numbers does little to dignify the sale of a product costing several thousands of dollars. The per-unit profit attained by manufacturers far outdistances the anemic new-car gross profit attained by dealers and this gross imbalance needs correction before any improvement in dealer marketing can be realized.
Another issue is new vehicle demonstrators to enhance the retail selling process. Time was, when sales persons were hired they were given a new vehicle demonstrator, a set of dealer plates and a weekly allocation of gasoline.
To most dealers, reinstating a demo program is akin to discussing an epidemic of cholera. However, the reasons for dealers to reject demos were a simple matter of cost and insurance exposure. Perhaps it's time to reconsider the advantages of a professional new-vehicle salesperson showing off the product they sell within their community subsidized and supported by their respective manufacturers.
Simply stated, remove any remaining stigma from the traditional image of a new-car salesman by relieving dealers of the financial burden of training and enhancing the position of salespersons. It is quite possible for manufacturers to assume more active roles in consistently expanding the level of professionalism within their respective sales representatives.
Nat Shulman was owner of Best Chevrolet in Hingham, MA for many years.
