The leading manufacturers are asking/demanding their dealers invest a half decade of profits in new bricks and mortar to “prepare for the future.” Second-tier manufacturers are asking/demanding that their dealers take slugs of inventory to “partner” through this unprecedented bloodbath that they’re experiencing.
Meanwhile the public is on the sidelines looking for cheaper and cheaper solutions to their transportation needs and asking/demanding someone other than themselves take financial responsibility for anything that might go wrong with the vehicle they bought, other than it running out of gasoline.
The only thing of which I’m certain is there is no conversation I’m hearing where honest “win-win” strategies are being created by manufacturers to support dealer partners. It’s back to the future. We’re in the industrial cold war, where everyone speaks in slogans to test the will of the dealer but no one dares speak unvarnished truth for fear that a dealer might take out a calculator, punch some buttons and then just say “no.”
So let me toss out some truths.
It’s about price. It’s not about product, unless you want to talk about the fact that when your product is shrouded in faulty reliability and your owner base is riddled with experiences of questionable commitments to their satisfaction, then you will, undeniably, struggle to achieve a good price.
It’s about intelligent marketing. Focus on the word “intelligent” not the word “marketing.” I am weary of advertising meetings that are 101 level universities on frequency and reach followed by earnest discussion of which media and programming touch what demographic profiles.
Give me an ad the content of which is a sensible reason to buy your product at a deal that is a value. Period. Glamour shots of cars and young people smiling at each other seductively are neither a motivation to buy nor to deal. And for those of you who like dramatic ads that win awards, cost fortunes, and run forever to justify their production, neither are they likely to provide ample motivation for increased sales.
Winning brands are more often the result of a decent plan staffed by a motivated team with a couple of talented players than that they are the result of brilliant leadership by an individual recruited with a staggering incentive plan.
I’ll bet on an all-star team over an all-star coach every time. So paying huge bonuses to attract or keep one great figurehead is an iffy strategy for success. Put that money on finding or pirating the best, brightest and most-motivated field team you can, and watch the old adage about not being able to turn a large ship on a dime fade quickly. Effective people are effective immediately.
If it doesn’t pencil for all the players, it isn’t a strategy it’s just a stalling tactic. Simply put, if all the players are not being compensated and motivated at or above the going rate, your foundation is cracked.
The marketplace is North America. If it doesn’t work here, chances are it doesn’t work. Thinking that a failing brand can be successfully launched in China or Europe or somewhere else in the world by management that have given up on winning in America is not a worthy investment. If a company can’t encourage and satisfy American drivers, it’s only a short matter of time before the same inability will either creep into the new market or before better brands beat them overseas.
I don’t know exactly when our second-tier manufacturers will, once again, embrace the greatest truth on Earth: that franchised dealers are the way to sell and service new cars. But I do know that any brand with a nutty strategy and an inability to speak the truth is not long for this industry.
Just as true is the fact that those manufacturers, who ask for commitments from their dealer partners that are greater than an outside investor would consider, are not partners. They are carpetbaggers preying on the weakness, not the strength, of their dealers.
Peter Brandow is a veteran dealer in Pennsylvania and New Jersey.