Differences Aside, Dealers, Automakers on Same Team

Dealer-automaker relationships can get strained at times, but companies such as Nissan, which has not scored particularly high on recent dealer-satisfaction scores, are trying to make things better – and to some extent make amends.

“We wanted to hear from dealers in each region what they think we can do better,” says Christian Meunier, Nissan North America’s senior vice president-sales, marketing and operations. “So we are continuing to work with our dealers in a way that makes sense for them.”

Dealers are key players in Nissan’s goal to raise profit margins and market share, he says. “We have partnered with our dealers to improve every aspect of how we do business.”

Nissan North America has 1,077 dealerships. Since 2012, Nissan sales per outlet have increased nearly 34%. “Dealer success is the key to our success,” Meunier says.

Nissan has scored below the industry average in the National Automobile Dealers Assn.’s dealer-attitude surveys. The automaker has sought to address that shortcoming.   

Strong dealer relationships have helped Toyota in sales and customer retention, says Bill Fay, group vice president and general manager of Toyota Motor Sales, U.S.A.

Last decade, Toyota dealers were scoring relatively low on customer satisfaction scores. Toyota responded by launching a program to make dealerships more customer friendly. It seems to have worked, as Fay speaks of increased customer retention, more service-department business and “all-time dealer profit levels.”

Toyota has 1,238 dealers in the U.S. and 235 Lexus dealers.

At Toyota’s dealer meeting in September, the automaker introduced an updated marketing agreement that took effect this year. It includes guidelines on minimum-allowable advertised pricing and clarification on digital advertising.

“Technology is enabling new ways of doing business and clearly empowering consumers. An important step in meeting the needs of the customer is the updates Toyota is making to its covenant,” Fay says.

General Motors had encountered some dealer push-back regarding aspects of facility-upgrade programs, particularly ones calling for a uniform design. But GM spokesman Jim Cain says those projects and others are reaping benefits.

“The investments in new and renovated facilities and training that our dealers have been making over the last several years are paying off in third-party customer-satisfaction studies, where our stores are ranked near the top of the industry for sales and service satisfaction.” 

Dealers are astute businesspeople and automakers should listen more to them, says Bently Durant, chief operating officer and general counsel at Classic Chevrolet in Grapevine, TX, No. 4 on the WardsAuto Dealer 500 ranking with $413 million in total revenue and 8,389 new and used units sold in 2015.

“The dealer councils are giving them the right advice,” he says. “Factories are making mistakes right now, like counting sales before they happen, by counting them when they go into (service)-loaner status. “

Once they put them into loaner status, they’re counting them as sold, and it’s creating all sorts of problems with dealers about when they actually sell.”

That becomes an issue for a dealership such as Classic, he says. “We maintain a fleet of about 300 loaner vehicles at any given time, so that’s 300 vehicles in limbo.”