NADA: Franchised Car Dealers ‘Crush’ Factory-Direct Rivals

DALLAS – Franchised car dealerships trounce factory direct sales outlets in satisfaction ratings, Mike Alford, the National Automobile Dealers Assn.’s outgoing 2022 chairman, says in his farewell address at the trade group’s annual convention here.

“Local dealerships are crushing direct sellers when it comes to the consumer satisfaction index,” he tells an audience of fellow dealers.

He takes direct aim at Tesla, the first of the battery-electric-vehicle makers to bypass the franchised-dealership model and sell directly to consumers. New BEV startups Rivian and Lucid are following Tesla’s lead.

Cadillac, Infiniti and Mercedes-Benz, which sell vehicles through franchised stores, held the top spots in customer satisfaction among 25 luxury brands, says Alford.

In contrast, “the direct sellers scored 21st, 23rd and 25th – bottom of the barrel,” he adds.

Tesla, which relies heavily on the internet to sell cars, has struggled to build enough facilities to service its vehicles. Alford takes aim at that.

“We know that 11,000 Tesla owners went to (General Motors) dealers to get their Teslas fixed in the last two years alone, because of failures of a direct-seller model,” says Alford, who is dealer principal of Marine Chevrolet, Trent Buick GMC and Trent Cadillac in North Carolina.  

He tells of one BEV automaker that was “so desperate to learn about auto retailing, they literally picked up the phone and called the NADA Academy and asked if we could provide them with our training materials.”

He contends franchised dealers and their automakers are part of an ecosystem that provides better customer service. “Only a local dealership network can provide the personal relationship consumers want.”