NADA Works to Ease Tensions Between OEMs and Dealers

SCOTTSDALE, AZ – Watch for discussions to heat up between Ford and its dealers about the manufacturer’s plans to expand its electric-vehicle offerings.

Dealers in 13 states contend Ford’s EV sales violate state franchise laws and place unfair burdens on them. Ford has mandated dealers invest $1.2 million in training and hardware. Dealers can opt to invest $500,000 if they agree to sell no more than 25 EVs a year.

“There are a lot of backroom activities going on” about ongoing group negotiations, dealership attorney Leonard Bellavia tells attendees at the Autovate 2022 conference here.. “I’ve been trying to (persuade dealers) to chill and not fan the flames. Ford knows dealers aren’t happy. Market factors drive changes, not lawsuits.”

Bellavia predicts the number of dealers that do not adopt the plan, combined with efforts by the National Automobile Dealers Assn., will persuade Ford to modify its plans. It likely will also impact the strategies of other manufacturers, he says.

NADA leaders speaking at the conference note that such disruption in the industry is not new. In fact, Andrew Koblenz, NADA’s executive vice president of legal and regulatory affairs, says the belief that the introduction of EVs into the market caused the unrest is false.

“One of the things I want to do here is to dispel the false narrative that what we’re facing has something that has to do with the powertrain of the vehicle,” he says. “That’s simply not true.”

After high-level discussions with dealers, associations and OEMs worldwide, NADA leaders conclude dealers can best succeed by helping OEMs leverage technology to reach customers.

“They are all trying to do three things,” Koblenz says of manufacturers. “They are trying to improve the customer experience, make it more transparent, shorter and more pleasant. They are trying to identify (effective) digital distribution and what costs are avoidable. And they are trying to expand revenue. So when we distilled that down, we said: ‘Wait a second. The dealer has been doing that for as long as they have existed.’”

Both Koblenz and 2022 NADA Chairman Mike Alford, president of Marine Chevrolet, Jacksonville, NC, underscore that NADA is actively working to advocate for dealers on multiple issues in what they call the ecosystem. The association does not ballyhoo its success or make public many of the discussions, they add. Still, they point to the association’s release of guiding principles that address the retail landscape and are designed to smooth conversations among dealers and OEMs.

Those guidelines encompass broad areas, including subscription services, over-the-air updates, vehicle reservations and data sharing. Those areas have significantly impacted dealers’ roles and perhaps revenue.

“We can’t expect that our model is going to be the same tomorrow that it was yesterday or 10, 15 years ago,” Stanton says. “The old adage of ‘Hey manufacturer, you build them and we sell them’ is probably not the best way to proceed going forward. We recognize that there is a need to evolve.”