Sleepless in Las Vegas

The NADA Convention is winding down and I'm tired. Each year we set up a booth on the exhibition floor.

Each year I tell myself I'm going to relax, sleep and not spend so much time hustling around and manning our booth.

Well, I lied to myself again! It's just such a great time to meet with dealers, friends and others serving the best industry in the world (at least in this country boy's opinion). A couple of auto journalists stopped by to ask what I believed the current industry buzz to be. My answer was that this convention was fairly quiet compared to previous ones.

But here are some items most dealers are or should be buzzing about:

Dealer-manufacturer Relations

I attended the pre-convention J.D. Power and Associates' Roundtable (yes, I like Dave Power, but disagree with him on some topics; read my Jan. 2004 column. It and all others are archived online in the free Ward's Dealer Business section of WardsAuto.com).

As Roundtable participants discussed relations between dealers and auto makers, this occurred to me:

Dealer profits and product quality do not always go hand in hand with dealer-manufacturer relationships.

Examples: GMC, Kia, Hyundai, Pontiac, Subaru, Saab and Volvo.

In each case, as measured by J. D. Power and Associates, product quality and dealer profits were fair at best. Yet the dealer-manufacturer relations were good.

Why? Communication. It helps. Even when I screw up with my wife, she still likes me if I am listening to her concerns and telling her (hopefully truthfully) what I am doing to make it better. More on this to follow on a related topic.

FTC's Safeguards Rule

It is a big deal. Yet some dealers don't seem to get it. This topic was covered in my Nov. 2003 column.

Sooner or later, a dealership will get slapped with the $11,000 per day per violation penalty.

I hope it is not a Ward's Dealer Business reader or a Dixon Hughes client. You have been informed and cannot plead ignorance. Not that you would get mercy anyway.

F&I Practices

This topic was discussed in my February 2003 column. I know that lenders are putting caps on the buy rate spreads, but there is still a lot of pressure to make money in finance & insurance.

I'm a capitalist who doesn't believe there's anything wrong with dealers making money.

However it must be done the right way. With all the scrutiny on F&I practices, I believe we are going to see a decrease in back-end gross and a corresponding increase in front-end gross.

Sounds like the old days are coming back. Does that mean there is hope for some of my neckties?

Alternative to CSI

We already covered dealer-manufacturer relationships, but it wouldn't be complete without considering customer satisfaction surveys. Please read my August 2001 column proposing ISO 9001 certification as a replacement for standard CSI surveys. As I found out, someone besides my mother read it. Jack Fitzgerald read it and took it to heart. He's the dealer principal of the Fitzgerald Auto Malls based in Kensington, MD.

At the NADA convention he announced the ISO 9001 certification of his dealerships. He did an outstanding job of explaining what the ISO process has meant to his 12 stores in three states.

He agrees with my assertion that using ISO standards would be the best way to scrap factory mandated CSI programs while at the same time providing the framework to continuously improve the customer experience.

If we cut through all the egos and pride, isn't making a good profit and being a good citizen in the community what it should all be about?

Yep the buzz at NADA varies, but maybe that means there is no crisis at hand and we can all get some of that much needed R&R.

Don Ray is a senior member of the George B. Jones Dealer Services division of Dixon Odom, a national accounting and consulting group for dealers. He's at 901-684-5643 and [email protected].