'07 NADA Chief Rues Strained Relations

Disharmony between dealers and auto makers worsened the industry's normally cooperative clime in 2007, asserts the outgoing Natonal Automobile Dealers Assn, chairman, Dale Willey.

“I have discussed this with my successor, Annette Sykora, and we are prepared to address the situation at the San Francisco convention,” Willey tells Ward's.

“This problem isn't confined to one or two auto makers,” he says. “Any auto maker who raises the issue of too many dealers or institutes unnecessary cost increases on dealers contributes to strained relations.

“Similarly, volume-driven incentives programs that are not equally shared add to the tensions.”

Willey, a Buick-Cadillac-Pontiac-GMC dealer in Lawrence, KS, declines to single out auto makers that he feels have strained dealer relations in the past year.

“They know who they are,” he says. “And sometimes they forget we are their first customers and are on the front line of selling the vehicles they produce.”

The “too-many-dealers” issue has spawned intermittently attempts by all three domestic auto makers to reduce their U.S. retailer totals. In 2007, three import brands also pursued dealership reduction initiatives — Nissan, Porsche and Volvo.

But the issue of reducing dealership counts has moved lately off the front burner of dealers-factory issues because of the slowdown in retail vehicle sales.

Willey says many auto makers have resorted to dealer cost increases in the form of vehicle margin cut-backs and higher costs for incentive programs.

Chrysler's switch from a volume-based bonus on new vehicles to a flat $200-per-vehicle spiff is an example of a factory's “listening to dealer complaints and improving dealer relations,” Willey says.