It's Wrong To Blame Dealers

A quick study of the golden years of automotive retail would show the benefits of what happens when dealers are in control of the customer experience.

My father was fond of pointing out that when manufacturers use all their talent to build the best they can, and dealers are unfettered to sell as many as they can, great things happen.

But when manufacturers are too focused on how and what dealers do, and dealers are drawn into what the manufacturer is up to, the result is, well take a good look around you, that is the result.

Rather than look into a mirror and ask what they have done, auto makers and politicians point to an industry they're killing, and shriek, “Kill the dealers.”

They all are confident of their ability to fix everything by dictating precisely what should occur between the curb and the showroom.

Why is it that despite the fact that dealer operating procedures vary little from store to store, every ill that touches the automobile industry seems to trigger a witch hunt for dealers to blame?

Just as interesting is that most dealers themselves foster the illusion that their approach, marketing and systems are uniquely theirs. But the economics of the industry, over-regulation, and manufacturer-designed information systems determine what goes on in a car store. Little separates one from another, save the willingness of the manufacturer to support one store over another with product, marketing and good will. Of course, the economic impact of those variables is huge.

Truth be known, today's dealerships are being run with little individuality. Even the impact of competing brands fails to separate most dealers.

Years ago, a dealership owed its success to the unique personality of its owner and the pride of its manufacturer.

But, armed with the arrogance of success, manufacturer-anointed accountants and business administrators seized control of dealerships and molded them to their pricing and whimsy.

Why would dealers yield to such treatment? Consider the termination of so many who have been tossed to the curb without compensation. A franchise document is an easily broken agreement held together only by the most fragile of relationships between dealer and sales rep.

Modern dealers are merely custodians of their stores. So who should bear the burden if dealerships are terminated for the benefit of other stakeholders?

Fairness dictates that if dealerships are cookie-cutter alike, those who have shaped them should carry the responsibility of the result.

Lastly, what of the certified public accountants and lawyers whose advice so often falls butter down? I remember when loans automatically renewed from year to year with little more fanfare than lunch with my bank rep and maybe a few signatures on internally prepared bank forms.

These days, it takes a renewal “package” requiring an independent analysis from a CPA and an opinion letter from an attorney.

If the loan fails or the lender pulls out, shouldn't the burden of that failure be shared with its authors? I'm all for using accountants and lawyers to interpret financial information and spot legal issues, but the benefits of their fees should be more than a pile of documents and a check on a check list.

Let's not allow accountants and lawyers to merely parrot information. They're charging enough for independent analysis, so we should not allow them to hide behind weasel language and slip out back doors.

We are only a moment away from having an insufficient number of dealers to shoulder blame for our industry's ills.

The good news: Bankers, lawyers, politicians and the like will be naked without dealers to shield them.

The bad news: Until we assign responsibility (rather than fix blame), we will continue to wander around aimlessly without direction, accountability or improvement.

Peter Brandow is a veteran dealer.

Questions or comments about this column?
Send us an e-mail at [email protected].