Franchised new-car dealers push back, quietly but forcefully, against trial balloons a few automakers floated in favor of Tesla-style factory-direct sales to consumers at the New York Auto Forum on April 4.
“Partners do not make threats,” says Geoffrey Pohanka (below, left), 2023 National Automobile Dealers Assn. chairman and chairman of Pohanka Automotive Group, based in Capitol Heights, MD, with 21 dealerships. NADA, J.D. Power and the New York International Auto Show host the forum.
“Tensions between dealers and automakers are not new,” he says. But the notion of direct sales is far more serious than “the usual push-pull on cost shifts or a difference of opinion,”
Still, he tempers his remarks by calling for dialogue. “The best way to solve our issues is by talking, by dealers and OEMs working with each other and not threatening each other, Pohanka says.
Pohanka cites a recent commentary on direct sales by NADA CEO Mike Stanton.
At the New York Auto Forum, Pohanka quotes Stanton saying manufacturers are “‘toying with the idea of removing franchised dealers from their strategies.’”
In response, Pohanka says NADA and state dealer associations “will be there to defend dealers’ rights.” In the end, Pohanka says dialogue is more effective than “schoolyard” or “bullying” language on either side.
In a separate Auto Forum panel discussion, Rob Cochran, NADA Industry Relations chairman, echoes the call for calmer discussion.
“Dialogue between dealers and OEMs has been very, very, good,” says Cochran, president and CEO of #1 Cochran Automotive, based in Monroeville, PA, with 32 dealerships.
Talk about direct sales comes from among a “fringe” of legacy manufacturers, but it’s having a disproportionate ripple effect, Cochran says.
“We need to acknowledge most all of the OEMs are working with us.”