DALLAS – Automaker-dealer relations in the past often were touchy, sometimes outright hostile under certain circumstances.
For example, about 20 years ago, Ford and General Motors announced plans to run their own dealerships in select cities.
Dealers went ballistic, saying such plans flew in the face of the dealer franchise system and fearing factory-run stores would get preferential treatment.
GM scrapped its plans amid dealer protests, but Ford continued the experiment until it ultimately imploded.
More recently, automakers overproduced vehicles, then pushed them on dealers who didn’t want them. If dealers balked, factory field representatives would punish dealers by depriving them of hot-selling models.
Dealer advocacy groups were popular for about 20 years. Their primary goal was to fight the factory. Some zealous dealer advocates cried foul over almost every OEM auto-retailing initiative, such as selling cars online.
Dealers and automakers will always hold respective business interests that aren’t fully aligned with each other, but relations are better than before.
That’s evident from Geoffrey Pohanka’s inaugural address as the National Automobile Dealers Assn.’s 2023 chairman.
Speaking to dealers at the trade group’s 2023 NADA Show, he stresses that “dealers and their OEMs essentially want the same things: to give customers a great buying experience and to sell a lot of cars and trucks.”
His speech seems conciliatory, even though he says that “sometimes we have to remind our legacy OEMs that dealers are their competitive advantage.”
Legacy automakers sell vehicles under the franchised dealer system, which automakers themselves created in the industry’s early years.
Car companies did so because they didn’t want to build their own dealerships nationwide, oversee a national sales force or bankroll a coast-to-coast inventory.
Setting up an independent dealer network handling sales and service was deemed best.
Today, many start-ups, led by electric vehicle maker Tesla, bypass the franchised dealer model and sell vehicles factory-direct.
“Dealers’ opposition to the direct sellers is not about EVs,” the head of Pohanka Automotive Group in Capitol Heights, MD, says in his convention speech.
“Our opposition is that we know the franchise system is the best way to sell cars and take care of customers.”
He assures automakers that dealers are as enthusiastic about selling EVs as car companies are about making them.