Compare the automotive retail industry to what it was 10 years ago and not much has changed. Heading into the National Automobile Dealers Assn. convention in San Francisco in 1994, little did dealers know they would be grappling with some of the same issues heading into the 2004 convention.
There was talk of sluggish sales, although, 1994, with slightly more than 15 million light vehicle sales, exceeded 1993's total by 1.3 million, according to WardsAuto.com. The downturn came the next year in 1995 when sales dropped to 14.7 million.
J.D. Power III of J.D. Power and Associates was busy giving speeches predicting how the retail franchise system would change in the next 10 years (sounds familiar, doesn't it?) He predicted there would be 8,000 dealers today. (He was off by about 15,000.) C.D. Bohen, editor of Ward's Dealer Business at the time, devoted part of his December, 1993 column rebutting Power's predictions.
The “one price/no haggle” concept, newly introduced by the Saturn brand, was being hotly debated. Consultants and trainers roamed the convention floor in 1994, looking for converts. There were seminars on how to succeed in this new way of selling.
The OEM and dealer relationships were spiraling down into a morass of ugliness heading into 1994. Manufacturers were beginning to use customer-satisfaction survey scores as a way to reward and punish the dealers. Many states later adopted franchise laws prohibiting manufacturers from engaging in this practice.
James K. Lust, owner of Lust Chevrolet Buick Geo in Aberdeen, SD was finishing his term as NADA president (today, that role is called chairman). One of his platforms in 1993 was for a reappraisal of dealer-factory attitudes.
That was the picture facing incoming NADA president William S. Dodge, owner of the Bill Dodge Automotive Group in December 1993. Dodge, a Saturn and GM dealer in Westport, ME, made it one of his goals to modify the customer satisfaction survey forms. (This is really starting to sound familiar.)
Dodge headed a NADA task force in 1993 whose goal was to create a standard CSI form. “CSI is not an exact science and no dealer is opposed to CSI per se,” he tells Ward's in a January 1994 interview. “But every factory has different semantics and measurements, and I would like to see one standard adopted in 1994 to bring consistency into the ratings.”
Fast forward 10 years to December 2003 and some of the faces and issues are strikingly familiar. We're still talking about Dave Power and his latest predictions in the Wall Street Journal of how the franchise system is going to change in the next 10 years. “That is certainly one of the big issues heading into NADA this year,” says a spokesman for NADA. Ward's Dealer Business editor Steve Finlay's column on page 5 rebuts Power's latest comments on the future of automotive retailing.
And CSI is again at the forefront. The issue likely will get top billing at the 2004 convention in Las Vegas. Dealers again are looking to modify the CSI forms, making them more customer- friendly and relevant.
NADA reports that some headway is already being made in the form of several encouraging discussions with OEMs. Look for that to continue in 2004.
Today, while many of the after-effects are still noticeable from OEM attempts in the late 1990s to get into retail, relationships between dealers and their OEMs are on the upside. There are still minefields, however, as Ford Motor Co. significantly changes the Blue Oval certification program in 2005.
And there are rumblings among numerous Honda dealers who are against the Excell certification program. But for the most part, when dealers and OEMs talk about each other today, the tone is respectful.
While the issue of one-price selling has failed to become the industry standard, being largely confined to the Saturn brand that brought it into being, it still generates interest and discussion.
Unlike 1994, the U.S. is engaged in a war in Iraq and has the specter of 9/11. General Tommy Franks, the man who led the military campaign in Iraq, will be the keynote speaker at the NADA convention in Las Vegas Jan. 31-Feb. 3.
Sales continue to be strong and there is no real concern that the industry will undergo a painful downturn anytime soon. GM's North American Operations President Gary Cowger is predicting sales will reach the 17.2 million level in 2004.
So all of this raises a question:
Will we be talking about the same things in 2014?