Who's Naughty, Nice?

Once again, my manufacturers are scrambling, just like I am. I like it when we're in the same mode, not that I wouldn't prefer it to be napping in the lap of luxury rather than running the gauntlet for survival. But cycles are what they are, and today I'm scrambling to meet the needs of staff, store and lender. It is tying knots and hanging on with lenders, manufacturers and dealers all straining

Once again, my manufacturers are scrambling, just like I am. I like it when we're in the same mode, not that I wouldn't prefer it to be napping in the lap of luxury rather than running the gauntlet for survival.

But cycles are what they are, and today I'm scrambling to meet the needs of staff, store and lender. It is tying knots and hanging on with lenders, manufacturers and dealers all straining in the same direction.

Most of the self-serving strategies have been played out. So now there is chance for auto makers to do the right thing for dealers and staff.

For the longest time, there's been a disconnect between what I could afford to do and what my auto maker wanted me to do.

We both wanted the same volume, happy customers and good life. But the gulf was wide between the volumes I achieved and those they wanted.

Given the immense disconnect, political correctness replaced candor. Polite diplomacy gets you through the moment but it doesn't solve anything. Solutions require change and change is gritty.

So I'm smiling in the face of adversity because I see real opportunity for my manufacturer and fellow dealers to create strategies that are honest and win-win.

They have needs and we have needs and we are not likely to get through this together by shifting burdens back and forth.

What a dealer needs to achieve profitable volume and happy customers is documented in the monthly financial statements that some 22,000 new-car dealers submit in detail to their manufacturers (and in lesser, but significant numbers to the National Automobile Dealers Assn. as well).

The line-item specifics are easy to spot, but it's not so easy identifying and eliminating the little secrets that have plagued our retail space.

Perhaps the first thing to overhaul is the notion that manufacturers and dealers can't deal honestly with one another and still earn a profit.

We endure the shell games of manufacturers and captive lenders who:

  • Play with interest days to enhance yields when they think no one is looking.
  • Shave percentages off payments with fine print and charge backs.
  • Manipulate “in transit” days to boost their return.
  • Average-up the shifted costs of handling and marketing.

Does anyone really believe we can embrace a customer-friendly sales process while shouldering massive facility costs, bizarre advertising expenses and rising days' supplies of product?

Car people are clever on both sides of the aisle (retailers and manufacturers). There is no lack evidence of the tricks and schemes we've hatched to overcome desperate circumstances.

But we have a chance to redefine our relationship as we overcome shifts in our market.

I don't expect many manufacturers will replace tiered incentives, rebates and ho-hum catch phrases (how many ways can you spin employee discount, red-tag sale and vendor pricing) with healthy dealer margins and heads-up communication.

But some, if only as a last ditch effort, will seize the moment to end the horse trading with their dealers.

In response, their best dealers will notice the connection between consumer responses to marketing and a reputation for customer satisfaction. Savvy dealers will correlate yield percentages (the ratios of leads to appointments made and deals closed) with specific in-store processes that significantly reduce the cost per sale.

Manufacturers will see that, just as they leverage communication and just-in-time efficiency to optimize their bottom line, they can eliminate dealers' impaired assets by ending sloppy communications and wasteful programs.

I am not so wide-eyed as to believe that just because General Motors and Ford are in tight spots that a new age will dawn.

But in times like these, who's been naughty and who's been nice isn't just about Christmas any more.

Peter Brandow is a dealer in Pennsylvania and New Jersey.

TAGS: Dealers Retail
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