AMY WILSON

Dealers on facilities: It's about the money

Automotive News | February 4, 2012 - 4:42 pm EST

LAS VEGAS -- Describing the retail community's interest in the outcome of NADA's dealership facility study as intense might not do it justice.

In a strange turn for journalists, lots of dealers and dealer advisers -- I spotted at least one building contractor and a lawyer, for instance -- showed up this morning at NADA's press conference releasing the study results. They easily surpassed the number of reporters in the room, and NADA officials had to drag in more chairs to seat the crowd.

During the past several months, I've received more e-mails and calls from dealers reacting to our stories about facility programs than probably any other subject I've covered for Automotive News. Within an hour of posting today's story describing the study results, I got even more reaction.

It's a complicated issue. But for the dealers, it boils down to one simple concern: money. If they spend potentially millions of dollars to comply with manufacturer facility specifications, will they see a payback? Some dealers who have spent the money tell me the NADA study comes too late to help them.

On the subject of money, I was struck by what study author Glenn Mercer said surprised him: the difficulty automakers had in conceptualizing the value of facility renovations. After all, they track money and results so carefully in other aspects of their business.

"I can't imagine going to the board of directors of any of these companies with a $1 billion request for new model development based on: 'Our customers want it; we think it would be great,'" Mercer said. "That was shocking."

I know a lot of dealers who are shocked by that, as well.

Amy Wilson covers auto dealer issues for Automotive News.Amy Wilson covers auto dealer issues for Automotive News.

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