First things first
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The recently released National Automobile Dealers Association's study on facility programs cast a bright light on a major conflict between dealers and manufacturers.
Hefty, volume-based payouts tied to factory programs -- combined with shrinking dealer margins -- are leaving dealers with little choice but to comply with requests for dealership renovations.
A caution to the factory: With dealerships just now getting back to business as usual, this is no time to step on the gas.
The incentive money, which has become a carrot for all dealers, is leading to pricing inequalities in the market and putting some dealers at a competitive disadvantage.
While the "Factory Facilities Programs" released at the NADA convention noted that a perfect resolution isn't obvious, what is obvious is this: Dealerships need to be attractive places of business, but costly standards requiring hefty investments cannot interfere with a retailer's ability to run a business.
