New NADA study should avoid rearview mirror
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The National Automobile Dealers Association is commissioning another study, this one to generate hard data about dealers' return on investment from manufacturer-mandated dealership renovation programs.
That's all well and good. Many dealers will find the return-on-investment data interesting. But by the time NADA generates reliable numbers -- probably not much before September -- many dealers will have completed or committed to their manufacturers' programs, which means the results could be moot.
Further, dealers planning to use the return-on-investment data to stave off the next round of brand-driven dealership enhancement programs would seem to be like generals preparing to fight the last war.
Instead, the association, its members and automakers should focus on the corollary NADA study that will assess what kind of dealership facilities will be needed in 2020 and beyond.
Changes in the industry suggest that today's standard dealership footprint and configuration may not be tomorrow's most efficient use of assets.
More consumers are shopping via the Internet and using the dealership as a place to pick up the vehicle, not look for one, for example. Manufacturers are getting away from the dysfunctional practice of overproducing vehicles and foisting unwanted inventory on dealerships that need half a ZIP code to store them.
The first facilities study commissioned by NADA concluded that manufacturer facility programs cost too much and produce uncertain results. It was met with little more than polite acknowledgement from most manufacturers.
No programs were altered or delayed. Little data were shared.
There is little reason to believe the return-on-investment study will be any more warmly received.
Factories have an undeniable stake in the appearance of the dealerships that sell their products and are entitled to set reasonable standards.
But dealerships are independent businesses and dealers have a right to participate in planning that affects their investments -- in many cases, investments that will play out long after factory executives making brand decisions today have moved on.
The dealership-of-the-future findings should help dealers as they undertake their next round of facility changes, whether that is soon or several years away. It behooves manufacturers to pay attention to the study and work with their dealers for the benefit of all.
