Outgoing NADA chairman urges factories to be flexible on facilities
Photo credit: Joe Wilssens
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ORLANDO -- With little payback proven, automakers should back off demands on dealers for massive investment in facility image programs, outgoing Chairman Bill Underriner told dealers today at the National Automobile Dealers Association convention.
Underriner, a Buick, Honda, Hyundai and Volvo dealer in Billings, Mont., criticized stair-step incentive programs and manufacturer intrusion on dealership renovations in his farewell speech at the convention.
He cited the second phase of NADA’s facility study, released this morning, which reaffirmed that factory-directed renovations aren’t worth what dealers are paying for them.
“The one-size-fits-all approach is just plain wrong,” Underriner said to rousing dealer applause. “Rigid standards often raise costs and produce little return.”
Underriner gave the example of Marc Heitz, who just sold his $20 million Norman, Okla., Chevrolet store rather than change its hunting lodge style as demanded by General Motors.
Underriner also stepped up criticism of stair-step incentive programs, which he says result in two-tier pricing that favors some dealers over others.
“Two-tier pricing is bad for the industry,” Underriner said. “And there are better ways to structure incentives that are fair to all dealers.”
Underriner urged manufacturers to be more flexible.
With facility programs, that means allowing dealers to try creative options such as satellite service centers, he said. Improving service options for customers is key in planning the dealership of the future. Underriner is making service the focal point of his own new dealership project.
“Service departments sell a lot of cars,” he said. “If we don’t do a good job in service customers won’t come back.”
You can reach Amy Wilson at awilson@crain.com.
