America is the birthplace of the franchise system for the distribution of motor vehicles.
Who could ever have foreseen two Japanese companies as the staunchest defenders of that system?
And who would ever have imagined that an American company would put forth a plan that could dismantle that franchised distribution network?
In Japan, most big dealerships are factory-owned. The system includes privately owned and financed outlets, but they usually are not as large or successful as the company stores.
Toyota and Honda, the two prime Japanese players, have wrapped both arms around the American system of franchised dealers. They are prepared to defend - by litigation if necessary - their views of the American concept against H. Wayne Huizenga, the Republic Industries boss who has become the biggest force in the dealership world. Toyota and Honda feel that Huizenga wants to control their dealer organizations. Republic denies that.
Honda and Toyota have every right to defend their turf. The pros and cons will be aired in court.
But legal proceedings aren't the only answer. The Japanese giants should do more than that. They should give their dealers a reason not to sell to Huizenga. The two importers have the money, and they have the brains. Let's see what they can offer.
Ford Motor Co. has already devised an alternative to Huizenga. In Indianapolis, the company proposes to replace the 18 independent Ford and Lincoln-Mercury dealerships with five megastores that would be owned by Ford and the dealers. The idea is a lot more radical than anything Huizenga envisions.
The franchise system has taken its lumps lately. Makers complain about the high cost of distribution. But isn't that the manufacturers' fault? The U.S. method may be every bit as inefficient as its critics claim - but it works! It moves about 15 million new vehicles a year.
The franchise system can be improved by dealers and makers working together. We recommend that course of action to Toyota, Honda and Ford.
Ford has fired a loud shot over the bow of the franchise system. Just as everyone has learned from Saturn Corp., everyone can learn from the Ford experiment.