As the National Automobile Dealers Association approaches the millennium, it faces a daunting task.
The organization must serve large public dealership groups without neglecting its traditional small, family-owned dealership members.
NADA has been quick to notice changes in membership and is introducing programs aimed at larger corporate members. But as it caters to the big players, NADA risks its longtime role as champion of mom-and-pop dealers.
'We are trying to put together a whole menu of things to provide to the public dealerships,' says Paul Holloway, outgoing NADA chairman and president of Dreher-Holloway Inc. in Exeter, N.H.
Mom and pop
For years, NADA has met the needs of much smaller companies. The average dealer is a family-run business with 47 employees and $22.4 million in annual revenues, according to NADA statistics. Its employees attend factory training sessions and NADA seminars; hiring an outside consultant for training purposes is a luxury. To make its case in Washington or before the automakers, 'John Doe Dealer' relies on NADA.
Then there's Republic Industries Inc., by far the nation's largest dealership group and just as much a member as Mom and Pop.
The Fort Lauderdale, Fla., giant has 56,000 employees and $18 billion in pro forma annual revenues. As a large publicly held corporation, Republic is able to spend $7 million on employee training in Denver alone, where the company has launched its brand marketing campaign. The company has lobbyists on retainer in Washington. And Republic has its own legal staff talk to the factories when the parties don't see eye to eye.
Though other chains are well behind Republic's volume, at least 13 chains have topped $1 billion in annual revenues; four of them are publicly held.
Still, not only are some of the large public dealership groups using NADA services; they are considering expanding NADA's role at their companies.
'I think that down the road, we will look at a lot of the different services NADA provides,' says Charles Smith, vice president of industry relations for Group 1 Automotive Inc. of Houston, a publicly held dealership group with almost $2 billion in annual pro forma revenues. 'It might be more efficient to have NADA provide some services than for us to do it ourselves.'
Holloway says there are at least three services NADA could tailor to large public companies, including:
Skylink, a satellite broadcast system that will deliver interactive training programs and industry news directly to dealerships. NADA will allow large companies such as dealership chains and automakers to send intracompany broadcasts to their own dealerships.
Modified 20 groups, in which NADA runs an intracompany version of its popular information exchange program. Many of the public companies already hold formal meetings where general managers for their stores swap ideas. The format of the new kind of 20 group would be similar to traditional 20 groups, though the conventional groups are composed of competing dealerships.
Specialized NADART (National Automobile Dealers Association Retirement Trust) programs that would let a public dealership chain provide a 401(k) plan that allows employees to invest in the company's stock.
NADA invited the publicly held dealership groups to its McLean, Va., offices in January to discuss how the association could meet the needs of these rapidly expanding chains.
'The interesting thing was that none of the things they talked about would be to the detriment of the independent dealer,' says Holloway. 'In fact, some of them are experiencing the same problems as the independent dealer. They have difficulties with some of the factories. And they were very supportive of our position on state franchise laws.'
But some dealers see potential for conflict. 'If you try to be everything to everybody, somebody is going to get stabbed,' says R. Dean Jones, president of Jones Motors Inc. in La Junta, Colo., and the NADA director for Colorado.
Jones is aware of the heated competition sparked by Republic Industries' brand marketing campaign in Denver. The conflict illustrates the danger that NADA could be torn between members large and small.
Republic has launched an ad campaign that feeds the negative stereotypes dealers have tried to shake for years.
The campaign features two fictional car salesmen dubbed 'the guys in plaid.' The campaign has infuriated local dealers and caught the eye of NADA.
NADA has spearheaded a new, nonprofit organization called Auto Retailing Today that is meant to improve the image of car dealers. Republic has contributed funds to the organization, says Holloway, who was surprised Republic would run a negative campaign.
Republic spokesman Oscar Suris says the company has no intention of changing the Denver campaign.
Nevertheless, NADA is discussing the campaign with Republic officials to try to get the company to change its advertising approach.
There is little NADA can do to stop the campaign and keep its smaller, conventional dealers happy.
'Other dealers have run similar negative campaigns' over the years, says Holloway. 'We ask no more of Republic than we do of any other dealer.'
Donna Harris is an Automotive News staff reporter based in Washington, D.C.