In the past two decades, the independent automobile dealer has felt a lot of pressure. That pressure has caused the dealer to change, improve and simply sway with the breeze.
Well, the wind will continue to blow, and blow up a real hurricane. But that doesn't mean the automobile retailer won't prosper.
It has been said that the last dumb customer walked into a dealership around 1998. Since then, customers have been better informed and educated about what they want to buy, what's available and what it costs at retail and wholesale. They know more about the process and the products than ever before.
That doesn't make them the enemy. It simply means that salespeople must be better educated and trained.
It is the most exciting and challenging time to be in the retail business. There are plenty of opportunities to serve the customer in different ways. Some customers will want a relationship with their dealer strictly on the Internet. For those customers, the dealer will have to learn all the newest communication tools.
Some customers will want a dealer who has a no-haggle system. And, yes, some customers will want to negotiate just as they always have.
But whatever the customer wants, the retailer will have to make it available. And the dealer will have to do it at lower and lower cost. Less profit and more service to the customer may not sound like much fun, but they will become the dynamics of the new century.
There will continue to be experiments on novel ways to retail cars and trucks. But when all is said and done, vehicle manufacturers will continue to realize that the most effective way to sell cars is with franchised dealers. Dealers will have to change, just as the factories will have to change, but the system is a great foundation that can only get better if dealers and factories cooperate.
In the last year of the old century, dealers in the United States sold nearly 17 million cars and trucks. And they sold them one at a time. It would be impossible to replace the franchise system with anything better. The system will improve, and it will prosper.