The National Automobile Dealers Association convention was a busy event this year.
Probably the most important issue resolved was that for the foreseeable future you will continue to buy your new car or truck and get it serviced at a franchised dealership.
General Motors and its dealers seem to have kissed and made up. GM has stated, without any exceptions, that it will support the franchise system, and its dealers seem to support that attitude.
Only Ford Motor Co. seems intent on continuing to experiment with systems of distribution other than the franchised dealer. And to date Ford's experiments don't seem to be very successful.
Now it will be up to all the dot-coms that are coming out of the woodwork to demonstrate that they can compete with franchised dealers for customers' business, although many dot-coms seem to be sort of electronic brokers. A lot of e-commerce companies are becoming part of the franchise system. They will continue to compete for dealer loyalty and support as they try to help dealerships do a better job and sell more vehicles.
But others are telling the customer that they are selling cars directly, and that is simply not true. They are just e-commerce brokers, and my guess is that those companies will disappear fairly quickly.
If anything was demonstrated at last week's NADA convention, it was that despite all of the challenges, the franchise system seems to be alive and well.
But the real danger may be within the system. Automobile dealers should not assume that all of the rotten practices of yesterday can continue. There is absolutely no reason to assume that the retail dealer will not have to change at as rapid a rate as before. Competition from other dealers will continue to be fierce, and customers will go where they are treated the best.
E-commerce will make today's consumer the best informed in our history, and dealers must be far better informed. Today's salespeople must know everything there is to know about their products because their customers know everything.
The challenges are still here for the dealer. It would appear that competing with the factory is not one of them. Treat the customer as king, a very well-informed king, and we will all be ready for this century. Otherwise dealers will get killed by their competitors, and they'll have no one to blame but themselves.