The six megadealers participating in J. D. Power and Associates' retailer roundtable at the NADA convention agreed on one thing: Toyota and Lexus are the best franchises to have in 2001.
Most often picked as the least desirable franchises were Mercury, Chrysler, Dodge and financially troubled Daewoo.
'We had three Chrysler-Dodge stores. We sold one. We have a buy-sell agreement pending. That leaves us one. I think that speaks for itself,' said Joe Serra of Serra Automotive in Grand Blanc, Mich.
Asked which franchise will be the next to go after Oldsmobile, the vote was split: two picked Daewoo; two named Buick; two selected Mercury.
The panel members provided their perspectives on a wide range of questions fired at them by the audience and moderators J. David Power III, chairman of J. D. Power and Associates, a consulting firm in Agoura Hills, Calif.; and Keith Crain, publisher of Automotive News.
J. D. Power predicts that 2001 light-vehicle sales will drop nearly 8 percent, or 1.4 million units from last year's record 17.4 million. The dealers said they expect a smaller decrease than that. Some even expect higher sales or sales on par with last year at their dealerships.
They said they will look at expenses that may have gotten out of line at their stores during the past two record sales years.
The dealers agreed that the manufacturers are placing too much emphasis on delivering a car in five days, since they sell most vehicles from inventories.
Henry Faulkner II of the Faulkner Organization in Philadelphia, which operates dealerships in Pennsylvania and Delaware, said he would participate in an experiment of the five-day car. 'I'd gladly volunteer to compete against a dealer who has nothing in inventory with a promise to get a car in five days, and I'll sit there with 30 to 45 days' supply of good inventory. I wouldn't even ask for manufacturer support.'
The dealers agreed they would like to order vehicles and know the vehicles would be delivered in a predictable, relatively short time to satisfy customers better and cut costs.
Greg Penske, president of Penske Automotive Group in El Monte, Calif., doesn't see the day when consumers order a car exactly as they want it and have it delivered in five days. But he expects dealers will be able to spot a similar vehicle in the pipeline and get it delivered in a short time, cutting dealer inventories in half.
Honda's simplified ordering process is the ideal, said David Conant, president of Conant Auto Retail Group of Cerritos, Calif. 'It allows a dealer to have a broad inventory without having thousands of cars on the ground. '
John Bergstrom, CEO of Bergstrom Corp. in Neenah, Wis., and Bert Boeckmann II, president of Galpin Motors in North Hills, Calif., said the five-day car is a nonissue because the manufacturers can't do it.
'When I first started in the business, we took a pen and put the `x' in the box of what you wanted, and you'd have the car in three weeks,' Boeckmann said. 'Now we've gotten sophisticated, and we can usually get it in about 60 days.'
The dealers said incentives would go away if manufacturers produced cars and trucks that consumers really want to buy. That would also allow a price increase.
In the short term, manufacturers need to look at their strategies when putting incentives on leases, however. 'The single biggest problem we're having at our stores is people coming out of leases and not being able to get a vehicle without a major shock,' Bergstrom said.
A larger issue is the factory-dealer relationship, the dealers agreed. Based on their comments, it requires a delicate balance. Bergstrom recognizes the need for dealers to meet consistent standards, as McDonald's does with its fast-food stores. Indeed, the manufacturers have had to deal with dealers who don't want to change. 'The dealer has got to change, and good dealers are changing,' Penske said.
Other dealers, however, said some manufacturers - naming Ford specifically with its Blue Oval plan - have overstepped their bounds. 'Any manufacturer who gets the reception Ford has with Blue Oval ought to step back and think about it,' Faulkner said.
At the very least, the dealers agreed, manufacturers need more input from dealers and more dialogue with them.