During last week's NADA convention in Orlando, Fla., I chatted with an acquaintance from Germany who had never been to an NADA convention before. He was bewildered.
The array of products and services that were displayed on the convention floor was mind-boggling to him.
There is nothing like that in Germany. If you go to a German trade show for new-car dealers, all you will see are hoists for the service department.
And that's why automobile dealers in the United States are so different.
Germany has a combination of independent new-car dealers and a lot of factory stores, depending on the brand.
The franchise system was created in Germany so the factories could have a service network for their cars.
They never saw the primary reason for having dealers: to sell cars.
In the United States, the primary purpose of the franchised dealer is to sell cars and trucks. Service is important, but it is only a secondary reason for the franchise.
What a difference that makes.
Just about everything at the NADA exposition is there to help dealers sell more cars and trucks. Sure, dealers have to have a strong customer satisfaction rating, and they must have a strong service department; but when you walk down the aisles at NADA, the exhibitors are going to tell you how to sell more and earn more.
That may be why the U.S. car market is so large and exciting. When you realize that most of the energy goes to selling cars and trucks, it becomes apparent why we're selling almost 17 million new vehicles a year. The mentality is different.
In Europe, there are still a lot of subdealers whose sole function is to provide service for a particular geographic area. They may sell only one car a month.
The mind-set is different. It should not surprise anyone that the sales volume in Europe also is considerably different.
It will be interesting to watch the development of the franchise system in Europe as more and more dealers start owning and running dealerships and more and more Japanese dealerships open in Europe.
The landscape will change dramatically during the next decade.
Each continent has grown and prospered with its own philosophy. It will be interesting to watch as European dealers become more sales-oriented.