DETROIT -- Change at the retail automotive level is inevitable, and the established players should be the ones to change it, said John Mendel, executive vice president for automobile sales at American Honda Motor Co.
Otherwise, new entrants from emerging markets such as India and China, with a burning desire to prove themselves on the world stage, will change it for them, he warned in remarks Wednesday at the Automotive News World Congress.
“We need to create a new sales and service environment that the customer doesn't simply tolerate but desires,” Mendel said.
He said he doesn't know what those changes will or should be. But he has seen changes at the company's motorcycle division, and the thought of similar changes at the retail auto level “keeps me awake at night,” he said.
That unit is being challenged by look-alike motor scooters that aren't technologically advanced, but the price point is right, he said. The vehicles are being sold at shopping malls, sporting goods stores, auto parts stores and discount retailers, not motorcycle stores.
Mendel said the sales process at the dealership level has to change. Honda has already started to brainstorm with its Acura dealer network about ways to add value for consumers at the point of purchase.
The process is starting with Acura dealers because that brand's network is smaller than the company's Honda dealer network.
“It's going to change; somebody is going to change it,” Mendel said. “It might as well be us.”
Mendel also said he believes that the industry has taken steps toward stability but cautioned that it is a mistake to believe that an improved market will solve the industry's problems. Areas such as energy sustainability, energy security and greenhouse gas reduction must be addressed.
Said Mendel: “The key to the future will be our ability to anticipate the change and strengthen ourselves to prepare for it.”
