It is time for dealers and automakers to reason together to ease the escalating tensions over factory programs that demand pricey dealership renovations.
Factories have a right to specify design elements that sustain, promote and develop their brand images, especially when a dealer plans a new store. But pressuring dealers to undertake expensive remodeling projects every few years can be burdensome, especially if changes are capricious and do nothing to move more metal or satisfy customers.
At stake for dealers are the hundreds of thousands -- even millions -- of dollars it can cost a dealership to comply with a factory program. Some programs offer inducements that reduce the effective price paid by dealerships that meet the standards. But even with those inducements, some dealers doubt they will sell more vehicles because of the changes -- or ever recoup the cost of satisfying the factory.
For example, one dealer says that to comply with General Motors' Essential Brand Elements program he would need to replace all his windows, at a cost of $200,000, because the strips between the windows are the wrong color.
Similar dilemmas confront thousands of other dealers, who are fighting back, state by state. This year alone, 15 states have enacted or proposed changes to franchise laws that shield dealers from such demands. More states are expected to do the same in 2012.
The situation has created a patchwork of state regulations.
Further complicating the issue is that at some automakers, zone representatives have the authority to grant waivers or exemptions for dealerships that are not in compliance.
What is needed are reasonable national solutions that benefit factories and dealers, not piecemeal policies that waste time and money. A study commissioned by the National Automobile Dealers Association and scheduled to be completed this year should provide answers about costs and benefits that can help automakers and dealers resolve their differences.
It's time to put this issue to rest.