Dissecting dealers' attitudes

The top and bottom brands in the Winter 2016 NADA Dealer Attitude Survey are predictable. But some of the shifts in the middle are surprising.

For example, niche brand Volvo surged 13 rungs in the overall rankings, to No. 13 from No. 26 a year earlier. (It gained one rung because Scion fell off the list.) Conversely, Land Rover tumbled 12 spots to No. 26.

Infiniti jumped 8 spots to No. 23 from next-to-last in 2015, even as sibling brand Nissan held at No. 25. And BMW remained stuck at No. 22, immediately behind Mitsubishi.

The survey, conducted twice a year by the National Automobile Dealers Association, is a report card that focuses on three main areas: franchise value, company policies and the brand's personnel. Results are shared with automakers in a series of meetings of top-level executives from the automakers, dealers and NADA.

Lexus, Toyota and Subaru held the top three spots, unchanged from last year. No surprise there: Lexus and Toyota are highly profitable franchises known for their high sales per dealership, while Subaru's unit sales have set records for seven straight years. All three brands also are renowned for listening to and acting on dealer concerns.

At the opposite end, the bottom five included four niche players with weak sales and one suffering well-publicized recall problems: Fiat, Smart, Jaguar, Volkswagen and, dead last, Mini.

NADA historically has not released the survey results but this year released the top 10, both overall and in consideration of dealer input, without further details. Automotive News obtained the overall rankings for all brands, as well as copies of this year's executive summaries of NADA's meeting with executives and dealers of select brands, which included some specifics of those brand's survey results.

Volvo's jump in the rankings came as the brand's dealers celebrated the launch of the XC90 crossover and rising franchise values as reasons for the high scores.

"We have a very transparent organization," Lex Kerssemakers, CEO of Volvo Car USA, told Automotive News. "We shared with our retailers our $11 billion investment on the product side. All these things make dealers positive about the future of Volvo, and that's reflected in the value of their franchise. They see the value will be higher."

Audi slipped to No. 10 from No. 4 a year earlier. "The survey provides us with quantifiable feedback," said Mark Del Rosso, Audi of America's COO, in an email to Automotive News. "It is in our collective best interest to improve the value of their Audi franchise.''

Other automakers agree.

"Ford takes it very seriously," said Rhett Ricart, the NADA Ford Lincoln line director and owner of Ricart Automotive Group in Columbus, Ohio.

When senior Ford executives met with dealer leaders and NADA representatives this spring to review the survey results, "there were 32 people at that Ford meeting," Ricart recalled. Ford, which eased to No. 6 from No. 5 last year, "wants to hear from everybody and they want everybody in the company to hear it. They're always asking what they can do better."

At the Lincoln meeting with NADA and dealers, the automaker was represented by Joe Hinrichs, president of the Americas, and Bernard Silverstone, CEO of Ford Motor Credit Co.

Lincoln dealers gave strong marks to future franchise values, product quality and field staffers for sales, service and parts. The brand's consideration of dealer input and overall dealer relations are "among the industry's top ten," according to the executive summary of the meeting.

Lincoln's overall score put it at No. 16, up from No. 20 a year earlier. Matt VanDyke, director of global Lincoln, said Lincoln is making progress.

"Working hand-in-hand with our dealers is a driving force supporting that progress," VanDyke said in an email. "Our dealers are seeing an increase in the value of their franchise with new product launches, growing sales volumes and improved customer satisfaction in sales and service."

Chrysler took a tumble to No. 24 from No. 19 a year earlier in part because of dealer pessimism about current franchise values. Dealers also had concerns about Chrysler's stair-step incentives, known as the Volume Growth Program. But the Jeep and Ram brands scored higher, especially in terms of their franchise value.

Field personnel scores slid for all FCA brands.

One Chrysler-Dodge-Jeep-Ram dealer, who declined to be identified, said: "I'm not stressed about the VGP because we've had it for so long, I've figured out how to make it work for my store. But we have had problems with our field staff. I don't think the field staff is responding as quickly as they could to customer issues."

FCA spokesman Ralph Kisiel declined to comment on the survey results, saying that while it's useful information, the company considers it confidential.

Volkswagen moved from last place last year to No. 30, topping Mini after Mini saw slowing sales.

About 120 VW dealers' comments largely focused on the diesel-emissions cheating scandal or current inventory challenges, the summary read. As of June 1, VW had a 73-day supply, according to the Automotive News Data Center. A 60-day supply is considered optimal by the industry.

Many VW dealers said they wanted more communication from VW on the diesel emissions issue, the summary said. But, the summary noted, there is a legal gag order in place.

VW leaders said they are studying the survey results and will work to improve dealer satisfaction with the brand.

VW spokeswoman Jeannine Ginivan, in an email to Automotive News, said: "Dealer satisfaction is a top priority for Volkswagen, as such, we have been actively working with our National Dealer Council to understand and address needs of our nationwide dealer body."

The average response rate to the survey was 58 percent, little changed from previous years. In releasing the names of the top 10 brands on the overall survey, NADA emphasized the importance of a strong response rate. "The willingness of dealers to share their views with their manufacturers is one of the best ways to gauge [dealers'] desire to grow the OEM-dealer relationship on an ongoing basis," NADA said in a statement.

Lexus had the highest survey participation, with 89 percent of its dealers completing the 2016 winter survey. Mercedes-Benz was second, at 85 percent. Lincoln's 68 percent rate was the highest in 25 years, but Cadillac dealers' response rate was only 42 percent.