I heard from friends in California that they actually passed legislation to benefit dealers. I had to question the fact until I read the story in Automotive News, which settled it.
I was in California for the annual Pebble Beach Concours d'Elegance last month, and all I heard from dealers was how tough it is to do business in the state. When you hear about the rules and regulations that go with running a retail car business, you understand just how tough it is. And that's before you try to add a body shop and paint booth, which can be a lifelong battle for a dealer in California.
Meanwhile, in what is a natural face-off, the California New Car Dealers Association is once again lined up against the Alliance of Automobile Manufacturers.
The legislation will keep the geographic rules the way they have been in California — no same-brand, factory-owned dealership within 10 miles, which seems to be a reasonable distance.
A friend of mine from one of the big car companies once told me that when he wanted to get a dealership cranked up, he would threaten them with a "neighbor" if they did not sell more vehicles. In most places, that is simply not allowed any longer.
California dealers also want to make certain that with the growth of subscription sales, those programs — when run by automakers — do not bypass dealers.
No, I don't think California has suddenly become a dealer-friendly state. Just ask Peter Welch, president of the National Automobile Dealers Association, who toiled for many years as head of the California association before he headed to Washington. I am sure he has lots of horror stories from his time there.
No one has told me lately of any state where it is easy for a dealer to do business. But there are lots of places where it just might be a lot easier than California.
Running an auto dealership is full of challenges, but I continue to believe, and still preach, that it might be the best way to become a millionaire these days.
Despite all the challenges, there are few businesses that allow a young person to head up the ladder as fast as they are able.
That is why it is still such an exciting business.