Amid signs of a softer market and restless consumer trends in vehicle shopping, some luxury brands are now rethinking big-budget and often contentious facility upgrades.
The automakers want to see just where economic and retail trends are going before pressing their dealers to commit to more investment in ever bigger and flashier brick-and-mortar facilities.
"It's not all about square footage and building the biggest facility in the world for no reason," said David Smith, CEO of Sonic Automotive, the nation's fifth-largest new-vehicle retailer, which owns premium-brand stores in multiple states.
Instead, a new attitude is rising that asks, "What's going to make financial sense?" he said. "It seems like we've gotten a lot more cooperation with our manufacturer partners with that."
With new-car sales flattening, retailer profitability slumping and the prospect of a pricey shift to selling electric vehicles, some dealers are pushing back against the factory's demands for seven-figure facility overhauls.
"You can't ask dealers ... to make investments in facilities and have profitability going in the other direction, which is what had been happening for the last three or four years," added Sonic President Jeff Dyke, who in the past has been outspoken about pricey facility upgrades.
But unlike in other times, when automakers used carrots and sticks to press showroom renovations forward, manufacturers at the moment appear to be listening to dealers.