Tom McCollum, CEO of Forbes Todd Automotive Group in Dallas, said gaining more flexibility with its software vendors was "a critical part" of the four-store group's recent DMS contract negotiations with Reynolds.
When its three-year DMS contract with Reynolds neared its end, the group decided to shop other providers. With Reynolds, McCollum said he prepared his team to expect "that historic inflexibility" in negotiations and noted that "we certainly took them through the paces." But McCollum said the company made concessions he hadn't anticipated.
Under his new contract, "if I see a product on the marketplace that's better than one of the strategies currently in my Reynolds agreement, I have the flexibility to do it without being penalized contractually, financially — any way, shape or form," McCollum said.
Youngs said he has seen some of Reynolds' flexibility in action while negotiating deals for his dealership clients.
One undisclosed large group returning to Reynolds will be able to add any stores it acquires to its agreement at the same price as its existing stores, Youngs said. He also said Reynolds notified a client in an addendum letter that the company planned to reevaluate the third-party integration fees over the next 12 months, and any changes would be applied to that client's existing contract. A Reynolds spokesman said the examples cited by Youngs are not part of the company's standard contract.
Some dealership leaders who have extended contracts or switched to Reynolds said they believe the management transition enabled the company's new strategy. McCollum said he also believes the DMS market is evolving and Reynolds understands it, too, must evolve.
"If they don't change," McCollum said, "they will become a victim to progress."