It was undeniably great that the automotive retail industry was able to get back together in person this month in Las Vegas for the NADA Show. But the "welcome back" gift that some brands offered dealers — in the form of challenges to the franchise business model — left much to be desired.
Frustrated by sometimes excessive and undisclosed dealer markups, some automakers have countered with remedies that go too far, effectively rewriting the franchised dealer agreement and backing into an agency model.
U.S. dealers have fought for decades to preserve their rights as independent retailers to buy at wholesale and sell at the price the local market will bear. Many brands, however, would prefer to use the agency model they're implementing across much of the globe, in which the manufacturer sets the price and the dealer is paid for handling the delivery.