LAS VEGAS — While new-car dealers see value in having clean and modern facilities, many have questions and, in a significant number of cases, are not convinced that the factory upgrades they are being asked to do will result in an increased return on investment, according to a new study by Glenn Mercer issued today at a press briefing during the 2012 NADA Convention and Expo in Las Vegas.
“These programs – intended to encourage dealers to invest in store expansion, modernization and standardization – can place significant financial burdens on dealers, yet there is little hard evidence on the return of investment this spending might yield,” Mercer said.
In response to dealer concerns, NADA commissioned last August the “Factory Image Programs” study to provide an objective, unbiased and neutral analysis of the various factors that drive the economics of facility programs.
“The NADA research project brought all the various perspectives on this issue out into the open by speaking with a wide range of industry participants,” Mercer added. “Our goal was to open up a dialog in which all parties could discuss facility requirements on a more rational, informed and fact-driven footing.”
Based on numerous interviews and discussions with automaker executives and a diverse selection of dealers, recommendations were provided to both parties, such as working together to reduce some of the tensions that exist over these issues.
The executive summary and full report are available at www.nada.org/facilitystudy.
The NADA Story
The NADA story began in 1917 when 30 auto dealers traveled to the nation’s capital to convince Congress not to impose a luxury tax on the automobile. They successfully argued that the automobile is a necessity of American life, not a luxury. From that experience was born the National Automobile Dealers Association. Today, NADA represents nearly 16,000 new-car and -truck dealerships with 32,500 franchises, both domestic and international. For more information, visit www.nada.org.