Dealership Decline Finally Ends

After a devastating loss of 3,200 GM and Chrysler dealers since the 2010 bankruptcies, plus 1,700 Ford dealers who lost the Mercury brand, signs of a recovery in new-car franchises have emerged.

The National Automobile Dealers Association reports that in the first quarter of 2012, the franchised dealer total gained 66 as ‘hot brands’ like Hyundai, Audi and Kia filled open points. Underscoring the reversal of fortunes in the U.S. market, NADA’s directors took the opportunity at their midsummer meeting of naming a task force to study oppressive automaker programs that give urban dealers larger sales incentives and reward those who add costly facilities or undertake renovation projects.

The task force has several small dealers, led by NADA’s chairman, William Underriner, who has Buick, Honda, Hyundai and Volvo franchises in Billings, Montana. Other members include NADA’s vice-chairman, Forrest McConnell, a Honda-Acura dealer in Montgomery, AL, and Ed Tonkin, NADA’s 2012 chairman, and a multi-franchise dealer in Portland, Oregon.

Underriner has called for “utmost speed” in tackling factory programs that harm smaller dealers.

A non-dealer expert in studies such as the one at NADA, Glenn Mercer, is leading the NADA project. Underrriner and McConnell have set a deadline of February for manufacturer compliance with the study’s targets of equalizing demands for facility upgrades, improving return-of-investments goals and ending two-tier pricing and stair-step incentives.