NADA to Automakers: Stop Unfair Business Practices

  • October 23, 2012

The automotive business is unique in the world of retail in one big way: because of the cost of the product their selling and the commitment it requires both of customer and dealer, automakers are compelled to control the retail experience the way they control their advertising and marketing in other ways. If it's, say, Cadillac, they want their dealers to evince the "Art and Science" iconography of the brand, established over a decade ago. 

Or if some dealers aren't pushing the metal as well as others, they want to give them what they would consider a friendly nudge. Dealers, however, see both as a Big Brother influence on their affairs. 

It's not a new story, but it's always current: auto dealers and automakers have a relationship that looks more like a state of perpetual detente than a marriage (though one might argue that most marriages are also states of detente.) 
The issue of the day is two-tier pricing and mandatory facility upgrades, the former (from the automakers' perspective) a way to motivate slow starters, and the latter a way to support the brand image and equity all the way to retail. 



From the auto dealers, it's a "don't tread on me," issue. at a press event in Detroit, Bill Underriner, chairman of the National Automobile Dealers Association, said "Two-tier pricing and mandatory facility upgrades are symptoms of a bigger overall problem—manufacturer intrusion into dealers' businesses," 

NADA has a dealer task force to focus on the fairness of the two-tier pricing programs."The history of our industry is littered with automaker attempts to impose one-size-fits-all programs on dealers. These efforts at top-down control almost always fail," added Underriner, a Buick, Honda, Hyundai and Volvo dealer in Billings, Mont. "We favor lawful, equal and fair treatment by a manufacturer for all its dealers. Unfortunately, history shows that, at times, manufacturers create incentive programs that favor some dealers over others."

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