A recent story in The Car Connectiongot me thinking about the disconnect between automakers and their dealers. While the companies talk a good game about cooperation and symmetry, it doesn’t appear to be happening, based on some recent polls. In the 20 years I’ve been covering the auto industry, not a whole lot has changed in that regard.
A Gallup poll ranks car salespeople at the bottom of the list of most-trusted professions, tied with telemarketers and members of Congress. Only lobbyists fared worse.
Total Dealer Compliance conducted its own survey and discovered most Americans have a negative view of dealerships, believing they employ shady business practices. Roughly 65% of those surveyed described auto dealerships' business practices as unethical.
Richard Read of The Car Connection thinks there’s credence to the surveys, stating, “In fact, given some of your comments in recent years — particularly as the National Automobile Dealers Association launched a charm offensive to improve consumers' opinions about dealerships and commission-based business models — we'd say that the survey reveals a slightly rosier opinion of dealerships than we'd expected.”
Indeed, the comments on that very story don’t mince words. “Stealerships is a fitting moniker for them,” wrote one reader. “Their advertising is certainly misleading,” comments another.
I asked an analyst at Cox Automotive, which includes Autotrader and Kelley Blue Book, what she thought of the Gallup poll.
“We do lots of studies about what consumers want,” says senior analyst Michelle Krebs. “I don’t believe we have specifically asked about trustworthiness or ethics. But according to the most recent Autotrader Car Buyer of the Future study, consumers are not satisfied with the current car-buying process. Of the 4,002 people we surveyed, only 17 said they like it just the way it is.”
“They tell us they still want to buy their car at a dealership, but they want big changes in the way they make their purchase,” Krebs says. “They want more test-drive time — including one without the salesperson — and that includes multiple models they are considering. They want to do more of the process online, especially applying for a car loan.”
Incidentally, consumers still want to negotiate price, according to Krebs.
“They don’t trust flat-price selling as they don’t trust that the flat price is the best price,” she says. “They feel they have to negotiate to get a fair price. What our data shows is consumers mostly want the system to change to be more efficient.”
All of these findings seem like something both automakers and dealers would want to address. The problem is there appears to continue to be a “church and state” separation of automaker and dealer that neither side seems totally willing to eliminate. It’s easier to point the finger at the other side than actually to do something to change things.
Interestingly, I couldn’t get a single automaker to challenge these findings, or, for that matter, even comment on them. For an industry that is usually so ready to self-promote, that’s telling in and of itself.