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Dealers Playing Critical Role in Recall Crisis – But Franchise System Under Increasing Fire

Tesla gets a loophole in NY.

by on Jun.19, 2014

Dealers have been investing billions for upgrades demanded by automakers like BMW in recent years.

The surge in recalls this year by General Motors and other automakers has underscored the vital role that franchise dealers play in the automobile industry – or so says the powerful dealer trade association – but there are a growing number of challenges to the century-old franchise system.

Dealers are facing a flood of work as recalls accelerate to a record pace – GM alone announcing service actions covering nearly 18 million vehicles sold in the U.S. so far this year. But other makers, including Toyota, Ford, Honda and Chrysler, have announced, or are facing the prospect of, millions more recalls in the months ahead.

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Handling those repairs is one reason why a new study commissioned by the National Automobile Dealers Association, the trade association tasked with protecting the position of franchised dealers, argues that the century-old system is the most reliable and efficient way to deal with the nation’s auto buyers and owners.

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Dealers Ready to Go to War Over Mandatory Showroom Upgrades

“Where’s the payoff?” asks head of national dealer group.

by on Oct.20, 2011

Cadillac is one of many makers who have laid out detailed showroom redesigns dealers are expected to implement.

When Ford Motor Co. officials began pulling together plans to revive the long-struggling Lincoln brand one of the first moves was to advise dealers they’d need to redesign their showrooms – again.  And Lincoln isn’t unique, from high-line brands like Mercedes-Benz to mainstream marques such as Chevrolet, automakers regularly roll out expansive – and expensive programs intended to reflect brand values with dealer redesigns that can run millions of dollars for even a small, rural showroom.

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Now, however, dealers may be ready to tell manufacturers that without a clear payoff they can take their blueprints and shove ‘em.  The National Automobile Dealers Association, the nation’s largest automotive franchise group, has commissioned a study designed to see whether such projects really pay off or are nothing more than an extension of brand ego.

“We need to get down to rhyme and reason, legitimate facts and figures,” said NADA Chairman Steven Wade, himself a Utah mega-dealer who has been asking for answers every time automakers have demanded he upgrade his various showrooms.

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