The new CEO of General Motors says it costs GM around $1,000 per vehicle to support the dealer with training, parts and service, advertising, etc. That's why they want fewer dealers selling the same amount of cars (hopefully). Sounds like they may also have a new set of "standards" its dealers must live up to in order to remain dealers - things like increased sales levels, not selling other brands, upgrades in facilities, and maybe even new locations. Sound familiar?
Here's a question for you: How much can/do manufacturers cost dealers? Training, parts catalogs/CD's, etc., fighting for customers because there's another dealer five miles down the road, poor management and/or manufacturing that puts added pressure on the dealer?
Is this a partnership, or what? I think it's fair for manufacturers to expect certain things of their dealers. But dealers should also expect certain things of their manufacturers. In both cases, what's acceptible? Where do you draw the line? Should a dealer risk everything and open up a second store or move to a new location in order to remain a dealer, only to find out three months later that his manufacturer just set up another dealer 10 miles away? Should a manufacturer stick with a certain dealer when that dealer refuses to clean up his store and operation "professionally"?
What the courts decide with respect to Chrysler and GM terminating many of their dealers will affect, in one way or another, the outdoor power equipment industry. As hard as it is to believe sometimes, our industry does recognize the fact that the dealer network plays a pivotal role in the success of a brand. The questions are: 1) what kinds of dealers are needed, 2) how many are needed, 3) to what degree is the dealer at the mercy of the manufacturer.
~ Gregg Wartgow, Yard & Garden editor-in-chief
A defining moment for dealers
June 4, 2009