HEALTHY DEBATE IS GOOD FOR OUR INDUSTRY
Magazines that don’t generate discussions generally don’t matter much to their markets.
At Canadian auto dealer, we like to inform and entertain, but we also like to challenge assumptions, and to use the pages of the magazine to reflect the types of discussions you might hear if you were standing within earshot of a group of dealers talking.
That’s why we are happy to publish two letters to the editor that take issue with a position that columnist David Adams took recently on the topic of all-in pricing.
Positions are meant to be challenged, ideas debated, and different viewpoints espoused. At times Canadian auto dealer will take a firm position on a topic (and we’ve certainly been smacked in the head for a few positions over the years) but other times we simply want to be the gathering place where people hash it out. It makes for good reading and helps both frame and elevate the debate.
We were also happy to get a call recently from a dealer who wanted to fill us in on some of the issues that he says are really ticking some dealers off.
Publisher Niel Hiscox and I visited this dealer for an off the record briefing about how some dealers are negatively affected by some of the programs used by the manufacturers to drive sales, particularly at the end of a month.
This dealer said some of these stair-step incentive programs are creating rosier pictures of vehicles sales that satisfy people in head office, but can wreak havoc on dealer margins. It’s a tug of war because dealers want more profits but OEMs want more volume. He says the manufacturers’ reps often turn on the heat at the end of a month and pit local dealers against one another to sell more so that dealer incentives kick in.
NADA Chairman Bill Underriner recently spoke out about these programs, saying they can create an unfair advantage for dealers close to meeting a quota who might lower the price on a sale knowing they can recoup it with incentives. “These unfair programs are bad for dealers, bad for OEMs and bad for customers,” he said, adding
that they also can favour the larger more urban dealerships to the detriment of the smaller, more rural stores.
What do you think of these programs? Are they working well for your dealership?
If you have an opinion on this or other topics, pick up the phone, send us an email or drop by our offices in the Canadian Automobile Dealers Association building in Markham, Ont. We’d love to hear from you.
