When it comes to factory-mandated image programs that require new-car dealers to invest billions of dollars to remodel their showrooms, Stephen W. Wade, outgoing chairman of the National Automobile Dealers Association, expressed hope that a new study released recently would help restore reason and common sense.
Responding to dealer concerns, NADA commissioned the study last August that looked at the various factors – both positive and negative – that drive the return on investment in dealership facility upgrade programs.
The study was conducted by Glenn Mercer, a former McKinsey and Company partner and industry consultant who focused on objective analysis, rather than on advocating the position of one party over another. Mercer interviewed a broad range of industry participants.
The study uncovered three types of store upgrades:
(1) Expansion – adding a showroom or service bays to support growth in UIO, for example.
(2) Modernization – upgrading facilities to contemporary standards in tile, furniture and fixtures, etc.
(3) Standardization – designing the interior and exterior look to ensure that every store selling a given brand looks as much like the other stores as possible.