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NADA Launches Initiative to Promote Benefits of Franchised Dealers

June 17, 2014

McLEAN, Va. — This week, the National Automobile Dealers Association (NADA) rolled out an initiative called “Get the Facts.” It is designed to demonstrate the benefits of the franchised new-car dealer network. As part of the initiative, the association has released an in-depth report on the consumer benefits of the franchise system.

The report, “Consumer Benefits of the Dealer Franchise System,” shows that factory-direct sales of new cars either sold online or through factory-owned and operated retail outlets have not resulted in lower prices for car buyers or increased market share for manufacturers.

“The franchised dealer network benefits consumers and manufacturers alike by providing fierce price competition among dealers and an extremely efficient distribution network that is acutely sensitive to local markets,” said auto industry consultant Maryann Keller, author of the report. “The new-car dealer franchise network is the most efficient way to distribute and sell new cars as well as provide convenient access to service over the life of every vehicle.”

Keller also found that as long as cars are retailed, there will inevitably be costs of retailing, and that local competitive dealers are the best way to lower those costs. Additionally, she noted that dealerships can make the complex process of a vehicle transaction as simple as possible.

The NADA’s “Get the Facts” initiative also includes a two and a half-minute animated video detailing the benefits of the franchised dealer system. Other resources include a 30-second video, a fact sheet on the consumer benefits of dealers, a longer informative FAQ, a document explaining the reasons for state franchise laws, an infographic and other materials.

“Franchised new-car dealers provide the best, most efficient and most cost-effective way to sell and distribute new cars in America, and we’re proud of our businesses and business model,” said NADA President Peter Welch. “The NADA’s efforts will set the record straight about the benefits of the dealer franchise network for consumers, manufacturers and local communities everywhere.

The NADA has presented the materials to state and metro dealer associations as well as individual dealers across the country. It is encouraging them to co-brand the materials and present them on their own websites.

“Franchised new-car dealers benefit consumers through price competition, accountability on warranty and safety recall issues, and provide enormous economic benefits to local communities across the country,” Welch said. “The dealer franchise network is supported by automakers as the best and most efficient way to buy, sell and service cars in the marketplace.”

To view the initiative, click here. To view the report, click here.

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