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NADA to Release Results of 'Image Program' Study at Dealer Convention

December 29, 2011

The National Automobile Dealers Association will release results from the factory image program study it commissioned in October at its annual convention in February, the group’s incoming chairman told F&I and Showroom magazine.

The study, which is being conducted by well-known industry consultant Glen Mercer, will highlight both the positive and negative factors that drive the return of factory-mandated dealership remodeling programs. Results will be released during a press conference at the NADA Convention in Las Vegas on Saturday, Feb. 4, at 9 a.m.

“[Glen] is talking to OEMs, dealers, customers, CPAs, attorneys and businesses that do image programs for hotels and restaurants to see if putting millions of dollars into a new facility will sell one more car,” said 2012 NADA Chairman William Underriner during a Dec. 15 interview.

Manufacturers that want all of their dealerships to look the same are urging dealers to update their showrooms, and are offering incentives to do so. But dealers have argued that they’ll never recoup the investments they’ll have to make on these “voluntary” projects.

In the NADA’s Oct. 20 press release announcing the study, 2011 NADA Chairman Stephen Wade said factory image programs are a major source of frustration among dealers. He added that new-car dealers who have been hit hard by the economic recession need less financial pressure – not more – especially when faced with tough decisions to remodel their dealership.

Wade added that there is little evidence as to the return on investment on such projects, either to the automaker or to the dealer.

“Each year, dealers collectively invest billions of dollars in facility upgrades, much of it mandated by the auto manufacturers,” Wade said to the Automotive Press Association in October. “These costs have a significant impact on dealer balance sheets, in many cases severely straining them and, in some cases, even persuading a dealer to leave the business rather than commit such large sums.”

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