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J.D. Power Event Looks at OEM-to-Dealer Relations

February 19, 2013

ORLANDO, Fla. — Mike Jackson, chairman and CEO of AutoNation, addressed dealers during the J.D. Power and Associates International Automotive Roundtable and gave them the truth about what he expects in the future for the dealer and manufacturer relationship.

Jackson said that each franchise has a responsibility to the manufacturer to maintain facility standards. That being said, he thinks the required brand identity and subsequent upgrades should be appropriate. “Overall, I think they’re headed in a good place … Sometimes it goes too far, and you have to speak up,” he says.

As for what goes too far, Jackson offered this: “Now when it gets down to the color of the toilet paper, you’re getting on my nerves.”

Honda’s Executive Vice President of Automotive Sales John Mendel spoke to the controversial stair step incentives, which are notorious for creating issues among dealers trying to stay competitive. “I hate the stair step and objective-based programs,” Mendel said. “I don’t ever want to use them … I can’t tell you that they’ll never be used.”

Mendel eased the minds of some dealers, though, by letting them know the industry, as far as Honda is concerned, does not run the risk of overcapacity. “We don’t look at our growth plans as adding dealers,” he said, noting Honda’s goals and sales projections are based rather on profitability. “If the dealer network is profitable, they can expand and meet the customer needs.”

Honda, Mendel said, thinks in terms of: “‘How did we do?’ not ‘Here’s what we’re going to do.’

Those are the types of behaviors that get dealers in trouble,” he added.


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