Auto Industry in Trouble! No, Surprise!

April 14, 2008

More than a year ago we released an report entitled “Is Auto Dealership Behavior To Blame For Recent Industry Woes?” it outlined the behavior performance of US auto dealerships. It also questioned the lack of attention for customer service by the industry according to our data at that time. I think it is ironic that we find ourselves here at the same cross roads. The powers that be blame the downturn in the economy, however the auto industry was facing this problem before the down turn. I believe it has been experiencing its own down turn for years. Dealers have been looking for various ways to improve sales. Incentives seem to be the key to boosting sales they say. However, this is a temporary fix and the industry keeps using this as a crutch. This isn’t the key, it only prolongs the biuld up of problems.

Manufacturers believe reducing the number of dealerships would correct the problem. The market is crowded, but this is good for consumers. But dealers are suffering. Only the strong will survive. Who is the strong? Is this the dealerships with the most inventory? Is this the dealership with the lowest prices? No! No! No! This is the very problem, everyone keeps making it a money issue. The more you discuss money the more money you lose, therefore the less profit. Dealers need to sell value. Not only value in their vehicles, but in themselves, as well. Manufacturer need to start holding dealers responsible for their reputations, not only sales. I believe the longevity of sales devrives from great customer service.

The industry has been fooling themselves for years with CSI scores. This is outdated and doesn’t work. There are many five star and president award dealerships that have a bad reputation in the community. Apparently, the consumers don’t agree with the CSI scores. Maybe if the manufacturers made these individual scores available to the public for comments we would discover the truth. Never mind, already has this covered. Entities can not police themselves. It must be truly open and transparent to obtain the truth.

If the auto industry wants to save itself. They must be honest with themselves. Our reputation stinks! Ask any consumer, they don’t trust us. The dealers and manufacturers must restore trust and confidence in order to rebound for this shipwreck. If consumers are not confident in your complete product, they won’t buy. And dealers are a major part of that product. Other industries have changed when will we.