NADA presents value of franchised system to the media

NADA presents value of franchised system to the media

In an effort to defeat attacks on the dealer franchise system by Teslaês Elon Musk and Federal Trade Commission officials, NADA has launched a media campaign showing the benefits of the current way of selling cars.

As part of the campaign, the NADA is showcasing a report it commissioned on the consumer benefits of the franchise system by none other than Maryann Keller, longtime Wall Street analyst and now managing partner of Maryann Keller & Associates LLC. –The consumer benefits of an independently owned franchise system arise not only from each dealerês ability to support the elements of every car purchase beyond simply determining the purchase price, but also from the fact that national franchise networks foster competition and therefore ensure fair market pricing in new and used cars and with service,” the report says.

There is good evidence that most car buyers are very pleased with their dealership experience, Keller writes. Dealers enable buyers to: educate themselves about market prices and car specifications; obtain competitively priced financing; have immediate access to inventory, to vehicle maintenance, and to warranty and recall repairs; and to sell their trade-ins.

Kellerês report also examines the pitfalls of a factory-owned system. First, it would be –a monopoly where the manufacturer sets prices for new and used cars, service and, perhaps even financing.” Second, contrary to popular assumption, the automaker would not pass along savings to the consumer. Third, the manufacturer would not be as objective as an independent dealer in addressing customer complaints. Fourth, as dealers are well aware, an automaker does not need to own its sales outlets to ensure that its product is sold in a way it considers appropriate.

The Detroit News published a commentary by Keller that was a condensed version of the report. Automotive News has reported on NADAês campaign. And NADA has created a website,, about the benefits of the franchise system. It includes Kellerês report, a fact sheet about the benefits to consumers, an overview explaining the need for dealer franchise laws, a section of Frequently Asked Questions, a report on why the franchise system works best for manufacturers, an infographic and a press release. Two videos are available for download.

WANADA members will find the NADA defense of the franchise system informative, compelling and helpful, particularly in fielding any questions that might come forward from the media.

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