NADA protests against stair steps, factory image program

NADA protests against stair steps, factory image program

NADA Chairman Bill Underriner took the fight against stair-step incentives and factory image programs to the Detroit Automotive Press Association last week.

Two-tier pricing and mandatory facility upgrades are symptoms of a bigger overall problem: manufacturer intrusion into dealers businesses, Underriner told reporters.

The sales bonuses hurt both brand value and dealers relationship with their customers, he said. NADA says the incentives give an unfair advantage to some dealers, since the amount varies depending on how close a dealer is to meeting the sales goal.

On required facility upgrades, NADA has asked for a tiered program, such as bigger upgrades for bigger dealers. But factories have not agreed to that request.

NADA is in the midst of a study to assess the return on investment of factory-mandated dealer upgrades. The association has asked automakers to quantify the value of dealers investment in the upgrades, but has gotten little response. Early next year, NADA will look at dealer data.

In the study, NADA recommends that the automakers work harder to ask for dealers views on the programs before they are put into place.

Underriner also told WardsAuto that NADA is working to overturn the recent mandate for CAFE increases to 54.5 mpg by 2025. The dealer group supports legislation introduced by Rep. Mike Kelly (R-Penn.) asking for Congress to do further economic and safety analysis and to assess the effect of CAFE increases to 35.5 mpg in 2017.

Its going to be very hard for the manufacturers to build the cars the public wants that get 54.5 mpg, Underriner said. The other problem is the cars are going to cost more.