J.D. Power and Associates Dealer Analysis Reveals: Dealer Principals are Hesitant to Rock Existing Franchise System
8 January 1998
J.D. Power and Associates Dealer Analysis Reveals: Dealer Principals are Hesitant to Rock Existing Franchise System
AGOURA HILLS, Calif., Jan. 8 -- The J.D. Power and Associates
1997 Dealer Attitude Study, Part 2 -- Dealer Perspectives(SM) reveals that
today's dealer principals, who created much, if not all of their wealth
through the existing automotive franchise system, are naturally hesitant to
jump onto any bandwagon that might unsettle that very system.
"As today's automotive retail environment undergoes significant changes,
many dealers are skeptical of the new trends -- from manufacturer
restructuring initiatives to public ownership to electronic marketing -- and
are waiting on the sidelines for proof of their beneficial effects," commented
Doris Ehlers, a partner at J.D. Power and Associates.
According to the study, only 5% of today's total dealer base are
considering selling their operation to a publicly held organization, despite
the extensive publicity given over the past year to this movement. When
looking only at high-volume operators, who might be considered to be more
receptive to and in need of public funds, the number of dealer principals
considering public money is less than one in five (19%).
The study also reveals that the dealers' view of manufacturer
restructuring programs is equally tepid. Only 25% of all dealers believe the
current initiatives will ultimately solve the overdealering (too many dealers)
problems in the industry.
Finally, the study shows that the dealer body is reluctant to embrace
electronic marketing. Only 10% of all dealers "agree very much" that the
Internet is a positive development, up from 8% last year. Moreover, almost
half (47.9%) of the dealer body sees the Internet as a threat to the franchise
system, and opposes its growth.
"In a world where products are not differentiated, price becomes the
predominant issue," continued Ms. Ehlers. "The challenge for dealers is how
to differentiate their services to move the customers' focus off of price.
Dealers have not yet seen these new innovations as a way to differentiate,"
Ms. Ehlers concluded.
J.D. Power and Associates is an international firm best known for its
marketing information services in key business sectors including market
research, forecasting and customer satisfaction. The firm's quality and
satisfaction measurements are based on actual customer responses from over a
million consumers annually. With its headquarters in Agoura Hills,
California, the firm also has U.S. offices in Torrance, California; Michigan;
and Connecticut. Its international locations include Japan, Korea, England,
Canada and Brazil.
J.D. Power and Associates can be accessed through the World Wide Web at
http://www.jdpower.com. Email: info@jdpower.com.
No advertising or other promotional use can be made of the information in
this release or J.D. Power and Associates survey results without the express
prior written consent of J.D. Power and Associates.
SOURCE J.D. Power and Associates
