Make meetings at NADA give dealers a look into their future
With NADA taking place in San Francisco in early February, I have been doing some thinking about what might be the topics discussed in the various make meetings.
Depending on the brand, Canadian dealers may or may not be invited to the make meetings. But what happens in those meetings and the messages delivered will have an indirect impact or influence on the futures of Canada’s dealers.
The meetings at NADA have a tendency to represent overall global brand policy and accordingly they are a good predictor of what could happen in Canada. As much as we all would like to think that Canada charts its own course, the reality is quite often the global brand focus takes precedent.
If you are attending NADA, I would encourage you to attend your brand’s make meetings, if allowed. The parties and special events are fun; however the real action takes place behind closed doors.
Without singling out any particular brand, I expect there will be many hot topics this year discussed at the NADA make meetings. Here are a few.
New product pipeline
All dealers are interested in the timing of new product that will appear in their showrooms. This year will have a different twist for a few brands. The big wild card will be the real dates that plug-in electric and hybrid vehicles will hit their showrooms and what their projected sales volumes will be.
Unfortunately Canadian pricing will not be discussed. This is a critical element for Canadian dealers. Many believe that some current models sold in Canada are not priced correctly, given the role of the Internet and different pricing philosophies between Canada and the U.S. These type of anomalies drive Canadian dealers crazy since they directly impact their ability to sell their Canadian allocation.
Branding and imaging
The past two years have produced a number of changes in both the brand and dealer landscapes. Many dealers will be going to NADA to find out their new investment requirements and timelines. Although these are often handled by region or zone personnel, the national tone will be set in San Francisco as brands flex their muscle to describe their new requirements.
Cost downloading
Most brands keep a close eye on dealer profitability. Many seem to believe that dealers make too much money. The same brands often try to reallocate or transfer additional burden on their dealer network.
Areas that are currently “hot” in the cost downloading scenario include training, demo vehicles, signage subsidies, technology, certified used programs and others. Some appear in the form of holdback changes, margin pressure and direct pass through.
Also, the choice of supplier and pricing is often mandated by the brand, leaving little to no opportunity for the dealer to mange costs to meet his/her direct and unique needs.
The make meetings are often a good opportunity for dealers to ask the tough questions to the upper echelon of brand leadership.
Return of captive financing
Many dealers will be looking for their brand to outline new consumer financing initiatives through captives. The ability of dealers to secure financing for their prospective customers is a critical success factor to closing the deal and delivering the vehicle. In the past this support has been strong, but not in the most recent 18 to 20 months. Dealers will be looking for brands to offer the finance support that is needed to move product.
Enhanced Certified
Pre-owned programs
Dealers that adopt brand CPO programs are generally accepting of those programs. They do require support from the brand, however, in certain areas such as co-op advertising, warranty and access to off-lease vehicles. Vehicle reconditioning is often a critical element but requires additional dealer investment. Dealers attending NADA will be looking for the 2011 and 2012 strategy for brand CPO programs.
Advertising and new product launch dates
Dealers want to know the direction and support of national advertising. Brand advertising is critically important in creating the public interest, especially in new EV models. Planned product launch dates, dealer inventory in-fill and the overall campaign strategy are often discussed at NADA make meetings.
New Dealer Agreements
Some brands will be entering the end of their current dealer agreement and dealers will be looking for direction or information on proposed changes. Certain brands have made significant changes to their dealer networks in recent years and will be proposing a new contractual relationship with dealers. The NADA make meetings are often the place where brands choose to make announcements before dealers return to their regions and meet with regional brand field travellers to iron out their specific details.
New brands
With the network changes that have taken place in the past 18 to 20 months, many dealers will be looking to round out their brand representation with the objective of becoming full-line dealers.
Some dealers have lost brands, others have lost significant market share due to brand difficulties and yet others want to protect their turf. Dealers
will be looking for brand direction on future network expansion and network manipulation.
Dealer viability is a concern for some dealers. Without product to sell, they believe they are vulnerable to brand change. The occurrences of 2009 and 2010 have certainly changed the dealer comfort zone and trust bond with brands. Dealers are looking to get some assurances on future business opportunities.
The future direction
of certain brands
Many dealers are multi-franchise. Their group expansion strategy will be impacted by the future direction of certain brands. The groups will be looking for clues at NADA to support 2011 and 2012 acquisition strategy. The make meetings and other NADA events, like the JD Power Roundtable Franchise Assessment Review, for example, are important and valuable sources of information for dealers.
Should Canadian
dealers attend?
I have attended NADA for the last 20-plus years and always find it an effective learning and networking opportunity. I believe NADA attendance is important for dealers and managers. It is a great opportunity to team build within a dealership or dealer group and a unique opportunity to take advantage of some fine industry specific educational and current event opportunities.
You do, however, need to set objectives and goals for attendance to get the most out of NADA. Much of the value comes from events and meetings that do not take place on the convention floor. These do take some advance planning to get maximum benefit. You also need to allow flexibility in your schedule in order to take advantage of some of the new contacts you make on the convention floor but require your attendance off site to get real product demos and negotiations.
The 2011 version of NADA is showing strong advanced dealer registration and the exhibitor space is fully booked. This has not happened in the last few years. Some brands are also returning to NADA after a few years of absence.
All in all, I believe NADA 2011 is shaping up to be best of the last five years. The make meetings promise to be eventful and San Francisco is one of the most popular venues on the NADA circuit. Only time will tell whether the actual events will meet or exceed expectation. My bet this year is on the latter after three years of so-so NADAs.
