One of the most controversial and frustrating aspects of modern dealer operations, concerns so-called factory image programs. Having traveled across the U.S. asking dealers about these programs, NADA chairman Stephen Wade has commissioned an independent study designed to highlight the effectiveness of them.
“These investments have a significant impact on dealer balance sheets, in many cases severely straining them and in some cases even persuading a dealer to leave the business rather than commit to such a large investment,” he said.
The NADA says it has undertaking this fact-based study to uncover both the positive and negative factors that drive return on investment so dealers are better able to make informed, fact driven decisions on investing in their facilities.
At present, surprisingly little evidence on return on investment from factory image programs exist, often they seem to be instigated on qualitative grounds such as “the store image must support the brand,” or “customers expect all stores to offer a similar look and feel,” stated Wade.
He also noted that solid arguments where updated stores sell X more cars than those that aren’t or CSI scores are improved at those facilities that have been upgraded generally seem to be absent. By taking a fact based approach; Wade and the NADA hope that the results from the study, to be conducted by industry consultant Glenn Mercer should prove “extremely valuable to dealers and manufacturers alike.”
