It was fantastic getting back together as an industry at the NADA conference a couple weeks ago. It’s amazing how much interpersonal communication we lost during the pandemic, and we’re grateful to have it back. There were a couple of things we saw there about the future of auto retail that really resonated with Motive Retail’s experience and highlighted a key issue in the industry - how will OEMs and dealers work together?
Incoming NADA chairman Michael Alford spoke to dealers and raised important questions about how the changes occurring in our industry would alter the OEM/dealer relationship. One crucial question he asked was
"Do we see each other as adversaries, as two opposing sides, each with its own turf to protect and distrusting of each other's motives? Or do we see each other as two necessary components of a single ecosystem?"
It’s a great question: are OEMs and dealers adversaries or allies in defining modern auto retailing? Mr. Alford, of course, makes a case for collaboration. He points out, though, that OEMs now have the ability to provide “ownership products and services after the point of sale”. This changes everything. OEMs have a real opportunity to take charge of retail processes in a way they never could before. But how and how much should OEMs collaborate with their dealers to define the ideal digital strategies? After all, OEMs and dealers still share a mutual dependence.
We got a glimpse of dealers’ answer to this question when Automotive News reported on the Mercedes-Benz make meeting. Rather than new cars, the lead story coming out of it was that Mercedes-Benz USA would no longer require its dealers to use an OEM-mandated lead manager and would be free to use whatever lead management vendor they chose. Dealers were thrilled. One said this new dealer choice “was probably as exciting as the product launches”.
Choice of lead manager is only one part of a larger digital retailing process - we are seeing OEM mandates throughout digital retailing. These mandates substitute the OEM’s best ideas for selling and servicing cars for the dealer’s, thus creating the adversarial relationship Mr. Alford warned about in his presentation. Kudos to MBUSA for moving in the direction of collaboration and cooperation.