Partnerships all come down to the mindsets of dealers and manufacturers, say industry insiders. 

Steve Finlay | Jun 12, 2023

BIRMINGHAM, MI – Automaker-dealer collaboration is essential and should increase in this new age of auto retailing.

So says Eric Frehsee, president of the Tamaroff Automotive Group, a six-franchise dealership organization based in Southfield, MI, in metro Detroit.

Some automakers collaborate with dealers better than others, he says during an Automotive Press Assn. panel discussion here.

“It depends on the manufacturer,” Frehsee says.

Overall, dealer-OEM relations have improved over the years, but could the collaboration between the two improve?

“Yes,” Frehsee says.

He cites examples. One of them is automakers helping dealers recruit and train auto technicians to work on the growing number of battery-electric vehicles.

“It’s particularly hard for medium and small dealerships to recruit new technicians for EVs,” Frehsee says. “OEMs can be a resource.”

He adds: “The future is scary to some extent. Something like the EV transformation is not something (dealers) can handle alone.”

Data sharing is cited as another area needing stronger dealer-OEM teamwork.

Right now, such information sharing can seem like a one-way street. “In some past cases, we’ve shared our data with OEMs, but they haven’t shared their data with us,” Frehsee says.     

Panelists agree auto industry teamwork is vital to sell vehicles in post-pandemic times that have seen inventory and labor shortages, the growing popularity of EVs and customers increasingly using digital auto retailing tools to shop for and buy cars.

“The last few years have been wildly interesting,” says Matt VanDyke, president of Shift Digital, an auto-retailing technology company, and formerly CEO of FordDirect, an initiative that digitally connects consumers to dealers.

He cites a need for dealers and automakers to work closely to satisfy customers online and in person.

“We see the franchise dealer model as the best way to deliver a world-class customer experience, but it’s tough,” VanDyke says.

Seeing “a dramatic shift in customer expectations” is panelist Jessica Stafford, senior vice president of consumer solutions for Cox Automotive, whose holdings include Autotrader and Kelley Blue Book. “Consumer expectations are high.”

When COVID-related mandates in some states temporarily closed many dealership showrooms, and car consumers subsequently pivoted to online buying, “some progressive dealers were digitally ready, but a lot weren’t,” she says.      

According to a Cox study, the peak of auto customer satisfaction ironically was during the COVID year of 2020.

Today, economic concerns and high interest rates are holding back some would-be car buyers, she says. “But they are still shopping like crazy. We’ve seen the strongest digital traffic in years on Autotrader and Kelley Blue Book, she says.

Likewise, Shift Digital has seen dealer website traffic increase  20%. Yet, sales leads are down 20%.

“It’s the economy,” VanDyke says. “Cars are more expensive, and interest rates are higher.”

Frehsee says his dealership group employs some outstanding veteran salespeople who nonetheless struggle to interact with customers digitally, such as during sales-related text messaging.

That’s why the Tamaroff Group set up a business development department to field customer inquiries by phone, text or email.

But, he adds: “We need to find a way to collaborate with OEMs by using their scale to train dealership people so they embrace digital retailing. It’s not successful to say, ‘We have digital retailing’ and then walk away from it.”

Stafford sees an ideal situation in which automakers and dealers collaboratively offer digital tools to customers.

Such cooperation requires automakers and dealers working more closely together, VanDyke says.

He cites a friction point, though: “Dealers are saying, ‘Leave us alone, we’re doing this,’ and manufacturers are saying, ‘You’re not doing it right.’”

Some dealers fret that automakers’ digital attempts to garner sales leads infringe on their territory.

“But dealers need to understand that brands are going to interact with customers,” VanDyke says.

SOURCE: Wards Auto