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NADA Chairman Forrest McConnell delivers keynote remarks today at the 2014 Automotive Forum in New York City.
To kick off the NADA/J.D Power Automotive Forum on Tuesday, Forrest McConnell III, NADA chairman and a Montgomery, Ala., Honda and Acura dealer, made a rousing speech. It was a blunderbuss with at least three barrels but the big one is one aimed at Tesla’s efforts to erode franchise laws in order to open legislative locks keeping factory-direct retail models out of the market, therefore, cutting out dealers.
McConnell’s major messages: franchised auto dealers are mom and pop small and medium-sized business that have real, personal relationships with car buyers; help keep automakers afloat because dealers are the drivers of new vehicle sales in a way that the automaker could never be by themselves; save automakers money because dealers handle service and marketing costs at the regional and local level; and save consumers money because the franchise model is inherently competitive and if automakers were controlling it they would have few incentives to give consumers a break beyond established incentives.
“If manufacturers sold directly to customers there would be zero competition in pricing, parts and services. Customers would be stuck paying full sticker price because there would be no ‘same brand dealership’ to shop and compare prices: The biggest competition for the Ford dealer is the dealer down the street.”
He also made a point about the dealerships role in recalls like GM’s noting that the automaker’s 4,000 U.S. dealers are gearing up service bays to handle the ignition redo, “From New York to Yuma, Arizona. When something goes wrong on an assembly line their service departments are there to make things right. Instead of dialing a faceless 800 number they have direct contact to provide retail and warranty at no cost.”