agent Entrepreneur logo
MenuMENU
SearchSEARCH

Auto Dealers Await Study on Showroom Standards, Cite 'Financial Pressure'

October 21, 2011
2 min to read


Auto dealers are facing unprecedented pressure to invest in their facilities and want to quantify the return on that investment, Stephen Wade, chairman of the National Automobile Dealers Association said Thursday.


The NADA has commissioned an independent study to gather data on what dealers get for the millions they spend when automakers demand cookie-cutter dealerships across the country, reported The Detroit News.

Ad Loading...


The study, by independent consultant Glen Mercer, former partner of McKinsey and Co., started a few months ago. Results are expected in December.


"There is a real need for less financial pressure, not more," Wade said at an Automotive Press Association event in Detroit.


"And the timing is bad with the most pressure to invest at a time when dealers are least able to afford it," he said.


A big concern is factory-mandated "image" programs, he said, that set dealership standards, usually by brand, that dealers must meet.


It can cost millions to incorporate specific colors and materials for showrooms, display areas, lounges and service bays, as well as signs and overall appearance.

Ad Loading...


Wade said the demands often are "enough to convince people to leave the business, rather than make the investment."


Ford Motor Co., for example, has implemented new standards to denote Lincoln as a premium brand that may drive some rural dealerships, especially those which lost their Mercury franchises, out of business.


Chrysler Group LLC, in deciding which franchises to terminate during its corporate restructuring, included in the evaluation whether dealers offered all brands in a single facility with arches and a specific look for each marque. Chrysler also demanded standalone facilities for the Fiat brand.


Wade said many of these dealers feel they are acting on blind faith, investing now on promises of new vehicles down the road.


General Motors Co. began a major push in late 2009 to work with its dealers on revamping their stores to redefine each GM brand with a distinctive look.

Ad Loading...


Many automakers help dealers offset the cost with quarterly payouts for hitting sales, service and technology targets.


But dealers want economic data on whether the investment improves sales and customer satisfaction, Wade said, adding the findings will be of value to dealers and automakers alike.


Wade said NADA recognizes the need for standards, "but they should be realistic."


Dealers say financing for upgrades is tough to secure, and automakers can't guarantee a single additional sale because the new floor is a darker shade of gray, Wade said.


More Industry

Five men smiling for photo in front of Honda car dealership.
Industryby Lauren LawrenceSeptember 10, 2026

Ohio Auto Group Under New Ownership

After 79 years with the Schluter family, Mansfield Auto Group has been acquired by Missouri-based Clement Auto Group.

Read More →
Blue and white RV parked on beach facing the ocean.
Industryby Lauren LawrenceSeptember 3, 2026

RV Group Expands Carolina Footprint

Blue Compass RV Columbia Northeast is the 13th RV dealership owned by Blue Compass in the Carolinas.

Read More →
Photo of two men and one woman on a discussion panel
Industryby Hannah MitchellSeptember 1, 2026

Agent Acumen

An Agent Summit panel of people who’ve been supporting auto dealers for years gave both timely and timeless advice for those starting out or mulling the prospect.

Read More →
Ad Loading...
Gloved hand holding two wrenches next to “Turn Overdue into Opportunity” Graphic
Industryby Lauren LawrenceAugust 27, 2026

Missed Maintenance Creates Opportunity

As families get back on the road and into daily school routines, service drives have an opportunity to capture customers who are behind on recommended vehicle maintenance.

Read More →
Mitsubishi shadow line-up
Industryby Hannah MitchellAugust 25, 2026

Mitsubishi Unveils U.S. Plan

The automaker announced a strategy that includes an expanded lineup and dealership presence, along with more ‘rugged’ and electric models.

Read More →
Photo of a laptop, cellphone and eyeglasses on a desk next to an office window
IndustryAugust 24, 2026

Selling to Grow

The question of whether you should sell your agency and if so, when, is up to you. But it’s a question worth asking to ensure you keep the business on the right path for yourself, employees and clients.

Read More →
Ad Loading...
Mechanic holding a vehicle diagnostic device while standing above an open car hood
Industryby Hannah MitchellAugust 24, 2026

Recalled Vehicles Hit 5-Year High

Though the number of events has fallen so far this year, impacted units are up significantly. Meanwhile, regulators consider consumer notification changes.

Read More →
outside of car dealership with cars parked in front
Industryby Lauren LawrenceAugust 20, 2026

Auto Group Acquires Top-Performing Rooftop

Car Pros sold its Kia Huntington Beach location to Sutherlin Automotive Group, marking the buyer’s third location in Southern California.

Read More →
Cars from the rear on a Shanghai freeway
Industryby Hannah MitchellAugust 19, 2026

China as Pacesetter

Automotive leaders huddled on where North America stands in the global picture and how it can strengthen its position against the Asian juggernaut’s surging industry.

Read More →
Ad Loading...
Orange BMW car on empty road.
Industryby Hannah MitchellAugust 14, 2026

BMW Concept Car Makes Fuel to Burn

The prototype developed in concert with a South Carolina university engineering team generates more solar energy than it uses in a typical daily commute.

Read More →
Ad Loading...