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

Shifting Loan Demands A Sign of the Times, Loan Application paperwork with a pen and a car outline, Auto Dealer Today
Industryby Lauren LawrenceMay 8, 2026

Auto Loan Outlook Shows Cracks

Recent survey data shows that the overall demand for auto loans is down, but the demand for subprime loans is up as consumers face economic uncertainty and affordability pressures.

Read More →
Photo of buyer and seller representatives in Waco Mitsubishi sale outside the dealership
Industryby Hannah MitchellMay 7, 2026

Lone Star State Store Sells

The Mitsubishi location moves from one Texas automotive group to another, continuing this year’s spate of brisk buy-sell activity.

Read More →
2026 Mitsubishi Outlander in front of the company’s first national Gallery dealer facility
Industryby Lauren LawrenceMay 7, 2026

Mitsubishi Gallery Makes Progress

As part of its 2030 business plan, Mitsubishi's North America arm will soon open its first 'gallery' store in Tennessee, where customers can learn about the brand, vehicles and technology.

Read More →
Ad Loading...
hand signing paperwork on a clipboard on top of a desk with a gavel to the side

Senators Propose Chinese Connected Car Ban

Just weeks before President Trump is set to meet with the Chinese president, two U.S. senators proposed a bill with the aim of protecting Americans’ data.

Read More →
Photo of work team at a U.S. Subaru hybrid vehicle plant
Industryby Hannah MitchellApril 30, 2026

Consumers Gravitate to Hybrids

A study of Q1 used-vehicle sales shows many consumers are looking to minimize fuel costs but aren’t willing to go all electric and no longer have a tax break incentive to do so.

Read More →
family in a car, Affordability Out the Window, Auto Dealer Today
Industryby Lauren LawrenceApril 24, 2026

Bad Credit Tanks Attainability

A recent study suggests expectant parents are feeling the burden of bad credit more than other demographics when it comes to buying a new car.

Read More →
Ad Loading...
Photo of two men in suit jackets shaking hands next to new car inside of a dealership
IndustryApril 23, 2026

A New Consumer Culture in the Auto Dealership

Dealers should aim to build a positive work environment, helping employees execute an efficient experience, from their online research to the final delivery of the vehicle.

Read More →
Closeup of the side of an Audi car
Industryby Hannah MitchellApril 23, 2026

New-Vehicle Sales Down

A cloudy April forecast was expected due to last April’s sales surge in anticipation of U.S. trade tariff-inflated prices. Meanwhile, automakers pumped up incentives to address today’s consumer wallet woes.

Read More →
Photo of Ford F-150 grill with nameplate
Industryby Hannah MitchellApril 20, 2026

Will Extended-Range Autos Make Inroads?

EREVs, also known as ‘series hybrids,’ may catch on in the U.S., where they currently have barely a toehold, as automakers tilt away from some purely electric models and consumers crave more range.

Read More →
Ad Loading...
Photo of Cadillac Lyriq SUV on road with partly cloudy sky in background
Industryby Hannah MitchellApril 16, 2026

Used Autos Selling for More

A recent price spike due to several larger market forces, though it hasn’t dulled demand, is pushing more consumers to efficient models to squeeze in buys.

Read More →