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

CPO Sales Could Take Off in the Right Conditions
A recent Cox Automotive consumer survey reveals the size of an undertapped market for the vehicle segment given affordability pressures.
Read More →
Global Consumer Trends Diverge
Price remains a top consideration for U.S. car buyers, and they are the most brand-loyal consumers to established automakers, according to a new survey.
Read More →
Badger State Dealership Gets New Owner
The longtime southern Wisconsin store moved from one area auto group to another, keeping the business in Dairyland.
Read More →
The Cycle of Negative Equity
Third-quarter data shows consumers still rolling over debt and stretching loan terms, raising their risk of remaining underwater.
Read More →
Charger Network Growth Slows
Despite a projected increase in public EV chargers in 2026, charging infrastructure remains a top concern for consumers as the gap between the most and least EV-friendly places remains substantial.
Read More →
Lenders, Consumers Take on More Auto Loan Risk
September records loosened credit access the most in over a decade as buyers took advantage of the conditions to afford trading, though loan applications fell.
Read More →
Next-Gen Hybrids in Sight
Dealerships can expect to see revamped hybrids from Honda next year as the company rolls out a new system and model lineup.
Read More →
Gem State Stores Change Hands
A larger auto group founded in the industry’s early years sold two franchises to a neighbor group that's on a growth spurt.
Read More →
Charging In Motion
Honda has been researching wireless in-motion charging for electric vehicles since 2025, and new technology developments have put it a step closer to a final product.
Read More →
Twin Cities Stores Sell
Minnesota-based Walser Automotive Group made what it called the most significant acquisition in its history with a three-rooftop deal in Minneapolis.
Read More →