One of the key issues that will be discussed in state legislatures around the country this year involves the ability to protect and integrate the data that dealerships gather and maintain in the course of their business operations. While these issues have been debated for years, they are becoming increasingly critical given the explosion in the volume and sensitivity of the information dealers obtain from consumers and increasingly from their vehicles. Meanwhile, dealers are growing frustrated as they face artificial market constraints.
The ability to protect and integrate dealer systems is of paramount concern to franchised car and truck dealers and is critical to their ability to run their businesses efficiently and provide a modern, integrated sales and service experience.
The need to have full access to their own information and be able to efficiently and securely transmit data and integrate with other systems is central to what dealers do every day. Indeed, these issues are so fundamental to modern commerce that it is surprising that it is even a point of contention. Unfortunately, for many dealers, it is.
While there are ongoing dealer concerns about OEM practices and programs that require broad access to dealership information, dealers and OEMs must continue to engage in an earnest conversation about how this information is shared. The conversation is needed to ensure that it is done in a secure, compliant manner, consistent with dealer needs, as well as consumer expectations and preferences. However, much of the recent focus has been on the structural inability of dealers to control their own business operations due to restrictions and limitations by the very technology vendors they employ.
Cost, innovation
For example, so-called "certified" integration requirements and restrictions from dealer management system providers are unnecessarily increasing costs for dealers (and ultimately consumers) and limiting dealers' ability to innovate. Dealers have long been focused on data security and will continue to do so. However, security concerns must not be used as the basis for increasing costs or limiting competition.
Dealers have ardently sought changes on their own — with little success. Recently, the Automotive Trade Association Executives, which comprises 113 franchised new-car dealer associations in North America, working with NADA, has prioritized data integration. The association is looking at the future technology needs of dealers and consumers and is working to facilitate a resolution of other data-related issues in the various state legislatures in the coming months.
Our organizations are working on broad-ranging model legislation that seeks to address these market failures. This proposed legislation would not only help ensure that consumers and their vehicles are protected, it would provide the flexibility and tools that dealers need to integrate efficiently and safely with manufacturers, finance companies, consumers and their vehicles.
Slowing the process
If dealers cannot integrate their systems as needed without interference, it slows the sales process, increases customer frustration and makes dealers appear "behind-the-times." Consumers are asking: "Why are you typing my information into your computer again?" and "Why can't I do this on my phone?" These are good questions and dealers often share in these frustrations.
Dealers have worked tirelessly to streamline and modernize the sales process. Mobile devices, vehicle integration, e-contracting, paperless warranty processing, predictive marketing and analytics, seamless third-party integration and other steps are critical to the evolution of the retail experience and ultimately to the future of the dealership. Dealers know what is at stake: To survive, they must provide consumers with the modern experience they demand. Unfortunately, dealers continue to face artificial roadblocks to widespread adoption of these and other innovations.
On behalf of all franchised car and truck dealers, we hope that the key stakeholders can work together to formulate a win-win solution on behalf of the entire industry. Pending a mutual resolution, the foregoing issues, and countless other data-related issues, will certainly be addressed and resolved, in detail, on a state-by-state basis in statehouses across this great country.
