Dealers, facing rising costs, lower margins, a changing retail environment and disruption, are looking to automakers to make adjustments to facility mandates and inventory allocation.
David Rosenberg, CEO of New England's Prime Automotive Group, said at the Automotive News Retail Forum: NADA on Thursday that mandates from manufacturers for more service bays don't make sense, given the likely increased penetration of electric vehicles that will reduce service work.
"Why should I have to put up a facility that has 40 facility bays, which may meet my requirement now, but five years from now, the average length of time that a car spends in the service bay is going to be a lot less," he said. "I think manufacturers should be more open to having smaller showroom facilities."
David Long, vice president of operations for Niello Co., a Sacramento, Calif., dealership group with 14 rooftops, said inventory ordering also is a concern, and he'd like automakers to work with dealers to ensure they are buying what they need vs. what automakers need to sell.
He said the dealership group has a $77 million investment in new-vehicle inventory, and automakers "provide us with very little or no value in our inventory ordering process."
Hyundai Motor America says it is working to increase demand for its vehicles and is adding more vehicles. And Dean Evans, chief marketing officer for Hyundai, said the automaker is using technology and working with dealers so they get the "best and right product at the right time."
"We recognize with interest rates going up now, it's a whole different game when you're paying for that stuff sitting there versus when we weren't for many years."
Long and Rosenberg also discussed how they are tackling the industry's changing dynamics. Both dealers, for example, said they have sold vehicles to Fair, a used-vehicle leasing subscription service.
Rosenberg last year launched Prime Flip, a new-vehicle subscription program in suburban Boston.
