{"id":13999,"date":"2013-04-23T12:35:44","date_gmt":"2013-04-23T16:35:44","guid":{"rendered":"http:\/\/stateimpact.npr.org\/new-hampshire\/?p=13999"},"modified":"2013-07-22T10:29:41","modified_gmt":"2013-07-22T14:29:41","slug":"economic-tensions-fuel-disagreement-between-car-makers-and-dealers","status":"publish","type":"post","link":"https:\/\/stateimpact.npr.org\/new-hampshire\/2013\/04\/23\/economic-tensions-fuel-disagreement-between-car-makers-and-dealers\/","title":{"rendered":"Economic Tensions Fuel Disagreement Between Car Makers And Dealers"},"content":{"rendered":"\n\t\t<style type=\"text\/css\">\n\t\t\t#gallery-1 {\n\t\t\t\tmargin: auto;\n\t\t\t}\n\t\t\t#gallery-1 .gallery-item {\n\t\t\t\tfloat: left;\n\t\t\t\tmargin-top: 10px;\n\t\t\t\ttext-align: center;\n\t\t\t\twidth: 33%;\n\t\t\t}\n\t\t\t#gallery-1 img {\n\t\t\t\tborder: 2px solid #cfcfcf;\n\t\t\t}\n\t\t\t#gallery-1 .gallery-caption {\n\t\t\t\tmargin-left: 0;\n\t\t\t}\n\t\t\t\/* see gallery_shortcode() in wp-includes\/media.php *\/\n\t\t<\/style>\n\t\t<div id='gallery-1' class='gallery galleryid-13999 gallery-columns-3 gallery-size-thumbnail'><dl class='gallery-item'>\n\t\t\t<dt class='gallery-icon landscape'>\n\t\t\t\t<a href='https:\/\/stateimpact.npr.org\/new-hampshire\/2013\/04\/23\/economic-tensions-fuel-disagreement-between-car-makers-and-dealers\/img_2238\/'><img width=\"150\" height=\"150\" src=\"https:\/\/stateimpact.npr.org\/new-hampshire\/files\/2013\/04\/IMG_2238-150x150.jpg\" class=\"attachment-thumbnail size-thumbnail\" alt=\"\" decoding=\"async\" loading=\"lazy\" srcset=\"https:\/\/stateimpact.npr.org\/new-hampshire\/files\/2013\/04\/IMG_2238-150x150.jpg 150w, https:\/\/stateimpact.npr.org\/new-hampshire\/files\/2013\/04\/IMG_2238-100x100.jpg 100w, https:\/\/stateimpact.npr.org\/new-hampshire\/files\/2013\/04\/IMG_2238-60x60.jpg 60w\" sizes=\"(max-width: 150px) 100vw, 150px\" \/><\/a>\n\t\t\t<\/dt><\/dl><dl class='gallery-item'>\n\t\t\t<dt class='gallery-icon landscape'>\n\t\t\t\t<a href='https:\/\/stateimpact.npr.org\/new-hampshire\/2013\/04\/23\/economic-tensions-fuel-disagreement-between-car-makers-and-dealers\/img_2222\/'><img width=\"150\" height=\"150\" src=\"https:\/\/stateimpact.npr.org\/new-hampshire\/files\/2013\/04\/IMG_2222-150x150.jpg\" class=\"attachment-thumbnail size-thumbnail\" alt=\"\" decoding=\"async\" loading=\"lazy\" srcset=\"https:\/\/stateimpact.npr.org\/new-hampshire\/files\/2013\/04\/IMG_2222-150x150.jpg 150w, https:\/\/stateimpact.npr.org\/new-hampshire\/files\/2013\/04\/IMG_2222-100x100.jpg 100w, https:\/\/stateimpact.npr.org\/new-hampshire\/files\/2013\/04\/IMG_2222-60x60.jpg 60w\" sizes=\"(max-width: 150px) 100vw, 150px\" \/><\/a>\n\t\t\t<\/dt><\/dl>\n\t\t\t<br style='clear: both' \/>\n\t\t<\/div>\n\n<p>As competition in the auto industry heats up, car makers are tightening their image and branding campaigns. But car dealers &#8212; who feel financially vulnerable despite soaring profits &#8212; say manufacturers are expecting them to pay too much of the price.<br \/>\nIn New Hampshire, dealer organizations are behind a bill that would protect them from what they see as exploitation by manufacturers, which won near-unanimous support in the Senate and is now being considered by the House. Manufacturers argue that government shouldn&#8217;t interfere with their private business contracts.<\/p>\n<p>But behind all the he-said she-said, there are changing forces in the automobile industry.<br \/>\nScott Holloway has been selling cars for as long as he can remember. His father Paul Holloway bought a dealership in the 1960s, they\u2019ve been expanding across the state ever since. While there have long been tensions between dealers and manufacturers, the Holloways say they have never seen anything like what\u2019s happening now.<\/p>\n<!--[if lt IE 9]><script>document.createElement('audio');<\/script><![endif]-->\n<audio class=\"wp-audio-shortcode\" id=\"audio-13999-1\" preload=\"none\" style=\"width: 100%;\" controls=\"controls\"><source type=\"audio\/mpeg\" src=\"https:\/\/stateimpact.npr.org\/new-hampshire\/files\/2013\/04\/nht042213ec.mp3?_=1\" \/><a href=\"https:\/\/stateimpact.npr.org\/new-hampshire\/files\/2013\/04\/nht042213ec.mp3\">https:\/\/stateimpact.npr.org\/new-hampshire\/files\/2013\/04\/nht042213ec.mp3<\/a><\/audio>\n<p>\u201cThis is the thing that really made my skin crawl almost,\u201d says Scott Holloway, pointing to some light fixtures at his Buick and GMC dealership in Portsmouth. \u201cWe went to PSNH and did their green energy program, less than three years ago.\u201d Holloway says he pulled out all the lights, and got energy saving lights put in. Then, a couple years later, Holloway says, General Motors told him he had to replace the energy efficient lights with GM\u2019s standard issue lights. If Holloway didn\u2019t comply, GM would increase the cost he pays on every car.<!--more--><\/p>\n<p>Maryann Keller, an auto industry consultant and former Wall St. analyst, says that most manufacturers have \u201cimage programs.\u201d But, she says, in the last few years, these programs have gotten increasingly specific, \u201cdown to the brand and color of tile used on the floor, or the paint color on the walls.\u201d<\/p>\n<p>Now, lawmakers in NH are considering a bill that would update existing franchise laws on a number of fronts. One of the hotly contested sections would limit dealer facility upgrades to every 15 years, unless manufacturers pay for the upgrades in full.<\/p>\n<p>New Hampshire Auto Dealers Association president Peter McNamara says as it goes now, dealers end up paying 96 percent of the costs for upgrades. While manufacturers say they subsidize the costs by offering vehicle discounts, dealers see the arrangement as \u201ctwo-tier pricing,\u201d which would be against the law.<\/p>\n<p>Dealers and manufacturers also disagree about whether or not the \u201cimage programs\u201d actually increase sales. \u201cThe key to a successful franchise model is conformity, uniformity, and brand identification,\u201d says Dan Gage, a spokesman for the Alliance of Automobile Manufacturers.<\/p>\n<p>But industry consultant Maryann Keller says while shabby showrooms are bad for business, there\u2019s no evidence that car makers\u2019 fastidious image programs improve sales. She says car makers obsess over cookie-cutter showrooms out of a kind of competitive desperation:<\/p>\n<p>It\u2019s harder and harder to gain competitive advantage in this business. Cars today are almost uniformly high quality. There\u2019s pretty good design across all manufacturers.<\/p>\n<p>Competition is so tight, Keller says, once one manufacturer started mandating showroom upgrades down to their brand of office chairs \u2013 everybody started doing it. \u201cIt\u2019s monkey see, monkey do,\u201d she says.<\/p>\n<p>But mandated facilities upgrades can cost dealers millions of dollars at a time. And, Keller says, despite record car sales over the last few years, car dealers are feeling financially vulnerable.<\/p>\n<p>In the last decade, manufacturers have generally adopted a policy where they raise the wholesale price to the dealer to a greater degree than they raise the retail price to the customer.<\/p>\n<p>That means dealers are making less and less profit on each car. \u201cSome cars? Some cars\u2019ll make you scratch your head about why you\u2019re even stocking \u2018em,\u201d says<br \/>\nScott Holloway, the car dealer in Portsmouth, \u201conce you factor in the cost of advertising.\u201d<\/p>\n<p>With today\u2019s super-low interest rates, car dealers can get by with slim profit margins, by selling lots of cars. But dealers worry. What if the market slows down? What happens when interest rates rise?<\/p>\n<p>Dealers don\u2019t want to be stuck paying back loans on a $1,000,000 showroom or fa\u00e7ade upgrade.<br \/>\nBut manufacturers &#8212; like Nick Yaksich of the Association of Equipment Manufacturers \u2013 says \u201cif we have a problem, let\u2019s fix it outside of the legislative arena.\u201d Even Republican Senator Jeb Bradley, a cosponsor of the bill, frames his support with the disclaimer that \u201cit is unfortunately appropriate to wade into what some are describing as a contract dispute.\u201d<\/p>\n<p>And it\u2019s true that franchisees in other industries don\u2019t get as much attention from lawmakers as car dealers do.<\/p>\n<p>One reason may be that while manufacturers have lobbyists in Washington, they have fewer at the state level. In the meantime, hundreds of car dealers in New Hampshire bring in 24 percent of the state\u2019s total retail sales. They sponsor little leagues, and they support candidates from both parties. Scott Holloway says he gives to the legislators who support him, as well as to the NH Auto Dealers PAC. \u201cHelp me out, I\u2019ll help you out, that\u2019s how life works,\u201d he says, adding that \u201call politics are local, so I figure the money is better spent here in NH.\u201d<\/p>\n<p>Whether that philosophy holds true in the House \u2013 we\u2019ll see. So far so good for the auto dealers, though, whose bill won near-unanimous support in the Senate.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>As competition in the auto industry heats up, car makers are tightening their image and branding campaigns. But car dealers &#8212; who feel financially vulnerable despite soaring profits &#8212; say manufacturers are expecting them to pay too much of the price. In New Hampshire, dealer organizations are behind a bill that would protect them from [&hellip;]<\/p>\n","protected":false},"author":84,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[542],"tags":[488,490,489,491,16],"acf":[],"_links":{"self":[{"href":"https:\/\/stateimpact.npr.org\/new-hampshire\/wp-json\/wp\/v2\/posts\/13999"}],"collection":[{"href":"https:\/\/stateimpact.npr.org\/new-hampshire\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/stateimpact.npr.org\/new-hampshire\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/stateimpact.npr.org\/new-hampshire\/wp-json\/wp\/v2\/users\/84"}],"replies":[{"embeddable":true,"href":"https:\/\/stateimpact.npr.org\/new-hampshire\/wp-json\/wp\/v2\/comments?post=13999"}],"version-history":[{"count":0,"href":"https:\/\/stateimpact.npr.org\/new-hampshire\/wp-json\/wp\/v2\/posts\/13999\/revisions"}],"wp:attachment":[{"href":"https:\/\/stateimpact.npr.org\/new-hampshire\/wp-json\/wp\/v2\/media?parent=13999"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/stateimpact.npr.org\/new-hampshire\/wp-json\/wp\/v2\/categories?post=13999"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/stateimpact.npr.org\/new-hampshire\/wp-json\/wp\/v2\/tags?post=13999"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}