Is there cause for concern among dealers as OEMs seek to revolutionize their auto businesses? – Tim Jackson

Automakers are pushing for radical changes in how vehicles are sold, but franchisees are still figuring out how to integrate these changes into their business plans. On this episode of Inside Automotive, Tim Jackson, Chairman and CEO of the Colorado Auto Dealers Association (CADA), joins host Jim Fitzpatrick to discuss the role that dealers play in transforming the automotive industry.

One point of contention between manufacturers and dealers is the shift toward electric cars. Politicians and automakers are pushing more and more for electric vehicles, but the market is still teetering. Four years after mandating the auto industry to have 940,000 electric vehicles on the road by 2030, Colorado currently has less than 100,000. While the public is interested in the technology, the limitations of zero-emission vehicles, such as long charging times, poor performance in cold weather, and short driving range, make many people hesitant to switch from traditional gas-powered cars.

To solve this problem, Jackson believes that “the industry needs to popularize charging networks and cars that can be equipped with quick chargers.” However, differences of opinion between OEMs (original equipment manufacturers) and dealers can lead to severe disagreements. For example, when Ford announced an electrification program that required dealers to invest in the automaker’s EV efforts and cover the cost of charging equipment, some dealers found the policy too restrictive.

Jackson believes the program was necessary to prepare for changes in the industry but recognizes that dealers have legitimate concerns about these challenges. Some EV brands, such as Tesla and Rivian, have introduced direct sales models that eliminate third-party dealers. Even traditional automakers are challenging state franchise laws that protect retailers from competition.

Jackson still believes that the dealer model is the best way to sell cars because retailers have spent decades refining their processes. He believes that dealers are good for the industry and consumers, but maintaining the agency model requires ethical pricing and customer service above all else. “There are many ways to make money, but this is not the best way.”

Ultimately, both sides of the industry must continue to work together to solve the problems they face. By prioritizing customer service and working to integrate new technologies in a way that benefits everyone, the automotive industry can continue to move forward.

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