Pub. 13 2014-2015 Issue 1

N E W J E R S E Y C O A L I T I O N O F A U T O M O T I V E R E T A I L E R S 19 new jersey auto retailer W W W . N J C A R . O R G Inmy experience, watching various factories attempting tominimize the costs associated with warranty and recall repairs, the record of interest in the consumer is spotty at best. Manufacturers, left to their own devices, are slow to react. While most of the time, safety is assured throughproper product reporting, there is a long list of product problems that range from denying there is an issue, to blaming the driver, to reluctant repairs, until there is, finally, a full admission of responsibility. Start with the Ford Pinto and work your way forward through the years of Firestone tires, Toyota floor mats and big key chains in GM ignition switches. Those are the big, headline-grabbing, situations but spend any time in a service department and you will find dozens of examples of a manufacturer trying to cut costs on needed repairs. Many dealers have been told by a factory representative that no expense should be spared to solve a customer’s issue, but subsequently struggle to receive full payment or lost money in a claim chargeback. The stories one can tell of dealers having to stand up for the consumer — and often at their own expense — is lengthy. The manufacturer’s approach is one of professing unending concern for the consumer while cutting the cost of such a relationship or, better yet, transferring those costs on to the dealership. While people who wish to demolish the franchise system say the market will play out to favor those manufacturers who take care of customers over those who do not, that is not much comfort for the consumers who choose poorly. It simply is not that easy; this is not a laptop or cell phone. Consumers who are locked into long-term purchases and finance contracts cannot just leave one brand in favor of another. Beyond the day-to-day repair and service costs, independently owned franchised dealerships not only have to please consumers and the manufacturer, but they also have New Jersey state regulators and local requirements to appease. While the threat of litigation, fines or attorney costs might not frighten a large corporation, they can be crippling to a small business that is more likely tomake every effort to conform to the law. The manufacturers have one major law to follow inNewJerseywith theFranchisePracticesAct and their recordof non- compliancewith that lawmay give you an indication of their concern. In this time of communities beginning to reject the big box retailers in favor of the small business, local owned that has a vested interest in the local consumer; it is hard to imagine the State being better off with factory-owned stores. Robert W. Campbell is an Analyst at The Mironov Group. He can be reached at 732.572.3900 or rcampbell@mironovgroup.com . We are your ONE SOURCE Ownership Has It’s Rewards 800-732-4511 • WascoOnline.com Your Purchasing Partners WascoOnline.com for everything you need to run your business. almost