I am sitting in the press room of CES, as the Consumer Electronics Show now prefers to be called. The Las Vegas show has ballooned over the past few years. A big part of that growth has been automakers. Indeed, I bumped into my old friend Lou Ann Hammond, publisher of Driving the Nation, as we rushed through the cavernous halls of the Mandalay Bay convention center. Remarking on the huge number of auto industry faces here, she said, “I now call this the year’s first auto show.”
Our first item this week looks at comments here by Mark Fields, Ford’s president and CEO, about Ford’s Smart Mobility program. I’ve long wondered how a program that is admittedly aimed at reducing congestion, among other aims, would impact Ford’s dealerships, since selling fewer cars would certainly be one way to achieve that aim. I got a chance to ask Fields myself. Read about his answer in this issue.
Dealership profiles are always popular, and this week I talk with Ben Keating, who owns dealerships in Texas. That name may be familiar because Keating is a champion race car driver as well as an excellent car dealer. He discusses his approach to the business of selling cars.
Another matter is also on my mind this week. The Federal Trade Commission, as you all know, has developed a keen interest in the dealership business. Now, Automotive Buy Sell Report has learned, it will hold a special one-day workshop on January 19 in Washington, D.C. to look at several aspects of the franchised dealer network including regulation of dealer location, laws relating to reimbursement for warranty services, restrictions on manufacturers’ ability to engage in direct sales to consumers, and new developments affecting motor vehicle distribution such as autonomous vehicles, connected cars, and the rise of subscription-based automobile sharing services (those may sound familiar; they are all areas Ford’s Smart Mobility program is focused on).
Automotive Buy Sell Report contributor Mark Johnson, president of MD Johnson, Inc., a buy/sell advisory firm, shared with us a letter he has written to the FTC in response to its request for comment.
Johnson says in part of his 20-page letter that the current system of a manufacturer having control over the location of dealerships allows dealerships to remain profitable and to invest in creating a specific customer experience that makes a brand competitive.
Limiting the number of dealerships does not create an uncompetitive environment for the consumer because a consumer can always drive or fly to a dealership in another area if he or she so desires, points out Johnson.
Have other readers seen and responded to this FTC request for comment? If so, we’d love to hear from you.
I am off to hear another press conference. Don’t forget to check out this week’s Transaction News!
Enjoy!
