Nada national chairman Ray Nethercott, who will be a speaker at the upcoming CAR Conference, says that although manufacturers genuinely strive to forge closer ties with dealers, one-sided franchise agreements are still a serious problem.

Nada national chairman Ray Nethercott, who will be a speaker at the upcoming CAR Conference, says that although manufacturers genuinely strive to forge closer ties with dealers, one-sided dealer-franchise agreements are still a problem.


Results of the recent National Automobile Dealer Association (Nada) dealer satisfaction index indicated that there has been deterioration in the relationship between dealers and new vehicle manufacturers and importers. The index revealed that despite buoyant sales of new vehicles and increased volumes for dealerships, the ratings of 10 of the 19 manufacturers and importers (featured in the survey) declined and many were below the industry average, reported.


Nethercott attributed the survey results to periods of communication breakdown between the franchises and their franchisers; “particularly at times when dealers wanted feedback on problems they were experiencing”.


The problems largely involved parts supply, after-sales back-up and new vehicle distribution, which involved communication on where a dealership's vehicles were, when they would arrive, their colour and the derivatives, Nethercott was quoted as saying.


However, "there was a genuine intention by manufacturers to get closer to dealers, who need manufacturers to achieve improved profitability, volumes and customer satisfaction," the Nada chairman added.


In addition, Nethercott said that one-sided dealer franchise agreements were an issue that needed to be addressed within the year: "One or two manufacturers have improved their dealer franchises agreements but I still believe we have the worst dealer franchise agreements in the world.


"Manufacturers can still demand that dealers invest R15 million to R20 million in dealership facilities and cancel dealer franchise agreements with three months' notice. It's ludicrous."


He added that customer satisfaction index surveys were far too lengthy and not meaningful. "It's more manufacturer fact gathering than whether the customer is happy about their service and would come back," Nethercott concluded.


CARtoday.com reported last week that the survey found that in the local manufacturer/franchisers' category, Ford finished first, followed by Toyota, BMW, General Motors (GM) Chevrolet, Nissan, DaimlerChrysler, GM Opel/Isuzu, Audi, Volkswagen and Fiat. In the importer/franchisers' category, Hyundai topped the list, followed by Subaru, Kia, Volvo, Renault, Honda, Alfa Romeo, Land Rover, Jaguar and Peugeot.


The 2004 CAR Conference (in association with Nedbank Vehicle Finance) will take place during the Auto Africa Expo at the

Expo Centre (NASREC) in Johannesburg on October 27. For more about the conference’s programme, speakers and booking details, click here.