For the first time in history, a National Dealer Council could be formed to tackle the common issues faced between manufacturers and Dealers.
Most vehicle manufacturers in Australia have in place an elected Dealer Council which manages the relationship between the manufacturer and the network of dealerships representing the brand.
Whilst the mechanics of these relationships are specific to each brand, a number of themes Dealers experience in these arrangements are common across the industry. Perhaps the most significant is the imbalance of power, in favour of the factory, when negotiating KPIs, contract terms and dealership expectations.
Dealers who are a part of these councils have, historically, had little influence over the outcomes of issues put forward in the course of Dealer/manufacturer proceedings – however that may soon be changing.
For the first time ever, Dealer Council Chairmen representing a number of prominent automotive brands in Australia are being approached to become directors of a National Dealer Council (NDC), which, amongst other objectives, will tackle the generic issues facing the motor industry.
Significant traction regarding this move was gained at this year’s AADA National Dealer Convention.
During the prestigious three day event in July, a number of current Dealer Council Chairmen met and unanimously agreed that brands should be represented through a national dealer council. AADA Chairman Ian Field was at the meeting, noting that ‘in the past the common issues affecting the motor industry and the relationships between OEMS and Dealers have not been handled by people with industry experience’.
An independent NDC would not only put a new mechanism in place for the collective Dealer Councils across Australia, but would also create the first separately funded national body solely representing new car dealers.
Whilst the AADA is determined to help facilitate the creation of a NDC, its future involvement with the Council would be ‘supportive’.
‘Of course the AADA will work closely with the NDC to collectively form policy and strategy, though ultimately, they should also make their own decisions’ said AADA Chairman Ian Field.
There is an opportunity to use existing resources to get the NDC off the ground, including initial financial support from the Queensland motor industry body (MTAQ). This, along with the new AADA, including its national structure and ability to provide secretarial services and facilities, could all contribute. Over time, more funding will need to be provided by the dealer body to sustain the NDC’s growth and harness its success.
Ultimately, the formation of a NDC has a lot of potential to advance the relationship between Dealers and manufacturers, including ‘levelling out’ the playing field for more balanced discussions about dealership KPIs.
Whilst many manufacturers do provide equitable conditions for their Dealer Councils to contribute to policy, this is not being seen universally across the industry. The development of a NDC will not only align Dealer councils, but provide greater strength of conviction for Dealers when it comes to tackling the broad issues arising between factories and dealerships.
In the view of the AADA, this is just another important step in opening (and strengthening) the dialogue between Dealers and their shared industry stakeholders.
If AADA’s relationship with the FCAI, which continues to provide mutually beneficial outcomes, is anything to go by, then the formation of a NDC is good news.
As Ian Field puts it, ‘without the support of a National Dealer Council, over time AADA will become just another bureaucracy’.