SURVEY: Car Dealers Don’t Trust Brands They Sell–What It Means for Buyers
An automobile industry consulting firm has the results of its car dealership survey asking whether they trust the company making the brand they sell. It seems like a no-brainer that the dealerships would mostly be unanimous in their praise of the brand they sell. Well, not so fast. The survey reveals that Ford Motor Company gets the rating of the “most untrustworthy” according to the survey.
The survey comes from the Kerrigan Dealer Survey. This is the first year the firm has asked the question about brand trust, and it relates to how the automakers are rolling out EVs. But maybe more of a factor is how manufacturers are inching toward direct sales to buyers.
Why don’t Ford dealerships trust Ford?
Unbelievably, virtually half of all Ford dealers in the survey said they did not trust the automaker. Yikes! It is not clear how many Ford dealers were part of the survey. Overall, 650 dealers took part in the survey.
Kerrigan summed it up by telling Automotive News that the common reaction to trust in Ford was “consistent with the expectation of a decline in future Ford franchise profitability due to the OEM’s EV and future retailing strategy.” Obviously, if dealers become unnecessary for transactions, their value diminishes.
What other car brands don’t car dealerships trust?
The survey found that 21% of dealers said their hope was that their franchises would increase in value in 2024, with over half expecting the values to remain as they are. But interestingly, despite the negative tone of the results, almost half expect to add a dealership within the next year. So, could things really be as bad as the survey suggests?
Next on the list of dealers not trusting the brand they sell is Nissan, with 43% of dealerships deeming it untrustworthy, and then Lincoln. Lincoln makes sense since the brand is made by Ford. Chrysler, Dodge Jeep, and Ram came in fourth, with 39% of dealers not trusting Stellantis, with Infiniti coming in fifth at 37%.
For buyers, despite frosty relationships between some dealers and automakers, not much will change in the short term. Selling directly to customers does not affect negotiations. Buyers will still use the dealership as a middleman that deals directly with the manufacturer. And by going direct, you get exactly what you want, not what is left on the dealership lot.
What brands do dealers like?
For dealers, direct sales will affect their bottom line. But, it will also lower their floor plan, which should offset some dealer expenses. However, if you’re a dealer looking for an increase in value, you should grab a Kia or Hyundai dealership. Dealers think these dealerships will increase the most in value for 2024.
Finally, if you own a Lincoln, Infiniti, Ford, or Buick/GMC store, dealers expect these car dealerships to decline in value. While none of these revelations will affect your new car sale, it might suggest there could be some motivation for these dealers to make a sale to support their dealership’s value.