For the past two months I have been on the road almost full time and have visited with hundreds of dealers across North America and several manufacturers and suppliers. Despite the hassles at the airports, this is the most rewarding part of my job! After visiting with so many people, I came away with a pretty clear picture of what is on your mind. This month, I simply want to share some of those thoughts with you.
What’s on your mind: Uncertainty
One of the most common themes I heard is uncertainty. Most dealers, and even manufacturers, are unsure about what the future will bring. Short term, many are concerned about soft demand for many products. Almost universally people mention the economy, stock market and weather as having an impact on the construction and OPE side of their business. Weather and commodity price conversations were most closely tied to ag equipment sales. Dealers in livestock and dairy country have been especially hard hit, but are a little more optimistic about the remainder of this year. Most people I talked with indicate 2010 is starting off well. That being said, no one expects the uncertainty to go away any time soon.
Market share is a hot topic
Market share is another hot button for most dealers.
The primary reason? Most major manufacturers have tied greater economic incentives to this metric. In many instances, these economic incentives can mean the difference between a good year and a not so good year.
The second reason? No one has confidence in the accuracy of market share numbers. We continue to work with manufacturers to make improvements to the system. A small working group established after the NAEDA Market Share Task Force completed their recommendations is working with AEM to update defi nitions, educate dealers about the system and make it less mysterious and more transparent. One way we can improve the system is ensure there is a clear, consistent appeal process, recognized and respected by dealers. Perhaps the most powerful way to improve the system must come from dealers providing accurate numbers. Bottom line: If we really want accurate numbers, we must remember who is responsible for putting them into the system. Therein lies the biggest challenge created by tying economic incentives to market share.
The third reason? There are factors beyond the control of a dealer that can and do affect market share. Availability of product in a timely manner, particularly the better selling combines and large tractors, is essential.
Credit is critical
Another thought many of you shared is the need for a reliable source of reasonably priced credit, both wholesale and retail. Th e wholesale/floor plan side is challenging because some fl oor plan suppliers have dropped out of the market. The credit meltdown of the past year has also increased the risk margin charged by banks when loaning to each other. As a result, there is no rush of new or existing wholesale lenders willing to lend more. It is more expensive for a lending institution to provide wholesale credit in the fi rst place. On the retail side, aside from the collapse of the securitization market, demands for lending standards for consumer loans is stricter today, thus, creating havoc for many dealers. Again, the good news is things are improving for both types of loans, but unfortunately no one expects it to be a smooth recovery!
Warranty woes
Warranty concerns have quickly become a top of mind issue with dealers. Resubmitting claims, low pay, slow pay, and sometimes no pay, cause dealers no end of consternation. Concerns over fl at rates established by manufacturers are also an issue. Add to that lack of pay for diagnostic time, travel, etc., and warranty becomes a big deal. Recently NAEDA’s Industry Relations Task Force in concert with NAEDA affiliates conducted a warranty survey to determine the depth and breadth of the issue. I thank the nearly 1,300 dealers who responded to the survey. Due to the volume of data and comments, we are still analyzing the fi ndings. This information will serve as the basis for more in-depth warranty discussions with many OEM, shortline and OPE manufacturers.
There were other issues shared that are also important … legislation, regulations, tax-related questions, and more. However, these issues do not convey the complete picture. To put it all in perspective, the most common thought you shared with me is OPTIMISM!
I don’t care how much we talk about dealership issues keeping you awake at night, there is always that final thought: tomorrow will be a great day! I admire your spirit. Pulled in a hundred diff erent directions by customers, suppliers, employees, family, etc., through it all you can still smile and be thankful for the opportunity to get up in the morning and try new ways to succeed. That, my friends, is the one thought that best captures why I love being associated with you and this industry! And that’s the way I see it. ■
PAUL KINDINGER is president/CEO of the North American Equipment Dealers Association. The association provides educational, legal, legislative, and financial services to approximately 5,000 retail agricultural, construction, large property/lifestyle and outdoor power equipment dealers in the United States and Canada.