Honda might have been one of the few automakers that actually posted a sales gain last month, but the Japanese automaker is unhappy with some of its dealers. In a letter sent out in March, Honda informed some of its dealers that they need to improve their operations or face the risk of losing their franchise.
“The letter is going out to dealers who are undersized for the units of operation in their market,†Honda’s dealer council chairman, Bill Smith, told Automotive News.
The letters called for several areas of improvement, such as site expansion, increased number of service stalls and showroom area. Dealers must come up with a plan for improvements by May 31 and break ground by January 2010.
However, several dealers feel Honda ’s requests are unfair and not necessary. “It’s a $2 million to $3 million investment they’re talking about,†one dealer said. “I’m in a small market. This is a recipe for disaster.â€
But there could be some relief for dealers that don’t want to make the requested changes. Some state franchise laws may prevent Honda from forcing franchises to make the changes.
