Honda trying to force dealers to make improvements or face losing franchise
05/05/2008, 7:06 PM
By Drew Johnson
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.”
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.



05/05, 7:16 PM
posted by:
A4
didnt LLN already put this article up about toyota?
05/05, 7:20 PM
posted by:
johnnycanuck
What a bunch of a-holes. They want the changes so bad let them f*cking pay for it.
05/05, 7:42 PM
posted by:
autonut
They are sort screwing small guy. I think all car companies do it however. They want each dealership to sell a lot and have a pleassant experience especially during service visit. In my area all Honda and Acura dealership are consolidated by few wealthy families. Prices for Honda were always just about list price, so it does not matter much, but dealerships do look nicer. Actually, those wealthy families own several brands.
And believe or not it was started by GM and Ford: if you own one GM/Ford dealership you were not allowed to buy “sister” company, so dealers bought foreign brands that had no restriction from GM/Ford. In essence it was GM/Ford who paved way for foreign competition, not consumer.
05/05, 7:49 PM
posted by:
TomF
Instead of worrying about whether the neon signage is bright enough, why not call the retailers out for ADP surcharges, crooked service desks and general customer-rape issues? I don’t really care what the showroom looks like. I care about the dealer’s service rep and whether he is going to force me to buy mudflaps for $1,300 to get the car I like.
05/05, 8:15 PM
posted by:
Shismo
And how about focusing on Acura, which was down 21% last month, and had 4 out of its 5 vehicles down by over 20% EACH…
05/05, 8:38 PM
posted by:
autonut
Shismo, I had Acura and can tell you firsthand their dealerships and service are excellent. The fact that cars are not desirable are not dealers problems and probably even big shots at Honda realizing that by now.
TomF, I think dealing with customer and customer satisfaction is part of reorg plan, or that what I would do. After owning 6 Honda’s (including Acura) I’ll tell you those flaps and floor mats are the only things you can bring from dealerships as a souvenir. Cars are hardly discounted at all.
05/05, 10:36 PM
posted by:
Impulsive
The dealerships should tell Honda to **** off and threaten to sue for designing such unattractive vehicles.
05/05, 11:10 PM
posted by:
Kaizen
Honestly, dealers take that risk when they sign their dealer agreement. If they’re complaining about reinvesting in their own businesses rather than spending the profits on yachts and Gulfstream jets, maybe they shouldn’t be in the car business. The ability for these dealers to serve a growing UIO is going to increase their fixed-ops business, satisfy their customers and be better positioned in the future, especially with growing Honda sales. Domestic dealers would kill to own a Honda franchise right now, let alone pay a couple million for store improvements. Every thing I said applies to Toyota and their dealer effort right now too.
05/06, 2:25 AM
posted by:
Veda
Being an owner of a dealership, I’d say that most dealers do tend to screw their consumers one way or the other, but a lot of consumers are picky ignorant bastards who complained too much anyway.
05/06, 4:14 AM
posted by:
sharpie
My local Honda dealership sucks! They don’t even try to make a sales anymore and the showroom is OLD and crowded. There is barely any parking there. They need to move, but no they won’t because they have the sales. I think there are cases, like my local dealer, where dealerships get complacent. I was in the showroom for 30 min, poking around every car from an Accord, a Fit, to an Element. There were 5 salespeople, 3 were assisting customers, the other two just stared. Ok I hate dealing with car sales, but would it f**king kill them to at least greet the customers? There were another couples there who were treated the same way. We all left, needless to say. My experience at Hyundai is even worse, and during the day of car shopping, Saturn got my vote with the best service and the guy actually knew what he was selling. Judging from my experience, I don’t blame Honda Motor Co.
05/06, 9:10 AM
posted by:
xyunya
Thank you Veda,
picky ignorant bastard
05/06, 9:55 AM
posted by:
DeansterTJ
Like anything, the experience at the dealership boils down to the specific salesperson and how motivated and nice they are. My last experience with a dealer was last November, when I picked up the Wrangler. The guy was easygoing, knew his stuff, made me coffee, called me to make sure I was satisfied TWICE in 2008, etc.
I’ve seen horror stories too though. Once, at a Toyota dealership, I wanted to test drive the Celica (this is back in 2000). The dealer flatly said no, unless I was willing to sign a contract stipulating I had to buy the car if I found the ride “enjoyable.” WTF? Needless to say, I told him to **** himself and I would spread the word about this, and maybe let the BBB know about this bull**** practice. Fags
05/06, 10:39 AM
posted by:
shaver
30 years ago Honda begged these small town dealers to join the team. Help them to grow. Essentially if you live between the coasts in a city of less then 50K people you shoud not get a Honda or Toyota dealership now, your not worthy.
05/06, 10:56 AM
posted by:
kgm777
Veda Yugo/Trabant
We screw you before you screw us. Free tube of KY with every purchase.
05/06, 11:07 AM
posted by:
injunraiv
This is an interesting turn of events. Dealer advocates have been raising the alarms for a while when manufacturers start trying to manipulate their dealers. It seems pretty innocuous at first, then the demands get more and more expensive and cumbersome. And all this usually comes up when the manufacturer loses its focus on designing great cars for the dealers to sell and starts worrying more about how the dealers run their businesses. Ask any longtime GM, Ford or Chrysler dealer about this, they’ll agree. For now, it seems the domestics have maybe learned a lesson about that. In other words; you run your business, we’ll run ours, and we’ll both benefit.
Do you know who the worst of these manipulators is? Hyundai/Kia. But it is interesting that lately there has been stories about Toyota doing this, and now Honda. As I said in another post, everything is cyclical…
05/06, 11:20 AM
posted by:
Fletch
Puts the smaller markets in a tough place. I bought my Legacy from a VW/Subaru/Suzuki dealership in Cleveland. No one of those brands could alone support the whole dealership and Cleveland is decent sized.
05/06, 11:58 AM
posted by:
gizmo2
It’s amazing that some of you guys who are dealers think that customers are picky ignorant bastards. May be you should let them know the next time they walk in. It’s a consumers market my friends, get with it.
05/06, 12:46 PM
posted by:
Get Real
Why can you not complain about 1/4 your home value in a fast depreciating purchase ?
05/06, 2:44 PM
posted by:
injunraiv
gizmo, I don’t believe for a second that veda is a dealer. If he was, he’d already be out of business with an attitude like that.
05/09, 12:19 PM
posted by:
injunraiv
OK, heres at least part od the ‘rest of the story’. Honda wants to increase their overall sales in the country. in order to do that, the sales per store has to go up (duh). Honda is concerned that the service capacity doesn’t exist to deal with all those extra cars out there. Hmmm…
If no Honda ever breaks down (right 1115?), then why is Honda concerned about that? It seems the ‘reality’ of the situation here is the typical Honda customer now has to wait up to 3 weeks for a service appointment. 3 weeks! That backlog CAN’T be all normal maintenance appointments!
05/12, 8:56 PM
posted by:
tripleonefive
Please find where I said no Honda breaks down If people are buying Pontiacs they have plenty of mechanics on duty bc they are more likely to break down Honda’s last so long and are in shops so infrequently they dont need mechanics on hand
Also please let me know how many do break down and how many get traded for Pontiacs I would love to see what you come up with You live in PA so I would love to look up the dealership and see how many Japanese cars are on your lots as trades lol A civic for a sunbird A crv for a Torrent An element for an Aztec ? LOL I have to laugh even thinking about that
Mass delusion lol That was funny