Low stock of dealers could mean the end of the stairs, says NADA president

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The worst consequence of the bonus system, he said, is the loss of credibility with customers. With stair treads, two customers buying the same model two weeks apart can pay very different prices when a dealership drastically downsizes one of the vehicles to meet a stair tread volume target at the end. of the month.

Walser credited dealer Mark Scarpelli, President of NADA in 2017, for taking active steps to convince automakers to rethink stair treads.

“It’s kind of like once you take a drug – it’s hard to get rid of it,” Walser said. “But what the pandemic has done is take the stairs out of the way because there doesn’t need a lot of incentives at all right now. There isn’t enough inventory. “

Dealers regularly collect the price of the sticker – or more – on new vehicles, and some customers order vehicles in production.

But Walser is more skeptical of this continuing long-term dynamic. He expressed doubts whether automakers will refrain from overproducing vehicles and chasing market share once supply constraints evaporate.

“When it opens again and the production capacity is there, will manufacturers stop trying to gobble up additional market share? It’s hard to believe for me,” Walser said. “I would like to think we all learn from this. I’m just not 100% confident.”

He’s more optimistic about the death of the stair treads, as automakers see striking benefits in their dealership relationships since the programs ended.

Walser pointed to NADA’s latest Dealer Attitude Survey and noted that brands that have used stair treads in the past suddenly score much better on the closely watched report card, specifically calling Nissan.

Nissan abandoned its staircase program this year. And while the Japanese brand did not make the top 10 in the dealership attitude survey in summer 2021, Automotive News reported in September that Nissan has gained 10 spots to rank 15th out of 32 brands.

“I think it’s fair to say that there is strong evidence in this investigation that the absence of stair treads significantly improves manufacturer-dealer relationships,” he said. “I’m proud of Nissan for their movement. They’ve come a long way. We have four Nissan stores in the Walser family, so I care what Nissan says and does.”

Nissan’s improvement has been far beyond any other gain it has seen for a brand in the seven years it has been closely involved in the survey program, Walser said. This turnaround shows that the end of the stairs can pay off, he said.

“Now it’s more about products and doing business on a daily basis than these complex and often perverse programs that lead to behaviors that are not conducive to a good customer experience or any … ability to truly understand, even for a dealer, what are its costs on a vehicle, ”Walser said. “I think we may have hopefully seen the end of these programs. Because now everyone realizes that life is better without them.”


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