Tuesday, March 15, 2011

Why your auto dealer wants your car to break, and that's a bad thing.

"The Saab 9-2x was a huge mistake for Saab. It was not the type of car that a Saab buyer wanted, so it didn't sell. And, it was bad for dealers because it didn't break."
-- Actual quote (paraphrased) from two disparate organizations from within the Saab dealership ranks

I ask you to let that sink in for a moment. Say what you will about the relative merit of the 9-2x (I happen to think that it was a fine automobile), it's the second part of the quote that has my head spinning. Your dealer wants your new, warranted automobile to require repair. Your dealer actually relies on the revenue derived from those repairs for their survival.

I hear you say, "Yes, but most of the repair costs are born by the OEM." True, but do you want your car to spend time in the dealership garage? Do you want your car to fail? Most sane people would answer, "no".

The truth? If an automotive OEM such as our beloved Saab were to build a nearly faultless automobile, dealers would hate the thing.

It is hard reality that automobile dealerships in North America (and elsewhere, I presume) see your malfunctioning vehicle as money in the bank. Many of the large dealers employ highly-paid commissioned sales people as "service writers" that have incentive to sell services that you may or may not need. I've had my share of run-ins with service writers over silly extras that do little but fatten the corporate coffers. Fortunately, none of my bad experiences were with Saab dealers.

Before I'm misunderstood, please hear me out. I'm not saying that our dealers are bad people, nor am I saying that they don't act in the interest of the consumer. Most (nearly all) Saab dealers get very, very high marks for taking care of their customers. Many of our dealers are to be commended for searching high and low for new ways to accommodate Saab owners .

I also don't begrudge any of our technical wizards their payment. The experts assembled at our dealers cost money, and they deserve a profit for timely repairs. Their services are necessary, valuable, and generally worth the premium that they charge.

So what, exactly, am I saying? It's my position that our desires as owners and the wants/needs of our dealers aren't aligned. We, as owners, want to stay out of the dealer garage, but our dealers absolutely need a garage full of cars for revenue and survival. I'd like that to change. I wish that our dealers could profit while keeping our cars on the road rather than in the garage. In fact, I believe that it's a matter of critical importance for the future survival of any brand, including Saab.

Saab and other brands already face more and more competition building better and better cars. Cars that will require fewer repairs. Ads from Japanese OEMs already trumpet their reliability records. At some point, an over-confident or desperate brand (Hyundai?) will begin to compensate owners for trips to the repair shop during the warranty period.

So, how do we manage to align dealers and drivers?

I propose a simple solution in the beginning: have the OEM share portions of the unused warranty reserve to compensate the dealers for lack of reimbursed repair business. It's simple, but it's not sustainable. Over time, the warranty reserves will shrink to make the company more competitive, and, of course, the need for the repair shops will shrink, too.

I'm sure that there are other ways. Let's start thinking about it, at the very least. My two cents.


Blogger Gunnar Heinrich said...

The Saabaru never broke? I find that hard to believe. Wasn't there an issue with a lack of oil reaching the engine in spirited race course driving?

11:13 PM  
Blogger Aina Siao said...

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10:15 PM  
Blogger Porcupinetaxi said...

That's why I say buy American!

8:05 PM  

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