Most of us (still) don’t trust car dealers. New or used, we just don’t like them, but why? We might add that the automotive industry is finally taking notice because, maybe, they have no other choice but to take notice. Automotive ethics, based on consumer sentiment, needs repair.
Eighty or ninety years ago, when your great grandparents first trudged into the horseless buggy dealer, they soon realized a truth that would perpetuate itself for decades: no one ever knew how the dealerships priced its products. Second, were the myriads of “dirty tricks,” ranging from “losing the keys” to your car to make you haggle to abrasive, bullying sales people.
However, the landscape started to shift as the internet grew much more sophisticated. Many people now buy cars through brokers rather than dealing with guys in polyester ties and numerous industry secrets are becoming unlocked.
In the latest online issue of The Detroit Bureau (August 9, 2016), they quote the automotive auditing firm, Total Dealer Compliance. The study has determined, “the biggest problem facing dealerships today is that nearly 65% of consumers said they believe that U.S. car dealerships’ business practices are not ethical.”
In addition to not trusting car dealer ethics, more than half of car buying consumers also want to see a code of ethics displayed on the showroom floor. Even with a code of ethics well in place, about 40% of customers still put no trust in the sales process. The car industry buying experience is very much broken.
“What the results suggest,” states the survey, “is that options like TrueCar or CarsDirect are growing because of consumer fatigue towards car dealerships.” Who can blame them?
Automotive Ethics: A lot of work ahead
From an ethical point of view, the study conceded that the industry has a lot of work to do to get people back in the door, but we all know that. The audit did recommend to the automotive industry that there should be regular audits and online courses on ethical topics. They stressed that employees should “conduct their business ethically.” There should be, they found, training programs and strong compliance to support good ethics.
What is evident is that for a time (we’ll come to this), people will keep buying vehicles. What is much murkier is how many of those people will ever need to set foot in a dealership again.
The more virtual we become, and the more we can find out about makes, models, performance, ratings and drivability, the less we will need any input from a salesperson. In fact, many buyers will realistically know more than the sellers.
Going back to the sellers, surely the industry has seen declines in new car sales among Millennials. Many Millennials would rather not drive at all. We have also seen the advent of ride sharing, Uber and carpooling. More states are expanding bicycle lanes and public transportation is roaring back in many cities.
If automobile dealerships believe the Golden Goose of the 1950’s or 1960s will continue to lay golden eggs far into the future, they might want to clean the crystal ball. By the way, smaller cars such as the Fiat or Volt have surprised industry analysts. They projected Millennials would snap them up. In reality, it is Boomers and Gen-Xers. In other words, there is a movement away from big, overpriced clunkers.
The only thing that may truly save the industry as most of us know it, is ethics.
However (!), I speak on ethics all across our great nation, including Detroit. If there is one thing most audiences fear (before I speak, of course!) it is how dull, dry and boring the topic is perceived. Therefore, telling a salesperson that he or she must take an online course, or to hear some corporate drone from GM talk in monotone about Betty Smith and her ’77 Buick, is just a little drier than the Sub-Sahara.
If ethics is taught to a group of dealers and their salesforces, then it is ethics that must be practiced. If ethics does not come alive, then the industry as now exists, could very well die. As a keynote speaker on the topic of ethics, I can promise the automobile industry an approach to ethical training unlike anything they have seen to this point.
