CONCORD, N.H. -

While studies by the National Automobile Dealers Association found principals have “lukewarm support” for major store reconstruction projects requested by automakers, measures currently being debated by New Hampshire legislators could change state law unlike rules in most other locations.

Possible modifications to the New Hampshire Dealer Bill of Rights contain several elements, including:

—Limits facility upgrade to every 15 years and puts local control on construction and renovation of New Hampshire businesses. After 15 years the manufacturer has the burden of proof that the new building is necessary.

—Lets dealers “buy local” and substitute materials, interior and exterior products, and tools with like materials and tools from other sources.

—Gives dealers local control over facility site control and exclusivity in a franchise arrangement or renewal.

—Allows dealers some local decision making to choose their floor plan and vehicle loan lending sources

“Automobile manufacturers control nearly every aspect of a dealer’s livelihood,” the New Hampshire Automobile Dealers Association said.

“At the beginning of the relationship and at renewals, a dealer must sign a unilateral contract drafted by the manufacturer and must do so without any negotiation,” the organization continued. “During the relationship, the factory exercises further control through of allocation of vehicles, pricing of vehicles, and various other methods.

“Like all other states, New Hampshire has a Dealer Bill of Rights which provides some balance to this one-sided relationship,” officials went on to say.

The New Hampshire Senate overwhelmingly approved these modifications. The 21-2 vote pushed the measure to the state’s House for consideration.

Showroom revamps has been a subject researched extensively by NADA. The association presented its latest findings back in February during its annual convention.

Industry consultant Glenn Mercer highlighted the findings of the Phase 2 study commissioned by NADA that took a deeper look into two key areas of factory-mandated dealership renovation, also known as facility image programs.

The Phase 2 study analyzed the return on investment (ROI) of image investments in the short term, and examined whether these investments might be right in the longer term, for dealerships of the future. The first phase of the study was completed more than a year ago.

“The facility image program issue is not as painful for dealers as it was in 2010 and 2011, in part, because business conditions have improved,” Mercer said. “However, there is still significant room for improvement, because new-car dealers overall still give facility image programs only lukewarm support.”

NADA indicated the Phase 2 study essentially reconfirmed the findings from the first phase, which include:

—Expansion of the dealership (especially service departments) can pay off well.

—Modernization of the store is somewhat harder to justify.

—Standardization, which is the replication of features from store to store far above and beyond logos and signage, seems to be of no benefit at all. 

The Phase 2 study also determined that some spending provides lucrative returns, typically through the refurbishment of a totally run-down store, and that, conversely, some maintenance spending should not be expected to yield a significant return at all, because it represents “table stakes,” the minimum spending required just to stay in business.

The association went on to note its latest study, as before, added insights from other retailing industries, pointing out in particular some that have been better at developing solid, quantified business cases for facility upgrades that are lacking among some — but not all — manufacturers.

“We’re requesting that auto manufacturers redouble their efforts to provide dealers with better business cases before investing in facility upgrades, and especially, to ease off on standardization demands that seem very hard to justify,” Mercer said.

With the results of those studies mind, the president of the New Hampshire Automobile Dealers Association is urging members to reach out to state lawmakers to push for passage of the Dealer Bill of Rights modifications.

“Make your voice heard,” Peter McNamara told New Hampshire franchised dealers. “These calls and visits are the most critical things you can do to encourage passage of the bill. Your representatives want to hear from you. They are excited to work on legislation that helps their local constituents.

“The manufacturers, your partners, have amped up their game like never before: newspaper advertisements, radio advertisements, hiring of a PR firm, firing off of letters and emails daily. Much of the information is misleading,” McNamara continued.

“The bill will force transparency when it comes to sales goals and dealer files, and there will be fewer lawsuits because of that. Vehicle prices will stay steady because your facilities costs will be limited. Remember this bill is about local control and transparency,” he went on to say.

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