At Carmakers' Request, Dealers Remodel Showrooms

fromWUWM

Across the country, car dealers are remodeling and updating their showrooms at the urging of manufacturers, who want all dealerships to look similar. The dealerships are spending hundreds of thousands to millions of dollars on these "voluntary" projects, but many say they'll never recoup all the investment. The manufacturers offer incentives to dealers who take the plunge.

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If you're shopping for a car this holiday season you may be in for a pleasant surprise. Thousands of dealers are remodeling their aging facilities, adding better lighting, cozy lounges, and offering free drinks and snacks. Many of the projects are being pushed by carmakers who hope that sleek-looking showrooms will lead to more sales.

Erin Toner of member station WUWM in Milwaukee reports.

ERIN TONER, BYLINE: Sommers Buick GMC, just north of Milwaukee, has been completely remodeled, though by design it's largely indistinguishable from many other GM showrooms. Owner Wally Sommers says one key element is his bold, new entryway featuring tall beams and an arched overhang.

WALLY SOMMERS: You'll also see that on a Chevrolet store or a Cadillac store, and it's a modern look and it has a consistent look across the country. So, nicely designed, I think. We've got a lot of compliments on it and we didn't have anything to do with the design.

TONER: Sommers says most of the upgrades were dictated by General Motors, even down to the paint colors, the floor tiles, and the type of chairs and desks. Think McDonald's or Starbucks - the one in your neighborhood likely looks just like the one in mine. Sommers said the renovation, plus a brand-new Subaru showroom next door, cost him a few million dollars. And he hopes the investment will give him an edge.

SOMMERS: We need to take sales from someone else. So we need to be better in terms of our facilities and our operations than everybody else in the marketplace.

TONER: Sommers is one of thousands of dealers who signed up for General Motors' branding program. GM spokesman Tom Henderson says the goal is to update '60s and '70s era showrooms.

TOM HENDERSON: We want a very common theme across all the media that our dealers present to our customers. And then, you know, we want to the facilities to look and feel like, for example, the Chevrolet brand does across the country. So a customer, they will see a dealership and they'll say, ah, that's Chevrolet.

TONER: Henderson stresses that the program is voluntary, but says dealers who do participate get financial assistance from GM. Other manufacturers - such as Subaru, Honda and Ford - also offer incentives for remodeling projects.

While many dealers are making the costly upgrades, some are resisting. Jim Tolkan is president of the Automobile Dealers Association of Mega-Milwaukee.

JIM TOLKAN: Most of them are dealers that have recently done remodels, will say with in the last five or six years, and the manufacturers are still pressuring them to make additional changes like different glass, different tile, different furniture.

TONER: Tolkan says dealers who don't take part are potentially at a disadvantage, because they don't get cash or other incentives that they can pass on to customers, making their prices less competitive.

TOM HORTER: My name is Tom Horter. I'm the president of Horter Chevrolet in Mukwonago, Wisconsin.

TONER: Horter's dealership is a blast from the past. The walls are covered in dark wood paneling and there's a drop ceiling overhead with unflattering fluorescent lighting. Horter has thought for years about renovating, but says he's not so sure that if he builds it buyers will come.

HORTER: There is no guarantee if you put up a new, modern facility and spend $3 million that you're going to double your income to pay for the building.

TONER: Horter says he'll probably hold out for a little while longer, but acknowledges that his dealership can't stay stuck in the '70s forever. He knows that fancy furniture, modern lighting and free Wi-Fi may help him lure in customers who are willing to travel outside his little town for a good deal.

For NPR News, Erin Toner in Milwaukee.

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