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Making the most of US auto distribution
US automotive manufacturers have long sought to improve the performance of their dealer networks—with good reason. Dealers account for nearly all US car and commercial-vehicle sales. But these networks are aging and inefficient, and manufacturers have been able to do little about the problem, since state laws often prevent them from relocating or shutting down poor performers. Nevertheless, manufacturers can reshape dealer networks by orchestrating a series of ownership changes, encouraging weak performers to exit the market, and helping top performers to expand and dealers generally to improve their sales skills. This program of change is a huge one, but with ingenuity and hard work manufacturers can dramatically improve their dealers' performance.
The take-away: By creating opportunities for dealers to act in their own interest, manufacturers can overcome the regulatory impediments to change and thereby gain a higher share of the market and improve revenues by as much as 10 percent.
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© 1992-2003 McKinsey & Company, Inc
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