Honda dealers are receiving a new line of criticism from Honda Motors, one we don’t normally see from the manufacturers. Some of BSM’s dealer clients have recently received a sales performance letter claiming the dealer is deficient in the registration of Honda brand sales within the dealership’s assigned territory. These are Honda sales by ANY other Honda dealer. We normally see dealers being criticized for not sell enough new Honda vehicles under Honda’s sales efficiency measurement. Under that measurement, Honda (and all other manufacturers) are focused on the dealer’s retail sales wherever those sales are made. In these new deficiency letters, Honda is focused on the dealer’s retail sales, as well as neighboring dealer’s retail sales, within the subject’s dealer’s assigned territory. This is a very limiting view of dealership performance which flies in the face of every manufacturer’s mantra that a dealership’s assigned territory is not “exclusive” for that dealership.
The concept of brand registration deficiency is particularly flawed in a market where there a number of Honda dealerships serving a metro area. Due to ease of travel and customer shopping patterns, customers in a metro area are likely to purchase from any dealer in the metro area. Any particular Honda dealership in the metro has little control over where the residents within its assigned territory choose to shop for a new Honda vehicle.