A step in the right direction?
I’ve heard people say that the operation of the RV industry is about ten years behind its automobile counterpart. Some examples are the functionality and maintenance of dealership Web sites, personnel training, customer service, consumer interest of products – the list goes on and on. I think ten years might be an exaggeration; but right now, we can only look forward to other industries’ examples.
So when I was checking the millions of news releases I receive each day, this one in particular caught my eye.
A reminder was issued last week by the RVIA stating that the provision on the California franchise law will become effective January 1. The law will require manufacturers to offer the option of a written agreement between themselves and the dealers with which they conduct business. According to the release issued by RVIA, the agreement must at least include:
“…Provisions regarding dealership transfer, dealership termination, sales territory, and reimbursement for costs incurred by the dealer for work related to the manufacturer’s warranty for each line-make of recreational vehicle covered by the agreement as required in the California RV franchise law.”
You can also take a look at the California RV franchise law document by clicking here.
Many dealers already have written agreements with their manufacturers. Although some businesses still operate under a “handshake agreement,” and California dealers have a right to refuse the written contract, this law can offer dealers protection and an opportunity to have legal documentation for questions or problems they might run into.
In the long run, dealers could have more protection against manufacturer issues, including warranty compliance. But right now, their may also be issues with the initial written agreement, including refusals or revisions.
Will the details and legalities bog down business owners, or help point in the direction of a more professional attitude for the industry?
And, is this a California fad or will other states follow suit?
February 7th, 2008 at 8:43 am
This is a follow up to my 12/11/08 post
Guess what my motorhome is still not ready and I am unable to get Holiday World - Houston or Holiday Rambler to do anything about the problem. I have created a website http://www.holiday-rambler-problems.com to get their attention but it does not appear to have much impact.
January 16th, 2008 at 1:15 pm
I FEEL SO LUCKY TO HAVE FOUND THIS BLOG!!! Your recent post (A step in the right direction?) really impressed me. Had found this blog a long time ago, I would have really appreciated it. I was searching MSN for information on Auto Warranty when I stumbled across you Wednesday. Keep it going!
December 18th, 2007 at 9:47 am
With or without a written sales agreement, a good warranty administrator should be recovering 95% + of warranty receivables. The major problem with our industry has always been poor quality at the manufacturing level. None of us will realize our potential until our manufacturers are truly committed to a higher level of quality.
December 13th, 2007 at 9:39 am
Having spent 10 years as an engineer in the auto industry, I’ve seen the same type of “not my problem” attitude at the OEM level as well. Despite the auto industry’s continuous attempts to model the Toyota Production System (TPS), they only pick and choose the elements that fit their mindset. A main facet of TPS is to partner with suppliers and dealers, sharing responsibility for any issues.
When I speak to dealer about our products, I make it clear that their customer is my customer. Strong partnerships are built on trust. You can’t force trust with a piece of paper.
December 12th, 2007 at 5:24 pm
In todays competitive market, the dealer demands programs (discounts) from the manufacturer, then a year later expects the manufacturer to incentivise any products they still have (more money from the manufacturer), then bills the manufacturer for ridiculous amounts of warranty. The best service managers at dealerships have found the items that the manufacturer can’t argue about and will add them to warranty claims as these managers are paid on the amounts they bring in. I once worked for a manufacturer that didn’t have installed stereos. You would be amazed how many claims we got with “stereo inop - staple through speaker wire - 3 hours to diagnose and repair”. Or units that dont have drawers having claims against them - “adjust drawer glides - .5 hrs”. If dealers only realized the thin margins manufacturers work under!
December 12th, 2007 at 4:02 pm
Being a service dealer only, I agree with what E.T.Andrysiak had to say. We perform warranty service for most of the manufacturers out there. Not only do we wait 45-90 days to receive payment, they squeeze every last cent they can out of you. Very few are willing to pay a decent amount of time to perform a job. They do not realize (or don’t care) that CUSTOMER SERVICE takes time. I have even brought up the Service Management Guide published by the RVIA which lays out how long a specific job will take, they pay less. Take into consideration that the customer wants to know what you did, wants you to test the product/appliance after repair (warranty does not pay for diagnosis or testing) and of course you want to wish the customer a good day and thank them for their patronage. Oh, and ALL that paperwork…you don’t get any time for that either. It gets very frustrating. I can only think of two companies that we have signed agreements with, but I believe we should have one on file for everybody.
December 12th, 2007 at 2:30 pm
Andy, sorry for the misunderstanding…
When I spoke with Matt Wald at RVIA, he informed me that the manufacturer’s would be required to provide a written agreement as of January 1, 2008. It’s then up to the dealer’s whether they accept and sign that agreement or not.
I agree with you that it would make the most common sense (and business sense) to sign it, too.
December 12th, 2007 at 2:01 pm
The new California law your article references “requires” a written dealer agreement to do business in the state as of January 1, 2008. The requirement of a written dealer agreement is not “optional”.
Having written business agreements, irregardless of the industry,only make common sense and will benefit all stake holders, especially the end consumer.
December 11th, 2007 at 11:09 pm
Well, first off, I have to say Erica’s picture is much better looking than Bob’s. You know I can’t pass that up, Bob.
Secondly, I agree with Mark. Adult businesspeople should be acting like adult businesspeople and making agreements. If it takes writing to honor agreements, bring in the paper and ink.
E.T., there’s a crying shame in your comment. Shouldn’t manufacturers realize that every time they screw a dealer it is going to trickle to the customer relationship? The dealer has the customer’s ear. The dealer is going to make sure the customer knows what is going on. This ownership of the customer ear can also work against manufacturers when they ARE NOT at fault. I’ve seen dealers play the manufacturer card many times rather than take any responsibility for their actions.
December 11th, 2007 at 11:04 pm
Fanchise being one example of progress opportunity for teh RV Industry. I too have often heard ‘10 years behind the auto guys’, but I dare say that the auto guys are different than the RV guys. Cars are a must, purchasing an RV is a lifestyle choice. VERY different.
Time will tell, but so far the RV Industry is working to embrace progress.
December 11th, 2007 at 7:19 pm
WARRANTY CALLS FROM CUSTOMERS WHO PURCHASED FROM ANOTHER DEALER AND WANT SERVICE ARE BEING REFUSED BECAUSE DEALERS ARE NOT BEING PAID COMPLETELY AND TIMELY, THIS HURTS THE ENTIRE RV INDUSTRY, WE ARE NOT CLOSE TO THE AUTO INDUSTRY
IN FACTORY PAYING DEALERS FOR WARRANTY WORK PROMPTLY (WITHIN TWO WEEKS). ANY AGREEMENTS SHOULD SPELL OUT WARRANTY PAYMENTS,THAT SHOULD BE PROCESSED VIA CREDIT CARD FOR SAME DAY PAYMENTS OR VIA THE INTERNET.
December 11th, 2007 at 5:54 pm
If my recent experience in purchasing a new Holiday Rambler Endeavor 40 foot motorhome is indicative of the industry, I would estimate the RV industry to be 20 to 30 years behind the automobile industry.
To add some perspective to my comments, I came out of the RV industry where I served as President, VP and General Manager, VP of Operations and Plant Manager of several major RV Manufacturing Companies. I made a decision to purchase a Holiday Rambler based on that experience. I purchased the unit from Holiday World - Houston took delivery and made my first shakedown cruise.
Even after inspection and a predelivery by Holiday World my unit had several water leaks (no big deal I fixed them) The wrong A/C 13500 instead of 15K with heat pump as was stated,the DVD would not work properly (skipped) The frame was rusty and full of Black Widow spiders. Holiday World immediatey changed the A/C and checked water leaks and declared my unit ready to go. Two weeks later I took another shakedown cruise and found the DVD still would not work, the shift panel was cracked where screws were forced in, the fascia boards on all the slideouts were installed improperly and TEK screws missed the slideout and were exposed where they provided a safety hazard and would damage the seals. In addition the compartments were screwed in with TEK screws exposed creating a hazard every time something was removed from the compartment. I sent the next 45 days attempting to get Holiday World and Holiday Rambler to correct the deficiencies. After 3 weeks of no one returning my calls I went to the dealership in person and found they had not even ordered the parts needed for repair. I was assurred the parts would be ordered and they would call to confirm. Guess what no response. I again started calling and left several messages but received no response. I emailed Holiday Rambler several times to express my disatisfaction but received no response from them either. After finally calling the Customer/Dealer Relations Manager at Holiday World we started getting a response. I have been told my parts will be in tommorrow and repairs will be made. I can promise you I am not confident of that happening.
December 11th, 2007 at 4:44 pm
Warranty seems to always be the big issue with dealers and I’m not sure a Dealer Agreement will cure that. One of my favorite says is “if I were king for a day” I’d fix that problem by…having customers pay the dealer for the warranty work and parts at the shops regular rate. The dealer would give the customer a copy of the work order, marked paid, along with a self addressed, stamped envelope for mailing to the manufacturer for reimbursement. The manufacturerss think nothing of honking a dealer off on warranty BUT how would they treat the many customers and word of mouth it would generate if they did not pay or arbitrarily reduced the reimbursement….hmmmmmmm.
December 11th, 2007 at 4:42 pm
Written agreements shouldn’t be an option for any dealer/manufacturer relationship — they should be a rock solid requirement.
Dealers should get in writing the manufacturer’s commitment to deliver parts quickly and pay warranty claims in a timely manner.
Manufacturers should get in writing a dealer’s commitment to service the products they sell and to provide training to their staff.
Only a child or an idiot would run a business that brought in more than $10,000 per year without written agreements as to who is providing what when.