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Jared Hamilton
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Chris Miller

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A Huge Move Could Lead To Increased Loyalty & Sales

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In an unprecedented move, AutoNation CEO Mike Jackson recently announced that AutoNation will no longer sell any vehicle with an open recall – new or used. According to Automotive News, this effectively grounds up to 10 percent of AutoNation’s inventory.

 

AutoNation’s initiative could actually increase its brand image and make the chain more appealing to car shoppers. Knowing that any vehicle they choose to buy will not have any pre-existing issues that need to be repaired will certainly be viewed as a bonus. However, the man-power, time and loss of potential revenue required to implement it nationally could well be cumbersome to many dealers - especially smaller ones who have limited inventory. But, Jackson claims in the article that they are nearing completion of an automated system that will allow dealerships to identify and block the sale of any vehicle with an open recall. He has vowed to make this system available free of charge to any dealership that wants it.

 

While they can afford to replace this grounded inventory by acquiring up to 10,000 more pieces of inventory for their dealerships, many dealers won’t be able to financially follow suit. Accumulated flooring costs alone from aging inventory would be a hefty bill. In addition, it will become extremely important for dealerships to search for their retail-able pre-owned inventory within their own stores -- auction prices for used vehicles are certain to skyrocket with increased demand by dealers seeking to replace these grounded units.

 

This move provides a very strong unique selling proposition for AutoNation to relay to consumers. Jackson is certainly making a statement and there’s no doubt that this news will reach the public’s ears and make them take notice. In addition, it’s almost certain that supporters of recall legislation will rally behind this move and use it as an example to fortify their positions. It’s hard to believe that any consumers will object and dealers who do could find themselves in a precarious position -- caught between financial reality and public opinion. It will be interesting to watch this initiative develop and see how it affects AutoNation’s bottom line and also customer perception.

Tim Scholtes
Another fine aspect of creeping socialism. No one is actually looking at the statistics to see if this would make the consumer safer. I have my doubts. Its good window dressing and it is certainly one more way that the big operators can drive out mom and pop stores. We have been looking into open recalls on all of our pre-owned vehicles for years and get them done quickly, especially when it is a safety situation. But this one size fits all approach is typical of our government and society. We'll temporarily make ourselves feel better, add another layer of bureaucracy, which may actually slow things down and put the burden of completing recalls not on the manufacturers and the government, but onto third party resellers who are the most likely to face fines and punishment for non-compliance when recalls have nothing to do with them in the first place ! I don't have a problem if AutoNation does this on their own but we shouldn't need legislation as it is something for the manufacturers to fix. Maybe they should provide easy recall lookups for Independent and competing Franchises to help the consumer. (voluntarily). Another great option is to feed this information to companies like AutoCheck and Carfax so it pops up with any report. It would make their products stronger, provide extra protection for consumers and could easily be done without the heavy hand of government which will lock us into one system for the next 100 years. NHTSA, EPA and others already can't be depended upon to get anything done. NHTSA doesn't do the best and most thorough crash tests. By the same token, EPA doesn't do most EPA mpg ratings or a thorough job on emission testing or they would have spotted VW gaming the system long ago. FEDERAL AGENCIES = COMPLETE INCOMPETENCE !

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