Is There a Dealership Edge?
The passing of the Right To Repair legislation in Massachusetts is a massive step in helping independent auto shops unlock access to consumer vehicle information and continue to remain competitive with OEMs and dealerships.
However, that legislation would only help undo some of the advantages dealerships enjoy over the quick lube industry. Dealerships consistently push consumers to their own services, depriving consumers with the right to choose where they service their vehicles, said Joanna Johnson, policy advisor for the Automotive Oil Change Association.
Johnson shared some of the most common methods that OEMs and dealerships use to control consumer choice and violate the Magnuson-Moss Warranty Act (MMWA).
Advertisements and Public Statements
The combination of Better Business Bureau statistics and U.S. Census information shows that new and used car dealers combined represent 22 percent of the industry but cause 46 percent of consumer complaints. There are nearly twice as many general auto repair shops and they generate 20 percent fewer complaints.
Yet still OEMs and dealerships engage in deceptive advertising to divert customers from seeking independent maintenance providers, Johnson said.
Ford Motor Co. promoted OEM brand oil filters for its 6.0L Power Stroke Disel Engine using several falsehoods, including that its filters were the only filters guaranteed to fit and function properly and that certain aftermarket filters have a permanently attached filter housing cap that can lead to serious problems.
Honda and Mazda were also investigated by the AOCA, which found statements from the automakers that said vehicle warranties could be invalidated if aftermarket parts were used
All of these advertisements create a perception that consumers must go to dealerships for service otherwise they’ll run into problems and receive inferior work.
Owners Manual Commands
The writing of owners manuals, and the propensity to offer matter of fact statements in unauthorized ways, has been a trend that AOCA has monitored for a long time.
In the manual of a 2012 BMW MINI Cooper, it says “only MINI dealers are to perform oil changes.”
The automaker provided no qualification or exception to the state, therefore violating the MMWA’s prohibition against tying arrangements on its face. The clear purpose of the wording is to make consumers believe that using a dealership is the only option. BMW has said similar things in other owners manuals.
The ACOA filed a complaint to the Federal Trade Commission in 2013 on the issue, which led to a change in the MINI Cooper manual. But it didn’t lead to changes for any other BMW vehicle.
It also hasn’t stopped other automakers from using similar language. Ford and Hyundai have since both used language that pushes consumers to assume the dealership is their only option for service.
With automakers and authorized dealers now being able to communicate with a consumer when it needs service and where to get it right from the vehicle, that has introduced another opportunity for them to push consumers away from independent shops.
Telematics have allowed commands such as “Maintenance required. Visit your dealer,” to become commonplace on the front dash of new vehicles. Sometimes it’s as blatant as “Changing the oil should be done by an authorized Mazda dealer.”
That’s the case for the 2019 Mazda 3, the AOCA found. Johnson sees this issue as one of the biggest challenges and more and more vehicles are equipped with this capability.
NOLN has reported several of these incidents over the past few years and it has been at the forefront of the AOCA’s efforts.
The AOCA has continued to work with the FTC to stop automakers from using brand product and service ties in telematics to command consumers back to dealerships, but there hasn’t been any significant change as of yet.
What can shops do about it?
The best thing shops can do is if they see, or hear from their customers, that dealerships are engaging in any of the above activities, to report it to the AOCA, Johnson said. The organization is continually collecting data and doing investigations on these issues. So as the popular phrase goes, if you see something, say something.
Johnson notes that anything that shop or customer finds should be emailed to the AOCA. A verbal complaint won’t be admissible when AOCA investigates the issue, so it needs to be written down.
Aside from that, Johnson advises shops not to get too bogged down with the issues. Organizations like AOCA are there to do the work so shops can focus on their own business. So stay aware but don’t let it consume the business and don’t try to pick a fight with the dealerships.
What’s amazing is fast lubes are still successful despite all of that behavior,” Johnson says. “The [fast lube] messaging should continue to be how good they are at what they do.”
While the Right To Repair legislation passed in Massachusetts, it has yet to be enforced in the state. That’s because there is a pending lawsuit by OEMs, Alliance for Automotive Innovation vs. Healey, which hopes to strike down the law because it would leave the manufacturers out of compliance with federal law. The OEMs are also contending it would raise too many security threats.
While that case sits in the courts, it has created somewhat of a hold on other states’ progress for similar legislation as everyone awaits to see how the court case is decided, Johnson said.