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What is a dealer's allowed marketplace?

mattwatson81

Getting Refreshed
Apr 10, 2009
334
10
First Name
Matt
I have a question for everyone and I'm sure this answer may vary from different manufacturers.

What area around your dealership are you allowed to heavily market to via TV, newspapers and even online?

For example, if you are a Ford dealer in Los Angeles would Ford be mad if you were trying to market yourself to customers in San Diego or San Fransisco? Do any manufacturers impose any limits on this?

Obviously I think a dealer can sell a car to anyone they want, but are there any limits to how heavily they can market outside their area?

I would think most dealers focus on 100 miles or so around their store, but how far should they realistically go?

I'm asking because I'm working on a project in regards to optimizing dealer's websites. If a Ford dealer in LA is advertises themselves as a Ford dealer in San Diego I'm curious if the manufacturers care.
 
Last edited:
Aug 20, 2009
113
5
First Name
Matt
Our territory differs by brand.

Brand A considers the entire state a dealer's territory. If there are multiple points in one state, then it comes down to distance from the client's home. No exporting allowed. I need permission from the dealership and the manufacturer before I can sell into another dealer's territory. If I don't have permission I do not get incentive money and a nasty-gram usually follows.

Brand B doesn't care where we sell the car so long as it is not exported. If you have a customer that lives across the street from a 'Brand B' dealership but wants to buy it from us, then send it. No exporting allowed.

Brand C considers territory to be everything within a 100 mile drive. No exporting allowed.

For used cars, it's basically anything goes. An overwhelming percentage of our business is out-of-state so our marketing focuses on national mediums, i.e. eBay, AutoTrader, etc.
 

DrewAment

3rd Base Coach
Apr 30, 2009
328
151
First Name
Drew
Matt,

I ran into this a couple of years ago with a major import OEM. The dealer I was working for was in way south Orange County, CA and they wanted to advertise into the San Diego market (where almost all the same OEM franchises at that point were owned by one player who had a non-negotiation 'one-price' policy).

I did what any good internet guy would do - I started multiple targeted search campaigns. It was VERY successful at generating leads. Did they sell at the dealers same closing rate - No. These were people ultimately shopping us for price. We did sell a few per month, and we did make a LITTLE money (positive ROI).

To answer your question - the dealer did get a strongly worded email from the OEM District Manager asking them to stop (took them over 6 months to figure it out - LOL). Rather than piss off the hand that feeds you, the dealer did stop the campaigns. Hard to justify fighting a battle when an OEM/DOM controls your special vehicle allocations.

To further answer your question - most OEM's have what is called an "area of influence", this is a geographic representation of the dealers "territory", however this is used more for expected sales and service penetration rates than selling territory.

I know that Volkswagen was the last OEM to fall in regards to protected territories. It used to be that you could NOT sell a vehicle to a customer if they did not live in your assigned area. Think that policy for VW died in the 60's or 70's.
 

mattwatson81

Getting Refreshed
Apr 10, 2009
334
10
First Name
Matt
Matt,

I ran into this a couple of years ago with a major import OEM. The dealer I was working for was in way south Orange County, CA and they wanted to advertise into the San Diego market (where almost all the same OEM franchises at that point were owned by one player who had a non-negotiation 'one-price' policy).

I did what any good internet guy would do - I started multiple targeted search campaigns. It was VERY successful at generating leads. Did they sell at the dealers same closing rate - No. These were people ultimately shopping us for price. We did sell a few per month, and we did make a LITTLE money (positive ROI).

To answer your question - the dealer did get a strongly worded email from the OEM District Manager asking them to stop (took them over 6 months to figure it out - LOL). Rather than piss off the hand that feeds you, the dealer did stop the campaigns. Hard to justify fighting a battle when an OEM/DOM controls your special vehicle allocations.

To further answer your question - most OEM's have what is called an "area of influence", this is a geographic representation of the dealers "territory", however this is used more for expected sales and service penetration rates than selling territory.

I know that Volkswagen was the last OEM to fall in regards to protected territories. It used to be that you could NOT sell a vehicle to a customer if they did not live in your assigned area. Think that policy for VW died in the 60's or 70's.
Thanks for sharing your experiences. With the internet it seems like a dealership could potentially optimize their website for every city and state there is if they wanted to!