State legislatures will be debating dealership data soon

One of the key issues that will be discussed in state legislatures around the country this year involves the ability to protect and integrate the data that dealerships gather and maintain in the course of their business operations. While these issues have been debated for years, they are becoming increasingly critical given the explosion in the volume and sensitivity of the information dealers obtain from consumers and increasingly from their vehicles. Meanwhile, dealers are growing frustrated as they face artificial market constraints.

The ability to protect and integrate dealer systems is of paramount concern to franchised car and truck dealers and is critical to their ability to run their businesses efficiently and provide a modern, integrated sales and service experience.

The need to have full access to their own information and be able to efficiently and securely transmit data and integrate with other systems is central to what dealers do every day. Indeed, these issues are so fundamental to modern commerce that it is surprising that it is even a point of contention. Unfortunately, for many dealers, it is.

While there are ongoing dealer concerns about OEM practices and programs that require broad access to dealership information, dealers and OEMs must continue to engage in an earnest conversation about how this information is shared. The conversation is needed to ensure that it is done in a secure, compliant manner, consistent with dealer needs, as well as consumer expectations and preferences. However, much of the recent focus has been on the structural inability of dealers to control their own business operations due to restrictions and limitations by the very technology vendors they employ.

Cost, innovation

For example, so-called “certified” integration requirements and restrictions from dealer management system providers are unnecessarily increasing costs for dealers (and ultimately consumers) and limiting dealers’ ability to innovate. Dealers have long been focused on data security and will continue to do so. However, security concerns must not be used as the basis for increasing costs or limiting competition.

Dealers have ardently sought changes on their own — with little success. Recently, the Automotive Trade Association Executives, which comprises 113 franchised new-car dealer associations in North America, working with NADA, has prioritized data integration. The association is looking at the future technology needs of dealers and consumers and is working to facilitate a resolution of other data-related issues in the various state legislatures in the coming months.

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