US dealers - they're scrubbing up well

Spending a Saturday afternoon at a typical United States car dealership is not exactly pampering yourself. Drab floors, battered furniture, weak coffee in a paper cup. And that's before the salesman abandons you for half an hour to "check with my manager".

But Detroit carmakers are finally stable after their brush with death and most dealers can afford to spend a little money to spruce up the showroom. So they're adding leather chairs, oak walls, theatrical lighting - even hair salons.

The improvements can cost from US$200,000 ($242,000) to US$15 million. But dealers say it's worth it because people expect a more luxurious experience as they make one of the biggest purchases of their lives.

"If we don't meet that expectation we will not compete," says Richard Bazzy, who plans to spend more than US$1 million each to renovate his two Ford dealerships in Pittsburgh.

Whether it helps sales is up for debate in the industry. Nicer surroundings may draw people in but they also raise costs and let dealers with shabbier buildings sell for less.

Bazzy says he'll pay for the upgrades without help from Ford, but sometimes carmakers will kick in. Some dealers have spent millions on their own, while others were forced to by carmakers.

General Motors, Ford and Chrysler have been trying for years to get dealers to spiff up, but they're pushing harder now. Honda and Toyota have similar programmes. There are specifications for uniform signs, paint colours and furniture as carmakers try to make dealers look alike and create a unified image for their brands.

Dealerships that sell luxury cars have been one-upping each other for years but the contest is moving into everyday brands. Some dealers say it's getting out of hand and the customer will wind up absorbing the additional cost.

Detroit carmakers can afford to turn their attention to modernising dealerships because the crisis of 2009, when GM and Chrysler went bankrupt, is behind them. All three Detroit carmakers are profitable again for the first time in nearly seven years.

The dealerships could use the attention. Many have buildings that date to Detroit's boom years in the 1950s and 60s - and it shows.

Competitors came along in the 70s, the time of the Arab oil embargo and long lines for petrol, when Americans began shifting to more fuel-efficient foreign cars. Toyota and Honda dealers blossomed with shiny buildings, especially in the suburbs.

In the 1980s and 90s, Detroit's market share sank further and it ended up with too many dealerships in more rundown neighbourhoods, all fighting over fewer sales.

Detroit tried to get its dealerships, which operate as independent franchises, to spruce up in the 1990s and 2000s.

Some did; others wouldn't or couldn't afford to. Then came the financial crisis of 2008.

Many dealers who made it through were targeted by Detroit companies for closure. GM and Chrysler cut dealers while Ford was easing dealers out, all with the idea of selling more cars with less competition.

All told, the Detroit carmakers shed more than a quarter of their dealers between 2008 and the start of this year, when they had about 10,000, according to the trade publication Automotive News. Since the survivors are selling more cars, the companies want them to invest.

The average US dealership has been in the same place for almost 28 years and nearly half the buildings haven't been renovated in more than five years, the National Automobile Dealers Association found in a survey.

- AP