The relationship between dealerships and manufacturers are just as important as those between dealers and customers and it plays a key role in the ultimate success of a dealership and its brand.

Before a dealership opens for business, a dealer principal must sign a sales and service agreement with his respective manufacturer (Ford, Honda, Kia, etc.). That agreement – sometimes referred to as a franchise agreement – is a legally binding contract that spells out in detail the procedures and expectations under which the dealership can operate.

The agreement specifies such things as vehicle pricing structures, vehicle allocation, purchasing obligations, customer satisfaction indices, sales territories, capitalization requirements, standard operating procedures, resource allocation, and much more.

This dealership-manufacturer relationship is symbiotic in nature: the two are interdependent and mutually beneficial to each other. In other words, one can't exist without the other.

Are these close-knit relationships healthy and productive all the time? Yes, for the most part. But there are occasions when the relationships become strained and disagreements occur. In most instances, these disagreements are resolved with minimal disruption to normal business activities.

I've always had fairly positive relationships with manufacturers. Of course, any professional partnership requires give and take on both sides, and dealership-manufacturer partnerships are no exception.

The dealership-manufacturer relationship has evolved since I first became a dealer principal 19 years ago. In the early 1990s, manufacturer reps were more hands-on and visited dealerships more frequently than they do today.

Back then, there was a more personal connection between manufacturer reps and dealer principals; dealers tended to know their reps on a first-name basis. Today, manufacturer reps still visit dealerships, but a majority of the communication now takes place via the Internet and wireless technology.

Personally, I think that the communication between the two partners is fast, efficient and productive. Dealer access to information from the manufacturer is no more than a few clicks of the mouse away.

Still, I can't help wondering if something has been lost with less one-on-one contact.

How does the dealer-manufacturer relationship affect the car buying public? It doesn't affect consumers directly, but consumer buying habits, preferences and expectations drive all manufacturing activities.

Manufacturers pay close attention to all points of contact between a dealership and its customer (sales, service, parts, etc.). They monitor customer activity and feedback and adjust their product offerings and marketing messages accordingly.

Manufacturers have very clear mandates about their roles in the car-buying process. Their primary roles involve the research, development, design and production of automobiles that ultimately end up in showrooms across the country.

They are responsible for setting the suggested retail prices for those automobiles and working with financial institutions to establish financial programs (purchase and lease options), which are made available to car buyers through the dealership network.

They are responsible for the design and architecture of a dealership facility and the many branding elements (signage, colour schemes, sales protocol, etc.) that distinguish one nameplate from another.

Manufacturers also provide marketing for their brands at national and regional levels. They hire ad agencies that produce advertising campaigns (for print and broadcast media), and content for the carmakers' websites.

The relationships between manufacturers and dealerships have certainly evolved. But for all of the high-tech communication that allows these partnerships to thrive, maintaining personal relationships between them should continue to be a priority for both sides.