MOM-AND-POP CAR DEALERS FACING TOUGH COMPETITION.

Byline: Ben Sullivan Daily News Staff Writer

Mom-and-pop car dealers face an uncertain future, according to a study released Wednesday by J.D. Power and Associates.

The market research firm's 1998 Dealer Attitude Study indicates that increasingly size matters in auto retailing, with smaller dealerships losing both market share and support from some manufacturers over the past year.

The survey found that the top 5 percent of dealers account for 31 percent of all new-vehicle sales, with such consolidation likely to continue going forward. National megachains and dominant local players in particular are expanding, J.D. Power officials say.

With more of their cars being sold through these outlets, some car makers have in turn started shifting resources to the larger players. In particular, some domestic manufacturers are eliminating field staff representatives who traditionally support small dealers, according to the study. The study found relations between dealers and manufacturers overall declined last year, and have fallen steadily since 1993.

To survive in an era of consolidation, dealers must establish retail personalities that distinguish them from one another, according to Chris Denove, director of consulting operations at J.D. Power.

``Ultimately, the goal is for the retailer to establish its own brand so when it comes time to buy a new car the customer first thinks about what retailer to go to, and then narrows down choices on the make (of car),'' Denove said.

While smaller dealerships may promote themselves as offering more personal service to the customer, increasingly it is dealership chains with economies of scale and large advertising budgets that draw in the most customers. Even midsize dealerships are not immune, Denove said.

But the smaller dealers are not throwing in the towel yet. Pointing to relatively new entities such as the national CarMax chain, John Woodward III at family-owned Westoaks Chrysler Dodge in Thousand Oaks said many smaller dealers have been in business for decades, weathering economic feast and famine. CarMax, meanwhile has only existed during the nation's recent boom years, he said.

``They've never seen an economic downturn,'' said Woodward, the vice president of operations. ``It may be the little guy who ultimately wins.''