A range of factors — from concern over future electric vehicles impacting all-important service and parts profits to heightened talk of direct-to-consumer sales and not wanting to make investments in digital retail to compete with larger groups or to adhere to mandated facilities requirements — has persuaded some dealers to sell their stores, buy-sell brokers say.
Many simply are at or near retirement age and may not have a succession plan and, like Patchett, are exiting the business altogether, brokers told Automotive News.
“The sole proprietor that’s owning a dealership is above 70 years old right now … [and] you’re thinking about, well, ‘How much more money do I want to put into my business, and how much longer do I have before I don’t want to do this anymore?’ ” Schmidt said. “So all of these things are driving that. When you have a dealer body that is on the older side, any of these things are going to drive turnover.”
While Volvo store valuations could be impacted, Kerrigan has not seen a rise in Volvo stores going on the market.
“Many dealers are wondering about the changes that will come with electrification and the OEM changes that may come as a result of a desire to have a more streamlined sale process that is more direct to consumer,” Kerrigan added. “And that [Volvo] comment just further raised eyebrows of all dealers in their concern about the potential for OEMs to try and work around the franchise system.”
Dealers’ wariness isn’t just with digital EV sales, Kerrigan said, but with “one-price” mandates for new vehicles.
She said the change is big because dealers last year during the pandemic and even more so during the recent inventory shortage have been able to adjust pricing to help boost new-vehicle gross profits.
“In a one-price, online format, dealers would no longer have that lever to pull in the event that inventory shrank or in the event that sales decline,” Kerrigan said in April.
Article from Automotive News Source: Link Here
By Dave Cantin
As an entrepreneur, one of the things that I look for in every conversation is how people carry themselves, their leadership ability, and especially how it carries through a conversation or a meeting.
I’m continually amazed by the drive of the people I meet in the automotive industry. I truly believe it is the greatest industry in the world, full of professionals that are full of resilience and tenacity at a level you don’t find anywhere else.
Today, I want to talk about all the unique flavors we bring as individuals to this “automotive tenacity” . If you’re in a different industry, you bring your own flavor to the distinct superpower of your industry.
You don’t have to be a CEO. You can be starting your career, but you always have an incredible amount to teach and learn from those around you.
I want to talk specifically about the contributions to this automotive tenacity made by one incredible individual, Sandy Scwartz, who I had the privilege of interviewing this past summer on the Dealer News Today Podcast.
Before we start, a point we will circle back to later. The best way to learn anything (including “superpowers” and new ways of being), is two fold:
First, by teaching what you know to others, it becomes a more deeply ingrained part of you.
Second, by openly listening to the contributions of others, your perspective will constantly expand.
I truly believe this is one of the best ways to ensure that personal growth continues as a daily and lifelong journey; to constantly share and invite others to share their best with you.
Over the summer of 2020, I had the privilege of interviewing Sandy Schwartz twice on the Dealer News Today podcast. The second appearance was to announce that he was stepping down as the CEO of Cox Automotive to become lead executive of Cox Family Offices, after 35 amazing years that left an indelible, positive mark on the automotive industry.
But that’s a story for a different day.
Today, I want to talk about the first time Sandy came on the show. It was a moment in our country’s history that will be remembered by all who lived though it—June 25th, 2020. The pandemic was still relatively new, though we were beginning to grow accustomed. Then our country broke into a moment of new and resounding calls for racial justice.
It was at this important moment that Sandy came on the show. His incredible leadership shined through from the start. It led me to see that Sandy sheds a unique light on this “automotive tenacity.”
In our society, we so often think of professionals who make it to the top by being cutthroat, by being able to take the emotions out of hard decisions.
But Sandy is different.
He still has the guts, the savvy, and the business mind it takes to make it to the top level of the automotive industry. He can take the emotion out of a decision when he has to. He’s unique because he combines all that grit with a seemingly bottomless well of generosity and positivity.
For an example, when I asked him, “What have been some of the greatest challenges you’ve experienced as the leader at Cox Automotive during these times? ”
. . . Someone else might have sighed and started with a heavy voice, “Well . . . ”
But not Sandy. Without hesitation, he said—
“I’m gonna answer that, but first of all, I have to tell you my greatest joy, because I think before we get into challenges, there are good things that come out of this.”
That’s not to say he doesn’t recognize the challenges. He’s deeply sensitive to them. Sandy comes from a space of such genuine positivity, that in facing any challenge, those around him are not exhausted or defeated. They’re uplifted and inspired.
By the way, that ‘greatest joy’ was witnessing the entrepreneurial spirit of everyone in the automotive business through these unprecedented challenges. There’s that tenacity again!
Later, he mentioned a mantra he’d been touting, “It’s time to be human at your core!”
In these times, it’s certainly important for us to be in touch with our humanity, but I have a feeling this has been how Sandy has operated his whole life, long before the pandemic.
Actually, I know it is. He talked about a slide he often uses in presentations, of a field where a little league game is being played, surrounded by sponsorship signs. And the sponsors are all automotive dealerships. He shows that image as a reminder, saying—
“We are deeply ingrained in communities. We help them build fields, schools, and so it’s really important that we realize we have a responsibility, not only to our great industry, but also to the communities that we all serve and we’re a part of.”
He embodies this in the way he led Cox, noting that having each of the 25+ different companies under the Cox Automotive umbrella working separately is good… but the “special sauce” is in how they work together.
“It’s less important to stand each one of them up as a separate business, and way more important to make sure they’re working towards something that will make the dealer more profitable.”
He ties this into the way he operates Cox Automotive, saying, “We’re a for profit company, but that’s not what it’s about . . . We do not win without dealers being successful.”
Sandy is an extremely savvy businessman. I don’t want to gloss over that. He led one of the biggest and impactful companies in the automotive industry (and the world) through many phases of key development. He said—
“Shame on us if we backslide at all. We’ve got to be forward thinking in what we do.”
He also sees far beyond profits, to role our businesses play in the lives of our customers and our communities.
And that attitude, to “be human at your core” can be a much more powerful approach to business and life than being “cut throat” all the time. Being human wins allies, commands respect, and can, as Sandy proves, live hand-in-hand with powerful decision making.
Finally, I want to mention Sandy’s response to the current moment in racial justice. It was the biggest lesson I got out from the interview—
The importance of listening.
“What I’ve done more than anything, which is hard for me to do, is listen,” he said, “Right now is not a time for me to espouse all my views. What’s important is for me to listen, to understand how people are feeling, to understand what they see, to understand what they feel.”
We so often think that to be powerful, we have to get up on a soap box and make ourselves heard. But there is incredible power in the act of listening. It has the potential to connect us all, make us all better as individuals, and make any group greater than the sum of its parts.
Which brings me back to my original point.
The way that we guarantee nonstop personal growth is by both sharing the best of ourselves with others, and by listening and allowing others to share their “super powers” with us.
Sandy is a seasoned veteran executive leader. It shows in the way that he operated Cox Automotive and the way he helped so many people navigate through a time of crisis. He didn’t hide from it. He said, “Let’s face it head on. Let’s deal with it.”
And my greatest takeaway from the interview that day was—
We need to do a better job listening.
—and that’s the key to success.
We hardly need to hear it again. 2020 was quite the year. And as we get farther into 2021, it’s clear we’re not out of the woods yet. But it’s worth looking back on the past year in the automotive industry, which despite the challenges, tells an unexpectedly inspiring story. The industry showed fortitude, tenacity and perseverance, while providing many practical and motivational lessons we can take into 2021.
2020 began as a strong (but mostly predictable) year in Automotive. Then, as in most industries, everything came to a halt as COVID-19 hit in March.
The automotive industry stands out for the way it bounced back in two major instances: first the initial onset of the pandemic, and then the deficit of new inventory. Following a very difficult March and April, May and June were some of best months in automotive history. Dealers quickly learned to serve customers safely, both in person and through increased online sales.
Yet, as inventory flew off the lots, production from the manufacturers was way behind.
Dealerships got scrappy. Many had proactively bought inventory from other lots. Others upped their game around CPO vehicles, or artfully rode the wave of shifting supply and demand.
As we enter 2021, the pandemic continues, but dealership sales, vehicle manufacturing, and mergers & acquisitions have remained steady. With vaccine distribution underway, there’s a light at the end of the tunnel, and we’ll emerge stronger than we were before.
Dave Cantin got on the phone to look back on 2020 and ahead to 2021. He reflects through two lenses: one as an expert in the Automotive Mergers & Acquisition (M&A) market, and one as a human being on a constant journey of personal growth.
This interview was edited for publication on this blog.
We entered 2020 anticipating one of the greatest years in history, due to many factors, one of them consolidation. The bigger private and public companies were buying as many stores as possible, and we saw a lot of momentum from Q4 ‘19 pushing into Q1 ‘20.
Then the industry shut down on March 13th, and everyone who was considering investing millions of dollars woke up and said, “Wait. How do I consider buying when I have to focus on maintaining what I already have?”
In this situation, there’s no book to read, there’s no podcast to listen to, nobody to call and ask what to do, because none of us has ever been in this situation. We were all working one day at a time to figure it out.
DCG decided that it was our moral obligation to be there for our clients. In March, April, May and June, we really focused on maintaining our relationships, doing everything we could for our clients, not for DCG.
Come July we decided, “OK, let’s turn it back on.”
A lot of our deals Q3 and Q4 came to us because of what we did during Q2, because we understood that we needed to be there for our clients.
DCG finished 2020 with incredible results, better than we expected pre-pandemic. We’re going into 2021 with more pending acquisitions than we had through all of 2020. That tells you how explosive the industry is right now.
There’s nothing that’s the same, so you could take that word ‘same’ and throw it in the garbage.
When people say we’ll go back to normal… What’s normal? Change is part of life. You always have to adapt. Those in the automotive industry who think they can go back to the way that they operated in January, February, March of 2020— they have another thing coming.
Moving forward, dealers are positioning themselves to understand what consumers want— there’s a new way of servicing your car, of buying a car, of marketing, of bringing a car in for service.
The greatest word I’ve been hearing over the past six months is communication. There’s a new way to communicate with your consumers, and those who are not properly communicating with the consumer are not going to retain that consumer.
The dealers that understand the change are the ones who are going to be in the M&A market buying more stores, because they are embracing this new business model of how to communicate and how to approach the consumer in a safe way.
I also think consolidation, over the next three years, will continue to rise. The dealers that were considering, before the pandemic, to sell within five years are now probably looking to sell within the next five months to a year. This past year has really sped them along.
I don’t think the days where GM’s become owners will ever expire. Part of the American dream is climbing that ladder. When I was a general manager, I used to pull into the dealership every day—first one in, last one to go home—as if it was mine.
When you work towards something, believing it is manifesting it.
That’s part of what America is built upon— that opportunity for every individual.
I think if you take that away in any industry, America goes backwards. I don’t foresee it ever going away, and I still see every day in this industry, general managers with the opportunity to either buy in as executive managers with a percentage of ownership, or one day succeeding and taking over their dealerships in full ownership.
Look at Hyundai and Genesis. They’ve come a long way in development and now enable driving with no hands on the wheel. Just a phenomenal technology.
Tesla, obviously. They’ve been on a run, doing a great job. Elon Musk is such a savvy guy who really understands what the consumer wants and how to build it to the next level.
General Motors is investing a lot of R&D into electric vehicles and they’re going to continue to do so. Toyota too, starting with the Prius and continuing to invest a ton of R&D. Lexus is also doing a fantastic job.
I think we’re going to see every manufacturer carry their weight with the electric car, and it’s something to watch over these next 10 years.
One of the greatest things to watch will be, who’s going to make the first battery that goes 1000 miles.
I think part of America is still scared of that 300- to 400-mile radius. Once that first battery comes out that will give you 1000 miles on one charge, you’ll see the market boom.
Right now it’s a lot of the West Coast with electric cars. You’re going to see drastically more of them on the East Coast and in the Midwest. They’ll be more on the top of consumers’ lists once the distance and reliability are there, and people feel more comfortable.
Where do I begin? I’ve learned more in the last 12 months than in my entire lifetime. There has obviously been a lot of tragedy throughout this pandemic, but it has also given many of us the opportunity to sincerely reflect.
For me it’s been the ability to create balance, to realize you don’t always have to be on the go. You don’t always have to balance 50,000 things to accomplish your goals.
Over the last 10 months, people have spent more time with families. We’re going back to eating dinner together every night. I think that’s something that people almost got away from with technology, cell phones, video games… They consume us. These last nine months have provided an opportunity for us to peel back the onion and get to know who we are as spouses, who are as children, as siblings, as friends.
Sometimes, when you’re going 150 miles an hour in life, you never get the opportunity to turn around and say, Is this right for me? Is this the best choice I’m making?
Everyone’s ultimate goal is to live their best life. Well, what does that mean? It doesn’t always mean more. It doesn’t mean being financially wealthy, having big homes, fancy cars, and designer clothes. What it ultimately means is our health: our physical, mental, and emotional wellbeing. And everything we do—our jobs, our families, our time we have for ourselves—goes into that.
I’m gonna tell you what I told my 10 year old son this morning. I don’t want him to just remember the last ten months. I want him to reflect on what he learned over these ten month that’s going to benefit him for the next eight years, for the rest of his life.
2021 is for everyone to not just start over but to be their best in every single area of life— to be a better father, son or daughter, a better spouse, a better employee or employer, a better individual. Everyone in the United States and around the world has experienced a tragedy in this pandemic, and I think it’s taught us to be more passionate individuals. So my prediction for 2021 is that we’ll see more passion and compassion in people.
America is the most resilient country there is. We’ll find a way to bounce back. Everyone’s got the tenacity to figure this out. Consider the automotive industry. They went from selling 17 million cars, to a complete standstill, to then completing the greatest year in automotive history. That’s the momentum we’re coming off of right now.
As a whole, we’re going to get out there, become a stronger country, become a stronger culture.
And ultimately we’ll say this has been an experience we’ve learned from.
We’re going to get some good out of this pandemic–and I hate to use the words good and pandemic in the same sentence–but if everyone reflects and says What could I get out of this? … if they focus on the positive and not the negative, then positive things are going to manifest.
People are going to find a way to prosper from this, so my ultimate prediction is that we will bounce back as a country. We will bounce back as an industry. We will bounce back as individuals, as Americans, and worldwide. And we’re going to get through this.
Operational excellence is a philosophical term that describes the various actions that go into improving your business, whether those involve delivering outstanding customer service, creating a positive working environment for your employees, or fostering a culture of teamwork. Below, you can discover five of the absolute best tips for creating operational excellence in your own dealership so that you can build your legacy.
#1 – Plan Your Work
You would never set out across the country without some sort of map, whether you prefer a traditional roadmap or GPS from your smartphone. It’s important to think of your dealership in much the same way. You may know where you want to go, but if you don’t have a plan for getting there, you’re going to run into traffic, roadwork, and other issues that could have been avoided. Create a clear plan for your operations, including a long-term roadmap that will help you realize your ultimate vision.
#2 – Communicate Clearly
One of the most important things you can do to achieve operational excellence in your dealership involves not only communicating clearly yourself, but encouraging others to communicate clearly, too. Things like implementing an “open-door policy” in which your employees can come directly to you with questions or concerns about things that are happening within the company is a great first step. You might also choose to hold weekly meetings and encourage discussions about the week’s events.
#3 – Measure What Matters
If you think of operational excellence in the same way as athletic prowess, there’s only one real way for you to measure your abilities: keeping score. If you want to know how your dealership is doing, you must be able to measure your success via some sort of scorecard. Make a list of your KPIs (key performance indicators) and understand what goes into each one. Then, create the best possible method for measuring those KPIs and ensure that everyone knows exactly how they are performing by making the “scorecard” accessible.
#4 – Implement Quality Control
In an auto dealership, quality control is all about making certain that your employees ae working hard to meet the KPIs you’ve set without sacrificing quality. For example, if you expect your employees to sell X cars in a month, your employees should be able to meet that goal without resorting to black-hat tactics that might sacrifice your dealership’s reputation. Offering surveys to people who visit your dealership and regularly tending to online reviews is just one way of controlling your dealership’s quality.
#5 – Reward Good Results
If you want operational excellence, it’s important that you reward it when you have it. When you appropriately reward the good things that drive excellence forward, those behaviors are far more likely to be repeated. For example, if employees exceed their KPIs, offering them some form of recognition in front of their peers is by far one of the best ways to continue to encourage exceptional KPIs in the future.
At the end of the day, operational excellence in a dealership is all about ensuring that you and your employees are taking the right steps to drive the best possible customer experience in every single interaction to convert more of your lot’s visitors into happy and loyal buyers. These five tips can go a long way toward helping you achieve that goal.
Succession planning involves recruiting and developing individuals to fill key roles within companies as employees leave an organization, and that includes your own successor when the time comes for you to retire. Here’s what you need to know about succession planning and finding the right person or people to carry on your legacy.
Planning a Successor for a Privately-Held Dealership
In a privately-held dealership, your goal will most likely be passing your legacy on to a family member – usually one of your children, or perhaps a niece, nephew, or even grandchild. Though this would certainly be ideal in almost every case, it is not always a feasible option. You may not have children, or your children may have no interest in owning an auto dealership once you retire.
In this case, you may have other options aside from keeping the dealership in your family. Perhaps you have a lifelong friend who has helped you manage and run your business for many years, or maybe one of your employees who has been with you through thick and thin understands the ins and outs and is willing to take on the responsibility. In either case, it can be incredibly gratifying, particularly if the person or people you choose share your passion and your business values. Another option available to you involves selling your dealership to a third party and investing the funds you receive to help carry on your family legacy for many years to come.
What Succession Planning in the Auto Sales Industry Should Entail
When you’ve narrowed down your choices for your successor, the next step involves making certain that the transfer of ownership flows smoothly. Ultimately, the factors you should consider will vary depending on the successor you choose.
Deciding who will take over your auto dealership when it is time for you to retire might seem like a stressful endeavor, but with the right information – and with the ability to think critically, even when it comes to friends and family – there is little doubt that you will make the decision that is best for you and your family.
Speaking to an audience can be terrifying for some, but for others, the feeling of truly connecting with people who share your passions and those who need the information you can deliver is almost euphoric. Below, you will find five tips to engaging with your audience so that when you speak, you speak with impact, fervor, and passion.
#1 – Start Your Talk Off with an Interesting Story
Numerous surveys and studies have shown that people have very short attention spans and pay attention to speakers for about eight minutes before they start to daydream or otherwise stop paying attention. Regardless, you can captivate your audience and hold its attention for much longer if you start your talk off with an impactful story. You might try surprising your audience with something they don’t expect or telling them a heartwarming personal story as long as it relates to the message you are delivering.
#2 – Make a Promise (and Keep It)
Next, make sure that your audience is aware of exactly why they are about to sit and listen to you talk. What is it that your speech or talk is going to deliver? What can your audience take away from what you are about to say, and how can they put it to use in their daily lives? “When you leave here today, you will be prepared to increase your revenue by as much as 50%” is a great example of a clear and concise promise that your audience can focus on throughout your presentation.
#3 – Enunciate and Be Concise
Your words can be some of the most powerful tools you have in your arsenal, but that’s only true if your audience can understand them. Make certain that you carefully enunciate your words, that you use terminology your audience is sure to understand, and that you avoid going off-topic and rambling. These things are surefire ways to lose your audience from the start, so keep them in mind.
#4 – Get Your Audience to Interact with You
When you’re speaking to a group and you want your words to truly mean something to them, the worst thing you can do is lecture them. Some ideas include having short question and answer sessions during the event, singling out members of the audience to give you information, such as a name or state of residence, and even organizing group discussions that make your entire talk interactive from start to finish.
#5 – Use Calls to Action
If you were writing a letter to persuade someone to give you a million dollars, your goal would be to convince that person of the reasons why you deserve to have that money and what you plan to do with it. When you deliver information during a talk or speech, you need to think along those same lines. Use calls to action to give your audience a reason to act on what you say.
Engaging with your audience is critical to ensuring that you can deliver your message accurately and truly make a difference in the lives of those listening to you. These five tips will help you do just that more powerfully, with impact, and with passion that your audience will feel.