Getting Inside Automotive

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A new Canadian auto dealer video series offers different perspectives from industry insiders

As winter turns into spring and people begin to breath in the fresh air and feel the warmth of the sun on their faces, auto dealers have a spring in their step in anticipation of a robust spring selling season.

2017 is off to a record start and anticipation is high to see this trend sustain itself in the coming spring and summer months.

Inventory, for the most part, is strong; the financing environment is also strong; fuel prices are relatively stable; factory incentives are also enticing in order to clear out built-up inventories.

There are, however, micro warning signs.

Some new 2016 product still remains at dealerships.  Manufacturers are adjusting production schedules both up and down as consumers continue to migrate to CUVs and SUVs and move away from cars.

The potential renegotiation of NAFTA could have severe economic consequences should Canada come out on the losing end of those negotiations.    

Hopefully the new U.S. president will begin to understand that Canada, Mexico and his country are interdependently linked in cross-border vehicle manufacture and assembly.   

At the macro level, and of greater concern, is the current political unrest in Syria, Russia and North Korea.

Hopefully what we are witnessing is nothing more than a lot of geo-political muscle flexing.   

The bombing of Syria by U.S. forces and the resulting positions of Russia and China mean that the stakes are very high and tempers are elevated.

North Korea missile testing and the armada that President Trump has set off on the waters of the Koreas look serious. If regional, or perhaps global conflict breaks out, all bets for record new vehicle sales in 2017 are off.

Much, if not all of this, is completely out of our control.

What we can control, however, is how we choose to run our business while ignoring the noise created by CNN and other news agencies.

Talking the talk

At the CADA Summit, I was fortunate enough to interview several Canadian dealer group CEOs about some of our day’s most pressing business issues.

Beginning in May, footage of these interviews will be released weekly under the name Inside Automotive and will be a part of Canadian auto dealer’s weekly news e-blast.

Some of the content covered in Inside Automotive includes:

Human resource management is a critical part of managing a dealer group — it goes way beyond payroll.

The group’s mission, vision and values, no doubt set the stage. These pillars determine the business goals that guide the strategic intent of a dealership.

They also describe the dealership’s purpose, future direction and serve as a moral compass for the business while guiding and directing employee alignment to be consonant with the dealership’s.

Attracting and retaining the right people, people that share in your beliefs and vision, is critical to future success.

Without everyone singing from the same hymn sheet, in three-part harmony, the music that is produced will not meet individual, organizational or customer expectations.

Dealer groups have become experts in managing in an environment of absentee ownership.

Some groups have equity participation while some do not — this is largely dependent upon the ownership philosophy.  All philosophies are different and there are many varying approaches and plans in and around our industry.

Another important area covered in Inside Automotive is growth.  Some dealer groups have national aspirations while others are purely local.   

The different philosophies of growth are based upon the wide variety of owner beliefs.  For some, growth is very strategic, while for others it is more opportunistic.     

Growth has several components and again, each dealer group is somewhat different.

Some speak of growth in terms of the number of locations; others in terms of financial fundamentals; while others regard growth in terms of creating more leaders who will explore their own opportunities as part of an expanded family.

Leadership is a management philosophy that is appearing in certain dealer groups.

Normally one thinks of leadership as leaders creating followers.

Some dealers, however, don’t want everyone to be a follower; rather, they want everyone to be empowered so that new leaders can emerge from the pack.

This requires a ton of consistency, transparency, trust, sharing of ideas, a culture of sensible risk and failure, very clear values and the courage to stick with the program.   

It was described to me as follows: “I want each of my people to do what is right when in front of the customer as though I was there with the customer myself.”

Walking the walk

Ever wonder why some dealers work bell to bell six days a week and then need to work on Sundays to keep organized?

And how about the dealer that never seems to work at all, but whose businesses are very successful?

Dealership management comes in all shapes and sizes.  Many dealer principals are masters at delegation; others, masters at micro-management, while others are masters at work/life balance. How can all these different management styles yield success?

In a world where dealers are measured by sales effectiveness, market share, profitability and working capital, management and dealer groups are held to higher performance standards contained in their framework agreements.

Dealership management, both at the group and individual store levels, must be first class to meet the various degrees of expectation.    

This does not mean, however, that a dealer principal must do it all by themselves — in fact, it’s quite the opposite.

The less they actually do, the stronger the organization becomes, provided there is sufficient business activity, appropriate measurable and attainable metrics and compensation plans to entice and reinforce your dealership’s goals while encouraging the organization to perform at high standards of achievement.

Your job as dealer principal becomes “being in the know” to participate in the conversation. You also need to have the courage to get out of everyone’s way and let the good people you hired do their jobs.

Look out for Canadian auto dealer’s weekly news e-blast for Inside Automotive.

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