AutoDealer Summer07 Final - American International Automobile

Auto Plants Go Green 5 | USTR’s Susan Schwab 9 | Hyundai Helps Kids 18
AutoDealer
The Magazine of the
VOLUME 1 NUMBER 2
SUMMER 2007
Toyota’s
Golden
Anniversary
Jim Lentz Weighs In As the
World’s Number One Automaker
Celebrates 50 Years in the U.S.
AutoDealer
CONTENTS
VOLUME 1 NUMBER 2
SUMMER 2007
The Magazine of the
13
9
PRESIDENT
Cody Lusk
© Stefan Zaklin/Corbis
VICE PRESIDENT OF PUBLIC
AND INDUSTRY RELATIONS
Lori McMahon
PRODUCTION EDITOR
Libby Krum
DESIGN CONSULTANT
Larnish & Associates
CONTRIBUTING WRITERS/PHOTOGRAPHERS
Marty Bernstein, Les Jackson,
Jon Didier Photography
FEATURES
In Defense of Trade: An Interview with
U.S. Ambassador Susan Schwab PAGE 9
For more information about AIADA,
topics addressed in this issue, or for
additional copies of AutoDealer, please contact
AIADA Publications at [email protected]
or 1-800-GO-AIADA.
BOARD OF DIRECTORS
Mr. John H. Hawkins
Great Metro Autogroup
Chairman
Mr. Jim Hudson
Jim Hudson Toyota
Chairman Elect
Mr. Russ Darrow
The Russ Darrow Group
Vice Chairman
Mr. Don Besecker
Pennmark Auto Group
Secretary/Treasurer
Mr. Don Beyer
Don Beyer Volvo
Immediate Past
Chairman
Mr. Jamie Auffenberg
Auffenberg Auto Mall
Mr. George Brochick
UnitedAuto Group, Inc.
Mr. Dave Conant
The CAR Group
Mr. Allen Courter
Honda Auto Center
of Bellevue
Mr. Rick DeSilva
Liberty Subaru
Toyota Motor Company:
50 Years and Going Strong PAGE 13
D E PA RT M E N T S
Mr. Jack Fitzgerald
Fitzgerald Auto Malls
Mr. Ralph Ghioto Jr.
Century Isuzu Kia
Did You Know? PAGE 22
COLUMNS
Dealer Involvement
Texas Community Embraces Hybrid Tech PAGE 5
Mr. Al Gossett
Gossett Motor Cars, Inc.
Mr. Fritz Hitchcock
Hitchcock Automotive
Resources
From the Chairman’s Desk PAGE 4
6
Manufacturer Update
Manufacturers Unveil Green Plants PAGE 6
Hyundai Invests $10 Million for Kids PAGE 18
Mr. Peter Lanzavecchia
Burns Hyundai
In the News
Same Old Protectionism PAGE 7
Mr. Ray Mungenast
Mungenast Automotive
Family
View From the Hill
House Delays Action on Fuel Rules PAGE 16
Ms. Peggy Proko
Peter’s Auto Sales
19
Industry Insider
Minority Dealers Unite Under New Leader PAGE 17
Mr. Robert V. Rohrman
Bob Rohrman Toyota
Dealer Spotlight PAGE 19
Thomas Moorehead, BMW/Mini of Sterling
Ms. Jenell Ross
Ross Motor Cars
Ron Esserman, Esserman Automotive Group
Mr. Jim Smail
Smail Auto Group
Scott Fink, Hyundai of New Port Richey, Hyundai of
Wesley Chapel and Mazda of Wesley Chapel
George Brohick, Penske Automotive Group
Mr. Tim Smith
Bob Smith BMW
Mr. Morrie Wagener
Morrie’s Imports
S U MM ER 2007 AutoDealer | 3
FROM THE CHAIRMAN’S DESK
T
he final month of summer is
a quiet one in Washington,
D.C., marked by skyrocketing
temperatures and empty offices. The entire city seems to function
in slow motion as tourists overrun the
metro system and Congress members
escape the humidity for an August recess in their home districts. But even as
our capital city seems to be operating
on fumes, there is a sense of urgency in
the air for AIADA and its members.
The issue is trade. Few car dealers
would identify themselves as ardent
free-traders. After all, we’re first and
foremost business owners. Our attention is far more likely to be on the
showroom floor than on the
foreign currency fluctuations. It’s not that we don’t
realize, as international car
dealers, that trade between
nations affects our bottom
line. But it can be difficult
to keep it in the forefront
of our minds as we work to
maintain our footing in this
competitive industry.
However, if there ever
was a time to consider free
trade, and how it impacts
you personally, this is it. Last fall,
Democrats won majority in the House
and Senate on a tide of anti-war
sentiment and fears for the economy.
But they seem determined to retain
their positions by returning to their
old political stand-by: protectionism.
It’s a concept that failed in the past,
and won’t work now, but is being
resurrected nonetheless.
While Democrats wink and tell
their constituents protectionism is a
principle they hold dear, the truth is
that it’s an economy-killing strategy
4 | AutoDealer S U MM ER 2007
for shoring up union votes. At the
moment, representatives like Speaker
Nancy Pelosi (D-Calif.) and Sander
Levin (D-Mich.) are working to sink
a number of free trade agreements,
painstakingly developed by United
States Trade Representative Susan
Schwab and her team (see page
9), including one with Korea that
could have a massive impact on the
international car industry.
In addition, these politicians have
declared that they will not renew the
president’s Trade Promotion Authority,
which allows the administration to
negotiate trade deals and submit
them to Congress for a straight up
or down vote. The authority was first
introduced in 1974 and is crucial to the
United States’ ability to negotiate with
potential trade partners. The sheer
shortsightedness of Congress’ actions
should be enough to set off alarms
across all of America’s industries.
So, as you enjoy these long
summer days, and prepare for a new
model year, spare a thought or two
for free trade. Read the insightful
Washington Post editorial titled “Same
Old Protectionism” on page 7 of this
magazine, and get in contact with your
representatives to let them know where
you stand. After all, it isn’t long before
what happens in D.C. impacts what
happens in your dealership.
JOHN H. HAWKINS
AIADA Chairman
The American International Automobile Dealers Association is the only
national lobbying force in the United
States dedicated exclusively to the
economic and political interests of
America’s international nameplate
automobile dealers. AIADA was
founded in 1970 in order to increase
awareness of the international nameplate automobile industry’s value to
the U.S. economy. The association
serves as an advocate for the industry
before Congress, the White House,
and federal agencies. It focuses its
lobbying efforts on trade and anticompetitive restrictions that limit the
availability of international nameplate automobiles, full repeal of the
Death Tax and other tax measures,
affordable healthcare, energy and
fuel economy policies that constrict
consumer choice, and other industryrelated issues.
AIADA Affinity Members
DE
NVO
NN
T T
DE
A AL LEERR II N
O LLVVEEMME E
Texas Community Embraces Hybrid Tech
BY AIADA STAFF
A
slew of dealers and
manufacturers
showed up early on
a Saturday morning
at the University of
Northern Texas Gateway Center to
show their enthusiasm for energy
conservation. The Energy Efficiency
and Conservation Summit hosted this
July by Congressman Michael Burgess
(R-Texas) and held in Denton, Texas,
appealed to both car lovers and those
interested in learning how to be more
energy efficient. But auto dealers were
not the only ones who came to strut
their hybrid stuff.
The Denton County Transportation Authority (DCTA) brought its
Commuter Express bus that runs on
a B-20 blend of bio-diesel fuel and
the Toyota Prius which the DCTA Bus
Operating Division uses as its staff
support fleet vehicle. Dee Leggett,
Communications and Marketing
Manager for DCTA, said these hybrid
cars were purchased largely to support
a regional effort to reduce emissions
from fleet vehicles.
Sales team members from AIADA
affiliated dealerships Huggins Honda
ABOVE: DCTA Commuter Bus: This Denton
County Transportation Authority Commuter
Express bus runs on a B-20 blend of biodiesel fuel and the Toyota Prius serves as
its sole fleet vehicle.
RIGHT: Huggins Honda of Fort Worth
displayed a Civic Hybrid for attendees of
the Energy Summit.
of Fort Worth and Freeman Toyota of
Hurst also had on display the hybrids
available at their respective locations.
The Honda Civic Hybrid has been a
popular choice among Americans since
its introduction in 2002, winning the
“World Car of the Year Award” for
greenest car after its redesign in 2006.
The Toyota Prius, however, has
dominated hybrid vehicle sales with
more than 24,000 units in May of this
year. Although Rep. Burgess began
driving a Prius in 2003, he said he
looked “brilliant” when the aftermath
of Katrina caused gasoline prices to
skyrocket in 2005. AD
Active Dealer Opportunities
Legislative Action Network
Join the L.A.N. and become more involved with the legislative
process in Washington, D.C. Through our updates and Action
Alerts, you will always be up-to-speed on the latest issues affecting you and the manufacturers you represent such as Corporate Average Fuel Economy, the
U.S.–Korea Free Trade Agreement, Trade Promotion Authority, and the Death Tax. We cover
these issues and want you to
stay informed, so sign up today!
For more details and to join the L.A.N. please visit our
website: www.aiada.org/getinvolved/lan.
Dealer Visit Program
The AIADA Dealer Visit program presents you and your staff
the chance to develop a deeper relationship with your elected
officials. In addition to the benefits of having personal time
with your Member of Congress, you will also help to ensure that
AIADA stays active in relating Capitol Hill to our members.
Get involved with the Dealer Visit & L.A.N. program today
by contacting our Grassroots Department. Melanie Batenchuk
— [email protected] or 703-519-7800.
SUM M E R 2 0 0 7 AutoDealer | 5
MANUFACTURER UPDATE
Manufacturers Unveil Green Plants
B Y L E S JAC K S O N, C O N T R I BU T I N G E D I TO R
A
mericans are more
concerned about the
environment than
ever before, and car
makers are working
to find new ways to style themselves
as environmentally-friendly. Two
manufacturers have hit on a method
that goes far beyond higher gas mileage
and cleaner emissions — they’re
focusing on the factory. Honda and
Subaru have created a manufacturing
process without waste. That means
nothing goes to the landfill from
the plant. No trash, no fluid waste,
no smells, nothing. And they’re
anticipating a positive response from
consumers.
Subaru’s Lafayette, Indiana, plant
is surrounded by green fields and
forests; home to deer, geese, squirrels
and beavers. You won’t see any trash
piles because there isn’t any trash.
Subaru embarked on a program of
environmental management to achieve
zero landfill in 2004, and they have it
down to a science.
Achieving this level of environmental quality control isn’t easy, but
Subaru has found a way. Or actually,
many ways.
• Paint sludge is dried to a powder,
then shipped to a plastics
ABOVE: Subaru can’t
help but be proud of it’s
Indiana plant.
RIGHT: Recycle bins are
a common site in Subaru plants.
6 | AutoDealer S U M M ER 2007
Honda Factory Ground Breaking: Indiana Governor Mitch Daniels (Right) with Honda
Manufacturing of Indiana President & CEO Yuzo Uenohara (Center) and Greensburg,
Indiana Mayor Frank Manus (Left) at the official groundbreaking ceremony for Honda’s
new $550 million automobile plant in Greensburg, Ind. The plant, which will create 2,000
jobs, will produce the fuel-efficient Honda Civic sedan. (PRNewsFoto/American Honda
Motor Co.)
manufacturer that mixes the
dried sludge with other plastic
compounds. The manufacturer’s
end products become devices
such as parking-lot bumpers and
guardrail safety blocks that absorb
impact when struck by a vehicle.
• Brass lug nuts used to hold wheels
in place during shipping used to
be thrown away. Today they are
reused until no longer serviceable,
after which they are recycled, saving
33,000 pounds of brass per year.
• The Lafayette plant was the first to
be designated a Backyard Wildlife
Habitat by the National Wildlife
Federation. Subaru even arranges
for sick or injured animals on the
property to be rescued and treated.
Meanwhile, Honda of America is
building a $550 million automobile
plant in Decatur County, Indiana,
to produce fuel-efficient vehicles.
Honda will make the new plant a “zero
waste to landfill” factory. According
to a Honda spokesman, “Our goal is
that this plant in Indiana will have
the smallest environmental footprint
of any Honda auto plant in North
America.”
Honda also constructed a 20million-gallon pond system behind
the Marysville Auto Plant that recycles
rainwater to cool the plant in warmweather months. The 7-acre pond saves
tens of thousands of dollars in energy
costs and significantly reduces the use
of groundwater.
This push for greener production
highlights the commitment international automakers have to the United
States, and to the global environment.
Consumers who see commercials touting “zero waste” factories now have one
more reason to consider those brands
for purchase. AD
IN THE NEWS
Same Old Protectionism
Agreement, the biggest such proposed
pact since the 1993 North American
Free Trade Agreement, Democratic
objections center on access to Korea’s
market for U.S. autos.
Do they have a point? South Korea
is the world’s ninth-largest car market,
with 1 million vehicles purchased in
2006 — but only 40,000 from abroad,
5,000 of those from the United States.
Legitimate U.S. concerns include not
only an 8 percent tariff but also a sales
tax and environmental regulations that
apply disproportionately to U.S. autos.
© Mannie Garcia/Corbis
rying to salvage an
American trade policy,
the Bush administration
took the unusual step
of embracing bipartisanship. Unfortunately, the overture
hasn’t been reciprocated.
In May, the administration accepted
Democratic demands for tougher
labor and environmental standards
in return for Democratic approval
of free-trade agreements with Peru
and Panama — and the possibility of
more. “Today marks a new day in trade
policy,” House Speaker Nancy
Pelosi (D-Calif.) said. But
last week, the speaker, along
with House Majority Leader
Steny H. Hoyer (D-Md.),
Ways and Means Committee
Chairman Charles B. Rangel
(D-N.Y.) and Ways and
Means trade subcommittee
Chairman Sander M. Levin
(D-Mich.), dashed those
hopes. There will be no more
“fast-track” authority for the
administration to negotiate
trade deals, they declared, until
that glorious day when we “expand
the benefits of globalization to all
Americans.” The Panama and Peru
deals may still sneak through, although
Mr. Rangel will be going to Panama
City and Lima soon to discuss how
those sovereign nations can change
their laws to suit the U.S. Congress.
Much bigger proposed agreements
with Colombia and South Korea are
dead, the Democrats say.
The Democrats insist their stand
is a principled one. On Colombia,
the ostensible issue is human rights:
America’s staunchest Latin American
ally must show unspecified “concrete
evidence of sustained results,” though
its record has already improved. As
for the U.S.-South Korea Free Trade
deal “addressed the auto industry’s
concerns” (though GM is officially
neutral on ratification). Only the
United Auto Workers, Ford and
Chrysler oppose the deal, insisting
on linkage between future U.S. tariff
reductions and increased sales of U.S.
cars in Korea. Of course, scuttling the
trade agreement is the one outcome
that would guarantee no improved
access to Korea. But perhaps that’s
all right with the critics, since the
protective U.S. tariff on Korean cars
would then remain.
It would be nice if South Korea and
other trading partners accepted every
item on every U.S. industry’s wish list.
But that is not the nature of trade negotiations. In the real world, officials
must weigh the costs and benefits to
the country as a whole — not to mention the legitimate interests of the other side. One union and the two smaller
U.S. automakers should not be allowed
ABOVE: Reps. Charles Rangel
and Nancy Pelosi have stated,
“Our legislative priorities do not
include the renewal of fast track
authority.”
© Han Myung-Gu/Corbis
T
House Democrats Put Up Roadblocks to a Balanced Approach to Free Trade
RIGHT: New cars prepared for
export await shipment at the
Hyundai Motor factory.
The trade agreement goes a long
way toward resolving these problems.
It would eliminate the Korean tariff,
as well as the 2.5 percent U.S. tariff
on Korean cars sold here. It commits
Korea to halving its sales taxes,
rewriting its regulations and joining
a dispute resolution panel that could
restore U.S. tariffs to punish proven
violations by South Korea. General
Motors, which owns 51 percent of
Korea’s Daewoo, has declared that the
to sink a deal that would improve relations with a strategic ally in Northeast
Asia and deliver real gains to U.S. agriculture and industry — not to mention
American consumers. The Democrats’
partisan embrace of rationalizations
served up by labor and (part of) the
auto lobby is not “a new day in trade
policy.” It’s protectionism as usual. AD
(c) 2007, The Washington Post. Reprinted with
Permission.
SUM M E R 2 0 0 7 AutoDealer | 7
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85048
© Jason Reed/Corbis
IN DEFENSE of TR ADE
BY AIADA STAFF
T
HIS SUMMER, AIADA SAT DOWN WITH
United States Trade Representative, Ambassador Susan C. Schwab to discuss trade’s
benefits to our country, the unprecedented
opposition she faces from Congress, and
what the future holds for free trade and America. Ambassador Schwab was nominated to serve as the trade representative by President Bush on April 18, 2006. In this
capacity she is responsible for trade policy development,
negotiation and implementation across a range of issues
and regions. Ambassador Schwab’s portfolio includes
overseeing U.S. trade relations with Europe and Eurasia,
the Middle East and the Americas. Most recently, she has
been occupied with establishing important bilateral free
trade agreements with Peru, Panama, Colombia and South
Korea.
AIADA: What is your office’s primary focus
at the moment?
Susan Schwab: The World Trade Organization (WTO)
Doha Development Agenda remains a top focus. The
President is fully committed to a successful Doha Round
— one that reduces global agricultural trade distortions,
brings significant new market access for agricultural and
manufactured products and expands services trade. We
are also working hard to educate Congress and the
American people about the significant benefits our
country stands to reap from the free trade agreements
we have recently concluded with Peru, Colombia, Panama
and Korea.
AIADA: How did automotive issues affect
the framework of the U.S.- South Korea trade
agreement?
Susan Schwab: We attached top priority in the KORUS
FTA negotiations to leveling the playing field for U.S. automakers in Korea. The agreement will address a range of tariff
and non-tariff barriers that have impeded U.S. automakers from competing in this large and prosperous market.
Specifically, under the agreement, Korea will eliminate its 8
percent tariff on most U.S. automobiles immediately after
the FTA enters into force; overhaul its system for taxing cars
based on “engine displacement” to eliminate its discriminatory aspects; and address current emissions and automotive safety standards that U.S. industry has identified as
priorities to ensure that technical standards do not preclude
U.S. automotive manufacturers from accessing the Korean
market. The agreement also contains an innovative and
unprecedented process for settling disputes on auto-related
measures on an expedited basis that will serve as a powerful deterrent against any violations of FTA commitments.
Finally, under the agreement, the United States and Korea
will establish an Automotive Working Group to serve as an
early warning system to address regulatory issues that may
develop in the future. On our side, the United States will
eliminate its 2.5 percent tariff on most Korean automobiles
within 3 years.
AIADA: How satisfied are you with the agreement
as it stands today?
Susan Schwab: I am very pleased with the agreement
Continued on page 10
SUM M E R 2 0 0 7 AutoDealer | 9
CONTINUED
© Stefan Zaklin/Corbis
we have concluded. It is the most
1974, every president has had that
commercially significant bilateral free
authority and we look to Congress
trade agreement we have concluded
to renew it. In the interim, we will
in nearly 15 years. Korea is already
continue to seek ways to promote
our 7th largest trading partner and
more trade and investment flows on
the 11th largest economy in the
a bilateral, regional and multilateral
world. As large a market as Korea
basis around the world.
is, however, it has been relatively
protected in many sectors. This
AIADA: How important is the
landmark agreement breaks down
president’s Trade Promotion
existing tariff and non-tariff barriers
Authority to the trade
Susan Schwab discussed the lack of progand — by leveling the playing field
agreement process?
ress at the Doha Round of global trade
— creates new opportunities for
Susan Schwab: TPA is absolutely
talks in Washington, D.C. on July 7, 2006.
American farmers, ranchers,
critical if the United States is to stay
workers, manufacturers and service providers in Korea.
in the trade game and not on the sidelines. Every president
since 1974 has had TPA and we are working for its renewal.
AIADA: Both South Korean and U.S. automakers
It is particularly important at this time as countries around
are claiming in the news that the pact unfairly
the world have stepped up efforts to cut deals with each
benefits the other. What is the reality of the
other. The United States cannot afford to be left out. TPA
situation?
lapsed for eight years before it was restored in 2002. Since
Susan Schwab: This agreement successfully addressed the that time, the United States has been back at the negotiating
tariff and non-tariff measures that have to date impeded actable, playing a leading role in shaping international trade
cess to this important market for U.S. suppliers. If automak- and opening new markets.
ers want to keep their markets closed to competition, they
will be disappointed. But if automakers are ready to compete AIADA: How do these large scale agreements
in fair and open markets, then they should be satisfied. That
benefit consumers and businesses?
is the essence of trade opportunities. Ninety-five percent of
Susan Schwab: As a result of our openness to the world
the world’s consumers live outside the United States. The
and free trade approach to commerce, the U.S. enjoys the
KORUS FTA, like all FTAs, is aimed at leveling the playing
world’s highest real incomes. U.S. real per capita income
field in both markets.
(over $36,000 per year) exceeds the average for people living
in other high income countries by 40% according to World
AIADA: Several lawmakers, including presiBank data. U.S. annual incomes today are $1 trillion higher
dential candidate Sen. Hillary Clinton, have
than in 1945 due to increased trade liberalization. Trade
come out against the U.S.- South Korea FTA on
puts money in your pockets in many ways. One, it supports
the grounds that it threatens the U.S. auto
better and higher-paying jobs. Jobs linked to exports pay
industry. How do you respond?
an estimated 13% to 18% more than other jobs. Jobs linked
Susan Schwab: I believe that the future strength of the
to imports also pay more. Two, it keeps inflation low. With
U.S. auto industry hinges in part on how effectively it is
interest rates low, more Americans can afford to buy homes
able to compete at home and sell its product abroad. If the
and small businesses have greater access to capital. Three,
auto industry wants to meet the competition on its own
lower tariffs mean cheaper goods. Trade liberalization since
turf by selling more cars overseas, we need to open markets.
the early 1990s has boosted annual income for an American
And that is exactly what the KORUS FTA will do. Under the
family of four by $1,300 to $2,000. Trade also allows Ameristatus quo, Korea sells over 800,000 cars a year in the United
cans to spend that money on a greater variety of goods —
States. The U.S. sells only 5,000 autos in Korea. We need to
whether shoes for children, fresh produce in the winter, the
make that trade more balanced. Without the KORUS FTA, it latest high tech gadgets or parts for American manufacturers.
stays imbalanced.
AIADA: Is America’s current trade balance with
AIADA: The free trade pact with South Korea,
China a matter that demands attention from your
once ratified, will be the United States’ largest
office?
since NAFTA in 1994. What do you predict will be
Susan Schwab: In February 2006, we produced a Topthe next big agreement?
to-Bottom Review of China that concluded that our trade
Susan Schwab: First things first. We need renewal of
relationship with China needs to be adjusted to ensure it
Trade Promotion Authority (TPA), which permits us to
has “equity, balance and durability.” We are working with
implement future agreements like the KORUS FTA by
China on many issues through the Joint Commission on
submitting them to Congress for an up-or-down vote. Since
Commerce and Trade and the Strategic Economic Dialogue.
10 | AutoDealer S U M MER 2007
Often dialogue works, and China has agreed to modify
policies that impede opportunities for Americans. However,
when dialogue runs its course, we do not hesitate to use all
the tools we have at our disposal to ensure China meets its
bilateral and multilateral trading commitment.
AIADA: How has the Democratic takeover of
Congress influenced pending trade agreements?
Susan Schwab: Almost immediately after the election, a
number of key Democrats in Congress expressed a willingness to work in a bipartisan manner and to grasp the hand
the administration extended. In May, the administration and
lawmakers of both parties from the House and Senate announced we had created a clear and reasonable path forward
for consideration of the four pending FTAs and found a
way to address our shared concerns about labor and environmental safeguards and other issues. This breakthrough
demonstrates that Democrats understand the benefits of
trade and want to keep the United States engaged in marketopening efforts around the world, such as the Doha Round.
It represents an historic chance to rebuild the bipartisan
consensus on trade.
Susan Schwab: By using facts instead of rhetoric. It is easy
to demagogue against trade because the benefits of trade are
diffused while the economic dislocation it can cause is more
concentrated. However, we know that trade contributes to
economic growth, that jobs linked to trade pay more than
those not connected to trade and that the U.S. economy has
remained strong as we have opened our market and gone
into new markets. In a global economy, change, including
change in the labor market, is inevitable. The good news is
that our economy has enjoyed an annual gain of some two
million jobs and exports have contributed to this economic
growth.
AIADA: What role has the business community
played in the formation of bilateral and
multilateral trade agreements?
Susan Schwab: The future of America’s companies and
their employees depends on participating in the global
market. We work very closely with our private sector
stakeholders in crafting trade policy that serves America’s
interest. This includes detailed and regular consultations
with a statutory network of over 1,000 private sector
and non-government organizations (NGOs) experts and
advisors grouped by interest and expertise. The support
of the business community
and NGOs is also vital in
educating the public and their
representatives in Congress. I can
give all the speeches I want about
the benefits of trade and cite an
impressive number of compelling
statistics, but an employer is best
able to explain how trade helps a
business grow.
© Gideon Mendel/Corbis
AIADA: How much bipartisan cooperation have
you seen from Congress
on trade issues?
Susan Schwab: The Democratic leadership, as well as the
chairmen of the House and
Senate Committees with jurisdiction over trade issues, have
made it clear they are willing to
consult and work closely on a
proactive American trade agenA final inspection as a new car rolls off the producda. We appreciated the cooperation line at the Hyundai factory in Beijing.
tion shown recently in extendAIADA: Many of AIADA’s
ing Andean Trade Preferences
members, business owners
Act preferences, for example. Now, we look for it to continue all, would like to know how they can help
for the four pending FTAs and the renewal of TPA.
promote free trade in the U.S. Any suggestions?
Susan Schwab: As companies at the forefront of
AIADA: How, if at all, has the Democratic
international trade, AIADA members are in a particularly
insistence upon the inclusion of labor standards
good position to make the case that open markets benefit
in trade agreements hampered your ability to
American workers, small and mid-sized business, retailers
make deals with other countries?
and consumers.
Susan Schwab: Our four FTA partners understand how
important an agreement with the United States is for their
AIADA: What legacy do you hope to leave as
economic future and agreed to adopt the standards that were United States Trade Representative?
included in the bipartisan agreement with Congress.
Susan Schwab: It is a privilege to serve a president
It is impossible to speculate on how a future FTA partner
who has had the vision to support trade liberalization as
will react to U.S. positions on labor rights, intellectual
a tool for promoting prosperity at home and economic
property protections, or any other issues.
development overseas. I believe we have carried out that
vision with energy and determination and worked at
AIADA: How do you respond to protectionists
rebuilding the bipartisan consensus for trade. I am proud
who oppose the very concept of free trade as
to have contributed to America’s economic growth and
conducted by the U.S.?
competitiveness. AD
SUMM E R 2 0 0 7 AutoDealer | 11
S POOLTVL EI G
D E PAALRET RN EI RN V
MHETN T
ADVERTISEMENT
Service Information Is Key
to Increased Revenue Opportunities
I
n this day and age, wellperformed maintenance and
customer service from your
service department is vital to
the success of your dealership.
The competition is fierce, whether it
be from national chains or local repair
shops. And don’t think competing
dealerships aren’t fighting tooth and
nail to push more customers into their
service bays as well — there’s too much
profit not to.
Dealerships account for 22%
of today’s maintenance and repair
business1. However, first owners make
up the majority of this business and
other service channels are gobbling
up potential customers once the
vehicle changes hands. So how can
you keep these vehicles in your service
cycle?
Thousands of dealers are doing
it using their service and repair
information. CARFAX Service Link is
a free program that puts maintenance
records from your service department
12 | AutoDealer S U M MER 2007
right onto CARFAX Vehicle History
Reports. Rather than hand customers
over to the competition, you can utilize
the power of CARFAX Reports to drive
these new owners back to your service
bays.
“With all of our service records in
CARFAX Vehicle History Reports, we
find that we are decreasing the ageold problem of losing vehicles out
of our service cycle due to
ownership change,” said Kyle
Chadwick of South Shore
Volkswagen in Hanover, MA.
“The new owners are not
only seeing that the vehicle
has been well-maintained,
but that South Shore VW
did the work and they are
bringing the vehicles back
to us to continue servicing
them.”
The concept is simple and
effective. Report your dealership’s
maintenance records through
CARFAX Service Link. Your
shop’s name, contact information
and Web site link then appear
alongside each service record.
The result is free advertising that
stays on the CARFAX Report for
the life of the vehicle, helping
to bring back those cars you
routinely serviced.
The concept is simple and effective.
Report your dealership’s maintenance
records through CARFAX Service
Link. Your shop’s name, contact
information and Web site link then
appear alongside each service record.
The result is free advertising that stays
on the CARFAX Report for the life of
the vehicle, helping to bring back those
cars you routinely serviced.
Sales Manager Zak Hussain of
Garden City Honda in Passaic, NJ,
recently told Auto Exec Magazine he
signed up for CARFAX Service Link
after seeing another dealer’s name on a
CARFAX Report. “It makes sense that
a buyer would want to bring the car
back to a place that’s familiar with it,”
he said.
Any dealership can participate in
this free, value-added program.
Research shows that used car buyers
and sellers won’t buy without a vehicle
history report. With CARFAX Service
Link, you’re reaching more than 45
million in-market consumers that
know exactly where their next dream
car was serviced.
“With a CARFAX Vehicle History
Report, I was able to tell that I would
be the third owner of a well-maintained, 1999 vehicle,” said recent CARFAX customer K. McIntyre Murphey.
“There were over 37 lines of maintenance entries from the dealership
that sold it originally — I could see
every oil change done for the last eight
years!”
For vehicles purchased at auction
or taken in on trade, access to maintenance information in CARFAX Reports also helps dealers quickly determine which services were performed
in the past to send service reminders
to new owners. This type of customer
service is proven to ensure more repeat
business and be more effective in getting new business out of recommendations from satisfied customers.
Don’t leave money on the shop
floor. CARFAX Service Link is the key
to igniting your service revenue and
keep customers coming back. For more
information or to sign up for CARFAX
Service Link, call 800-561-5496 or
email [email protected]. AD
NPD Group study, June 2006.
1
50 YEARS
The 50th Anniversary
Toyota Camry Hybrid.
AND GOING STRONG
BY AIADA STAFF
O
Toyopet: Two Toyopet Crowns, Toyota's
first exports to the United States, wait to
be loaded at Yokohama in August 1957.
N OCTOBER 31, 2007 TOYOTA MOTOR
Company will celebrate 50 years operating in
the United States. The golden anniversary is a
special one for the little Japanese carmaker that
overcame intense opposition to win the hearts
of Americans, and used its popularity here to catapult itself to the
position of world’s top automaker. Along the way Toyota redefined
what it means to be an American carmaker — and what it takes to
be an international success.
While the road to the top is never an easy one, Toyota reached
the pinnacle by adhering to the principles set by its founder,
Kiichiro Toyoda, in 1935 — reverence, practicality, and the pursuit of improvement. It also doesn’t hurt that an almost maniacal
hunger for success is in the blood of Toyota’s managers and dealers,
and seems to grow with each successive generation.
Continued on page 14
SUMM E R 2 0 0 7 AutoDealer | 13
What Have They Done for Us Lately?
uu Toyota directly employs 33,511 Americans, more than Gene
parts plants. uu The Center for Automotive Research (CAR) est
of Miami. uu Toyota’s U.S. payroll totals $2.9 billion per year. uu Toyota purchases $28 billion in parts, materials and services annually fr
groups. uu Since starting operations on October 31, 1957, Toyota’s total investment in the U.S. amounts to nearly $14 billion.
Coming to America
Toyota’s experience in the United
States follows the classic immigrant
narrative. A foreigner arrives, faces
setbacks, works diligently, assimilates
to the culture, and achieves success.
In March, Toyota’s chief executive,
Katsuaki Watanabe, emphasized this
point, telling BusinessWeek, “It’s
very important for our company and
products to earn citizenship in the U.S.
We need to make sure we’re accepted.
In addition to enhancing the level of
production and vehicle design, we will
Toyota has worked to retain its
foundation of Japanese values and
integrate them with the ideals it has
discovered in the United States. Like
most immigrants, Toyota has found
its own unique methods of achieving
that balance. Everyone knows that
Toyota has irrevocably changed the
car industry here in America, but
it is equally true that America has
left its mark on Toyota. “Over the
last 50 years, our key philosophies
— continuous improvement and
respect for people — were blended
and fishing tournaments, and making
its NASCAR debut earlier this year.
In addition, Toyota has won hearts
and minds by embracing the very
American tradition of large-scale
philanthropy. Toyota’s primary philanthropic focus is education, including the Hispanic Scholarship Fund,
the American Indian College Fund,
and the Congressional Black Caucus
Foundation. In 2000, they doubled
their commitment to the United Negro
College Fund to a total of 40 annual
scholarships. One of Toyota’s largest
uu
Toyota’s Milestones in the U.S.
Toyota Motor Sales, U.S.A. Inc.’s original headquarters in Hollywood, California, was housed in a
former Rambler dealership. In 1958, Toyota Motor
Sales signed up 45 dealers, located mostly on the
west coast.
increase procurement in the U.S., and,
of course, have American people in the
management cadre as well.”
The first obstacle Toyota faced on
these shores was its own product:
the infamous Toyopet. Jim Lentz,
Executive Vice President, Toyota
Motor Sales, U.S.A. describes it as
“underpowered and ill-suited to
American roads.” However, instead
of admitting defeat, Toyota rallied.
“We learned from that lesson,” said
Lentz. “We listened to U.S. customers
and went back to the drawing board
to introduce the Corona. Especially
designed for American roads and
tastes, it was a big hit.”
14 | AutoDealer S U M MER 2007
1957:
1961:
1966:
1972:
1986:
1987:
Toyota Motor Sales U.S.A. is established.
1989:
1999:
2007:
Lexus is launched with LS 400 and ES 250 going on sale in September.
Toyopet sales discontinued.
The 2000GT makes its debut at the San Francisco Auto Show.
Toyota begins manufacturing operations in the United States.
Toyota vehicle production begins in the United States.
Establishment of the Toyota USA Foundation with a $10 million
endowment and a mission to make Toyota a leading corporate citizen.
The first Toyota hybrid vehicle is sold in the United States.
The all-new Tundra full-size pickup, born and bred in America, arrives in
dealer showrooms.
with made-in-America habits like
pioneering new segments that meet
customers’ needs, staying close to our
dealers, and evolving marketing to
deliver information to consumers the
way they want to receive it,” said Lentz.
“America has prompted us to refine
our decision-making process, and
taught us first-hand the value of giving
customers what they want.”
While it may not be quite as
American as apple pie, Toyota vehicles
have certainly established themselves
as American as bass fishing, NASCAR
and macho trucks. Toyota has earned
the respect of consumers from coast
to coast by sponsoring livestock shows
philanthropic partnerships is with the
Los Angeles Urban League Automotive
Training Center. Toyota has invested
more than $10 million in the Center,
which recruits, trains and places Los
Angeles inner-city residents in the auto
repair industry.
Staying Hungry
Of course, there is more involved
in becoming an American institution
than generosity and clever marketing.
Anyone involved in the auto industry
will tell you, Toyota made it to number
one by refusing to be satisfied with
any single success. It is a company
that is constantly evolving and
e than General Mills, Texas Instruments or Cisco Systems. uu Toyota is a major manufacturer in the U.S., currently operating 10 vehicle and
h (CAR) estimates the spin-off employment resulting from Toyota’s presence in America equals 386,000 jobs...roughly similar to a city the size
annually from 400 suppliers in 35 states. uu Since 1991, Toyota has contributed more than $340 million to U.S. community and non-profit
Watanabe’s watch, the company
revamped its methods of detecting
potential defects, added lead time to a
variety of projects, accelerated research
and development and slowed down
production in order to guarantee
deliberate, sensible growth.
For some, it may seem anti-intuitive to hit the brakes just as you reach
an apex of profitability, but for Toyota
it all makes perfect sense. This is a
company that is anticipating backlash
as it closes in on GM to be America’s
number one automaker. For Toyota,
now is the time to slow down and
prove to America that it belongs in that
top spot.
Toyota Motor Manufacturing
Kentucky Team member working
at car assembly line.
immediately abandoned Toyota’s modest approach and went on the offensive. He was open with the press about
his grand plans to capture 10 percent
of the global auto market and then, by
2010, 15 percent — the amount GM
now controls. That was the end of the
“cooperative competition” era.
Now with the No. 1 spot all but
an inevitability, Toyota is scanning
the horizon for the next mountain
to climb. Many believe that the
greatest challenge for automakers in
coming years will be adjusting their
products to suit environmentallysavvy consumers and demanding
government regulations. Currently, no
car company is better positioned to
do just that than Toyota, with its bestselling Prius hybrid.
To establish the Prius, Toyota had
dealer Mike Sullivan, who owns Toyota
of Hollywood, take 26 Priuses to the
2003 Oscars. Before long, “green”
stars like Leonardo DiCaprio were
posing with their Priuses. “It became
the cool thing to do,” says Sullivan.
Toyota followed up on this success by
sponsoring the annual Environmental
Media Association Awards in Los
Angeles. Before the awards show,
uu
The 2004 Toyota Tundra NASCAR
Craftsman Series Truck.
The Future
Not long ago, Toyota was content to
remain in the shadow of American and
even other international automakers.
For Toyota, being No. 1 was never a
priority. It was content to pursue a
policy of “cooperative competition,”
which meant keeping a courteous
distance behind GM in order to
avoid the attention of Washington’s
protectionists.
That all changed 10 years ago when
Hiroshi Okuda became the first CEO
outside of the Toyoda family. Okuda
uu
uu
seeking a better way to achieve its
goals. Watanabe is vigilant when it
comes to steering clear of what he
calls Big Company Disease. “The
scariest symptom of big-company
disease is that complacency will breed
in the company. To be satisfied with
becoming the top runner, and to
become arrogant, is the path we must
be most fearful of,” he told reporters.
In recent months, to counteract
any creeping complacency, Toyota
has embarked on a series of selfimprovement projects. Under
In 2002, Jim Press and Jim Lentz announced
the launch of SCION and unveiled two showcar concept vehicles for media at the New
York International Auto Show.
celebrities were photographed on a
green carpet, with the Toyota logo in
nearly every shot.
For Jim Lentz, the future is bright
with possibility. “I think Toyota will
need to become a transportation
company, not just a car company,” he
tells AIADA. “In 2057, people might
not even be driving anymore. The cars
might be driving themselves. So, we’ll
need to meet the transportation needs
of people so they can get more out of
life. Certainly that can mean cars, but
also public transportation, ride sharing
and other modes of transport . . . who
knows? In 50 years, we may see Toyotas
on the moon.” AD
SUMM E R 2 0 0 7 AutoDealer | 15
VIEW FROM THE HILL
House Delays Action on Fuel Rules
BY AIADA STAFF
T
© Matthew Cavanaugh/Corbis
he big question for automobile manufacturers
and dealers prior to the
House of Representatives’
August Recess has been
whether or not Speaker Nancy Pelosi
(D-Calif.) would allow Corporate
Average Fuel Economy (CAFE) provisions into her 2007 Summer Energy
Package. The results are in — there
were no CAFE standards in any of the
packages introduced in legislation by
Rep. Ed Markey (D-Mass.), Rep. Joe
Barton (R-Texas), or Reps. Baron Hill
(D-Ill.), or Lee Terry (R-Neb.).
In June, Speaker Pelosi criticized President
Bush’s plan to tackle climate change.
In an announcement made late
on August 1, 2007, Speaker Pelosi
disclosed that Congress will have the
opportunity for a full debate over
fuel economy standards when they
return in the fall; for that reason, Rep.
Markey and Rep. Hill withdrew the
amendments they had offered to the
energy package.
As the summer energy legislation
moved forward to the House Rules
Committee, an amendment filed
by Congressman Eliot Engel (DN.Y.) threatened to mandate certain
alternative fuel technologies be
regulated by the U.S. Secretary of
Transportation during the rulemaking process. AIADA President
16 | AutoDealer S U M MER 2007
Cody Lusk promptly sent a letter to
members of the Committee on August
2, opposing Engel’s amendment to the
House energy bill. In his letter, Lusk
urged Congress members to reject
the mandate on certain fuel usages
in America and insisted that they
allow the market to determine the
appropriate amount of alternative fuel
technologies acceptable to consumers.
In the end, the amendment was not
accepted by the Rules Committee and,
therefore, was not considered as part of
Pelosi’s final energy package.
As the week of July 30th progressed
it was still unclear whether Speaker
Pelosi would actually be able to
bring the energy package up for
consideration on the House floor.
Finally, in a rare Saturday session, the
House moved forward and considered
the final package; and in a partisan
vote, representative of the long week,
passed the bill 241–172.
The New Direction for Energy
Independence, National Security, and
Consumer Protection Act, H.R. 3221,
now heads to a Conference Committee,
made up of House and Senate
members, where it will be married
with the Senate energy legislation
passed on June 21, 2007. While the
House energy package does not
contain language specific to CAFE, the
Senate legislation does contain CAFE
language. The Senate bill requires
standards to be set at the maximum
feasible level for cars and light trucks
beginning in model year (MY) 2011
in order to reach a domestic fleet-wide
(not per manufacturer) average of 35
miles per gallon by MY 2020. These
standards could be based heavily
on vehicle attributes and would be
increased ratably between MY 2011
and 2019. Speculation has arisen to
whether or not House Conference
Committee members will accept the
Senate language, thereafter sending
it to the President Bush’s desk for
signature into law. This process would
leave many in the House crying foul
and complaining that the democratic
process of fair and open debate has
been bypassed completely on the
CAFE issue.
Many eyes will certainly be keeping
a close watch on the Congress and any
final legislation that it produces during
the fall session. AD
The Toyota PHEV (plug-in hybrid electric vehicle). Toyota estimates that over the past
decade, hybrids worldwide have emitted approximately 3.5 million fewer tons of CO2
than gas-powered vehicles of the same class.
NE
DU
RY
IN
E RE N T
D E AI L
R S IT N
VO
L SVI ED M
Minority Dealers Unite Under New Leader
BY AIADA STAFF
A
s the National AssoIn remarks delivered to the
Magazine’s Top 100 Auto Dealers list in
ciation of Minority
assembled members, Lester vowed to
2003, 2004, and 2005.
Automobile Dealers
continue to oversee the rising number
AIADA member Thomas Mooreprepared to hold its
head (see Dealer Spotlight on page 19)
of minorities who own and are
Annual Membership
employed by international nameplates. was honored with a Lifetime AchieveMeeting in Texas this June, it was
ment Award at the conference, an honThose efforts will be fueled, at least
feted by a number of celebrities and
or he called “humbling.” Moorehead
in part, by grassroots activism. “For
local officials. In one letter, dated
is the owner of BMW of Sterling and
the first time ever, NAMAD has a blue
June 20, 2007, Congresswoman
MINI of Sterling located in Virginia.
print on how we will interact with
Eddie Bernice Johnson welcomed
He has been an active member of
our members,” said Lester. “How we
NAMAD to Texas, calling
NAMAD for over ten years,
the group “a champion
and in 2007 was named
for the implementation
Dealer of the Year by Black
of opportunity for many
Enterprises.
ethnic minorities in the
Other highlights of the
automobile industry.” The
NAMAD’s meeting, held in
praise was well-deserved,
Grapevine, Texas, included
as NAMAD embarks on
an annual golf outing and
its 27th year of trailblazing
remarks by Chris Gardner,
initiatives.
author of The Pursuit of
Headquartered in MaryHappyness, which was turned
land, NAMAD is a noninto a blockbuster movie
profit organization that
starring Will Smith. Members
seeks to ensure the preswere urged to remain active in
ence of ethnic minority entheir communities and seek
Desmond Roberts, Damon Lester and Tom Moorehead shared ideas
trepreneurs and employees at NAMAD’s annual meeting.
out opportunities to support
in the retail sales, supplier
the cause of racial equality in
and service sectors of the automobile
the workplace. AD
will interact regarding federal and
industry. Through education and part- state legislation, how we will mobilize
nerships with both domestic and inour members to move forward to
ternational nameplate manufacturers,
accomplish our mission.”
NAMAD’s more than 650 members
Also at the conference, Desmond
NAMAD’s 15 Percent
have achieved great success in creating
Roberts officially began serving a twoFormula for Success
opportunities for all Americans.
year term as chairman of NAMAD.
The 2000 Census confirmed that a homogenous
For many NAMAD members the
Roberts had recently completed a twoAmerica is definitely a thing of the past. People
conference, themed “Inclusion +
year term as president of the General
of color represent more than 32 percent of
Advocacy = Power,” was their first
Motors Minority Dealers Association.
the population and purchase 15 percent of
introduction to Damon Lester, elected
“I am honored to accept this position
to serve as the group’s president
at a time when we are facing great
new and certified used cars and trucks in
earlier in 2007. He quickly impressed
challenges in the automotive industry.
America yet ethnic minorities represent less
conference attendees with his wealth
I am committed to continuing the fight
than five percent of the majority owners of
of practical experience, energy, and
for parity and inclusion of all ethnicdealerships in the United States. NAMAD
optimism. Lester served as NAMAD’s
minority dealers,” he told NAMAD
has asked every automotive manufacturer to
vice president of operations from 2002
members. Roberts is the president
commit to a blueprint to achieve an initial goal
to 2006 and before that worked in the
of three dealerships in Illinois. He
of 15 percent majority-ownership of their retail
audit and consulting departments of
received the Jack Smith Leadership
network by ethnic minorities.
Gelman Rosenberg and Freedman
Award in 2004 and 2005, and appeared
CPA’s, a public accounting firm.
on the annual Black Enterprise
SUMM E R 2 0 0 7 AutoDealer | 17
MANUFACTURER UPDATE
Hyundai Invests $10 Million for Kids
B Y M A RT Y B E R N S T E I N, A I A DA C O N T R I BU T I N G E D I TO R
I
n the most prevalent adult
cancers — lung, breast and
colon — even with amazing
progress in recent years, the
prognosis is devastating. For
kids it is worse, much worse.
The 12 identified types of pediatric
cancer afflict some 12,000 children under the age of 15 every year. And heartbreakingly, cancer is the leading cause
of death, other than car accidents, in
children between the ages of 1 to 14,
according to the National Institute of
Health.
Almost 10 years ago, Tom O’Brien,
a Hyundai dealer and AIADA member
in the Boston area, started a local fundraising program for the Jimmy Fund,
which supports the fight against cancer in children and adults at Boston’s
Dana-Farber Cancer Institute. His
project grew into a regional program
underwritten by the 36 New England
Hyundai dealers, including an annual
walk that follows the route of the Boston Marathon and last year attracted
7,000 participants and a welcoming
crowd of 30,000.
In 2001, the regional program went
national as Hyundai Motor America
and its 750 dealers joined to fund the
Hope on Wheels tour for pediatric
A young cancer patient applies her hand
print to the Hyundai Santa Fe.
18 | AutoDealer S U M MER 2007
A recent donation ceremony at the Children’s Hospital of Orange County, CA included
Hyundai’s CEO Steve Wilhite (top row, far left), Dr. Leonard Sender, medical director of
the hospital (third from left), nurses and patients.
cancer research. And they’re not asking
for a donation, thank you.
That’s right. The Hope on Wheels
tour does not ask for money, it gives
it away. For every car sold, a Hyundai
dealer contributes $4, and the automaker matches that gift and then
some. As a result, millions of dollars
have been raised to support pediatric
cancer research.
This summer, 28 ceremonial donation events took place at pediatric
cancer research institutions across
the country. These ceremonies celebrated children’s lives and treatment
milestones by capturing the children’s
colorful handprints on a 2007 Hyundai
Santa Fe. Since the inception of Hope
on Wheels in 2004, the tour has visited
more than 70 hospitals nationwide and
collected more than 300 handprints at
“handprint ceremonies.” During the
ceremony, young cancer patients dip
their hands in paint and apply them to
the sides of the white vehicles.
There are 88 handprints on each
Hope on Wheels Santa Fe, each representing a real-life pediatric cancer
patient. In past years, these vehicles
have been used to transport patients,
or auctioned to raise even more funds.
This year, Hyundai is also donating six
2008 Santa Fes to various recipients of
Hope on Wheels funding.
Hyundai and its dealers have contributed more than $8 million to cancer research across the country since
2001. This year, Hyundai expects to exceed $10 million in total contributions.
“We are excited and proud to continue
our ninth year of commitment to helping children who have overcome or are
battling pediatric cancer. Providing
financial assistance is just the first
step,” said Hyundai America CEO Steve
Wilhite. Augmenting this program,
the company recently donated $25,000
in scholarships to 10 bright college
students who have battled and are winning the fight against pediatric cancer.
“As dedicated as we are to winning
the fight against pediatric cancer, we
are equally dedicated to ensuring that
survivors enjoy the rich quality of
life they deserve,” said Zafar Brooks,
director, community relations and
government affairs for Hyundai Motor
America. AD
DEALER SPOTLIGHT
Dealers Check In
Thomas Moorehead
BMW/Mini of Sterling
Sterling, Virginia
Thomas Moorehead is the CEO of BMW/Mini of Sterling, Virginia,
which grossed more than $122 million in BMW sales last year. However,
he admits that at one point the car retail business in no way appealed
to him. “I thought of dealers as guys in plaid jackets who talked fast,
smoked cigarettes and wore stretch pants,” he admitted. Fortunately, in
1988 he discovered the reality of car sales — and has since thrived in the
business. Today he employs more that 130 employees at one of the premier BMW dealerships in the country and is active in a variety of industry
organizations.
What first got you into the auto
retail business?
I was enticed away from the University
of Michigan, where I was teaching and
completing course work for my Ph.D.,
by James Bradley, who was one of the
first African
American dealers in the country. Based upon
our work together on several
civic projects,
he thought he
saw a budding
businessman
in me. I left the
university to work with him and have
tried very hard every day since to live
up to his expectations.
In your tenure as an auto dealer, what is the one accomplishment you are most proud of?
Being recognized by my peers as the
recipient of the National Association of
Minority Automobile Dealers Lifetime
Achievement Award. (see page 17)
When did you first get involved
with AIADA and why?
I joined AIADA as soon as I opened my
BMW dealership in 2001. I see AIADA
as the chief advocate and mouth-piece
for the international nameplate auto
dealers. I want to participate in any
way I can to advance to consensus
agenda for the group of dealers.
What is your personal dream
car?
My dream car is in my garage. The
BMW Z8. I drop the top and cruise to
the dealership any time the weather
permits.
Any advice for aspiring
dealers?
Whether you are aspiring or have been
at it as many years as I have, my advice
is still the same — it’s a marathon, not
a sprint.
What was your most memorable sale?
Early in my career with Mr. Bradley, an
elderly gentleman who had worked as
a scrap metal laborer his whole life was
retiring and wanted to reward himself
for his years of hard work by purchasing a Cadillac. Other dealerships had
pre-qualified him by his appearance
and largely ignored him in their showrooms. Well, I was able to make his
dream of owning a Cadillac come true.
It was one of his happiest days, and by
extension mine. Because the sale represented so much to him, it made me
happy too.
Ron Esserman
Esserman Automotive Group
Miami, Florida
Ron Esserman is the owner of Esserman
International Acura – Kia – Volkswagen,
Esserman Nissan – Volkswagen, Miami
Acura and Largo Honda. An ex-retiree,
Ron keeps busy by managing over
600 employees and constantly working to improve customer satisfaction.
Volkswagen of America has called his
innovative “You are Empowered to Satisfy” program, which targets customer
service, “a huge positive reflection on
the brand.”
In your tenure as an auto dealer,
what is the one accomplishment
you are most proud of:
Our YES Program. It stands for You are
Empowered to Satisfy.
Every employee has to
find a way to say yes to all
our customers. We have
extensive training of all
employees, especially our
management team, which
is ongoing. In addition,
we offer educational
continued on page 20
SUMM E R 2 0 0 7 AutoDealer | 19
DEALER SPOTLIGHT
RON ESSERMAN CONTINUED
programs. Presently we have classes
after working hours for employees
who want to learn English and also
those employees who would like to
learn Spanish. We want to help them
get where they want to go, so that we
can get where we want to go.
How many employees do you
have with all of your dealerships?
Over 600.
Who was the biggest influence
in your career?
Peter Drucker and his books on
management and Frank Bettger who
wrote the first book on selling.
What was your most memorable sale?
Selling my 10 dealerships that I had
built up over 20 years. I retired for
two weeks and immediately realized I
needed to get back to work. I started
buying some new dealerships and now
I have four, with seven franchises.
What issues most affect your
business and its bottom line?
Free trade and frivolous class actions/
law suits.
What makes a great auto
dealer?
Complete customer satisfaction. In
the early 1970s we had what we called
the “Mod Squad,” who were a group
of young people that made calls in the
evening to service customers, asking
them if they were satisfied and so on.
This was the beginning of CSI as we
know it today.
Any advice for aspiring
auto dealers?
Know the operations of all departments and understand the financial
statement. And make sure your department managers do so as well.
20 | AutoDealer S U M MER 2007
George Brochick
Penske Automotive Group
Phoenix, Arizona
George Brochick is executive vice president for Penske Automotive
Group, formerly United Auto Group. He oversees Penske Automotive
Group’s Western Region operations and Mexico. Over the past eight years,
he has seen the company grow from less than $2 billion in revenues to
over $11 billion and increase its number of employees from less than 5000
to over 16,000. Today, he and his wife Chris reside in Arizona and are very
active in the Save the Family Foundation, which helps provide services for
homeless families. In addition to his current executive functions, Mr. Brochick has held numerous dealership general manager positions throughout his automotive career.
Scott Fink
Hyundai of New Port Richey, Hyundai of
Wesley Chapel, and Mazda of Wesley Chapel
Tampa, Florida
Scott Fink is a resident of Florida and the owner of Hyundai of New Port
Richey, Hyundai of Wesley Chapel and Mazda of Wesley Chapel. The
New Port Richey store has sold 13,500 Hyundais in its first four years of
operation — an accomplishment he attributes to a willingness to take
advantage of Hyundai’s programs and a highly professional sales staff.
Fink says his customer-focused practices, like keeping phones out of the
salesrooms, have resulted in a loyal following for his “big store” in New
Port Richey. The name recognition then helped successfully launch the
Wesley Chapel store, which sold 118 vehicles in its first full month versus
a planning volume of 50.
What first got you into the auto retail business?
I first got into the auto business by answering a blind advertisement in the New
York Times for a sales and marketing position. It was with the Lincoln-Mercury
division of the Ford Motor Company in Teterboro, New Jersey.
DEALER SPOTLIGHT
What first got you into the auto retail business?
My first exposure was through my father who had a thirty
year career with General Motors. During my undergraduate
education, I was involved in a work-study program as an
engineering student with GM. My first business assignment
involved the management of a chain of heavy-duty truck
dealerships, so I guess it was a natural transition for me to
move into the auto retail business.
Who was the biggest influence in your career?
My father was a big influence on my career. He worked seven
days a week, many times on the night shift to provide the
opportunity for me to advance
my education. He taught me
a strong work ethic, to never
sacrifice integrity and always be
responsible.
What is the best part of
your job?
I enjoy being part of a large
organization, yet having the
autonomy to oversee all facets of
a region that does $4 billion in
revenues.
When did you first get involved with
AIADA and why?
I have been on the Board of AIADA for the past two years.
Are you active in your local community?
If so, what specific organizations do you
contribute to and why?
I am the board-chair of the YMCA of the Suncoast. Our
organization runs eight branches in the Pinellas and Pasco
County areas. Through the dealership we formed a charity
group called “Hyundai of New Port Richey and Partners.”
We allocated $10 per car sold and donate the monies back
to local charities. In addition, many of my employees
contribute to the fund to assist in our efforts.
What is the biggest issue affecting your
business?
There are many issues affecting my business and making it
more and more of a challenge to stay ahead. Rising costs in
insurance and taxes, health care expenses and rising interest
rates have put real pressure on the bottom line. Finding
trained technicians is also a difficult task.
How does federal legislation impact your
business?
The proposed changes in the current CAFE standards could
With 90 percent of the revenues of Penske Automotive
Group coming from international nameplates, I want to
assist in preventing legislation that may be harmful to our
business.
What federal issues most affect your business
and its bottom line?
We continue to monitor closely pending trade agreements,
automotive technologies such as alternative fuels, consumers’ bill of rights regarding financing and federal
legislation that may impact our health care costs.
What was your most
memorable sale?
Being part of the negotiating team
to build the Penske Wynn Ferrari
Maserati dealership in the Wynn
Resort in Las Vegas.
Any new additions to your
business or new dealerships
that we can highlight?
I am extremely excited about
the Smart Car for which we are
the exclusive distributor for the
United States and Puerto Rico. The cars will be available
for sale in early 2008 and as of today we have over 24,000
individuals who have reserved a place in line for a 2008
production model.
drastically alter the
types of vehicles
that manufacturers
produce and
dealers sell.
Any new additions to your
business or
new dealerships that we can highlight?
The Wesley Chapel stores just opened within the
last 90 days. Hyundai of New Port Richey is the
number three volume Hyundai store in the United
States and number one in the Southern Region.
Any advice for aspiring auto dealers?
The auto business is becoming more and more competitive
and more and more expensive. Consolidating, I believe,
has been good for the industry but has made the dream of
becoming a dealer more difficult. That being said, nothing
replaces hard work — and good timing.
SUMM E R 2 0 0 7 AutoDealer | 21
Did You Know?
Due to oil shortages, a national speed
limit of 55 mph was enacted in 1974.
“If all the cars in
the United States
were placed
end to end, it
The record for the fastest
speeding ticket in the world
was set in Texas in May 2003.
A Swedish built Koenigsegg was
ticketed for going 272 mph
in a 75 mph zone.
would probably
Ferdinand Porsche
designed the original
Volkswagen Beetle.
be Labor Day
Weekend.”
—Doug Larson
In 1982 the Honda Accord
became the first Japanese
car to be produced in the
United States.
Hong Kong has more
Rolls Royces per capita than
any other city.
160 cars can drive side by side on the Monumental Axis
in Brazil, the world’s widest road.
22 | AutoDealer S U M MER 2007
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DEALERS SERVING DEALERS FOR OVER 37 YEARS
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including our relationship with Key
AutoFinance.”
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O’Brien Automotive Team
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switching to Shell.”
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Fitzgerald Auto Malls
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seminar is one of the best training
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— Bob Pietroske,
Pietroske Dealerships
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I do.”
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Bob Rohrman Toyota
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