Hudson Takes the Reins

Annual Meeting & Luncheon 10 | DOT’s Mary Peters 13 | Nissan’s New Look 21
AutoDealer
Hudson Takes
the Reins
In the face of an uncertain
economy and a wild election
season, AIADA’s 2008 Chairman
is ready to take on Washington.
Presorted
First Class Mail
U.S. Postage
PAID
Merrifield, VA
Permit No.1502
The Magazine of the
VOLUME 2 NUMBER 1
SPRING 2008
Finish First With Our
Customer Payment Processing Solutions
American International Automobile Dealers Association (AIADA) is proud to announce a new
partnership with Moneris Solutions, one of North America’s leading payment processors. Moneris
Solutions offers electronic payment processing programs created to meet the specific needs of
automobile dealerships.
Regardless of the size of your dealership or your annual credit and debit card volume,
the AIADA/Moneris program enables you to accept payments quickly and affordably.
Features and benefits include:
Exclusive AIADA member pricing
Credit and debit card processing
Paper and e-check processing
Check guarantee and conversion (ACH)
Gift card and loyalty programs
Payroll cards
Fast, reliable service
Responsive 24/7 technical support
Funds deposited directly into your bank account,
generally within 48 business hours
State-of-the-art terminals, software, and e-commerce solutions
Free online reporting for instant access
For a FREE no-obligation cost analysis, contact Moneris at
847-240-7537 or [email protected]
AutoDealer
CONTENTS
VOLUME 2 NUMBER 1
SPRING 2008
g
13
VICE PRESIDENT OF PUBLIC
AND INDUSTRY RELATIONS
Lori McMahon
PRODUCTION EDITOR
Libby Krum
DESIGN CONSULTANT
Larnish & Associates
CONTRIBUTING WRITERS/PHOTOGRAPHERS
Melanie Batenchuk, Marty Bernstein,
Jim Koscs, Rachel Robinson,
John Rigolizzo Jr., Robert Clark Photography
© Ron Sachs/Pool/epa/Corbis
PRESIDENT
Cody Lusk
FEATURES
Meeting & Luncheon PAGE 10
For more information about AIADA,
topics addressed in this issue, or for
additional copies of AutoDealer,
r please contact
AIADA Publications at [email protected]
or 1-800-GO-AIADA.
Car Czar: U.S. Transportation Chief Mary Peters
Speaks Out PAGE 13
Wheels of Destiny: Honda Takes the Long View on
Sustained Mobility PAGE 17
BOARD OF DIRECTORS
Mr. Jim Hudson
Jim Hudson Automotive
Group
Chairman
Mr. Jack Fitzgerald
Fitzgerald Auto Malls
Mr. Al Gossett
Gossett Motor Cars, Inc.
Mr. Fritz Hitchcock
Secretary/Treasurer
Mr. Larry Kull
Burns Kull Automotivve
Mr. John H. Hawkins
Great Metro Autogroup
Immediate Past
Chairman
Mr. Ray Mungenast
Mungenast Automotive
Family
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
COLUMNS
Dealer Involvement
Making D.C. Connections in Arizona PAGE 5
6
In the News
TPA Truce Needed PAGE 6
Partner Spotlight
Auto Dealers Save Money on Loaner Cars PAGE 7
Ms. Peggy Proko
Peter’s Auto Sales
View From the Hill
2008 Ushers in Change PAGE 8
Mr. Robert V. Rohrman
Bob Rohrman Toyota
Industry Insider
BMW Finds New Dealer Advocate In-House PAGE 20
Ms. Jenell Ross
Ross Motor Cars
Manufacturer Update
Nissan’s Latest Shift PAGE 21
Mr. Jim Smail
Smail Auto Group
Mr. Tim Smith
Bob Smith BMW
Mr. Morrie Wagener
Morrie’s Imports
From the Chairman’s Desk PAGE 4
Did You Know? PAGE 26
Mr. Ralph Ghioto Jr.
Century Isuzu Kia
Mr. Russ Darrow
The Russ Darrow Group
Vice Chairman
Mr. Jamie Auffenberg
Auffenberg Auto Mall
D E PA RT M E N T S
Clarification: A photo on page 6 of
the Winter 2007/2008 AutoDealerr was
incorrectly captioned as Bill Pollack, CEO,
Chamco Auto. The photo was of John
Perez, CEO of Global Vehicles USA.
Dealer Spotlight PAGE 22
Lee Beaman, Beaman Automotive Group
Charles Barker, Charles Barker Automotive
Dave Wilson, Wilson Automotive Group
Stuart Rappaport, Perfection Honda
S P R I N G 2 0 0 8 AutoDealer | 3
FROM THE CHAIRMAN’S DESK
W
ith the near-constant
barrage of political ads,
automated phone calls,
and news coverage, it’s
hard to ignore the fact that 2008 is an
election year here in the United States.
And why would you want to? It’s a time
when our democratic process shines,
and when change is inevitable. I’m
both energized and honored to lead
AIADA over the next 12 months, and I
fully anticipate it being a tremendous
year for our organization.
One of the most vital events
on AIADA’s calendar is quickly
approaching, and
I’d like to take this
opportunity to remind
you all to register
for our 2nd Annual
International Auto
Summit in Washington,
D.C. The Summit will
take place on April 30th
and May 1st, and will
include the presentation
of the prestigious
Newsweekk Dealer of the
Year Award.
In addition, the
summit offers many
of you a valuable
opportunity to visit
our nation’s capitol
and see firsthand where
the laws that impact your businesses
originate.
In my speech at AIADA’s Annual
Meeting in San Francisco I urged you
all to get involved in the programs
AIADA offers its dealer members.
4 | AutoDealer S P RING 2 0 0 8
Once again, please consider hosting a
dealer visit at your store, joining our
Legislative Action Network (L.A.N.),
and supporting AFIT PAC. We may
never see a time when your support
is needed more. Your donation is
certainly a small price to pay for the
good work the PAC will do on your
behalf.
Your participation in these
programs may not seem earth shaking,
but believe me, in this election year we
can sway votes in Congress and votes
in our hometowns. As an organization,
we have the momentum behind us to
make a real difference this year, and we
must seize it.
I intend to continue John Hawkins’
work in making AIADA a force to be
reckoned with in D.C., but to do that
I need all of you to become forces in
your communities. Don’t say you’ll do
it sometime in the future; do it now.
Contact AIADA headquarters and ask
how you can get involved.
JIM HUDSON
DA 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 Partners
DE
NVO
NN
T T
DE
A AL LEERR II N
O LLVVEEMME E
Making D.C. Connections in Arizona
Congressman Mitchell Meets Penske Executives
ack Guthrie, general manager
of Penske-owned BMW/Mini
of North Scottsdale, invited
Representative Harry Mitchell
(D-Ariz.) to visit and tour
his dealership this February.
Guthrie, a member of AIADA’s Legislative Action Network (L.A.N.), invited
Rep. Mitchell to his store in order to
get acquainted and to show him the inner workings of a successful dealership.
The visit also served as a forum for
regional Penske Automotive executives
to talk with the Congressman. George
Raysik, Penske’s chief financial officer;
Jon Wiggins, area vice president; and
Scott Moss, senior vice president of
Human Resources were all in attendance.
Guthrie led his visitors on a tour
of the immense facility, making sure
to stop in and meet members of all
the various departments. BMW/MINI
of North Scottsdale currently has the
largest BMW store in the world and
the largest Land Rover off-road test
course in the nation. Roger Penske,
chairman and CEO of Penske Automotive, has poured an enormous amount
of resources into this location, which
J
(L to R): Scott Moss, Jon Wiggins, Rep. Harry Mitchell (D-Ariz.), Jack Guthrie, Melanie Batenchuk
of AIADA, and George Raysik.
spans 42 acres and includes nine franchises. The North Scottsdale MINI
franchise will be getting its own showroom soon. In 2002, the existing buildings all got major facelifts, and today
they embody sleek modernity.
The on-site Penske Museum contains 13 winning Indy 500 racecars and
is the epicenter of this complex. During the daytime, employees can
enjoy lunch in the café located
directly above the museum’s
showroom. By night, the place
turns into a grand reception
hall with floor-to-ceiling windows that fold open to create
a breezeway off the outdoor
balcony.
Rep. Mitchell was impressed
with the facilities, and particularly interested in what training is available to “Fixed Ops”
employees like service technicians and parts team members.
Guthrie told him about BMW’s
Jon Wiggins, Penske Area Vice President, talks
program for educational
numbers with Rep. Mitchell (D-Ariz.).
training called STEP (Service-
Technician Educational Program). The
program is directed toward outstanding students who graduate from automotive technical schools. BMW uses
STEP to ensure that top-notch service
techs assist their clients.
During their meeting, Jon Wiggins told Congressman Mitchell that
international brands were succeeding
for one simple reason: product. By
reinvesting their profits into research
and development projects, they are
constantly improving their vehicles.
Wiggins gave the example of Toyota
bringing the Prius from “just a sheet
of paper to reality in three years” back
in the 1990s. Toyota put their money
where their ideas were and it worked.
At the end of the day, a solid
connection was made between Rep.
Mitchell, Jack Guthrie, and the Penske
executives. This is just one example
of how L.A.N. members can make an
impact on Washington, D.C. Sign up
today to host your Dealer Visit at
www.aiada.org/dealervisits or call
(800) GO-AIADA! AD
S P R I N G 2 0 0 8 AutoDealer | 5
IN THE NEWS
TPA Truce Needed
BY JOHN RIGOLIZZO JR.
he presidential candidates have plenty of differences on Iraq, taxes,
and health care. They
don’t agree on trade policy, either. Some want the United States
to continue robust levels of trade with
foreign nations and others would prefer to pull back into the phony comforts of protectionism.
Yet here’s an issue that should unite
them all, no matter what their party or
ideology: The next president should
have Trade Promotion Authority
(TPA).
That’s because TPA is an essential
tool that gives America’s chief executive the versatility that he (or she)
needs to pursue the economic self-interest of the United States, while also
preserving a way for Congress to exercise its legislative judgment.
TPA makes so much sense that it
should be above partisan bickering.
Unfortunately, it’s often kicked around
like a political football.
President Clinton had TPA and lost
it, thanks to a GOP-controlled Congress that refused to renew it. Then
President Bush was handed TPA, but
he lost it last year, when a Democratcontrolled Congress let it expire.
This tit-for-tat partisanship helps
nobody, except perhaps for the fingerpointing pundits who gather around
the media’s real and imagined controversies the way hogs congregate
around troughs.
By itself, Trade Promotion Authority is an empty vessel. It doesn’t
advance or inhibit free trade. It simply
creates a set of conditions that gives
the president a reasonable level of flexibility to negotiate or renegotiate trade
agreements with other countries. Congress has the opportunity to approve
or disapprove these agreements in an
up-or-down vote — it can accept or
T
6 | AutoDealer S P RING 2 0 0 8
© Corbis
In his last State of the Union
Address President Bush
urged Congress to approve
pending trade agreements.
reject trade deals, but not amend them.
The restriction on congressional
amendments is essential. Any change
to the text of an existing agreement
actually creates a new agreement. The
White House would have to re-open
talks with one or more foreign governments, persuade them to accept the
changes no matter how large or small,
and then resubmit the revised agreement to Congress, which could demand even more modifications. In this
vicious cycle of congressional whimsy,
it’s easy to see how the whole process
would break down.
The fact is that without TPA, other
nations won’t even bother discussing
trade accords with the United States.
That’s because they aren’t negotiating
with the president, but rather with the
president and 535 senators and representatives. It’s an impossible situation.
Even with TPA, checks and balances
ensure that Congress will have a voice
in the process. The U.S. trade representative must win Senate confirmation
and remains in regular contact with
members of the Senate Finance Committee and the House Committee on
Ways and Means, which have jurisdiction over trade matters. Individual
members of Congress may have varying opinions on any single trade agreement, but they’re never surprised by
the contents and they’ve often played a
role in shaping it.
Most important of all, Congress
keeps the ability to rebuke a trade
agreement — if either the House or
the Senate says no, then it fails.
There are many ways for Democrats and Republicans to find common
ground, and TPA is one of them. At
different moments, large numbers of
members from both parties have supported it. In their hearts, they know it’s
right.
Now is the time for the politicians
to accept a truce on TPA — and to
admit that it’s always worthwhile, no
matter who sits in the Oval Office. AD
John Rigolizzo Jr. is a fifth generation
farmer, raising fresh vegetables and
field corn in southern New Jersey.
John is a board member of Truth
About Trade and Technology
www.truthabouttrrade.org
ADVERTISEMENT
PARTNER SPOTLIGHT
Auto Dealers Save Money on Loaner Cars
Enterprise Rent-A-Car® Offers Outsourcing and ARMS® Application
n an effort to help reduce
dealers’ liability exposure,
lower costs and meet increased demand for service
loaners, AIADA exclusively
endorses Enterprise Rent-A-Car, the
largest rental car company in North
America for service loaner programs.
“With nearly 7,000 locations and
more than 900,000 vehicles in service,
Enterprise has the coverage and proximity to meet the needs of each of
our members nationwide, ” said Cody
Lusk, president of AIADA. With the
flexibility to offer 65 different vehicle
makes and models, Enterprise can
match the loaner needs of almost every
dealership.
I
Customers Appreciate Added
Value of Rental Cars
With the highest percentage of
completely satisfied customers in
the industry according to JD Power,
Enterprise’s commitment to service
can enhance a dealership’s overall CSI.
And with Enterprise’s virtually unlimited fleet, dealers are able to accept
the customer’s first choice in service
appointment rather than rescheduling
around the availability of the dealers’
own loaners. This can be a powerful
driver of customer satisfaction, according to JD Power.
Recognizing the advantages of
outsourcing, many manufacturers
and dealer groups recommend Enterprise to meet their customers’ service
loaner needs. “Outsourcing frees up
space on dealership lots by eliminating
parked loaner cars, especially on busy
weekends,” said Hugh Whiles, of Sonic Automotive. “Outsourcing also is
effective in helping dealerships lower
operating costs and avoid large capital
investments associated with having a
dealer-owned rental department. These
investments include savings in direct
costs such as depreciation, interest,
uncollected fuel expense, license, taxes,
inspections, maintenance, uncollected
damages, and insurance premiums.
Although all these costs exist, they are
rarely recognized.”
ARMS® Technology Lowers
Costs and Improves
Efficiencies
Improvements and upgrades in
technology also are making renting cars for service loaners easier by
streamlining invoicing, managing
rental costs, and sending rental authorizations directly to the rental car
company.
For example, Enterprise Rent-ACar’s application, called Automated
Rental Management System (ARMS®),
which has been used effectively by the
insurance industry for nearly 10 years,
is available to dealerships.
ARMS® not only
gives dealerships more control of
the rental process, it enables them
to lower costs, improve efficiencies
and enhance service to customers.
For Inskip Automall in Rhode
Island, the ARMS® application’s twoway electronic communications creates
a seamless process that streamlines
invoicing and helps them better manage costs by sending electronic authorizations directly from the dealership
to Enterprise, including the number of
days authorized.
“The ARMS® application makes it
faster and easier to provide rental cars
for our customers,” said Mike Johnston, service manager for Inskip, which
rents an average of 600 cars a month
from Enterprise. “We’re better able to
analyze and manage activity on every
level because the automated application provides management reporting
and reduces errors, as well as unnecessary invoicing delays that can impact
customer satisfaction.”
With a virtually unlimited fleet, dealers are able to
accept the customer’s first choice in service appointment.
With the new ARMS® application,
Johnston’s service advisors are able
to create an electronic authorization
for a rental car at the same time they
are initiating a repair order for service. “All of the renter’s information is
sent to Enterprise electronically,” said
Johnston. “Enterprise is ready for our
customers when they arrive for their
service appointments and the contract
is closed as soon as the rental car is
returned to our dealership.”
Not only does outsourcing reduce
liability exposure and lower costs by
adding operational efficiencies, it creates more time for the dealership to
focus on revenue generating activities
such as selling and servicing cars. And
that’s a bottom line that most dealers
can appreciate.
For more information about
ARMS® and outsourcing, please email
[email protected]. AD
S P R I N G 2 0 0 8 AutoDealer | 7
EW
OM
I LELN T
D EVAI L
E RF R
IN
V OTLHVE EHM
2008 Ushers in Change
Presidential Politics Fills the Air
he 2008 Election year is
already shaping up to be
one of the most tumultuous in Washington D.C.’s
recent history. With
multiple trade deals pending, an ailing
economy, undecided party nominations, and a towering 2009 budget,
many are uncertain about what the
future holds. Fortunately, AIADA’s
government relations team is covering
all of these developments, and has broken down some of the biggest issues in
Washington facing dealers today.
T
Trade
There is no doubt that the
incoming Administration of 2009
will face significant challenges on the
trade front. On the upside, 2007 was
a productive trade year regarding
Presidential trade negotiations;
however the lack of action on Capitol
Hill leaves many to wonder if the
pending free trade agreements —
Colombia, Panama, and South Korea
— will make it across the finish line.
The largest market opportunity for
the U.S. lies in South Korea. Although
negotiations were finalized in May
2007, the free trade agreement continues to be held up by concerns
over beef regulations and the
auto trade.
Despite a slowing economy, U.S. exports grew
at twice the rate of other
countries in 2007, and our
trade balance improved
by 162 percent in those
countries. Increased
exports resulted in a
28 percent higher Gross
Domestic Product growth
in the 3rd Quarter alone.
These statistics reflect the rising
importance and benefits of free international trade.
8 | AutoDealer S P RING 2 0 0 8
The Economy: Bush’s Stimulus
Bill and FY09 Budget
All eyes in Congress have been focused on the Economic Stimulus package since the second session began.
The House overwhelmingly passed the
package negotiated between President
Bush, Speaker Nancy Pelosi (D-Calif.),
and House Republican Leader John
Boehner (R-Ohio). The Senate then
chose to move a separate bill with additional language aimed at helping
seniors and veterans.
After much debate and a failed
attempt to move the larger package
forward, the Senate passed the House
bill plus a veterans and senior citizens amendment by a vote of 81–16.
The House immediately accepted the
Senate amendment and passed the bill
380–34. On February 13, in the final
step of this rare show of bipartisanship,
the president quickly signed the $168
billion Economic Stimulus package
into law. The Bush administration said
the package will provide tax rebates to
128 million American households in
May.
In other economic news, President
Bush delivered his final FY09 budget
package, the first of its kind to exceed
$1 trillion. And not by a small
amount — the proposal
reaches $3.1 trillion. But on
the bright side, the FY09
budget should bring
us a surplus in
FY2012.
The President’s budget also asks
Congress to permanently extend his
2001 and 2003 tax cuts that are set
to expire in 2010, which includes the
death tax. “Above all, my budget continues the pro-growth policies that
have helped promote innovation and
entrepreneurship. I will not jeopardize
our country’s continued prosperity
with a tax increase,” Bush said.
What Is to Come in 2009?
The early months of 2008 have
brought us a big dose of presidential
politics fever. For the first time since
1952 the presidential campaign will
not include a sitting President or
vice president running for office. This
has caused plenty of anxiety amongst
party leaders as Presidential candidates
and Congressional leaders from
both sides of the aisle try to get their
message heard in a crowded election
field.
No one could have predicted the
tight presidential races that developed
over January and February, or the outcome to date. On February 5, deemed
“Super Tuesday,” 23 states held their
primary elections. Many believed
both the Republican and Democrat
nominations would be settled; yet the
American voters had a different plan
in mind. With ever-changing delegate
counts, pending Super Delegates, outstanding endorsements, and still more
primaries to be held, predictions are
changing constantly.
But rest assured that while Washington, D.C. may be unsettled, AIADA
will continue to work to move its legislative priorities to the front of any
and all agendas — promoting free
trade, reducing the tax burden,
and continuing to support
Congress and the Administration in addressing the global
issue of fuel efficiency. AD
AIADA’s
38th Annual
Meeting &
Luncheon
a Rousing
Success
Chairman Jim Hudson called his
predecessor, John Hawkins, “a
strong, ethical leader, and a man
we can all look up to.”
Automotive News Editor Peter Brown
joined Cody Lusk at the luncheon.
Lusk described Dave Mungenast Sr.
Lifetime Achievement Award-winner
Joe O’Brien as “someone for whom we
knew Dave would be proud.”
Dealers Make
O
nature of the association’s mission.
n Monday, February
11, 2008, more
Jack Fitzgerald, owner of Fitzgerald
than 500 dealers,
Auto Malls, captured many dealers’
manufacturers, and
sentiments flawlessly when he said,
executives gathered
“Every time Washington is in session,
at the San Francisco Marriott Hotel
our business is at risk. We’re at risk.
The country’s at risk. So we need lots
for the American International
Automobile Dealers Association’s
of people in Washington looking out
38th Annual Meeting & Luncheon.
for us.”
The video was followed by remarks
The program, which followed
from AIADA President Cody Lusk, in
Friday’s board meeting, highlighted
AIADA’s work on the legislative front
which he noted some of the watershed
events that have occurred within the
and the varied benefits it brings to
AIADA’s newly inaugurated chairman,
automotive industry since the last
its dealer members. On three giant
Jim Hudson.
high-definition screens, video footage
luncheon. Specifically, he spoke of the
played of AIADA board members emphasizing the vital
international auto industry’s growth and increased influence
10 | AutoDealer S P RING 2 008
Virginia dealer Thomas Moorehead and Larry
Mullens of NADA.
Despite an anticipated economic downturn,
Toyota Motor Sales USA President Jim Lentz was
upbeat in his keynote address.
Cindy Wagener Robin of
Morrie’s Automotive Group
in Minnesota, and her
husband John.
Mike Dever, AFIT PAC
Chairman.
an Impact
in the United States, evidenced by Toyota becoming the
world’s largest automaker and the emergence of a national
50/50 market split between international and domestic
brands.
The centerpiece of the luncheon was the “passing of
the gavel” from outgoing Chairman John Hawkins to
current Chairman Jim Hudson. “Like many of us, he is
an entrepreneur at heart and his continued success makes
him a perfect leader for our high achieving dealer body,”
Hawkins said of Hudson. “As I transition into my next role,
I am confident that AIADA will be left in extremely capable
hands.”
In his remarks, Hudson praised Hawkins’ work over the
past year, and committed himself fully to leading AIADA
in 2008. “You can count on me going to Washington and
advocating on your behalf every chance I get,” he told the
crowd. “There isn’t a cause or an organization I believe in
more than this one, and so I’m honored to greet you as your
chairman today.”
Then, before Toyota’s Jim Lentz gave the keynote
address, Cody Lusk presented former AIADA Chair Joe
O’Brien with the 1st Annual David F. Mungenast Sr.
Lifetime Achievement Award. O’Brien, a longtime dealer
who worked closely with Mungenast at AIADA for years,
was recognized for his philanthropy and civic involvement.
An emotional O’Brien was quick to remember Mungenast
in his acceptance remarks. “As the first recipient of the
Mungenast Award, I am grateful and most appreciative of
this wonderful honor . . . and am especially thrilled it is
named after a truly remarkable man and wonderful friend,”
he said. AD
AutoDealer S P R I NG 20 0 8 | 11
Shau Wai Lam
of the DCH Auto
Group.
No Magic Dust for Success
B Y M A RT Y B E R N S T E I N,
AIADA CONTRIBUTING EDITOR
Larry Kull, of
Burns-Kull Automotive, is AIADA’s
newest board
member.
Morrie Wagener
and Rick DeSilva,
AIADA’s 2009
chairman-elect.
Irv Miller, Toyota Motor
Sales U.S.A. group vice
president, was a guest
at AIADA’s Friday night
reception.
AIADA Board
Member Tim Smith
and Mike Stanton,
President of AIAM.
Charlie Vogelheim
of J.D. Power and
Associates.
AIADA’s 38th Annual
Meeting & Luncheon
12 | AutoDealer S P RING 2 008
Jim Lentz, president and CEO of Toyota Motor Sales, USA, told the 500+
audience at the American International Automobile Dealers Association’s
38th annual luncheon meeting in San Francisco, “There’s no Toyota
magic dust I can sprinkle to make things better. It won’t happen, but I can
tell you this … we will get through this year, the challenge will make us
stronger and the long term outlook is very good.”
Lentz was responding to the industry events and days leading up to
the luncheon in San Francisco. The general tone of conversations during
NADA’s annual convention was cautious, careful, and to some degree
concerned as the slowing of the economy impacts the retail automobile
business. Optimism was not rampant.
Yet from Toyota’s industry perspective all was not doom and gloom.
Their projection for the U.S. market at the close of the year remains
around 16 million vehicles, slightly down from 2007, but as Lentz noted,
“Instead of seeing 2007 as the worst year in the last nine, we think it will
be one of the best eleven years in automotive history.
Supporting this approach, he commented on the auto needs of an
aging population, the growing younger demographic entering car buying
years, low inflation combined with low interest rates, the Fed’s quick
responses, and Congress’ move to pass a near term stimulus plan. Toyota,
he said, “Is optimistic about the future because people love cars!”
“Today’s consumers are super stressed and overwhelmed by too much
information and too many choices,” said Lentz, referencing a study
by DYG, a research firm specializing in trends and motivations. “It’s
the result of too much information, too many choices, multi-tasking,
technological speed, non-stop media coverage, and endless choices.”
Adapting to the societal changes will require eliminating the “hassle”
out of car buying by providing low- or no-maintenance products,
offering valet ownership plans, creating a faster, less complicated
F&I process, and generally, “reducing the time customers spend in
dealerships.”
Lentz ended his remarks by encouraging the audience to stay active in
the AIADA and stay involved with the legislative process in Washington.
“Congress is always working on issues that can affect our business and
we need your help to make sure our voice is heard. This made a huge
difference last year before the crucial vote on the CAFE bill.”
The year ahead, he emphasized, is critical to the automobile industry
on issues regarding vehicle safety, free trade, climate change, and
the state-by-state movement to further regulate greenhouse gases.
The election of a new president and new Congress will have major
ramifications on our future.
“So, this is no time to be timid, lose focus, or get complacent. We all
need to stay informed, stay active, and stay united to protect our business.
There is no magic dust; it’s about hard work and working together.” AD
Photos: © Ron Sachs/Pool/CNP/Corbis
MARY PETERS BRINGS A UNIQUE PERSPECTIVE to her
role as the nation’s transportation chief. An avid motorcyclist,
she fully grasps the uniquely American fascination with
the wide-open road, and as a mother of three and
andmother of five, she has worked tirelessly
roughout her career to better our transportation
nfrastructure.
Peters was nominated to serve as Secretary of
Transportation by President George W. Bush on
September 5, 2006, and confirmed by the U.S. Senate
on September 30, 2006. Previous to taking on her
role in Washington, D.C., Peters spent more than
two decades working on transportation issues in the
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continued on page 14
AutoDealer S P R I NG 20 0 8 | 13
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CONTINUED
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TTTTTTTTTTTTTTTTTT
AIADA: The Corporate Average
Fuel Efficiency (CAFE) bill was
a long-time in coming. Are you
satisfied with the end result?
AIADA: How important was
the passage of the energy bill
to President Bush and to you
personally?
MP:
MP:
TTT
AIADA: How will consumers
and businesses benefit from the
new law?
MP:
TTT
| AutoDealer
What is CAFE?
TTT
AIADA: How much bipartisan
cooperation did you see in Congress as this bill was debated?
Corporate Average Fuel Efficiency, or CAFE, is the salesweighted average fuel economy, expressed in miles per
gallon, of a manufacturer’s fleet of passenger cars or light
trucks with a gross vehicle weight rating of 8,500 lbs. or
less, manufactured for sale in the United States, for any
given model year.
CAFE standards were enacted into law by Congress in 1975,
in response to shortages caused by the 1973-74 Arab Oil
Embargo.
MP:
On December 19, 2007 CAFE standards received their first
overhaul in more than 30 years. Fleet-wide gas mileage for
cars and trucks was increased to 35 mpg by the year 2020.
Previously, the average for cars was 27.5 mpg.
TTT
AIADA: Do you feel that the auto
industry is where it needs to
be in order to reach the 35 mpg
goal by 2020?
Not everyone is satisfied with the new CAFE standards.
California and 15 other states are suing the federal
government for the right to set their own criteria. With
all three presidential frontrunners supporting their plan,
California could force automakers to reach an average of
almost 44 mpg by 2020.
MP:
The penalty for manufacturers who fail to meet CAFE
standards is $5.50 per tenth of a mile per gallon under
the target value multiplied by the manufacturer’s total
production for the U.S. domestic market.
TTT
AIADA: Recently, the National
Surface Transportation Policy
and Revenue Study proposed
raising the gas tax. Will a tax
increase improve our congested
and aging roadways?
The CAFE law provides for special treatment of vehicle
fuel economy calculations for dedicated alternative fuel
vehicles. The fuel
economy of a dedicated
alternative fuel
vehicle is determined
by dividing its fuel
economy in equivalent
miles per gallon of
gasoline or diesel fuel
by 0.15. Thus a 15 mpg
dedicated alternative
fuel vehicle would be rated as 100 mpg.
MP:
For passenger cars, manufacturers’ domestic and import
fleets must separately meet the CAFE standard. A vehicle,
irrespective of who makes it, is considered as part of the
“domestic fleet” if 75% or more of the cost of the content
is either U.S. or Canadian in origin. If not, it is considered
an import.
Information gathered from www.NHTSA.dot.gov
AutoDealer S P R I N G 2 0 0 8 | 15
CONTINUED
“If we can develop
the necessary
leadership and
political will,
America is capable
of effectively
eliminating
congestion.”
AIADA: What legacy do you
hope to leave as Secretary of
Transportation?
MP:
TTT
AIADA: What are the primary
issues that will face your successor?
MP:
TTT
ut
ters
y Pe
etar
Secr Show.
Auto
| AutoDealer
ks o
chec
oods
the g
at l
ork
ew Y
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a
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AD
WHEELS OF
Honda FCX Clarity
DESTINY
A champion of high
fuel economy and low
emissions, Honda
takes the long view on
sustainable mobility
BY JIM KOSCS,
AIADA
CONTRIBUTING
EDITOR
D
ecades from now,
automotive historians
will call the 2007 North
American International
Auto Show (NAIAS)
a pivotal moment in the transition to
a hydrogen economy. That much was
assured when Honda introduced its
FCX Clarity at the show. Honda also
announced that this new, secondgeneration fuel cell car would be
leased to retail customers in Southern
California starting in summer 2008.
Having unintentionally ceded
hybrid leadership to Toyota, Honda
is now staking an early claim on the
future of personal transportation. That
future, Honda seems to have no doubt,
will require hydrogen to achieve the
best fuel efficiency and lowest emissions. The FCX Clarity is only one very
visible part in the carmaker’s plans to
achieve that end.
While it helps pave the road to
hydrogen, Honda will continue to improve its gasoline engines’ efficiency,
introduce new hybrid models, and further develop alternative fuels, including
clean diesels and natural gas.
“Global warming is the number
one environmental issue. For every
company, increasing fuel efficiency to
continued on page 18
AutoDealer S P R I NG 20 0 8 | 17
reduce CO2 emissions is the single most important challenge we face, along with the new CAFE standards,” Honda
CEO Takeo Fukui told journalists at the 2007 NAIAS. “I look
at this challenge in the same way we approached the issue of
clean air more than 40 years ago.”
Fuel Economy Leadership
Honda built its car business on a foundation of
economical cars, and its continued devotion to fuel
efficiency shows in a 2006 CAFE score of 29.1 mpg. That’s
one reason Edmunds.com Senior Editor and Green Car
Advisor John O’Dell is confident Honda will achieve the new
35-mpg fleet standard before the 2020 deadline. High fuel
economy, O’Dell said, “is part of the company’s engineering
DNA. It’s not marketing
driven.”
The small start of something really big:
Ed Cohen, Honda’s vice
The first Honda Civic arrived in 1973, just
president of government
in time for skyrocketing gas prices and
and industry relations,
gas lines.
shared the company’s
basic plan for pursuing
high fuel economy. “Over
the last 15 years, Honda
has had the highest average fuel economy of all
manufacturers, and that is
even while an increasing
proportion of our vehicles have been light-duty trucks,” he
said. Light trucks, including SUVs and the Ridgeline pickup,
constituted 43 percent of Honda’s 2007 sales.
When it comes to fuel efficiency, Honda has always offered standout choices. In many years, Honda offered the
country’s highest-mpg vehicle, including the first Civic
(1973), special, high-mpg versions of its CRX two-seater
(1980s) and Civic (1990s) and, more recently, the slow-selling Insight Hybrid.
No V8s – But Timing May be Perfect
Consistently strong sales of economical models don’t provide the only route to a high CAFE result. What is not in
Honda’s lineup helps, too: no conventional full-size pickups,
and no truck-based large SUVs and especially, no V8 engines.
Timing and rising gas prices could vindicate Honda’s
strategy. A recent new-car buyer study from Edmunds.
com revealed that America’s appetite for V8s is declining in
all segments where they’re offered except full-size pickup
trucks. Overall, shopper demand for V8s has dropped from
19 percent two years ago to 15 percent today, according to
Edmunds. Declines were steepest in the SUV and large car
categories.
Do Customers Get the Message?
O’Dell said that Honda hasn’t been as vocal about its fuel
economy leadership as it could be. “Honda attracts atten18 | AutoDealer S P RING 2 008
tion for fuel economy, but there’s not a lot of drum banging
in the marketing. Brands with a lesser message are making
louder noises.”
Dave Conant, who owns the country’s largest Honda
dealership, Norm Reeves Honda in Southern California, sees
an opportunity to speak up. “Honda has traditionally taken
a very understated approach to marketing. Everything has
been on the strength of the product,” Conant said. “Because
of that, Honda has always been a brand that savvy customers
research and study, and its cars tend to be bought by more
‘influentials,’ which ultimately does help.”
Enough customers seem to be getting the message to keep
pushing Honda’s sales upward. In 2007, Honda (including
Acura) sold 1,541,542 new vehicles in the United States, a
2.5-percent increase over 2006. It was the company’s 14th
consecutive year-over-year sales increase. “I think the best
consumer research is found in the sales, and ours keep going
up,” said Cohen.
Hybrids: Act II
Eight years after launching the first gasoline-electric
hybrid in the U.S. market, the two-seat Insight, Honda found
itself announcing a “do-over.” The company has not come
close to matching Toyota’s success with hybrids. To remedy
that situation, Honda will build new, dedicated hybrid
models with lower prices.
What went wrong? The Insight sold only 13,000 vehicles
over six years. The first- and second-generation Civic Hybrids, well regarded by the auto media and customers alike,
were left in the Prius’s clean exhaust trail. In 2007, the Prius
sold 181,221 compared to 31,253 for the Civic Hybrid. The
Accord Hybrid, engineered for high power rather than high
fuel economy, sold only about 25,000 units over three years
before Honda cancelled it.
The problem was not technology. Honda’s Integrated
Motor Assist (IMA), which sandwiches a low-profile electric
flywheel/motor between the gasoline engine and transmission, is as elegant in its seeming simplicity as Toyota’s hybrid
system is in its complexity. The problem was positioning and
perception.
“We were first [with a hybrid in the U.S.], but you have
to give Toyota a lot of credit,” said Cohen. “They led with a
dedicated vehicle, and it was a very smart thing to do. Our
Get sporty: Honda has not yet revealed the first of its nextgeneration hybrids, but the second one will be a sports
coupe like the CR-Z Concept.
technology, which has now been addressed.
approach was to make the hybrid technolTwo is cost, which commercialization can
ogy transparent, a powertrain option on
theoretically reduce by economies of scale.
existing models.”
The third is a doozy: comThe idea was to demysmercialization will require
tify hybrid technology to
hydrogen infrastructure,
help take it mainstream
which barely exists today.
quickly. But hybrid buyers,
Honda has some ideas on
Honda learned, want to
that, too.
stand out from the main“It’s the chicken and egg
stream.
situation — you can’t do
Now, Honda has a
one first. Both must evolve
new plan. It will build a
Elegant packaging: Civic
simultaneously,” said Conew hybrid “world car”
Hybrid’s Integrated Motor Assist
(IMA) uses a low-profile electric
hen.
in Japan next year, with a
motor sandwiched between the
As one part of the solucapacity for 200,000 units. gasoline engine and the transtion, Honda envisions
Half of those are slated for mission.
using homes as fueling
the U.S. market. The price
stations. Honda announced its Home
will be “under the Civic Hybrid,” Cohen
Energy Station (HES) IV at the same time
confirmed. “We’re trying to reduce the cost
it unveiled the FCX Clarity. The HES IV
premium of a hybrid to under $2,000 on
would tap a home’s natural gas supply
this next vehicle,” he said. By comparison,
to produce hydrogen, while also providthe 2008 Civic Hybrid is priced $3,090
ing heat and electricity to an average-size
more than the Civic EX sedan with autohome. According to Honda, such an instalmatic transmission.
lation can reduce CO2 emissions by an esJust as important to many hybrid
timated 30 percent and energy costs by an
buyers, the new Honda hybrid will be a
estimated 50 percent.
distinct vehicle, not a version of a current
Others are testing fuel cell vehicles now,
model. And car enthusiasts who have been
too, including Daimler, Ford and General
lamenting the departure of the CRX since
Motors. But nobody else is putting them
1991 should be excited about the second
into the hands of paying customers for
new-generation Honda hybrid planned, a
sporty two-seater based on the rakish CR-Z three years. Still, there are doubters. In its
March issue, Car & Driver magazine said,
concept.
“The Honda FCX Clarity is a technology of
Fueling the Future with Hydrogen
the future and may always be just that…”
Honda is careful not to put an arrival
Cohen shrugs off naysayers. “We would
date on mass-produced fuel cell cars, but
not be investing hundreds of millions of
its FCX Clarity makes clear its intention to
dollars or more in technology that we
hasten that day along.
thought was a dead-end,” he said. “Look at
A fuel cell vehicle is an electric vehicle.
the extraordinary difference between our
But rather than drawing energy stored
first FCX from four years ago versus the
in a battery, it creates energy by pulling
FCX Clarity. The magnitude and rapidity
electrons out of hydrogen as it is passed
of our progress and refinement is simply
through a special membrane. The only
breathtaking.”
emission is water vapor. In the FCX ClarRita Sims-Snyder of Coeur d’Alene
ity, a small fuel cell “stack” is positioned
Honda in Idaho, which sells the entire line
between the front seats. Range is about 270 of Honda cars, trucks, motorcycles, powermiles on a tank of pressurized hydrogen.
sports, and power equipment, is optimistic
That’s a 30 percent improvement over
about Honda’s chosen road. “Honda is very
Honda’s first fuel cell vehicle, the FCX,
innovative, but also conservative. They
which a handful of consumers began testmake sure technology is perfect before they
ing in 2004.
release it. As dealers, we sometimes find
There have traditionally been three
ourselves waiting and waiting for someobstacles to fuel cell cars becoming mainthing new. But when it arrives, we realize
stream: One was the physical size of the
why we had to wait.” AD
“IT WAS
20 YEARS AGO
TODAY…”
1988
HONDA ACCOR D
With each new-generation of its
Civic and Accord, Honda has
improved fuel economy, even as the
cars gained in size, weight, power,
features, and safety technology.
“In order to not lose ground, you
must make both the powertrain and
the vehicle more efficient,” said
Ed Cohen, Honda vice president of
Government and Industry Relations.
2008
HON DA ACCOR D
AutoDealer S P R I N G 2 0 0 8 | 19
INDUSTRY INSIDER
BMW Finds New Dealer Advocate In-House
MW didn’t have to look
far for a replacement
for Tom McGurn, the
recently retired and
highly respected head of
its North American Communications
and Dealer and Industry Relations
office. In fact, his successor, George
Baldwin, is a 27-year BMW veteran
who has already made a name for
himself as a dealer advocate in
the German automaker’s Center
Development department.
Baldwin will continue his Center
Development role in Woodcliff Lake,
New Jersey in addition to his new
responsibilities, and says the expanded
function will give him greater access
to dealer input and ensure
that the actions he takes
in Center Development
will stand the “red face
test” with dealers. Under
McGurn, BMW dealers
enjoyed a positive and
open relationship with
the manufacturer. Dealers
familiar with both men
George Baldwin
don’t expect that to change.
“He’s a long time BMW player, and I’m
personally looking forward to working
with him,” said California dealer Fritz
Hitchcock.
Baldwin, who drives a 550i unless
the weather necessitates a 535xi allwheel drive wagon, has always felt
a connection to the car industry.
He grew up in Detroit and has a
framed photo on his desk of his
great grandfather in 1907 in front
of the family car company — B&B.
As a young man, George moved
to California and went to work for
Mercedes Benz of Hollywood. After a
few other jobs in Mercedes retail, he
was hired away by BMW. “I don’t think
that there are many companies that
would have given me the opportunity
B
20 | AutoDealer S P RING 2 008
Shelly BMW in Buena Park, Calif.
to learn and grow the way that BMW
has,” he told AIADA.
In his new role, Baldwin looks
forward to following in McGurn’s
footsteps. “We will continue to work
closely with the BMW and MINI
dealer forums including the working
committees and make sure that we are
communicating what is happening
to support the dealers,” he says.
“Tom McGurn was always good at
encouraging our managers to listen.
Hopefully I can do the same.”
So what can dealers expect from
BMW in 2008? According to Baldwin
they’ll continue to see focus on dealer
profitability and the bottom line.
“Dealers understand the pressure
that the European companies are
under because of the exchange rate
and so they are watching that pretty
closely to see what we do to maintain
profitability,” he says. One of the
things BMW is doing is introducing
new products like the already highlyanticipated 2008/2009 M3, the 1 Series
coupe and convertible, and the X6
coupe-crossover.
MINI, which has been a resounding
success for BMW, is also part of its
long-term growth plan. Dealers are
embracing the need to expand their
facilities and bring a higher level of
exclusivity for their MINI customers.
To meet demand, Baldwin expects
to deliberately add a small number
of dealers in 2008 to address the
substantial distance between dealers.
Another factor that will figure in
BMW’s future is the introduction
of diesel engines into some of their
products. With its advanced diesel
technology and the availability of low
sulphur diesel fuel, BMW now has the
opportunity to offer diesel powered
models with both high performance
and outstanding fuel economy.
Despite a world-wide economic
downturn, BMW dealers can rest
assured they are in good hands. George
Baldwin is a man who knows his
dealers and their merchandise. “Great
products that are exciting to drive are
the foundation of our success and why
we are such an aspirational brand,” he
says. “And, just as importantly, we have
great dealers who are as passionate
about the product as we are.” AD
R VUEPM
DA
DME AANLUEFRA CI TNUVROE L
ETNET
Nissan’s Latest Shift
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
hift. Every Nissan advertisement carries the tag
line “Shift,” a clever adautomotive double speak:
Shift for the way a vehicle
moves from one gear to another,
and shift for the change brought to
the Nissan organization under the
direction of President and CEO Carlos
Ghosn. It also happens to be the title of
the autobiography Ghosn authored a
few years ago.
In prior years, shifts were
meticulously sequenced for Nissan
— targets were not only met, they were
exceeded. Cars were selling well. The
outlook was favorable. Dealers were
very happy. But this is the automobile
business and sometimes things tend to
go a bit wonky.
Last April, Nissan reported its first
full-year drop in net profit in seven
years and rescheduled a key long-term
sales goal. New model introductions
were few and far between. Quality had
suffered. Dealers were, to put it mildly,
not thrilled.
The causes were many: There
were management subtractions,
additions, and other changes in the
U.S. organization, some brought on
by the relocation of the corporate
headquarters from Southern California
to Nashville, Tenn. And we all know
what has happened to the economy.
But even as the winds of change
were tearing at the corporate sails, new
vehicles, albeit some a bit tardy coming
to market, made their way to autos
shows and Nissan showrooms, and
were well received by the automotive
journalists.
“Despite the headwinds that affect
our industry, Nissan has benefited
from the success of the new products
launched during the past 12 months,”
Ghosn was recently quoted as saying.
“Although the market outlook remains
S
Nissan Rogue
Nissan GT-R
Nissan Altima Coupe
volatile for the coming months, Nissan
is focused and on track to deliver our
full year objectives.”
Given the financial maladies
infecting the industry, these results are
positive.
A Few Financial Figures
So, how is Nissan doing now?
Globally, Nissan sold a total of
2,714,000 vehicles in the first nine
months of 2007, up 8.4 percent
compared to last year. While the
final numbers are not yet in, Nissan
reported a total of 898,000 vehicles
sold worldwide in the October-toDecember 2007 period, up 13.0
percent. In the April-to-December
2007 period, net income after tax
totaled 344.6 billion yen or 2.94 billion
dollars, down 9.0 percent compared
with the previous year.
Nissan’s forecast for the full fiscal
year is unchanged at an operating
profit of ¥ 800 billion yen or US $6.84
billion and net income of ¥ 480 billion
yen or US $4.10 billion.
New Models Are Providing
the Stimulus
For Nissan, it has always been
about the cars. Good looking, high
performing, quality cars will sell even
with bad marketing and advertising.
Conversely, cars lacking in quality
and performance won’t sell with great
advertising. That’s the car business and
Nissan recognized this fact and altered
its course.
Result: In the first nine months
of 2007, Nissan (including Infiniti)
launched nine all-new models
worldwide, six in the U.S., including
the Nissan Altima coupe, Infiniti G37
coupe, Nissan Rogue crossover, Nissan
GT-R, Infiniti EX, and a new Nissan
Murano — the iconic style leader.
continued on page 22
S P R I N G 2 0 0 8 AutoDealer | 21
MANUFACTURER UPDATE
Nissan Murano
A review of the new Nissan and
Infiniti models demonstrates the wide
variety of appealing and reasonably
priced vehicles the Japanese company
has to offer.
Nissan Altima Coupe All-new
for 2008, the Altima coupe, which is
scheduled to go on sale this summer,
is based on the next generation 2007
Altima sedan. The new exterior design
is intended to stand out in a crowd of
sedan-based two door models, with its
sophisticated, perfectly proportioned
styling. The Altima coupe has a shorter
wheelbase, overall length and height
as compared to the Altima sedan. The
smaller size and lighter overall weight
also contributes to the coupe’s sportier
driving feel.
Nissan Rogue The 2008 Nissan
Rogue adds a new dimension to the
crossover sport utility segment. The
good looking exterior is complimented
with an equally nice interior. Rogue’s
roomy cargo area features an available
one-touch foldable cargo organizer,
a removable tray that fits below the
cargo area floor and rear tonneau
cover.
Nissan GT-R Unless you were
in Tokyo for the auto show last
November you cannot imagine the
rock star crowd that gathered hours
— yes, hours — before the reveal of
the Nissan GT-R. The new Nissan
GT-R is built on an exclusive midship
platform that enables the use of the
world’s first independent rear transaxle
all-wheel drive system, which places
the transmission, transfer case, and
22 | AutoDealer S P RING 2 008
CONTINUED
Infiniti EX35
final drive at the rear of the vehicle,
optimizing weight distribution and
maximizing handling capability. Under
the hood, the Nissan GT-R features an
all-new 3.8-liter twin turbo V6, capable
of producing 480 horsepower and 430
lb-ft of torque. Watch sales climb when
this vehicle is introduced in June.
Nissan Murano The most
striking visual element of the 2009
Murano is its new body, which
imparts a “modern art” feel, while still
maintaining its distinctive “Muranoness.” The new Murano design also
includes an available dual panel power
sliding glass moonroof and second row
skylight. Inside, the 2009 Murano lives
up to its “mobile suite” design theme,
with new levels of warmth and luxury.
What was good is now great. Five
different models are offered.
Infiniti EX The all-new 2008
Infiniti EX35 offers an exceptional
combination of seductive design,
elegant interior, and advanced
technology systems. The EX35’s
sculpted elegance expresses a timeless
appeal — sleek lines that portray
speed, grace, and finesse. Its layout
combines the look and feel of a luxury
coupe and an SUV’s interior flexibility.
A truly unique feature is the Around
View Monitor, which gives the driver a
“top-down view” of the outside of the
vehicle and helps reduce blind spots
when parking.
Infiniti G37 Coupe Coupe
lovers rejoice. The all-new 2008 Infiniti
G37 coupe combines the exhilarating
performance, stunning styling, and
Infiniti G37 Coupe
modern sporty interior of the original
Infiniti G coupe, accelerating each to
new levels. The G37 coupe’s seductive
exterior design is highlighted by
flowing front fender curves, a wavestyle hood, expressive front fascia with
Infiniti’s signature double-arch grille
and L-shaped headlights.
This no subtle shift of emphasis in
new models. It’s a giant leap towards
a more youthful demographic, and it
is starting to pay dividends at dealers’
stores. The little Versa, one example of
this move, is one of the sales leaders
in the multi-car line of Nissans now
available.
All is not perfect at Nissan by any
stretch of the imagination. But quality
has improved dramatically; the Nissan
Altima scored a major winner over the
Honda Accord in Consumer Reports’
top ranked mid-priced sedan study.
And just a few weeks ago, Renault
and Nissan announced a program for
battery-powered electric vehicles for
the nation of Israel.
Just seven years ago, Ghosn brought
a shift in thinking to the struggling
Japanese automaker, which soared
out from near bankruptcy to great
profitability. There’s a new shift
underway. It will be interesting to see
the progress Nissan makes in a year
fraught with economic danger.
Is it time for a shift change? AD
DEALER SPOTLIGHT
Dealers Check In
Lee Beaman
Beaman Automotive Group
Nashville, Tenn.
Lee Beaman was born and raised in Nashville, Tenn., where he lives today
with his wife Kelley. He employs 450 people at his four dealerships, one
of which, Beaman Toyota, has been the number one sales leader for three
years in a row and has received the Toyota President’s Award for 10 years.
Beaman Automotive was founded in 1945 by Lee’s father, Alvin Beaman,
and has long been a Tennessee mainstay. The family and the dealerships
are well known in the area for their customer-oriented business philosophy, generosity to the community, and friendly workplace.
What first got you into the auto
retail business?
My family was in the Pepsi Bottling
business and the automotive business.
When I graduated from the University
of Tennessee, I wanted to work at the
bottling company but my dad wanted
me to join him
at the dealership.
I was hesitant
because of the
reputation of car
dealers. My goal
was to change
the image of the
car business and
I have devoted
my career to
improving the perception of our
industry by treating customers with
respect and dignity and conducting
business in an honest and ethical
manner.
In your tenure as an auto dealer, what is the one accomplishment you are most proud of?
I believe that people are the most
important part of any business and
I am proud of our leadership team.
We have won every major award from
each manufacturer we represent and
received much community recognition.
We have been recognized as one of
the top employers in Tennessee for the
past 3 years and, in 2003, Beaman was
awarded the American Business Ethics
Award.
Who was the biggest influence
in your career?
My dad, Alvin Beaman taught me the
importance of customer satisfaction.
Several years ago, I realized that
employee satisfaction is even more
important. My motto is “Take care
of our employees and they will
take care of our customers and the
customers will take care of us.” My
parents believed in giving back to the
community. Two city parks as well as
a library at Lipscomb University were
made possible by their generosity.
Sixty years ago, my father was ahead
of his time in charitable giving and
today Beaman Automotive Group is
continuing that legacy of commitment.
What is the biggest issue affecting your business?
Attracting people who share our
vision and understand the importance
of associates and customers to our
business. We need leaders who
can embrace and manage changes
necessary to compete in today’s
market-place, where customer
expectations continue to rise and
technology continues to amaze us.
Charles Barker
Charles Barker Automotive
Norfolk, Va.
Charles Barker owns and operates
Charles Barker Automotive in Virginia
Beach, Hampton Roads, and Norfolk,
Va. His dealerships include Toyota,
Infiniti, and two Lexus stores. In addition, he owns interest in a Toyota dealership in New York. Barker employs over
275 people and tells AIADA that the car
business is “all about building trusting
and caring relationships. It’s a proven
formula that can’t miss.”
What first got you into the auto
retail business?
I was in the insurance business and some
of my friends were selling Chevrolets. They
were making more money than me, so I
gave it a try in 1971. My first sale was a 1971
Camaro. I made a lot of money on that first
sales, and I think that’s what sold me on the
car business.
In your tenure as an auto dealer,
what is the one accomplishment you are most proud of?
That’s a hard one, I think there is really two.
Being named Time Magazine Dealer of the
Year for Virginia and being named one of
the top ten finalists for the Newsweek Dealer
continued on page 20
S P R I N G 2 0 0 8 AutoDealer | 23
DEALER SPOTLIGHT
CHARLES BARKER CONTINUED
of the Year award. Those recognitions
are the culmination of a lot of hard
work by my entire organization, not
just me.
Who was the biggest influence
in your career?
My wife. She is always pushing me
to change and try new things. Also,
my first partner Josh Darden taught
me many things; most importantly
how to do business with integrity and
professionalism.
What is the biggest issue
affecting your business?
It’s always been attracting, hiring, and
training the right people for the right
job.
How are you active in your local
community?
There are too many organizations to
list. We give back in a big way, especially to children in our community.
I have a foundation, “Champions for
Charity,” and it focuses on a variety of
youth programs. We have donated over
$2 million in the last 10 years.
What is your personal dream
car?
Since I was a boy I always marveled at
the 1957 T-Birds. Today I actually own
one, along with several other cars from
the 1950s. The classics from the 50s are
in a class of their own.
How does legislation impact
your business?
Of course there is a need for laws,
but unfortunately a lot of them raise
the costs of goods and services to
the consumer. Politicians need to
understand that the additional cost
to the consumer may outweigh any
positive impact from the law.
24 | AutoDealer S P RING 2 008
Dave Wilson
Wilson Automotive Group
Laguna Beach, Calif.
Dave Wilson is the owner and president of
sixteen automobile dealerships — employing
nearly 2000 people. Sales for these corporations now total just under $2 billion annually, making the Wilson Automotive Group
one of the ten largest dealership chains in
the nation. He received the Sports Illustrated
Dealer of Distinction Award in 1988, and the
Time Magazine Quality Dealer Award in 1991
and again in 2004. In 1998 he was presented
with the AIADA All-Star Dealer Award for his
commitment to the community and work with
charitable organizations. David and his wife Holly live in Laguna Beach
with their two children Alexandra and Cameron. His two adult daughters,
Christine Francis and Logan Tass, live in Arizona with their families.
What first got you into the auto retail business?
When I was in college, I was working nights at a dealership changing oil filters.
I decided I could make more money selling cars than repairing them. So I
approached the dealer and sold him on the idea. By the time I was a junior
in college, I was selling cars. I became a partner at Covey Lincoln Mercury in
Arizona in September, 1975. I then became a partner at Toyota of Orange in
January, 1983. The first dealership I owned on my own was Toyota of Orange,
when I bought out the 75 percent owner in August, 1985.
Stuart Rappaport
Perfection Honda
Rio Rancho, N.M.
Stuart Rappaport employs about 100 people at Perfection Honda and Perfection on Academy in New
Mexico. With his son serving as general manager,
theirs is truly a family business. Rappaport received the Time Magazine Quality Dealer award in
2001. He is a graduate of the University of Southern
California and was instrumental in the establishment of Honda’s first 350 national dealers. He is a
member of the Albuquerque Economic Development group, University of
New Mexico’s Lobo Club, and the Greater Albuquerque Chamber of Commerce. He was also a frontrunner in selling hybrid cars and in supporting
the trend towards fuel efficiency.
What first got you into the auto retail business?
After graduating University of Southern California I was hired as an analyst by
Ford Motor Company. I continued the factory life with Alfa Romeo and in 1968
DEALER SPOTLIGHT
Who was the biggest influence on your career?
The dealer that first hired me, Dick Gray. He introduced me
to “The Power of Positive Thinking.” Actually, he didn’t just
introduce me — he drilled it into me. His long-time mantra
has now become mine: “Whatever your mind can conceive
and believe, you WILL achieve.”
What makes a great auto dealer?
Probably a well-rounded person. Someone who is
concerned not only with his business, but also with his
customers — and most of all, his employees.
What is the biggest issue facing your business?
Today in Southern California it is the mortgage meltdown
and housing slump.
How are you active in your local community?
I have always been partial to children’s charities. Since
I first came to California I have been very involved with
Orangewood Children’s Foundation, a home for abused
and abandoned children in Orange County. I am also the
chairman of the annual Boy Scout Toyota/Lexus/Scion
golf tournament, which raises nearly $200,000 annually
for scouting. In 1999 I contributed $1,000,000 to my alma
mater, the University of Northern Iowa, to endow a Chair
in Business Ethics. And if you visit Chapman University in
Orange, you will see Wilson Field, made possible by my and
Holly’s donation.
was hired by American Honda to assist in the establishment
of a national dealer network for a new automobile they were
introducing into the U.S. in 1969. The atmosphere at Honda
was unique. The company spirit and can-do attitude was
like nowhere else I had been. I covered the entire country
interviewing dealers of all makes and existing Honda
motorcycle franchise holders to determine the possibility of
them becoming Honda Automobile Franchise holders. It was
at that point in time that I wanted to become an automotive
retailer.
When did you buy your first dealership?
After leaving Honda, I worked outside the industry, always
thinking about the day when I could get back into the
business on the retail side. In 1979 an opportunity arose for
me to go into retail with a partner. We were able to open our
Honda dealership in November 1982 in Albuquerque, N.M.
In 1984 I bought my partner out and have remained here
since.
What makes a great auto dealer?
No secret, good product and customer satisfaction. After
When did you first get involved in AIADA
and why?
In the mid 1980s, we attended the AIADA conference in
D.C. because at that time there was a voluntary restraining
agreement on the number of Toyota’s that could be
imported to the U.S. In addition, there was a feeling in
Congress that Detroit’s problems were caused by American
dealers selling Japanese cars.
How does legislation impact your business?
Obviously legislation affects us somewhat. However, thanks
to the efforts of AIADA, it doesn’t affect us nearly as much as
it used to.
Any new additions to your business or new dealerships that we can highlight?
The new Toyota of Huntington Beach opened on December
1, and Toyota Puerto Vallarta opened on December 18. The
$19 million state-of-the-art Huntington beach store covers
nearly 200,000 square feet, and will stock over 800 vehicles
under one roof.
25 years I realize that the proportion of success is directly
related to the way you treat the customer. You can be the
sharpest trader in the world, but if the customer feels no
benefit they will not be back.
What is the biggest issue affecting your business?
I think the matter of consumer credit will be the issue of
2008.
How are you active in your local community?
For over 25 years Perfection Honda has provided a
Presidential Scholarship at the University of New Mexico.
In addition we contribute to Concern Foundation in the
fight against cancer. Also many local organizations and
high schools rely on our annual contributions for their
budgets.
Any advice for aspiring auto dealers?
Forget the hours, live the business. It is too difficult
otherwise.
S P R I N G 2 0 0 8 AutoDealer | 25
Did You Know?
William Taft, who served from
1909–1913, was the first U.S. President
to own a car.
Subaru was the first
A car
moving at
60 miles per
hour covers
88 feet
in one
second.
Japanese car company
to use a name derived
from its own language. It
refers to the constellation
pleiades — also known by
its original Japanese name
of mutsuraboshi.
Around 85% of the cars
sold in India are financed.
In China, only 15-20% of
vehicles are financed.
Honda’s entry into the
U.S. motorcycle market
during the 1960s is
used as a case study for
teaching introductory
strategy at business
schools worldwide.
In 2007 silver was replaced by white as
the most popular car color in the U.S.
The first power windows were introduced in 1946.
26 | AutoDealer S P RING 2 008
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April 30 and May 1, 2008
Grand Hyatt — Washington, D.C.
2nd Annual International Auto Summit
and Dealer of the Year Award Dinner
Presented by
REGISTER TODAY: Call 1-800-GO-AIADA or visit www.AIADA.org/events