Recently I spoke at length with Dick Welte, president and CEO of the NFADA (Niagara Frontier Automobile Dealers Association), a post that Dick has held for the past 29 years. We discussed the car business -- how it has changed and where he saw it going. Here are the highlights of Dick's insights.
"When I became president of the NFADA, the major thrust behind the carmakers was profit and ego. Their goal was to make the biggest, shiniest, and fastest car for the least cost and maximum profit. The attitude was 'we'll tell the customer what he or she wants.' Then the Imports came on the scene and changed the game rules dramatically. The Import carmakers' thrust was to put a car out there that was initially affordable, reliable, and economical. They were concerned about what the customer wanted! (Wow! What a concept!) Eventually, the designs got sleek and sexy and the competition grew. The carmakers realized that if they were going to compete, they would have to satisfy the customer, regardless of their own agenda. That's why the CSI (Consumer Satisfaction Index) has become so important; so much so, that bonuses paid to corporate heads are now predicated on the CSI. The carmakers realize that in order to survive they must retain the customer at all cost."
Well then, how are things changing in the dealerships, I asked?
"The way business is conducted in the dealership has changed dramatically as well. Today's consumers are savvy. They usually know what they want. By the time they enter the dealership, all the research on pricing, available options, and safety features has been done, either on the Internet or through some sort of consumer report or periodical. The sales person acts as a guide, helping the customer make minor decisions regarding color and interior design (and provide a test drive, of course). The day of the aggressive sales person controlling the sale with an iron hand is gone; control is in the hands of the savvy consumer."
I asked Dick how women are affecting the car business.
"Women now represent over fifty percent of all purchases of new and used vehicles. They are well educated and know what they want! If dealers want to make sales to women, they must have their facts in line because studies show that women, in general, have done their research before going into the dealership. In addition, there are more women in the dealer showrooms selling vehicles today than anytime in the history of the business. And they are doing a great job! Why? Because women bring to the showroom floor the same skills they use when they are shopping -- research, attention to details, and outstanding people skills. It's no wonder that this trend is growing by leaps and bounds. The showroom floor is no longer a man's world."
Next, I asked Dick about the quality of today's cars.
"Carmakers have outdone themselves with respect to quality and engineering. The percentage of cars on the road today with over a hundred thousand miles is staggering. The average age of these cars is nine to twelve years. Even if you drive only ten thousand miles a year, on a nine-year-old car that's ninety thousand miles! You were hard pressed to drive a car to seventy thousand miles in 1968, much less a hundred thousand miles!"
What about the used car chains like Carmax and Autonation USA, and the Internet? Will this be too much competition for the local dealers?
"They have their place in the market and serve their niche. However, they will never replace the local dealer that serves its customer base. The customer-dealer relationship is a strong and vital bond that can't be replaced with the impersonal, sterile atmosphere of the used car chains and the Internet."
Finally Dick, where do you see it all going?
"The CSI, engineering, new designs, and quality are on the rise. The future of the car business looks bright!"
I wonder if they'll hover six inches off the ground in ten years?
'Til next time -- keep rollin'
