DCH Auto blends tradition with new twists
Innovation, respect are basic principles
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Dah Chong Hong Ltd., a Chinese food and textile distributorship, survived World War II by relocating to avoid military occupation -- first from Shanghai to Hong Kong, then to Macao and only returning to Hong Kong after the war ended in 1945.
Thus the company that evolved into DCH Auto Group, which today operates 29 car dealerships in New Jersey, New York, Connecticut and California, has a long history of moving and adapting.
The man who led the transformation into autos was founder B.Y. Lam's son Shau-wai, who was born in 1941 while DCH was ensconced in Hong Kong. In 1959, the younger Lam was sent to America for an education -- and with the idea of eventually joining the family's commodity import business on the U.S. side.
After earning bachelor's and master's degrees in math from Purdue University and an MBA from New York University, Shau-wai Lam went to work for DCH in New York in 1967.
Now 71, Lam said he put the "customer-first" tradition of a Chinese merchant to work in the United States.
But he also sought new opportunities, and that led him to the fledgling Honda franchise. In 1977, DCH opened its first dealership, Paramus Honda in Paramus, N.J., and the conversion of the family business from importing food and clothing to selling cars had begun. By 1979, Lam moved to Los Angeles as head of DCH's western region, opening what is now DCH Gardena Honda and DCH Tustin Acura.
Switching industries "made sense" to a company already used to big changes, Lam said.
"The margin on distributing commodity products like food and clothing was very small, and we didn't set the prices," he said. "Selling autos has a higher margin, fewer entry barriers and is a more efficient use of capital."
By 1988, Lam became president of DCH as it continued to expand its automotive operations.
"Most of our philosophy has been passed down generation to generation by informal tradition," said Lam, who is now chairman of the group.
But as DCH grew and more people from outside the family filled key positions, Lam knew dinner-table lessons weren't enough.
"In 1997, we wrote it down and created a formal mission statement," he said. It includes the key tenets of customer service, integrity and innovation.
"We want to be industry leaders, be innovative, take better care of customers because we have happy employees who act as a team," Lam said. "The power of a team is much stronger than the sum of individuals added together."
Lam said happy employees mean less staff turnover, which gives the company a competitive advantage in stability and lower training costs.
On the corporate side, it starts with strong employee benefits, including medical and dental insurance. In addition, a profit sharing plan helps create "a sense of ownership" in employees, said Roy Bavaro, director of marketing and brand development.
But it's up to general managers to implement personal touches that keep the staff engaged at individual stores. Dick Hsu, who has run DCH Tustin Acura in Southern California for 24 years, said if workers go beyond the norm in helping a customer, they might get a $25 gift card. But they get it at the midmonth staff meeting in front of their colleagues in between birthday and anniversary call-outs. "The card is just a token," Hsu said. "The real reward is the pat on the back."
The approach works. Hsu's Tustin store and DCH Millburn Audi in Maplewood, N.J., were on Automotive News' 2012 list of the 100 Best Dealerships To Work For.
Even the evolution of the corporate name from Dah Chong Hong Ltd. in Hong Kong to DCH Auto Group reflects Lam's commitment to blending tradition with new twists.
The initials are the same, but in America, DCH is also a trademarked marketing slogan: Delivering Customer Happiness.
And Lam has reached outside the family for talent. For example, Susan Scarola, now vice chairman, became DCH's first non-Chinese CEO in 2007 after 21 years with the company. She launched a woman-friendly marketing blitz, Test Drive the Dealer, emphasizing service.
And current CEO George Liang was hired from Nationale Bank de Paris in 1988.
Lam's daughter Christine is not active in the company, but son Brian Lam is general manager of the company's original store, Paramus Honda, and recently added new responsibility for other dealerships.
Shau-wai Lam also has gone outside to hone DCH's philosophy. In 2007, brand guru Larry Light, CEO of Arcature and the architect of a 2002-05 McDonald's restaurant turnaround when he was global chief marketing officer, interviewed hundreds of DCH employees and vehicle shoppers on what they want in a dealership experience, either shopping or service.
From that DCH created a five-point corporate pledge at the core of what Lam calls "the DCH Way." Employees try to make customers feel welcome and respected, that their time spent was productive and they can feel confident about their decision and enthused about their experience.
The company's approach helped it weather the recession. But sticking to policy can be a challenge, Lam said, particularly when it comes to the trade-off of maximizing profits on a purchase transaction and long-term profitability.
"It's better to let the customer win." he said. "If you always want to win, then the customer becomes a loser and the relationship with him will not last long."
That's hard to stick to on a daily basis, Lam acknowledged.
"We have preached the philosophy, but it must be practiced day in and day out," he said. "We still have things to do. There's always room to improve."
Dealerships: 29 stores in New Jersey, New York, Connecticut and California
Chairman: Shau-wai Lam
You can reach Jesse Snyder at jsnyder@crain.com.
