Why DCH Auto Group’s overhaul should give all dealers pause

When the vice chairman of a large dealership group says the company’s business model is “outdated,” you listen.

You listen because if the big player admits to needing change, it probably means other dealers should examine their business models and make some tweaks, too.

Susan Scarola, vice chairman of DCH Auto Group, said the New Jersey-based dealership group is in the process of reviewing its entire business model. Expect to see changes, including the way it compensates salespeople and its digital presence, she said.

“We haven’t made changes yet, but we’re in the process of reviewing our whole business model and updating it,” Scarola said on Sunday at the National Automobile Dealers Association convention in New Orleans.

DCH evolved from Dah Chong Hong Ltd., a Chinese food and textile distributorship, which has a long history of adapting to achieve success. It 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.

Today DCH operates 27 car dealerships in New Jersey, New York, Connecticut and California.

Scarola said DCH needs and will get a cultural and operational overhaul because customers want an easy car buying experience. DCH also wants to hire and keep top talent. The overhaul, which already has taken place at one of its dealerships, will make the stores more cost efficient.

For example, DCH wants to make it easier for consumers to conduct more transactions online by making dealership Web sites more interactive. And it is considering paying salespeople in a more salary-based manner rather than a commission-based plan.

“We think the model right now is outdated and consumers don’t want that model,” Scarola said.

DCH hopes to accomplish some of the changes this year. But Scarola said to stay relevant and competitive, change should never end.

“It’s a constant evolution,” Scarola says. “We either change or be left behind.”

That’s a message all dealers should listen to.

You can reach Jamie LaReau at jlareau@crain.com -- Follow Jamie on Twitter: @jlareauan



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