Minority dealers are adding import brands

NAMAD, at 34, wants more stores overall

Texas dealer Carl Barnett is among the minority dealers now heavily invested in import stores who got their start through programs operated by General Motors, Ford and Chrysler.

MIAMI BEACH, Fla. -- After taking a disproportionately big hit when General Motors and Chrysler closed more than 1,600 dealerships in 2009, minority dealers have been adding import franchises.

Still, the total number of minority stores remains inadequate, the National Association of Minority Automobile Dealers says.

"Some manufacturers are doing a better job than others," said NAMAD President Damon Lester during the organization's annual membership meeting here last week."But when you look at NAMAD -- we're celebrating our 34th year of existence -- we still have not increased our numbers to over 5 percent representation."

NAMAD Chairman Tom Moorehead, who operates BMW, Mini and Rolls-Royce dealerships in Virginia, said import manufacturers are providing opportunities for minority dealers "but not in great numbers."

"We're working very hard to get more of us on this side," said Moorehead, who was trained by GM and started his career as a Buick dealer in 1988.

Indeed, import brands are partly offsetting the decline in Detroit 3 stores. Many minority dealers complained in the 1990s and early 2000s that they could not acquire import stores, but today they are expanding their companies with brands such as Fiat, Toyota, and Volkswagen.

Dealer Carl Barnett also cut his teeth in the auto industry at GM. He worked on the assembly line at a Buick factory in Flint, Mich., and then transferred to Detroit Diesel when it was owned by GM.

In 1987, he entered GM's minority dealer development program and over the years, he operated three stores that sold Oldsmobile, Pontiac and GMC vehicles. Today, Barnett has no GM brand dealerships.

He is among the minority dealers now heavily invested in import stores who got their start through programs operated by GM, Ford and Chrysler to recruit, train and invest in dealerships.

GM’s Peterson: Trying to match dealers, stores

Many minority dealers lost their domestic stores during the recession when GM and Chrysler filed for bankruptcy protection and GM shed the Pontiac, Saturn, Hummer and Saab brands.

Import brands are reaping the benefits of the Detroit 3's labors.

According to NAMAD, 548, or 53 percent of the 1,028 dealerships owned by minorities at the end of 2013, were import stores.

"The dealers that you see doing well with the import stores were trained by the domestics," said Barnett, who operates two Volks-wagen dealerships, one Mazda store, and a Ford and Lincoln dealership, all in Texas. He made his comments during the NAMAD meeting.

"There should be more focus on keeping these guys that they trained," he said. "They should look at us as an investment and protect that investment."

Though minority dealers lost domestic stores disproportionate to their numbers during the worst of the economic downturn, the Detroit 3 still had the highest numbers of minority-owned dealerships at the end of 2013, according to NAMAD data.

Ford had 164 dealerships owned by minorities, closely followed by GM at 163 and Chrysler at 153. Toyota had 85 minority-owned dealerships last year -- the highest among the import brands -- followed by Nissan at 62 and Honda at 48.

But from a percentage standpoint, import brands were ahead.

For example, last year minorities operated 10.4 percent of Lexus' dealerships, 9.3 percent of Infiniti's dealerships and 6.9 percent of Volkswagen's dealerships, according to NAMAD. The only domestic brand to exceed 6 percent minority ownership was Chrysler at 6.4 percent. Ford's minority store ownership stood at 5.0 percent last year, and GM was at 4.8 percent.

GM remains interested in recruiting and retaining minority dealers, said Eric Peterson, head of GM diversity dealer relations.

He said GM awarded 21 dealerships to minorities in 2013 and "our goal is 25 and our stretch goal of 30" this year. So far this year, Peterson said, GM has added 13 minority-owned dealerships. About half are owned by African Americans.

"We're trying to match dealers and their resources against what our opportunities are," he said.

But import companies are seeking minority candidates as well.

Brian O'Malley, Hyundai Motor America's director of dealer development, said his company is doing "OK" in diversifying its ranks. But he said Hyundai still needs to improve, especially when it comes to African-American dealers. Minorities own 45, or 6.3 percent, of Hyundai's dealerships. Seven Hyundai stores are owned by African Americans.

"We want our dealers to be more reflective of the customers they are selling to," O'Malley said. "In certain areas we are not, and we need to improve."

Jay Rosario got his training through Ford's dealer development program and is now the owner of Wesley Chapel Nissan in Wesley Chapel, Fla. He owned Rolling Hills Ford in Clermont, Fla., from 1998 until 2004 and sold the store when his business strategy led him to a different franchise in a different part of Florida.

"I'd love to be a Ford dealer again," Rosario said. "It's always been a great product."

You can reach Arlena Sawyers at asawyers@crain.com



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