NEW ORLEANS - Members of the nation's largest minority dealer group handed out bouquets to some import manufacturers and brickbats to others during their annual meeting here last week.
National Association of Minority Automobile Dealers members grilled representatives of American Honda Motor Co. and BMW of North America Inc. about what they see as the companies' lackluster efforts to provide dealership opportunities for minority candidates.
The group applauded Toyota Motor Sales U.S.A. Inc. and Mitsubishi Motor Sales of America Inc. for their recent efforts to add minority dealers. On June 19, Toyota announced that it had awarded three Toyota franchises and one Lexus franchise to African-American dealers. In January, Mitsubishi committed to increasing its minority- and woman-owned dealership count from its current 10 percent to 15 percent over the next five years.
NAMAD President Winston Pittman said he is pleased that Toyota has recognized that a diverse dealer body is crucial to the company's continued success.
'They've made some commitments to NAMAD and the minority community as a whole, and I commend them for that,' Pittman said. 'Mitsubishi has made strides. Other import manufacturers have not come to the table and we are not pleased.'
NAMAD members were particularly peeved at Honda and BMW because both companies had announced programs to include more minority dealers. Honda made its announcement in September 1996, BMW in September 1995.
Neither program has yielded much fruit.
Axel Mees, general manager of BMW's southern region, said he is 'very dissatisfied' with the progress that the company has made in terms of diversifying its dealer network. But he said the company has made some efforts.
For instance, over the last 15 months, BMW exercised its right of first refusal four times when BMW dealerships were up for sale, and offered those stores to African-American dealers. However, those dealers turned down the stores because they either could not afford them or thought the financial commitment was too great.
Mees said it takes $3 million to $5 million to buy the land, construct a building, finance inventory and have working capital.
'The plan is to have more African Americans and Hispanics; we have to do a better job,' Mees said. 'Our dealer organization should mirror our customer base.'
NAMAD: MAKE CONCESSIONS
NAMAD Executive Director Sheila Vaden-Williams said that if BMW is serious about diversifying its dealer body it must be willing to make some concessions.
'Our position is that after years and years of not being at the table to play the game, it would be appropriate for BMW to consider some concessions first of all in blue sky or some type of subsidy or support,' she said.
'For example, Toyota has said it will be willing to absorb a portion of blue sky. We think that's an appropriate measure. We urge BMW to take such measures under consideration also.'
Earl Campbell, senior manager of market representation at Honda, said Honda has secured 'letters of intent' from Eve Slapp, who will own a Honda store in Devon, Pa., and from Utah Jazz basketball players Karl Malone and John Stockton, who will be partners in a dealership named Stockton To Malone Honda in Sandy, Utah. Malone, who is an African American, will be the majority owner. Slapp, who is white, owns a Subaru store in Newark, Del.
Campbell said that despite Malone's celebrity status, Malone is a qualified African-American dealer. He said Malone is an investor in a Toyota store in Albuquerque, N.M.
Since Honda is not significantly expanding its dealer network in the near future - maybe a dozen new points over the next three to five years - the most common way to secure a Honda store is to find a dealer who wants to sell, Campbell said.
However, most transactions are handled privately between the seller and the buyer. Campbell also said that except for the Pennsylvania and Utah points, Honda has not added any new points since it announced its program to NAMAD last September.
'The only two opportunities we added were female and minority,' he said.
He said Honda has trained its field organization to look for potential minority dealer candidates and dealers who want to sell their stores.
About 80 of NAMAD's 425 members attended the conference, about 20 more than attended last year's gathering.
NAMAD members agree that the Big 3 have done a better job helping minorities get dealerships than the imports, but the Big 3 still have a long way to go.