Mike D'Amato became a Nissan dealer at what looked like a challenging moment. He opened for business as Nissan of North Olmsted, near Cleveland, in the summer of 2007, just as the industry was sliding into trouble. But D'Amato, now 50, was armed with a positive attitude.
He may have been new, but he was no stranger to retailing. A former West Coast field manager with Toyota Motor Sales U.S.A. Inc., D'Amato had crossed the fence to serve under two powerful Midwestern dealers starting in 1997. The first was Chicago dealer Bob Navarre; the second was Detroit megadealer Roger Penske. As an area vice president, D'Amato ran Penske's operations in Cleveland, which consisted of 10 dealerships and service centers. "I was getting the itch to be my own boss, and Roger let me do it," D'Amato says. "He allowed me to buy this store, which he didn't have to do."
Despite the heat of the recession, the disappearance of the truck market, the national financial crisis, the doldrums of 2010 and the natural disasters of 2011, the store has prospered. D'Amato, the 2012 chairman of the Nissan National Dealer Advisory Board, says he's satisfied as a single-point Nissan dealer. He might consider a second store nearby -- preferably a second Nissan point -- but no more than that.
"I get up every day and drink the Nissan Kool-Aid," he says. "If I had more than two stores, I couldn't put my hands on it every day. It takes a while to build the culture of a dealership. And I'm one of those dealers who wants to be there involved every day. I like to appraise cars, talk to customers, put the plates on, and at night, I'm picking up cars at customers' houses to bring in for service. That's the way I want to do business."
D'Amato spoke with Staff Reporter Lindsay Chappell.
You bought your dealership in 2007, just in time for the economic meltdown. You must have had some doubts.
I didn't know any better! A year into it, in 2008, I attended my first regional meeting. One of the older dealers warned me: "This is just like 1980. You have to cut your advertising, cut your inventory and cut your personnel."
But I thought: Why change what we're doing? I called back to the store and said, "Order more cars, order more advertising and hire more people."
We chose not to participate in the recession.
That's pretty contrarian.
It has worked out great for us from the beginning. The store was pacing at about 700 new vehicles a year when I took over. We ended up with 967 the first year. We did 1,400 the next three years, and last year we did 1,562. We haven't had one slip- up at all. I wish every year could be like the past four.
I tell my people not to watch CNN to hear about the economy and not to listen to their neighbors. Let's not watch the economic indicators. Let's focus on the big stuff. Let's focus on the 85 percent of the customers who are working instead of the other 15 percent.
I believe your attitude will set you free.
What do you predict for 2012?
It's going to be a good year. As I said, I don't dwell on economic indicators. But there is some confidence back in the industry, despite the tsunami. You see jobs coming back up, and the banks are lending again.
I don't get too caught up in the big-picture stuff. I believe you have to focus on what's in front of you, and that's the guest and the associate. When you take care of your guests, the business will follow.
You mention the banks -- are you seeing an easier time in getting customer credit approved?
Yes. But I have to say that NMAC [Nissan Motor Acceptance Corp.] never got out of the game. They've kept us competitive. We were fortunate all along to have a captive that could dance.
They've been a fabulous partner for the past four years. They stepped up to the plate and kept us in the money while some of the other guys were getting out of the business.
Subprime lending continues to lag. Is that hurting you?
Sure, we see it. But it's not 30 percent of my business. I'm in a good market here in the Cleveland area. Maybe we're not as impacted as other guys who are in tougher markets.
Despite what you hear about Cleveland, it's a great town, with good schools and a good cost of living. It's not like I'm in a really high demographic area, but we see a good median income.
In general, credit has clearly loosened up. But, quite frankly, I think that during the past four or five years, if somebody should've got bought, they got bought.
What are the biggest opportunities coming from Nissan?
There are a lot of things coming at us. Our market share has been increasing for the past few years. I think we've got to continue to grow sales and gain market share. And we're going to launch three big-volume products this year: the Altima, the Sentra and the Pathfinder. Those are big-volume products with tremendous upside for us.
And then after that, we have another three or four next year. The arsenal is absolutely full. Nissan didn't back off of new-product development during the downturn, and we're going to start reaping the benefit of that.
The planners believe that with the changes to the Pathfinder, it could grow back to the volumes that Nissan used to sell -- 70,000 or 80,000.
I think it will be 100,000. Look at the competitors. It's a huge segment. People come in looking for a crossover with three rows of seats, and we just don't have it. Look at how many Pilots, how many Enclaves and how many Highlanders are sold, and we're not in the segment. We've got 17 or 18 models, but that's one we don't have.
Another promising vehicle is going to be the Rogue. We're going to get domestic production of the Rogue. And when we do in the next generation, there will be more upside to that model.
Also look at what we have to gain with the Sentra. In some markets, like the Midwest, compacts sell one-to-one with mid-sized cars for Honda and Toyota.
We sell [nearly] 269,000 Altimas and [less than] 120,000 Sentras [in the United States]. So this next generation is going to get us a lot closer to the competition.
So you ask what the outlook is. It's launching new products, increasing sales, growing market share, more throughput and improving customer satisfaction.
The company has been talking about improving the "sales satisfaction" part of the Nissan experience, which scored very poorly two years ago in J.D. Power's study. But Nissan improved in the study last year.
We moved from last place two years ago to basically average. That's a huge jump for one year. It's because of all the programs we have in place.
We had a program called "Touchpoint Review," where they went in and inspected all the facilities. We have a new retention program. Express Service has been rolled out. There is an owner loyalty program in place now. Nissan has attacked it on many different fronts to give us a toolbox to service and retain the customer.
Has it been clear from the factory that they really want the dealer body to improve?
Oh, it's crystal clear, believe me. They've made our goals very clear, and the dealer body recognizes that they're right. Al Castignetti [Nissan Division chief] doesn't mince any words.
Nissan has said that, despite the launches coming, there won't be a significantly higher ad budget.
But there is more marketing coming. They will sustain the launches. But more than that, the regional marketing associations are going to get significantly stronger. The budgets are going to be increased pretty dramatically this year. That's something the dealer board has been working on. We want to get our throughput and share of voice up -- not just through their investments but through our tier-two advertising.
When will that kick in?
We'll see it with the new fiscal year starting in April. That's a big impact. Now, every market will be different, but all of them are going to go up across the country.
We need to do this. [Nissan brand had 7.4 percent of the U.S. market share last year], and we want to go to 10. It takes share of voice to make that happen. And the dealers are willing to participate in that.
Nissan did very well in 2011 with older models. The Altima and the Sentra are both at the end of their model cycles yet saw double-digit increases. What was happening with those older models?
A lot of factors. Quality has never been better, and the marketing is fabulous. And Nissan management did a great job with putting national and regional money and tactical money into helping us pull the vehicles through the system. They're not pushing vehicles on us -- we're pulling it.
Think about this: The average Nissan dealer is having a record profit year, and we've done it with aged products. Imagine when we get the fresh products. It will be Katy-bar-the-door.
How were communications with the factory during last year's earthquake and tsunami?
The Nissan management team did the best job of getting product to the market. They did things most guys wouldn't do. They were getting parts put on airplanes to get them over here to keep plants running. They were finding other suppliers.
Did we have exactly the product mix we wanted? No, but we had cars when nobody else did, and that's a tribute to Nissan. Those guys are really good at knowing how to get through a crisis.
What could the factory do to help you be more profitable?
We'd always say give us better margins and more money. But the real key is product. Product is always king. That's one thing we've got coming is more product. As I said, they never backed off of product development. The fruits of that are coming this year and next year. c