DETROIT -- Take on well-heeled partners, such as minority private-equity groups or black athletes. Train at least one minority dealer hopeful.
Those are among the recommendations from the nation's largest minority dealers group to its members.
Members of the National Association of Minority Automobile Dealers are grappling with higher dealership price tags and who has the money to buy them -- the same issues all dealers face and the same issues that, in part, played out in Minneapolis dealer Morrie Wagener's decision to sell to an investor with no prior auto-retailing experience.
The recommendations are part of an action plan that NAMAD is working on to shore up minority dealership numbers in the face of lessened support from automakers.
"We've not done partnerships, we have not used venture capital and all these other investments," said Perry Watson, who took over as chairman of NAMAD in July. "We've got to get smarter about who our partners are. When you talk about $19 million, $20 million [to buy a dealership], we're going to need investment groups and pool our resources."
Watson, president of Lexus of Mishawaka (Ind.), made his comments during and after a panel discussion at the Rainbow Push Global Automotive Summit here this month.
Before the recession, each of the Detroit 3 had a dealer development program under which they trained dealer candidates and invested in stores with them. Over time, the dealers bought out the manufacturer's stake with profits from their stores.
General Motors still trains dealers and invests with dealers who need financial assistance through its Motors Holding division. But Ford Motor Co. and Fiat Chrysler Automobiles have restructured their programs to shift more responsibility for training and dealership financing onto candidates and sponsoring dealers.
Although NAMAD's plan is to ask every automaker to create a program to help dealers finance dealerships -- if they don't have one already -- Watson said minority dealers must take more responsibility to increase their numbers.
Training minority candidates and investing in stores with them are ways to do that, Watson said. Minority dealers have always trained family members and others, but NAMAD is putting more emphasis on that commitment, he added.
Minorities owned 1,096 dealership rooftops at the end of 2014, down 1.8 percent from a year earlier, data presented during a NAMAD conference in July showed.
Watson, who is African-American, is currently training his son, who is his general manager and designated successor. He is also training his general sales manager, who is African-American, and will send him to the National Automobile Dealers Association's NADA Academy. Watson is prepared to invest in a store with him. The plan would call for the candidate to buy out Watson's interest over time, similar to a manufacturer's dealer development program.
"I've got to walk the walk," Watson said. "If I'm asking my members to do that, then I've got to do it." c