WESTBROOK, Maine — Adam Lee is chairman of Lee Auto Malls in Auburn, Maine, which has seven new-car locations selling Honda, Toyota, Nissan, GMC and Chrysler-Dodge-Jeep- Ram and 13 used-car stores. The group sold over 10,000 new and used vehicles last year and is Maine's No. 1 used-car seller.
The dealership group is a strong supporter of firefighters and the environment. In fact, Lee, 58, has testified in favor of strong corporate average fuel economy standards at the state and federal levels. The third-generation dealer spoke with Staff Reporter Jennifer Vuong at his Dodge-Chrysler-Jeep-Ram store here about selling cars and supporting the environment, as well as reasons dealers shouldn't pay third-party websites for leads.
Q: Aren't you the No.1 hybrid seller in the state?
A: Yeah. It really started in '01, when the Prius first came out. We forget: The first year it came out, it was not a hit. People were deeply suspicious. They didn't get it. What does it do? Is it electric? Do you plug it in?
I saw it and thought, gee, here's a nice Toyota that gets 50 miles to the gallon when there was very little out there that got more than 30.
And that resonated here?
Maine is a very green state. It's been important to everyone, Democrats and Republicans, in Maine to protect the environment.
We made a point to go to every clean-car show, every church fair, whatever it was. If somebody wanted us to bring one, we would show up with a Prius. At that time, we were the third-smallest Toyota dealer in the state. But we were always the No. 1 hybrid seller because we were involved with the community of people who were buying hybrids.
I think it makes a difference. If you have a real commitment to whatever the community is — whether it's environmental or whether it's firefighters, whatever it is — they tend to remember and show up when it's time to buy a car.
Talk about the environment.
If you grow up in Maine, there's a good chance you grow up spending time in the woods. I don't hunt but we have a really strong hunting culture. And it's good. People in Maine hunt and they feed themselves. But I did grow up camping and spending a lot of time in the woods. And that really influenced me to want to be involved in organizations that try to protect the woods, our water, our air.
You've been active in the CAFE debate.
I was very involved with lobbying for raising CAFE standards. I've testified [not only] in Maine but also Washington and California and Florida. I always felt that if the largest source of pollution in most states is cars, that we would be better off if they could make cars that were a little cleaner.
Is there any conflict in selling gasoline vehicles and being pro-environment?
There really isn't. We're the largest Jeep dealer in the state and we're also the largest Prius dealer.
People are going to buy what suits their lifestyle. But if you gave the customer the choice of a Jeep Grand Cherokee that got 18 miles per gallon or 24, they'd buy the one that gets 24. If you gave them a choice of a car that gets 30 or 40, they'll buy the one that gets 40.
So I don't have any qualms about selling Jeeps. I have qualms about manufacturers not producing, or trying as hard as a lot of people think they could, to make a cleaner car. And they are doing it. There's a ton of great cars out there right now.
Why do you drive a Tesla versus, say, a Nissan Leaf?
I wanted a car with a bigger range.
But Tesla doesn't sell through dealers.
If they want to try and go it alone, then they should. If they want to have an affiliation with a chain of dealerships or a franchise, they should do that, too. I don't believe it opens the door to the other manufacturers suddenly trying to go it alone. I think they have to make a choice: You go it alone or you have a dealer network. But you can't have both.
If Tesla decided to sell through dealers, would you sign up?
I wouldn't have any interest in it. In Maine there's a limited number of people who will or can spend that kind of money on a car, even the Model 3, which is coming out slowly. I'm not particularly optimistic about the business model they have. They've never made money.
Do you see the overall EV/hybrid market growing?
I do. Everybody is coming out with something. I think there's perhaps more hype than volume going right now. We're still years away before we see really big numbers. We're looking at the 1 and 2 percent range, if that. But I think it's exciting that everybody is coming out with something electric. They're developing cars that go 200 to 300 miles. We need a car that goes 200 miles that really costs $30,000 or less.
We see news stories pitting the Tesla Model 3 against the Chevrolet Bolt.
Competition is good. When the Prius was the only show in town, we got sticker price for a car. There's a lot of competition now. It's better for the consumer and it forces the manufacturer to try a little harder.
What do you think of President Donald Trump's decision to review the CAFE rules and his effect on the industry?
Starting with CAFE, I think it's a terrible mistake. And America, we shouldn't have to concede all of this to Toyota and Honda.
I am not a Trump supporter, but I do share some of the sentiment [of his supporters]. Flint, Michigan, helped make GM great. And in the end they got repaid by GM closing their factories and moving to Canada and Mexico and elsewhere. That's not right.
There's something wrong that BMW and Honda and Toyota and a whole bunch of other brands have figured out how to successfully make cars in this country and we are moving our manufacturing out of the country. So to that, I am somewhat sympathetic to his efforts to get them to pull back.
What are you doing to hedge against a slowing market?
Controlling inventories. If you're not careful, you wake up and have a 90-, a 120-, a 180-day supply of cars. We try and run as tight as we can. Honda, we're always short of cars. We'll take whatever we can get. At Toyota, we are often short of cars. But some manufacturers, if you're not really careful, you end up with way too many and that will kill you. It only takes a couple of months of a slowdown to suddenly realize you have a ton.
Why do you say that third-party vendors should be paying dealers?
When you watch TV news, there's actually a product, which is the news. That gives them the ability to sell advertising, because I'm watching the news. I'm not watching the ads.
Cars.com and Autotrader, they essentially don't have a product. Their products are my cars. Without my cars they have nothing. So how they manage to convince us to pay them, to put our cars on their website, so they can also sell advertising, is bizarre.
I don't need them. I have a website. And if every dealer promoted their own website or every state dealer association [were to] develop a website that is similar [to the third-party ones], it'd be 10 percent of what we'd spend on these other services.
In the end I feel like they have found a way to insert themselves in between us and the consumer without bringing any real value. You can't see anything on their site that you can't find on a dealer's website or state-run websites.
Do you use third-party sites?
We do. Here's the challenge. We have general managers and they are entrepreneurs. Some of them want to use it. I argue till I'm blue in the face about it. But if they're really determined we tend to let them do it.
The dealerships that don't use it, we have not seen dramatic drop-off — we're still in business. These are separate from CarGurus and TrueCar and the buying services, which to me are even worse.
Not only do they not bring value to the customer, in the end they have to cost them money. If we have to pay $500 to TrueCar, when the customer buys a car, in the end someone's paying that $500.
We don't use any of those buying services. That's where we have drawn the line and said, "No, we're not doing that."
Which sites do you use?
We use Autotrader and Cars.com in a few of our stores. They produce very little. There are months where we'll sell 800 to 900 cars and not a single sale [is] attributable to Autotrader or Cars.com. We use Edmunds and Kelly as links on our website if someone wants to look up the value of their car.
Any advice to other dealers?
We could all stop doing the kind of ads — and we pretty much have — where we're standing in front of a row of cars and we're screaming about a price or a discount. We have made our industry look like clowns.
We had in Maine, years ago, a dealer named Jolly John. Go find some of his old ads. He was not dumb. He was a friend, a wonderful man. He has since passed away. But his whole shtick was he was sort of a buffoon. And that worked for him really well.
But mostly we could raise the image that car dealers have by stopping the screaming and shouting and the ridiculous stuff.
And the other thing I'd say: Find a good cause and stick with it. I think that customers appreciate that a dealer puts their marketing money behind something [like firefighters] instead of some moronic whatever.
How much do you allocate to marketing?
I don't know the percent. Too much.