Subaru dealers get back to the basics of selling

In his heart, Jeff Williams has always been a salesman. The vice president of Williams AutoWorld in the Lansing, Mich., area, which includes Williams Subaru and nearby Hyundai and Volkswagen-Audi stores, believes Subaru is well-positioned for the future, especially now that it is able to produce enough vehicles to keep up with consumer demand.

Williams, 61, is in his second year as chairman of the Subaru National Retailer Advisory Board. The brand is benefiting from the popularity of its top three nameplates, the Forester, Crosstrek and Outback, and factory efforts to keep them fresh, but now that dealers have cars back on their lots, he said, it's worthwhile for them to teach salespeople the basics of selling again.

Williams spoke with Staff Reporter Larry P. Vellequette about the business of selling Subarus. Here are edited excerpts.

Q: What was 2023 like for Subaru dealers?

A: 2023 has been a good year, a rebounding year, as I like to call it. We ended up about 14 percent at 632,000 vehicles for the year, and that was held back still by production constraints and automotive supplier constraints. You've heard the litany of issues: They could build more cars if they could get more parts, and when they get more parts, they run into some other type of production issue that every manufacturer is facing right now.

But since the fourth quarter, things have really started to smooth out, and the transition from 2023 to 2024 will run very smooth, and then production will be on an upward climb in 2024. We also introduced our first-ever EV, the Solterra, in 2022 as a 2023 model year, and the factory is forecasting that we should be able to double Solterra sales in 2024, plus we have four more EVs coming on the horizon next year.

The new Forester debuted in November at the Los Angeles Auto Show. What does that vehicle mean for your dealership, and what is that redesign going to bring into your store?

The Forester is one of our bestsellers. It's one of our top volume models in the Subaru lineup. The Forester, Crosstrek and Outback have been our big three for the Subaru brand, followed by the Ascent.

There have been a lot of folks that have waited through COVID to buy. They knew that there was a new model that was coming out, and they're very excited to see it. I anticipate that we will be taking orders very shortly. But I think that the new 2025 Forester will increase sales for the model, not only for Subaru, but for us as well.

Have you been surprised at how well Crosstrek has done?

The Crosstrek has really been the belle of the ball. It's a model that we thought would give us some incremental sales, but we didn't realize that it was going to lead to being one of our volume models. It's very interesting, the customer base for Crosstrek. We see younger folks buying Crosstrek, and then maybe a couple of years later, they graduate to a Forester and then maybe to an Outback because their family grows. Or we see it go the other way, where some retirees that have had several Outbacks or Foresters and now it's just the two of them and they're empty nesters and they don't need the big car anymore; they want to downsize a little bit, and to do so, they look at the Crosstrek.

It's really been kind of interesting. I didn't anticipate the second scenario happening as often as it does. I thought that that car would appeal more to the younger buyer, and it's appealing to both. It's appealing to the younger buyer — it still skews younger, the demographic still skews younger — but there are some of the baby boomers that are buying that vehicle as well, which is, I think, extremely interesting.

If we look at 2023 and now into 2024, there's something very unusual for Subaru dealers: You actually have inventory on your lots.

It's funny that you mention that. Yes, that is true. We haven't had inventory on our lots for years — and now inventory levels are still low, still very small, and I still don't have enough to just fill the front row, but the middle of the parking lot is still empty.

What's your opinion on that?

It's great that we're turning our inventory. It keeps our inventory holding costs down, our floorplan down.

But it is a problem with some customers who want to go on a lot, they want to see some availability, they want to see an option, they want to see colors. They want to sometimes come in and drive different models when we might only have two models in stock. And, of course, whatever two models we have, it's not the one they want to look at. Unfortunately, it just is what it is. And the color — you know, people like to look at colors. And that's a problem for some when you don't have inventory to show color.

Subaru has had lean inventory for many years. How has it altered the way Subaru dealers meet customer demand compared with other brands?

There's some dealer trading going on, but trading overall is down, substantially down. It's more a case of sell what's available. And because the inventories are low, we've done a better job of selling into the pipeline — down the road 30, 60 even 90 days, and our customers are more willing to wait, where the past customers have not been willing to wait.

They're like, "My lease is up in two weeks, so I need a car next week." But I believe that leasing has become so popular that customers now have kind of conditioned themselves. Years ago, it would always be, "My lease is up tomorrow, what do you have?" Now, they're coming in three, four months earlier and we're doing a better job as retailers servicing the customer, telling them when their lease is coming up and inviting them in to go over their options well in advance so they're not without a vehicle. Ten years ago, managing that was the exception, not the rule that it is today. So it's nice that customers are doing that and helping us plan a little better.

It's always nice to have sales in your pipeline, where you're selling 30 to 50 percent of your pipeline, and we've had some cases where up to 60 or 70 percent of our pipeline was sold. For dealers, that's candy in the stocking, so to speak.

Have you had to retrain your sales staff how to sell vehicles that are actually on the lot?

During COVID, there were some salespeople that left and not just at my Subaru store, but my other brands as well. So we recruited some new salespeople, and a lot of salespeople that we brought back in are people that are not from the automotive industry. The ones that we've hired have done a great job based on our training and the information that was available, but that's changed.

Now, we're going back into the normal years, the normal chaos of the car business, and some of the salespeople have some learning to do, some have some polishing up to do; they've developed some bad habits. So it's time to put the salesman cap back on. The sales follow-up has always been important, but what would happen is, a customer came in, they didn't buy, then that car tomorrow was gone. There were five buyers for every car. You had more buyers than you had cars, and now it's changing the other way. It's not a huge change just yet, but I believe that yesterday is on the horizon, and we're going to have to get back to basics. We're going to have to hone the ax, as they say, and get buffed up on our salesmanship and product feature presentations and finding out what the customer's needs and wants are.

How so?

Subaru has actually been a great help with this with their training in the dealerships. But really, selling is really nothing more than making sure that you're fulfilling your customers' wants and needs, as opposed to selling something that you want to sell; if you turn your sales technique to features and benefits, and how those features and benefits fit into your customer's lifestyle.

Customers today are very well informed because of the Internet, sometimes more so than the salespeople, if they're new. I tell people to just be honest. If you don't know the answer to a question, tell the customer you don't know, but that you'll go get the answer for them. The worst thing you can do is lose your credibility. You just can't lose your credibility when you're talking to customers these days.

How has fixed ops changed for Subaru dealers over the last few years, and last year specifically?

It's interesting, because it's kind of been a bell curve. During COVID, fixed ops was really slow. People weren't driving as much; they'd go from 15 or 20,000 miles a year to five to 7,000 miles a year. So instead of seeing a customer three times a year, we'd see them once a year.

Then, 18 months after COVID started to lift, boom! People's driving habits got back to normal. Not all — there are some folks that didn't venture out and their driving style did change. The work environment changed a lot of people's driving habits. So that certainly affected the amount of times that we would see customers coming into our service drive. And then what we saw when it really lifted and vaccines were available, then we started to see it really ramp up, because people were taking vacations and they weren't flying. They were hopping in their cars and [vacationing].

But it didn't last, because inflation started eating into people's budgets, and customers had to allocate their dollars to what worked best for their families. We also had the UAW strike here in Michigan, and that always affects people's spending habits, so we've seen a slight dip, but some cold and snow here, and things will get back to normal pretty quick.

Do you see Subaru following Mazda's path and turning to Toyota Financial Services to serve as a new captive?

We've had a great relationship with Subaru Motors Finance. They have been great partners for a lot of years, and they've done a lot of great things for Subaru as a brand, for the retailers and, most importantly, for our customers. Our customers have liked working with them. Chase is a big, big bank — there's stability, there's the ease of making payments. And I think our relationship with Subaru Motors Finance is going to continue, and I hope it continues. But it's a changing market. We've seen a tremendous amount of cash buyers over the last 18 to 24 months. There's a lot of money in the market, for sure.

Have Subaru dealers had trouble recruiting employees like everyone else?

Employee recruitment is a 24/7 job, and has been for several years. During COVID, it was even more difficult. Our biggest challenge has always been the hours we work. The younger folks, they don't want to work weekends. They're talking four-day workweeks, five-day workweeks and, respectfully, if that's what they want, I'm good with that. But you picked the wrong field; this isn't a four-day-workweek job.

Is it different operating a dealership in a college town?

I believe it is. I believe that it offers us a lot of opportunities. We get a lot of kids that buy cars here after they graduate. We get a lot of kids that buy a car, or their mom and dad buying a car when they graduate and/or when they go to school, and then they service it with us. We're grateful for both those opportunities.

We cater to the faculty and staff at Michigan State University, and we have a lot of faculty as customers. And I'm grateful for them. Our products fit their lifestyles and fit their wants and needs. For us, it's been a great relationship over the years. I grew up in East Lansing, about a mile from campus. There are all kinds of positive, positive things. There's more positive than negative.

Does being in a college town impact recruitment?

It used to be that you went to school for a higher education and to eventually get into middle or upper management and make a six-figure income. Now you see kids going to school just for the party and they come out with an advanced degree in basket weaving, making $40,000 a year and carrying $200,000 in student loans. They're immediately behind the eight ball.

I think career path is a critical decision that young people have to make. I believe in higher education, I really do, but I have more college-educated employees working for me that aren't in anything near what their field was. But if you don't get the education in a field that is growing and offers career opportunities, at a higher scale of pay, then I think you might want to reconsider.