As diversity initiatives are debated in the political arena, automakers have remained steadfast in their efforts to build inclusive environments and increase the number of minority dealers in their retail networks, said John Graves, chairman of the Rainbow PUSH Coalition's Automotive Project.
Automakers have added more than 100 minority-owned dealerships in each of the last two years, bringing the total to 1,476 at the end of 2022. That's about 9 percent of the 16,773 franchised dealerships in the U.S.
The number of stores owned by African Americans rose 7 percent last year, to 313.
Graves said automakers have been growing their minority dealer ranks because it makes good business sense.
He spoke with Staff Reporter Vince Bond Jr. about the auto industry's ongoing push to diversify and opportunities for minority suppliers in the EV space. The coalition's annual automotive summit this week in Detroit will focus on the EV transition, continuing a trend from the last few years. The event's theme is "Affirming Diversity in the EV Sector." Here are edited excerpts.
Q: What is the thinking behind the theme of this year's conference?
A: We've had electrification discussions the last two years, but we're trying to make sure OEMs leave the door open for opportunities and they're doing everything they can to make sure that African-American and minority suppliers have an opportunity to participate. On the other side of the coin, we're making sure we're doing all we can to educate African-American and minority suppliers that this window is closing. So you've got to retool with personnel, you have to be ready for the opportunity, you've got to be ready for the moment.
With electric vehicles, the parts are going to be reduced 30 percent to 40 percent. The supply side is going to change tremendously, so we just want to make sure we're doing everything we can. At some point, that door's going to shut. Companies such as Piston Group, they've been in the EV space for almost 10 years. They saw it coming. They've been fortunate and blessed to have the resources to do that. But some of the other companies have not made the investment in personnel and have the appropriate human capital to address the demand that is right around the corner.
There will be a panel at the conference on doing business in Africa. What will be the focus of that discussion?
Dealerships. We have one speaker, (Mamadou Diallo, senior vice president of auto sales for American Honda), that will lead that panel because he is from Mali. He has a sensitivity to the lack of African dealerships in Africa. What we're trying to do is to make sure there's a discussion that the individuals who are of means in Africa understand what it takes to get a dealership.
It's not something that's going to happen overnight, but [we want to] educate the OEMs, and also to attract investments from the governments to aid potential dealers in the continent because it's certainly needed. When you begin to do research, you find there are not a lot of dealerships.
In the U.S. over the last two years, more than 100 minority-owned dealerships have been added. How do you feel about that?
I'm delighted to see that. In addition to that, we're delighted to see African-American dealers are growing also. [The National Association of Minority Automobile Dealers] was established for African Americans, and now we've dropped behind [Hispanics] who have twice the amount of dealerships that African Americans have. But the fact that minorities are growing is something worth shouting about, because we are a country in a quilt of many, many nationalities. OEMs are looking at this, not through a social lens, but more so from a business lens. It makes good business sense.
It seems like there's been a backlash against diversity, equity and inclusion programs. What kind of challenge does that present to you?
I don't think that it is something that has permeated throughout the auto industry. Matter of fact, in the DEI space, OEMs have been filling the position of diversity heads.
I would say 90 percent of the companies that participate in the summit have a strong DEI program. When I say strong, they either have a plan that we've approved, or they're already in that space and they're doing more and more.
We visit all of these OEMs throughout the year and they tell us about their successes, where they're trying to exercise first right of refusal [for dealerships] in the states where it's legal. They've gone to the point where, in some cases, they've been sued and won. So I think in the auto space, these companies are entrenched. I think they recognize they have to have a reciprocal relationship with consumers.
Last year, we talked about you trying to build relationships with new EV companies such as Lucid and Rivian. Have you made progress?
We have not made any progress. We have a dual track. We want to advance that relationship. In addition, we've got to have some type of relationship with [SK On], Samsung, the battery manufacturers. We think that is an opportunity for diversity. We are looking in that area, as well as seeing how we can develop relationships with Rivian, Tesla and others. We have our eye on the ball. We know that EVs is where we must focus.