When it comes to financials, dealers want partners who understand the auto business inside and out.
Now, a new educational program from lending products provider NextGear Capital is training its field representatives to be those knowledgeable partners.
On Wednesday, NextGear Capital announced the creation of its Ambassador Program, which will provide certified training modules developed with industry experts, to further develop NextGear’s field representatives’ dealership business and industry knowledge.
"We care about our dealers’ success and know that they want a partner that understands their business," said NextGear Capital president Brian Geitner.
"By furthering our educational platform with various industry experts, our field representatives will gain expert knowledge and become ambassadors to the industry, allowing us to continue fostering consultative relationships with our dealers to ensure they remain successful," he said.
As part of the Ambassador Program, NextGear Capital said it is providing dealer training through various state independent automotive dealer associations.
The company is nearing the completion of its first ambassador training module, which is based on the NIADA's Certified Master Dealer program.
Developed in 2001, that program helps dealers manage their businesses with an emphasis on business planning, human resources, merchandising and financial management.
Led by Joe Lescota, NIADA director of dealer development, all NextGear Capital field representatives obtained certification through Northwood University upon completion of the two-day course.
"NIADA and NextGear Capital share the belief that an educated dealer is a successful dealer,” said Steve Jordan, executive vice president of NIADA. "As such, we were naturally excited to work with the NextGear Capital leadership to evolve the NIADA Certified Master Dealer program with them.
"NextGear Capital is known for building high-touch, consultative relationships with auto dealers and we feel this 'partnership in education' will have enormous benefit to our dealers long-term," he said.
Whether it’s the film industry or the auto industry, the shift in lead roles is hard to miss. The 2014 Oscars that took place a couple of weeks ago was truly a revelation of the changing gender role trends in films. More than one film nomination had strong female leads, enjoying almost all the air time as opposed to their male roles.
In the Oscar nominated film “Gravity,” Sandra Bullock played the lead role while George Clooney played the supporting role. According to an article in the New York Times, Ms. Bullock occupied almost 87 percent of the film’s running time and was the life of the film. This was an industry first and did not go unnoticed.
Women taking over lead roles is a step towards breaking the “stereotype” and reducing the gender gap. Just like the film industry, the auto industry landscape is also experiencing significant shifts where women are becoming the fastest growing car-buying segment.
Analysis on Professional Women at Dealerships
There remains a tremendous and visible gap in the number of women working in dealerships compared to the number of female buyers. The percentage of women working at dealerships is between 18 percent and 20 percent, while women represent over half of all purchasers.
Yet, many of the women are largely working behind the scenes at car dealerships in business development roles, service, social media, advertising, Internet and office administration. Women in sales roles are fewer in number.
The era when men sold cars to men is over. Today is the genesis of a diverse customer base. How can the needs of these buyers be met, and exceeded?
It’s Time to Mentor & Develop Women Leaders at Car Dealers
Who would have thought that male actors like Clooney would be playing a supporting role while the actress would be the lead? Just like this gender gap is being bridged in film, now is the perfect time for dealerships to implement the same strategy and groom women to be take on leadership roles.
According to CNW Research, of the 17,540 new-car dealers just under 3 percent are women-owned — a significant, grossly disproportionate under-representation.
By having women in leadership and executive positions at car dealerships, it will open up options for buyers to have more choice. In 2010, CNW Research found that when asked, 47 percent of women car shoppers would prefer to do business with women dealers — a huge upside for female-run businesses.
This leads to the bold question: Who will take on recruiting, training and developing women to become GSM’s, board members and dealer principals?
Editor's Note: Anne Fleming is president of Women-Drivers.com and is a guest contributor for Auto Remarketing. She was also recognized as one of Auto Remarketing's 2013 Women in Remarketing.
In the 2013 Chase Auto Finance Dealer Survey released earlier this winter, dealers were asked what parts of their business were seeing growth.
Out of the 262 dealer principals taking the survey, 207 of them (or an even 79 percent) said they were seeing growth in pre-owned sales. More than 56 percent of the 262 dealers said they were improving in service sales. (The survey was an online poll conducted among Chase Auto Finance's dealer base between Dec. 18 and Jan. 13.)
These two areas beat out all other categories, which included new sales (55.7 percent seeing growth), leases (38.2 percent) and service contract/warranty sales (48.5 percent), as well as the respective proportions for dealers who selected “none” (4.2 percent) and “other” (8.8 percent).
When asked what parts of their business they were seeing the most growth, more of the dealers pinpointed new-car sales (second-most commonly cited option at 29 percent) than service sales (third at 17.1 percent). Pre-owned sales still led the way at 41.3 percent.
As important as new-car sales, F&I and other areas of a store can be, strength in the service department and pre-owned ties into one of the measurements that NADA Academy considers in determining the health of a franchised dealership’s business.
When calculating the percent of the store’s expenses that are covered by service, parts and body shop gross profits, the standard dealers should aim for is 75 percent, says management instructor Les Abrams.
Taking it a step further is “total dealership absorption,” where service/parts/body shop gross profits and used-car gross profits cover the entirety of a dealership’s expenses.
“Rephrasing that, we’re saying, ‘You do not need to sell a single new car to break even.’ All your new-car gross profit will be net profit,’” Abrams told Auto Remarketing in a recent interview.
Doing this, Abrams said, gives dealers solid financing footing and allows them to maneuver through the ebb-and-flow of new-vehicle sales.
To learn more about the importance of the service department, see the print edition of the March 15 Auto Remarketing and stay tuned for the digital edition of this magazine.
Many reports have surfaced that contend Millennials are not interested in new cars and find these purchases less of a necessity than earlier generations.
That said, a study from Strategic Vision was released this week that brings up another potential reason Millennials aren’t on your lot. And the answer may be simple: money.
According to results from Strategic Vision’s New Vehicle Experience Study, even though there are many reasons why new-vehicle sales are slumping for younger buyers, there is one consistent factor — many simply can’t afford them.
Strategic Vision contends that the idea that “younger buyers do not purchase new vehicles because they no longer care about them” may actually be a myth.
“It could not be further from the truth. In reality, they tend to feel a deep emotional connection to their vehicles and would love to buy a new one. The main reason why they do not is because they cannot afford to do so,” company officials further explained.
The economic downturn of 2008 has set Millennials up for a hard introduction into adulthood, and Strategic Vision noted, “They are also on track to have a lower standard of living than their parents,” with student loans, and lack of full-time jobs creating a difficult atmosphere.
The company’s research shows that members of Generation Y may not be detached from the idea of owning a new car, but rather that younger buyers are much more emotionally invested in their vehicles than the average buyer.
“However, compared to those surveyed at the turn of the millennium, they are not looking as much for feelings of freedom, fun, or power from their new vehicle. Their focus has instead shifted more toward prestige and feeling that their needs are met,” according to the study.
So, once the Millennials can conquer some of their financial difficulties, they may enter the new-car market, as well.
Getting Millennials into New Cars
Strategic Vision also explained a few factors that dealers and automakers can focus on to lure Millennials into new cars.
The first point: focus on value.
“Value is what you receive in exchange for what you sacrifice. As the perceived value increases, so does the love that a first-time car buyer has for his vehicle. While it is important to have a low price tag for them, it is equally important for the vehicle to not be ‘cheap,’” company officials said. "Millennials expect a quality vehicle that can deliver them a sense of security for the amount that they are able to spend. If it is too hard to deliver quality at a low price, other methods can be used to increase the product’s perceived value.”
In other words, focusing on warranties and service packages can help buyers feel like they are getting a bargain and more for their money, even if the price tag is a bit higher.
According to the study, easy versatility might also play a key role in attracting younger buyers.
“Generation Y buyers want a vehicle that makes it easy to transport their friends and their belongings. They look for, and sometimes even demand, convenience,” the report from Strategic Vision says. “Show the vehicle in ways that are convenient, easy to use and hassle-free. That way they can see how it will help them to be more independent and to live their lives on their own terms.”
Lastly, if they are going to shell out for a new car, Millennials want to be able to make it their own — making customization very important.
Strategic Vision explained that many younger buyers are looking to change their image, and factors such as color coordination and equipment options can help them display their personality through their new-car purchase.
“The good news is that the underlying desire is there. When the time is right, they will purchase new vehicles, and they will love them. Someday there may come a generation of young people that does not care about cars. That generation has not yet arrived,” Strategic Vision concluded.
