Pub. 1 Issue 1

6 VIRGINIA AUTO DEALER www.virginiadealers.com consumers reward the sellers who are willing to make individualized price accommodations. Many McDonalds restaurants are franchisee owned, but no one negotiates over the price of their hamburgers. On the other end of the spectrum from hamburgers, are home sales. Homes, like cars are expensive and when consumers purchase a house, they are typically buying direct, and price negotiations are very much a part of the home buying process. Other than Tesla, all auto manufacturers use the franchisee distribution model, however, nationally there are a handful of factory operated dealerships, and interestingly, even these factory operated dealerships generally negotiate car pricing. Car pricing, and home buying is negotiated in the U.S., hamburger pricing is not, due to the nature of the good, not due to the chain of distribution. If there comes a time when consumers reward a car seller for pricing the car at $40,000 up front and do not reward another seller who has offered to reduce the price to $39,600, the US will shift to one price auto selling, much like we do with hamburgers. Some proponents of “factory direct sales”, will argue that cutting out the dealer mid- dleman will save the consumer money. Nothing could be further from the truth. Across the Commonwealth consumers have numerous dealership choices for every manufacturing make. I believe people intuitively understand that if one dealer owned every outlet in Virginia for a given make, the transaction prices on the sales of that make would increase, not go down. It is axiomatic that competi- tion lowers consumer prices. Whether a manufacturer or franchisee, operate the retail location, the costs of operating that location are similar. When those locations are owned by competing individuals, competition drives them to become more and more efficient and to lower prices. Where all locations are owned by one entity, whether dealer or manufacturer, competitive pressures decrease and the consumer pays more. I also think as we move to protect the franchise system, there will be issues to potentially divide the dealer body, and I believe that we will all need to keep our eye on the greater good. What is the importance of being a VADA member, what makes it beneficial? VADA is a great organization. The op- portunity to spend time with, and learn from, other dealers is one of the signifi- cant benefits of membership. Another is the leadership within VADA that makes such a difference. We have a forum for sharing ideas: what works, what doesn’t, what’s happening, but equally import- ant is that we have a way to get our concerns heard. Don and his staff do a wonderful job of educating legislators and the public on the issues. Do you have past experiences that will help your leadership in VADA? I believe I do. I came from loving parents, that nurtured me and fostered a compet- itive desire to be successful, but they also instilled a desire to improve on what I can and to make a difference. I believe that our personal signature – in any situation – should be one of betterment. Mercedes Benz has some of the best lead- ership training anywhere. I was fortunate to attend a recent 3-day Mercedes Benz leadership training at West Point, which was absolutely incredible. What inspired you to serve as a leader within the association? I think we all should give back to the industry we work in. I cannot say it better than Don, who likes to say “who pulls if we all ride?” This business has been great for many of us, and we owe an obligation to the next generation in our business. If you look back at your career and life, what would be three things that you have learned, that you would pass onto a younger mem- ber within the auto industry? Well first, I think that in doing anything worthwhile, you will be tested. So have a mindset that is prepared to be tested. This is not an easy business – not that any