Digital Dealer - February 2018 - 10

O WN E R S H I P

Continued from pg. 9

...THEY HAVE TOO MUCH AT RISK TO RUBBERSTAMP DEALER PRINCIPLE SUCCESSION.
THEY ARE INSISTING UPON AN EXPERIENCED
PROFESSIONAL AS THE SUCCESSOR..."
manufacturers are going
to make it more difficult
for family members to be
approved as a successor dealer principal?"
"Good question, Doc.
You are correct. I spend
a significant amount of
time helping successor candidates obtain
approval as dealer principals. There is no security in being approved as
a successor nominee.
Until the nominee is
approved as dealer principal the continuation of
the dealership through
the next generation is
not a certainty."
"From my perspective,
the manufactures have
concluded that they
have too much at risk
to rubber-stamp dealer
principal succession.
They are insisting upon
an experienced professional as the successor
dealer principal and their
definition of professional
is progressively becoming more demanding.
Their priorities are market share and customer
satisfaction in that order.
The days of getting Junior approved because
the district manager is
dad's dear friend are
over. Candidates must
stand on their credentials not their parent's
relationships. Likewise,
the days of getting Sis
approved because the
manufacturer needs to
fulfill their female quota
are over. I believe that
10

FEBRUARY 2018

manufacturers view
dealer principals as their
market representative
and irrespective of the
size of the dealership
group, they are demanding all the professional
attributes: maturity,
hands-on experience, social skills, respect for the
brand and demonstrated
performance. The market
is too competitive. The
likelihood that a manufacturer will take the risk of

able. His technology does
not exceed that of Toyota,
GM, Ford or VW. And
when the big boys decide
to compete with him, they
will dominate the market."
"There is a great place
for self-driving cars in
New York City, San
Francisco, metro Atlanta,
etc. and they will be great
improvements over cab
drivers!"
"You've got that right!"
responded Doc who has

...DEMANDING ALL
THE PROFESSIONAL
ATTRIBUTES:
MATURITY, HANDS-ON
EXPERIENCE, SOCIAL
SKILLS, RESPECT
FOR THE BRAND AND
DEMONSTRATED
PERFORMANCE."
an unproven candidate is
becoming less and less."
"OK, Loyd. It's time to
start sipping some vino
so one last question.
What do you think is the
future of the dealership
system considering Elon
Musk, self-driving cars,
Amazon, etc.?"
"Big 10-4 on the vino
Doc, so I'll be quick with
this one. At some point in
time, investors are going
to evaluate Mr. Musk
based upon productivity
and profitability. Then
he'll be done because he
cannot achieve sufficient
productivity to be profit-

D I G I TA L D E A L E R . C O M

zero patience cab drivers
who do not know where
they are going.
"I thought you would
like this one," I continued
with a smile. "Think of
NYC without those terrible horns. Won't that be
wonderful? Unfortunately,
the unions, regulators
and attorneys will drag
out deployment of this gift
from God for many years.
Cab and Uber drivers
may be in trouble but
car sales in semi-urban
to rural communities will
not decline. Those of us
who like driving will enjoy
the continued advance-

ments of cruise control.
Assuming people are
taking cabs in the city
now, the intermediate
term impact on car sales
will be negligible."
"And finally, I believe
the mega-marketing
companies like Amazon
recognize three profound realities of the automobile business: low
margins, high overhead
and high hassles. That's
not a combo they like
and therefore beyond
occasional marketing
joint ventures, they will
not have a significant
impact on the retail automobile business."
"Well, thanks Loyd,"
Doc concluded as he
gathered his notes and
prepared to leave. "Your
perspective of the future
is very interesting. No
doubt a glass of wine
will help me understand
what you have said."
LOYD H. RAWLS,
Chairman of The Rawls
Group (www.rawlsgroup.
com), has specialized in
succession planning for
automobile dealers since
1973. Well respected in his
field, Mr. Rawls is a highly
requested speaker and
has published numerous
articles and publications
on this subject such as
"Seeking Succession: How
to Continue the Family
Business Legacy" and
"The Succession Bridge:
Key Manager Succession
Alternatives for Family
Owned Businesses."
http://www.rawlsgroup.com http://www.rawlsgroup.com http://www.DIGITALDEALER.COM
Table of Contents for the Digital Edition of Digital Dealer - February 2018
