What Drives Us?

Most of the nearly 700 members of the North Carolina Automobile Dealers Association (NCADA) can easily relate what today’s customers are looking for in the car they buy. Some even speculate as to what’s behind some of the trends.

“People’s love affair with the automobile is all in the way it makes them feel,” reckons Bruce Biggs, owner of Biggs Pontiac-Buick-Cadillac-GMC Trucks in Elizabeth City. It’s not so much about image as self-image, according to Biggs, who founded his dealership in 1982. “You want something that makes you feel good about driving it,” he says.

Biggs, who currently serves as vice chair of NCADA, says rising fuel prices have done little to dampen the popularity of sport utility vehicles (SUVs). “People seem willing to pay to ride in that kind of style,” he says. Improved comfort explains why many like SUVs. “Years ago, they rode more like a truck,” explains Biggs. “Today, they ride more like a luxury car.”

The appeal of SUVs is nothing if not broad. Buyers cut across all age and income groups. Increasingly, they are women. “There’s a tremendous move among females toward SUVs,” according to Doug Barbour of Capital Ford of Wilmington. Whereas some automobile classes come and go, SUVs are no passing fad, Barbour says. “SUVs are certainly here to stay.”

The dependable performance in all types of terrain and weather conditions explains why SUVs have become a popular vehicle in many business situations. As economic development director for Wayne County, Joanna Thompson frequently takes visiting executives through undeveloped “greenfield” locations. For that, safety, visibility and four-wheel drive traction are requisite — and her SUV offers all three.

“It’s a comfort level for the clients more than anything else,” she says. “There’s nothing worse than having to ask your clients to get out and push if you get stuck,” Thompson says only half-jokingly. Such a thing occurred once when she was taking a group of Japanese businessmen on a tour of industrial properties. Thankfully, the visitors were good sports about it, says Thompson, who no longer takes any chances on similar excursions. “I don’t care at all about color so long as it’s an SUV with leather interior and four-wheel drive.”

Leather seats add elegance, as well as easy clean-up. The latter feature makes them a popular extra for buyers with children. So too do entertainment systems such as back-seat DVD players. High-tech navigational systems are also a hot draw on all types of automobiles, especially among male owners. “Men like speed and gadgets,” according to Staunch, while women typically consider styling and color. For business vehicles, a clean, sharp look should be an important criterion. “A car can be a symbol of the company as well as a mode of transportation,” Staunch says.

Staunch is so satisfied with her Mazda that she would consider replacing it with another one when the time comes. Though the company phased out the Millennia, comparable models offer similar style, pricing and performance. Sticking with a certain manufacturer is not uncommon, experts say, especially for company vehicles. Doing so displays a sort of brand consistency that some executives like to project when doing business. Others simply prefer the confidence that comes with knowing what they’re getting. “I’ve got people who’ve bought BMWs for years,” says Dan Belmont, a Raleigh-based auto broker. “That’s what they like and they continue to buy them.”

Some take sticking to a favorite model to an extreme. Rep. Nelson Cole (D-Rockingham) tools around in a ’68 Ford pick-up and a ’72 Olds Cutless convertible. The candy apple-red convertible tends to attract some attention, says Cole, which can be helpful during election campaigns. “I get a lot of comments on it.” Cole, a retired Oldsmobile dealer, likes American-built cars, a legacy of his high school years in the 1950s. “I just grew up in the era of the American car,” he says.


Turn of the Screw

One key factor in selecting a company car, Cole says, is service. “The most important thing for business people is minimizing down time,” he says. “Some company vehicles are operating 20 hours a day.” The issue involves reliability, to be sure, but also the service agreement and accessibility of qualified technicians to provide maintenance. “You want to be sure repairs can be made in a timely manner,” Cole says.

Because today’s automobiles are increasingly equipped with technology-rich features and components, finding automotive technicians with the latest skills is a serious challenge for dealers, according to Cole. “A mechanic is no longer a mechanic. He’s a computer analyst and technician,” Cole explains. Strong math and PC skills are necessary in addition to expertise with engines and other mechanical gear.

Experienced automotive technicians possessing the latest skills can make a handsome living — in some cases six figures. There remains, however, a nagging misperception that these jobs are undesirable. In order to overcome that, dealers are working with legislators and community college officials in promoting automotive technology programs both to high school students and dislocated workers from textile, furniture and other industries. “What we’re faced with is a shortage,” says Cole, who convinced his legislative colleagues to match a $125,000 pledge from NCADA to create printed and web-based information about automotive technology careers. “People don’t normally migrate to those sorts of careers,” Cole says.

The attractively designed promotional materials (www.ncautocareers.com) include encouraging projections for job growth and wages in the field. Auto technician positions in North Carolina alone are expected to surge some 30 percent by 2010, for example, and median wage levels in the state actually beat the national average. These are jobs that can be found in every corner of the state. Better still, it is difficult to imagine such positions ever falling victim to global trade forces or offshore outsourcing. “These jobs are going to be around for as long as you want them,” Cole says.

Currently, nearly 2,300 students are enrolled in automotive technician programs in community colleges across North Carolina. “Most of these graduates have absolutely no problem finding a job,” says Mike Pittman, associate director of programs at the North Carolina Community College System. The system welcomes input and leadership from auto dealers both locally and statewide. Automotive workforce programs are expensive to maintain, for one, because of the equipment involved. There is also the ever-present challenge of keeping instructors’ skills up to date. “Some of our rural campuses are unable to support a program like this,” Pittman says. Currently, associate-level and certificate curricula in automotive technology are offered at 47 of the system’s 58 colleges.


Partnering for a Better Workforce

“It’s just a wonderful relationship we’ve had with them,” Pittman says of the system’s collaboration with NCADA. After the matching legislation was passed last year, NCADA staff and community college officials organized a task force to address the skilled manpower shortage strategically. Curricular design is one area educators are looking to auto dealers for input. Many students enrolling in automotive courses leading to diplomas or certificates ultimately wind up in the associates degree program in order to boost earning potential.

“Students realize they need more than just a few courses, so they come back and enroll in the associates program,” explains Mike Cloninger, chairman of automotive technologies at Gaston College.

Given their high visibility, North Carolina’s automobile dealers are prominent fixtures in their communities, helping out with sponsorship programs, voluntary organizations and fundraising campaigns. “We sponsor about 10 charitable golf tournaments each year,” says Bruce Biggs.

North Carolina dealers are generous with their financial contributions — contributing an average of $10,500 to community causes in 2002, according to NCADA. Dale Stearns is an active volunteer with Burlington’s hospice program, for instance, and he serves on the advisory board of the local school system’s automotive technology training program. That comes on top of the time he puts in as NCADA chair and an active member of the National Automobile Dealers Association. “It’s only a question of where you think you can be most effective,” he says.

Among other roles, NCADA works to promote consumer-friendly business practices in the industry. In doing so, it works closely with the General Assembly when legislation is needed. North Carolina, in fact, is the only state in the nation requiring automobile dealers to disclose their business relationships with lenders.

“In most cases, dealers are pillars in their communities,” says Rep. Cole. They have a vested interested in treating consumers fairly — with the expectation that they and their families will return through the years each time they purchase a new car. “As needs arise, we’ll do whatever it takes to meet public expectations,” Cole says. “Dealers are very conscientious of consumer protection,” he adds. “Their livelihood is derived from the community.”


Dealers Recognize Lifetime Achievements
Proud North Carolinians know that in this neck of the woods, we do most things better. Nowhere is that more evident than the North Carolina Automobile Dealers Association (NCADA), a nearly 70 year-old organization that is considered a role model by its peers around the nation. A stunning 98 percent of the state’s auto dealers are members of NCADA, a testimony to the group’s effectiveness in legislative advocacy, training, community activism and more.

“Our association is admired around the country,” says Dale Stearns, NCADA’s chair. “When I meet with Ford dealers from other states, they’re always eager to hear about the things we’re doing in North Carolina.” It is the only state auto dealers association in America that bestows a Teacher of the Year award, for example. This year’s winner,

Lizbeth Alfaro, who teaches English as a Second Language (ESL) at Lyle Creek Elementary School in Conover, was presented with a new Mazda III during ceremonies at Cary’s Embassy Suites hotel on May 4. In the photo at right, she is shown with (from left) Bruce Biggs, Robert Glaser, Dale Stearns and James Barber.

The NCADA is also understandably proud of its reputation as a force that encourages ethical behavior and community service across its industry. Along those lines, NCADA, since 1999, has recognized the distinguished service of its members through annual Lifetime Achievement Awards. “

For 2004, NCADA has named four recipients of its Lifetime Achievement Award:

Ever since his years at Rocky Mount High School, where he was sports editor of the yearbook and student body vice president, Joseph Nelson, chairman and president of Davenport Motor Co. of Rocky Mount, has been a mover and shaker. After obtaining a degree in journalism from UNC-Chapel Hill in 1953, it was off to the U.S. Navy for service in Korea, Japan and Vietnam (then French Indo-China). In 1956, he returned home to join the family business, and hasn’t looked back. Nelson served as treasurer and president of NCADA, and since 2000 has presided over its sister organization, the North Carolina Auto Dealers Charitable Foundation. He has served as chairman and director of the Rocky Mount Chamber of Commerce, president of his Rotary Club and senior warden of St. Andrews Episcopal Church.

Though Harold Wells is a native of Duplin County, his name is synonymous with leadership in and around Whiteville. Wells recently sold Wells Chevrolet Buick Pontiac GMC and Wells Chrysler Dodge Jeep, his two new-car dealerships, after some 46 years as a fixture in Columbus County. But he remains active in new and used car operations, as well as real estate development initiatives around the state. Wells, a graduate of Atlantic Christian College (now Barton College), spent two years in the U.S. Army, mustering out as a sergeant before heading to Whiteville to purchase his first dealership at the tender age of 24. He later rose to chair the National Association of Automobile Dealers (NADA), as well as to preside over NCADA. He is a 32nd degree Mason,  a deacon of the First Baptist Church in Whiteville and is actively involved with the Cape Fear Council of the Boy Scouts of America. He holds a Silver Beaver award from the scouts, as well as an honorary doctorate from Campbell University, where Wells currently chairs the Board of Trustees.

Fishing, amateur radio, writing and travel are listed as Sam Johnson’s hobbies, though it’s not apparent when he finds time for them. An attorney with the Raleigh firm of Johnson, Hearn, Vinegar, he has lobbied on behalf of automobile dealers and other groups, and provided legislative counsel to a speaker of the N.C. House and two governors. Along the way, Johnson has been active in the American Bar Association and the North Carolina Association of Trial Lawyers. He has also served numerous leadership roles at West Raleigh Presbyterian Church, including Stephen Minister, deacon and chairman of its capital campaign in 1995. Johnson is a member of the Raleigh Lions Club. The Sampson County native served in the U.S. Navy and holds bachelors and law degrees from UNC-Chapel Hill. Now in his 70s, Johnson continues to arrive at his office promptly at 7 o’clock each morning, spending part of his day composing his memoirs.

During the 1950s, Royce Reynolds honed a knack for sales by working his way through college selling books door to door. In 1958, with a B.S. degree from Middle Tennessee University in hand and a two-year stint in the U.S. Army under his belt, Reynolds took on a sales position with a Pontiac dealer in Birmingham, ultimately rising to the post of general manager. From 1972-1998, he owned Crown Automobile Co., which began as a Pontiac dealership but blossomed under his leadership into a group of 11 dealerships representing 20 franchises. Reynolds, an Eagle Scout, has been active in the local Kiwanis Club and the Salvation Army. He is a trustee of Greensboro College. A member of the West Market Street United Methodist Church, Reynolds and his wife established a foundation which works to advance Christian education in the Methodist Church.   — Lawrence Bivins


Dealers Expect Incentives to Stay
Even though sales have been strong, automobile manufacturers and dealers are reluctant to take their foot off the gas when it comes to buyer incentive programs. Introduced in the wake of the terrorist attacks of September 2001, the offers include zero-interest financing and a range of juicy rebates. The incentives, when matched with historically low interest rates over the past few years, have served their purpose, keeping demand for new autos at healthy levels.

But with the economy on much firmer ground, now what?

“Incentives are unlikely to be going away anytime soon,” says Dale Stearns, owner of Stearns Ford in Burlington. “If anything, they’re going to get stronger.”

Generous financing deals and cash-back offers helped fuel strong sales volume in 2001 — the industry’s second best year ever. Nationwide, auto sales declined slightly from those levels the following year, from 17.1 million to 16.8 million units. When sales dipped again in early 2003 prior to the war in Iraq, automakers extended — in some cases, enhanced — the inducements, avoiding a major drop. Sales in 2003 totaled 16.6 million vehicles.

While incentives had the desired impact of shoring up squeamish consumers, they have also permanently elevated expectations. “I don’t see any way manufacturers can retreat from those incentives,” Bruce Biggs adds. Biggs, owner of Biggs Pontiac-Buick-Cadillac-GMC Trucks in Elizabeth City, says General Motors Corporation’s “Keep America Rolling” campaign helped keep his business strong over the past 30 months and reckons incentives are now an irrevocable fixture on the automotive industry landscape. “They’ve become a way of life and a way of doing business,” he says.

By design, rebates and interest-free financing yielded strong sales of new cars. They do not apply to pre-owned or program vehicles, which had been gaining steady market share in prior years. Today’s 6:4 ratio of new cars to used is largely a credit to factory incentives, according to Doug Barbour of Capital Ford in Wilmington. “Consumers now come in expecting that,” he says. Inducements also support the purchase of a car over a leasing arrangement. “Buying is still the trend,” Barbour says. Only one in 10 Ford customers now opt for a lease, a figure down significantly from a decade ago.

A greater concern among dealers is the direction of interest rates. “Rising interest rates are a concern,” says Biggs. With rates low, dealers could afford to boost their inventories. “We’ve carried larger inventories for the last few years because rates were so low.” A sudden hike in market interest rates would adversely impact his bottom line.    — Lawrence Bivins



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