Fleet-ing Thoughts

NADA 90th Annual Convention, Part II – Great Cars, A Great Floor Show, Great Parties, and Lots of Old Friends…

As expected, the greatest annual convocation of “car guys,” didn’t disappoint and kept me moving 20 hours a day for about five days. As I said last year, one of things I like best is that this convention is big and bad enough to unite all “car guys,” even if they don’t work directly in the car business. It also is the once a year event that gets “car guys” from all corners of the world, from every continent, for those few days united, focused on all things related to, well, cars....

Once again, the shear square footage of exhibitors on the exhibition floor is amazing. You really can not cover it all well in even two days worth of time. Over six hundred vendors, many with two story booths, working kitchens and bars, overstocked with food and candy – let’s just say walking the place for the better part of two days wasn’t a chore and you would never go hungry. Interestingly, two of the most popular booths were from two distributors of China-made cars looking for US Dealers. While neither China American Cooperative Automotive, Inc., of Parippany, NJ nor Miles Automotive Group, of Los Angeles represent major vehicle suppliers in China, that didn’t seem to dampen the enthusiasm of dealers looking for distribution rights.

Demetra Markopoulos from Driveitaway meets various "characters" on the NADA Convention Floor - (from left to right) "The Car-Diologist," "The OVE Ferret," and "George W. Bush" (about as genuine as the Dr. or the Ferret)

Also once again, just walking the massive exposition floor I ran into many old friends and acquaintances that I haven’t seen in months or in some cases years. I’m especially glad I got to spend some time with Warren Brown from the Washington Post. Warren is one of those industry veteran auto journalists who I never fail to learn many new things about the business every time we have a conversation. I’m also glad I got to meet, for the first time, Chris Woodyard, the automotive writer for USAToday. As one can probably tell from these blog entries, I’m kind fancy myself as a (very) amateur (very, very) frustrated automotive journalist myself, of sorts, so it’s really a fun for me to converse a bit with the professionals.

I’m proud to say that this year’s Convention Chairman was none other than David Penske, from David Penske Chevrolet, in King of Prussia, right outside of my hometown of Philadelphia, and he put on quite a show. With keynote speakers Richard Colliver, EVP of Sales, Honda of American, and Jack Welch, former Chairman and CEO of GE, motivational speaker, Sugar Ray Leonard, and Fox News Anchor Stuart Varney as a moderator, there were enough celebrities on the podium to usher in Dale Willey, the new NADA Chairman, taking over the top roll from outgoing Chairman William Bradshaw.

During the convention exposition, there were, of course, dozens of simultaneous workshops going on, grouped this year into six different topic tracks – “Strategic Business Management and Succession Planning,” “Business Development,” “Vehicle Sales,” “Fixed Operations,” “Human Resource Management,” and “Technology.” Topics titles ranged from, “Anatomy of a Construction Budget” to “How to Sell an Extra 100 Cars a Month;” from, “The Psychology of Service Selling” to “Dysfunctional Family – Functional Business: Navigating the Landmines of a Family Business.”

In addition, it was a year of fairly challenging manufacturer “make” meetings, that is, the organized meetings where the manufacturers address only their dealer body in a closed door sessions, where even the press is not allowed to attend. And speaking of the press, this year there were no fewer than 17 press conference scheduled over a three day period (that’s about five more than last year, as a I recall): from Manheim Auctions, who once again introduced this year’s annual Manheim Market Report (glad to say it forecast that, as expected, less than half of the vehicles supplied to rental car companies this year will be program “buy back” units – it may not mean much to most, but this prognostication means a lot to me), to F & I Magazine’s annual “F & I Dealer of the Year” presentation, to a brand new woman focused Web based offering with the name of “AskPatty.com, Inc.”


Give Me the Night (or, Why I lost my Voice by Monday Morning)

The View of Las Vegas from Jaguar Landrover Party at Mix at THEHotel

I guess it may be typical for most large conventions to host a reception or two after the days work activities, but what is normal for most conventions goes to the “extreme” for NADA – that by the way, is what I like most about the car business, its filled with “extremes”…conventions, personalities, etc. (that’s the why it’s the only place I feel I fit in).

Of course I could only go to a small handful of the dozens of receptions and parties going on each night. However, once again, to give a sense of scale here, I’ll list the receptions and parties I knew about (and again, there were probably double this number, as most go unpublished and/or I don’t get invited to them), not counting the 23 different State Automotive Dealer Association functions:

Friday, Feb 2nd
Automotive Youth Educational Systems, Inc.
Autoteam America
General Motors & GMAC Financial Services
NADA/Dealer Academy
Incisent Technologies/First Look
Credit Union Direct Lending
ATAE
DaimlerChrysler Minority Dealers Association
General Motors Minority Dealers Association
The Wall Street Journal

Saturday, Feb 3rd
ADP Dealer Services
Audi, Bentley Volkswagen
Cobalt Group and Dealix Corp
Bank of America
Stone Eagle Group
General Motors Vehicle Divisions and GMAC Financial Services
Mitsubishi Motors North America
Northwood University
O’Connor & Drew PC and Massachusetts State Automobile Dealers Association
Jaguar Land Rover
Resource Automotive Group
American Suzuki Motor Corp.
RouteOne LLC
Isuzu Motors America
United Car Care Inc.
Zurich
Kia

Sunday, Feb 4th
North American Dealer Co-Op
Ford Motor Company
Mazda North American Operations
Subaru of America
Hyundai Motor America
Toyota
DealerTrack
Universal Warranty
[And the Super Bowl afternoon bash that I attended, hosted by CNA Insurance]

So who threw the best party this year? If I have to narrow it down to one single event, I have to say that, for venue alone, the Incisent Technologies/First Look reception, at the Wynn-Penske Ferrari Maserati store in the lobby of Wynn’s Hotel Casino, was my favorite – lets face it, lots of the events had top shelf drinks and outstanding food, but eating, drinking and mingling around those $300k + cars did it for me this year…

Close runners up included the Resource Automotive reception in the main ball room of Caesar’s Palace, replete again with working bars carved entirely out of ice (and a few standard ones as well), at least a dozen or so food kiosks, and great band; and the Jaguar Land Rover party always takes top honors for cool sophistication, this year held at Mix at the top of THEhotel at Mandalay Bay.

Finally, honorable should probably go to the DealerTrack party at Studio 54 at MGM. While it lost a few points for having pre-defined bottled drinks served in plastic cups (I think this may have been the only NADA party I have ever been to where I had to pay for my scotch), the venue, music, and crowd pleasing dancers where lively and provoked quite a reaction from the guests towards the end of the night.

So that’s it, the start of another year, and the end of this year’s NADA – this is such a good show, it’s a shame we have to wait another whole year for the next one

Next Year, San Francisco

I’m looking forward to next year’s NADA event (I may have my voice back by then), February 9-12, in San Francisco.

NADA 2007 Chairman Dale Willey addressed the NADA's convention

Once again, it was time for the largest industry event of its kind, the National Automobile Dealers Association (NADA) Annual Convention and Exposition 2007, February 3-6th. Over 26,000 registered attendees, this annual event is so large there are only a few convention venues in the entire country that are large enough to host this event – so every year it goes through a rotation, San Francisco/New Orleans/Orlando, and this year, my favorite venue, Las Vegas, Nevada – on Superbowl weekend, no less (which added another 150,000+ people to the town, if I read the statistics correctly).

This is (no kidding) my 21st year attending NADA (I must have started going before I could legally drive), and schedules and planning notwithstanding, once again, I came no where close to catching up with everyone I intended meet up with there, and went to only about half the events I was invited to attend. The exposition floor seemed bigger and better than ever, with over 600 exhibitors, exposition, presentations and workshops during the day and the receptions at night, 20-hours days are the norm at this event. On Saturday night, February 3rd, I counted no less than four simultaneous receptions going on, just at Caesars Palace alone (and this, as far as I could tell, was duplicated at the same time in every major hotel on the strip).


But You Can’t Go to the NADA Convention, without Starting Out a Couple of Days Before with JD Power…

It has become an annual tradition for many industry folks “in the know” to come a couple of days before NADA officially starts and attend the JD Power Roundtable meeting, this year held at Green Valley Ranch February 1st & 2nd. Manufacturers, OEM’s, and retailers alike see this meeting of great value, and every year it kicks off with their annual Franchise Assessment, which reviews the strengths and weakness of automotive franchises and their products. Now, for the last six years, I’ve attended the JD Power Roundtable meeting that precedes the annual NADA Conference and never been disappointed. I think I’d probably attend anything Charlie Vogelheim hosts (really if I had even one instructor like him in law school I’m sure I would have attended class a lot more often), but he is certainly at the top of his game putting together and engineering the best out of all of VIP’s and intelligencia that make up this Roundtable.

Industry Legends Dave Power and Carroll Shelby share the podium

The kick-off dinner Thursday night, Febuary 1st, for me at least, was a very special event, as the key note speaker was non-other than automotive legend Carroll Shelby himself, Chairman and CEO of Shelby International, Inc. and Shelby Automobiles, Inc. Shelby is one of those rare personalities that virtually everyone in the car business looks up to and respects as an industry hero, as he personifies the “guts & brains” of the quintessential car entrepreneur. He is also a very nice and charitable man, giving back to his community at every turn (see his Carroll Shelby’s Children’s Foundation™). You know, from a personal perspective, not to take away from any younger folks, but when you see industry legends like David Power and Carroll Shelby up on stage together, guys that truly did, almost as a force of nature, trail blaze innovation and reshape the car industry, you kind of wonder where there counterparts are now a generation or two behind them – I’m afraid maybe they don’t make “car guys” like them any more, and that’s too bad.

Carroll Shelby with Driveitaway's Demetra Markopoulos

Preceding Carroll Shelby on stage was the new President of Shelby Automobiles, Amy Boylan, who has the interesting history of running the Hot Wheels division for Mattel before coming into the “big toy” car business. From what I read, and from hearing her on stage, she seems to have melded into the automotive industry as if she had been there her whole career, and is having amazing success at Shelby Automotive. Which proves, I think, talent is transferable between industries (like Alan Mulally at Ford, for instance), and, just perhaps, the there is a common thread between people who like “big” cars and “little” cars (see blog entry Vol. 2 No. 36).


The Next Day, Down to Business…

The next day started off with a comprehensive industry analysis by Stephen Girsky, now President of Centerbridge Industrial Partners, an industry hedge fund, but most recently a Special Advisor to GM Chairman & CEO Rick Wagoner, and, before that of course, the Managing Director/Senior Global Automotive Analyst at Morgan Stanley. Girsky has always been one of the foremost authorities on the industry (which I guess is why they put him in charge of a $3B hedge fun). My conclusion from his presentation: there still is too much capacity in the OEM’s and its going to be more challenging before it gets better…but eventually things will settle down a bit…and there are always opportunities.

This particular Roundtable always seems to get its share of top politicos, and this year was no exception with two presidential candidates: former Governor of Iowa, Tom Vilsack, and former Governor of Wisconsin, Tommy Thompson. While I’m not a big fan of political rhetoric at car events, it really wasn’t too tough to take these two Midwestern neighbors, with excellent moderation by Susan Page, the Washington Bureau Chief of USA Today.

This was followed by a presentation by Gary Dilts, now Senior Vice President of JD Power, but formerly Senior Vice President Sales of Chrysler. Dilts was a 30 year veteran of Chrysler before he left this year (which means, by the way, he was there way before and way after I was Chrysler dealer), and his presentation, entitled “More Equals Less” sort of echoed on the retail end what the essence of whatt Girsky’s talk conveyed from the supplier side, mainly too many brands, too much capacity and more carnage before things get better.

Next came a fun presentation about a fun new car to hit the market soon, the Smart car, from Daimler Chrysler. Dave Schembri, President of Smart USA and Tony Pordon, Senior Vice President, UnitedAuto Group and Smart USA, detailed the well conceived product and sales strategy behind the new Smart car product. You know a few years ago I would have said that they would have an up hill battle selling a tiny little two door, kind of “cutesy” car, but how can anyone argue with the success of the Mini by BMW or Toyota’s Scion product. Still, it will be a long while before I look for a car that allows me to change my door panels to suit my mood.

This was followed by a presentation by Troy Clarke, President of General Motors North America, which had enough impact to be quoted in the Wall Street Journal the following week. Among other things Clarke announced a 10 year/100k mile power train warranty on all GM Certified used units – another strong message that the strength of used car values directly affects the state of new vehicle sales. Prior to this talk, at the Detroit auto show the week before, GM announced, and Clarke confirmed, the cut back of another 100k units from daily rental service this year (which followed a 100k prior year cut) - no more greatly subsidized GM rental car fleet offerings – again demonstrating now a firm commitment to strengthening residuals. That’s good for the industry and good for the domestic manufacturer’s “P & L” (and not bad for our business either…).

In the afternoon Steve Wilhite, Chief Operating Officer of Hyundai gave a well done presentation that focused on the importance of the retail dealer in vehicle brand sales and customer satisfaction, and indeed, established that dealer profitability is a baseline enabler for the practice of sales satisfaction. This was followed by my favorite session of the day, the Retailer Feedback panel. Moderated by Ed Lapham, Executive Editor of Automotive News, the panel included John Bergstrom, Chairman and CEO, The Bergstrom Automotive Group, Earl Hesterberg, President and CEO, Group 1 Automotive, Susan Scarola, CEO, DCH Auto Group, and Tony Schurr, COO, The Larry Miller Group. Training and development of employees for attracting and retaining good people, which, in turn, ensures good performance and customer satisfaction seemed to be the underlying theme of this panel. I counted it up and between the panel, in total, they represented over 200 retail stores, indicating the tremendous expertise the collectively had on the topic.

Ed Lapham moderates the dealer panel, with John Bergstrom, Earl Hesterberg, Susan Scarola and Tony Schnurr

Finally, this roundtable wrapped up with a special presentation on the area that seems to be creating the biggest “buzz” right now, that is, the consumer growth and impact of China. John Humphrey, Vice President, Asia Pacific Region, JD Power, and Michael Dunne, Vice President, China, JD Power explored both the “sell” (Chinese imports to the US) side and the “buy” (opportunities for investing in China) side on the topic. It’s all a little beyond me, but interesting from a global perspective.


It’s Night Time in Vegas, Time to Look Around at a Whole Lot of Nice Models…

After the JD Power Roundtable, I wrapped up the very first full day in Vegas at a fantastic reception hosted by Pat Ryan’s Incisent Technologies First Look dealer inventory management system. The First Look folks always do it up right, this reception was hosted at the Wynn-Penske Ferrari Maserati store in the lobby of the Wynn Casino, and I was very grateful for receiving an invitation. High end drinks, food and Ferraris all seem to go together somehow, for a perfect end of the day. My thanks to the Ryan folks and Tony French, Vice President of Sales, for inviting us - although this reception was to be followed by many others throughout the course of NADA, it gets my vote as the best one of the convention this year. Now if I could just get my hands one of those nice looking cars and take it for a spin around Vegas…


To be continued…