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Tuesday, February 13, 2007 

Vol. 3 No. 3

The JD Power Roundtable & the 90th Annual NADA Convention, “The Main Event” Part I
or
You Can’t Really Start the Year without the Granddaddy of all Car Conventions…

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…

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