Fourth Saturday's Loneliest Liberal: Thinking about cars and how they’re sold

NADA doing

By James Knudsen

Spend any amount of time on the internet and you’re bound to come across a story about Tesla Motors. For the past few years, company founder Elon Musk has been changing the way people think about cars, electric or otherwise.

    More recently Tesla has been making news because of the way it wants to sell its product. And the New Jersey Motor Vehicle Commission recently approved rule changes that will effectively shut down Tesla’s retail operations. The action may force Tesla to sell its cars through traditional dealerships. I hope Tesla is able to overcome this and avoid the traditional dealership model.
    As far back as I can remember I have been interested in cars. By the time I was three I’d worn out the binding on a book of cars that began with the Cugnot and ended with the 1967 Chevrolet Camaro. Some the earliest things I remember reading were bore and stroke dimensions, terms that were absolutely meaningless to me. So it seemed natural when I was a young adult that I should work in the automotive field. I loved automobiles – who better to work in the automotive world? Who better to sell cars? Rarely have I been more wrong.

The automotive sales world is not populated with people who particularly like cars or are interested in cars or who know the first thing about cars. Don’t believe me?

Exhibit A: I was working at a Buick/GMC dealership. One afternoon a Ford Mustang II came in as a possible trade-in. It was a notchback version and probably had the Cologne V-6, but it may have been a 2.3 OHC four-cylinder. What is certain is that it had a manual transmission. One the managers and a salesman were looking it over and called me over. They wanted to know where the transmission dipstick was. I explained, impatiently, that a manual transmission, with VERY few exceptions (and my father owns one of them), does not have a dipstick. The ignorance I encountered regarding basic concepts of automotive engineering and design – unibody versus body-on-frame, inline versus Vee versus boxer cylinder arrangements and front versus rear-wheel drive – was rampant.

After the General Motors dealership, a former colleague invited me to join him renting cars. Maybe this environment would be better, I thought. No. There I encountered

Exhibit B: I was working the evening shift. A customer called from the high-desert city of Palmdale. It was winter and he’d flown into LAX with the intent of taking his daughter skiing and needed a mini-van with front-wheel drive that could handle any snowy conditions he might encounter. The rental agent working the counter before I arrived of course placed the customer in a Ford Aerostar, forsaking the front-wheel drive Windstar. That night I drove to Palmdale, where it was snowing and the customer had realized that he was NOT in the proper vehicle for such conditions, and exchanged the Aerostar, truck-based, body-on-frame, rear-wheel drive mini-van for the unibody, front-wheel drive Windstar. Once again, the untrained had reacted with the uninformed resulting in an unsatisfactory outcome.

I remember being told by a manager at the aforementioned Buick/GMC Truck dealership, “You don’t sell the steak, you sell the sizzle.” The argument can certainly be made that there was a time when cars were a new technology that no one could understand. We, the car buying public, were diners in a restaurant. We had no idea what went into the manufacturing of our meal – we had no interest. We left the selecting of the steak to the chef and listened for the sizzle. But times change and I suspect that, for many new-car buyers, the days are over of blindly scarfing down whatever is put in front of you and rolling out the door – I am still talking about dining, right? Information is available about everything, and consumers want to know the pedigree of their purchase regardless of the size. Even In ’n Out Burger touts the provenance of the potatoes that become their pomme frites. Now, we’re all chefs. We inspect the marbling, the cut, the trim of the fat layer and we’re informed about the diet, living conditions, and slaughter procedure of whatever was that steak well before we make it sizzle on the grille.

It’s reasonable to think that a similar shift in consumer habits has been going on in the industry I left 20 years ago. What I don’t think has happened is a similar shift in the way business is done. For reasons that no one has been able to explain, automobile sales became a world held in a regard only slightly above that of aluminum siding sales. And when I first went to work selling cars in the summer of 1987, I worked for a manager who decades earlier had sold aluminum siding, using techniques chronicled in the movie Tin Men. Big gold watches and double-breasted suits were de riguer then. The look and mood I worked around was always just a little too flashy to be true white-collar professional.

    Working hard to dispel that is the National Automobile Dealers Association (NADA). NADA has taken a particular interest in Tesla and the way Tesla does business. Car dealers believe they are a vital link between the manufacturer and the consumer. Their stance is that the state agencies that regulate car sales should be allowed to make the decisions.
    So NADA isn’t getting involved directly, but its former chairman, William Underriner, told reporters in 2012 that the dealers’ group “has ‘a whole mess of lawyers in Washington’ who work on state franchise laws.” Google Mr. Underriner and note the big gold watch.

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Copyright © 2014 by James Knudsen

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