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  • Driving Prosperity: Car Dealers Fuel Our Local Economy

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    In both tangible and intangible ways, the River Region’s car dealerships and multiple associated services are steering the area’s economy in the right direction.

    For a good stretch of Montgomery’s Eastern Boulevard, both sides of the street are lined with lots packed full of shiny new cars sitting under the signs of some legacy names in the industry. But unless you’re currently in the market for a new car, you may not pay them much attention. You should: The River Region’s new car dealers account for several thousand good-paying jobs, do an average of $1 billion in annual sales and pay millions in state, county and city sales taxes.

    Their owners, leaders and employees also donate time and money to local causes and nonprofit groups. And offering myriad options of make, model, style, color and more, they help folks find the right new car for them right here — keeping those dollars in our tax coffers — and then help put them behind the wheel, keeping River Region residents rolling along our streets, getting to and from their jobs, to shops, restaurants, schools and more.

    CAR BUYING 2020
    Ray Ingram, President of Jack Ingram Motors, Inc., has been selling cars since 1961, beginning by working summers at his dad’s Montgomery Mercedes Benz dealership when he was 18 years old and jumping in full time after serving in the military and finishing college. Ingram stressed how he and his colleagues contribute to the area. “All of the local auto dealers employ many people, so we’re creating jobs,” he said. The Jack Ingram dealerships combined (Mercedes-Benz, Nissan, Audi, Porsche, Volkswagen and Volvo) employ a total of 185 people. “We also pay the city and county a lot of taxes. We provide a necessary service for people here, so our residents don’t have to travel elsewhere to do their car-buying business,” he said. “And we’ve all made substantial investments here and remain committed to doing business here.”

    These investments keep paying off in both boom and lean times, according to Ingram. “We enjoyed a big uptick right after the recession in 2011 and 2012. There was a real pent-up demand at that point,” he said. The average age of cars on the road at that time was 10 years, so as the economy got better, many people were more than ready for a new car.

    In the last few years though, the brakes have been pumped on those accelerated sales. “Things have now leveled off,” Ingram said. “But there are always ups and downs and various things influence the swing: fuel prices, interest rates, the overall economy.” Despite this slowdown in previously speedy sales, he deemed the current state of the industry “stable.”

    Mike Reinhardt, Vice President/General Manager at Reinhardt Motors, Inc. agreed, but noted that Montgomery’s economy doesn’t seem to be traveling at the same pace as coastal parts of the state or areas in north Alabama. Still, his dealership employs 189 people at four locations and saw a 2018 revenue of $122 million.

    THE EXPERIENCE
    While multiple events influencing car sales are out of any dealership’s hands, there is an aspect they can control, and it’s a powerful part of success or failure: the experience. Today, just as it is in sectors from home building to banking, technology is having a major effect. During his six decades in the industry, Ingram has witnessed a multitude of changes, but a big one is customers’ use of the internet. Tire kickers are becoming a thing of the past. “We know from JD Powers information that now, most consumers do most of their car-buying research online,” Ingram said. “Some spend up to 14 hours online before ever going to a dealership.”

    By giving a dealership’s sales team less time with a car shopper, this trend makes the experience increasingly important, as Reinhardt stressed. “Every customer now demands the best customer experience and wants it in a convenient, modern location,” he said. That’s one reason Reinhardt built sleek, updated dealership spaces that opened in 2015.

    Ingram echoed Reinhardt. “A good customer experience is paramount. It is the key to success in our industry today,” he said. “Seventy-five percent of the time, they make the decision to buy a certain car online, but they don’t buy it there. They come to us, and then they are active online again, leaving reviews and posting on social media about the purchase and process, either good or bad.”

    Knowing how strongly these comments can influence others and how valuable return customers are, particularly in a smaller market like Montgomery, Ingram and his team work hard to earn praise over pans and keep customers happy. “We don’t want to turn off future customers, and we want to keep that current customer in our base,” he said. “We want to sell them another car, and we want them to service their car here.”

    Keeping them coming back is crucial to a dealership’s bottom line. “Every retailer wants to sell to the customers in their market because convenience will often win when they’re making decisions on buying the follow-up services,” Reinhardt said.

    That’s why continuing the service after the sale is as imperative as the service provided during the initial purchase.

    Once a customer buys and then visits the dealership again for maintenance or repairs, they expect to be treated well, an expectation a good dealership works hard to meet. “We are supported by Toyota and Lexus with classes to improve every way we serve our clients,” Reinhardt said. Ingram added, “When it comes to the service department, we try to take care of customers as promptly and efficiently as we can. We are fortunate to have some really great technicians. Our goal is to service that customer’s car in the most perfect way we can.”

    In many instances, technology can help dealers achieve all of these goals. “Computers and technology make us faster, more accurate, more informative and help us serve our customers better,” Ingram said.

    Other ways dealers are enhancing the experience include things like Reinhardt Lexus’ efforts, aimed to increase transparency while adding to customers’ convenience and saving them time, according to Dan Knotts, General Sales Manager. “The Lexus client enjoys a host of privileges like loaner vehicles waiting on them when they arrive for their scheduled maintenance, and the porters there to assist them with their transfer,” he said. “We have a New Owners Breakfast every quarter on a Saturday morning to show appreciation. We detail their vehicle while they enjoy breakfast and share some news about Lexus and the technology in their vehicle.”

    The dealership also has two delivery specialists who travel the state (and beyond) to offer in-home delivery. And if local clients show interest in a Lexus on the lot, a member of the dealership team will bring it to them, at their home or office, for a look or even to complete the entire buying transaction, including an appraisal of a trade-in vehicle. “We also offer The Lexus Saturday Morning Test Drive every Saturday from 9-11 a.m.,” Knotts said. “We do not ask for names or even approach them. It’s just them and our technology specialist, letting them asking questions and learn why Lexus is the top brand here in our market.”

    Of course, price still matters, a fact all car dealers understand. “A lot of shoppers tell us that they are not gauging the experience until they find the price, so we try to deliver both,” Reinhardt said.

    GREEN LIGHT ON GOOD DEEDS
    While providing good customer service is essential, area car dealers provide the region with additional benefits too, in the form of philanthropy. “We support multiple community partners because they serve our community, our customers and make our community better,” Reinhardt said.

    Ingram spoke to his dealerships’ commitment to their hometown and noted that community involvement seems to be an industry-wide priority. “We have long supported our community and given back in various ways and to various organizations,” Ingram said. “I think all auto dealers here do. Really, most of the new car dealers, we all have the same goals and problems, and we all strive to do the best for our customers and our community. We’re very lucky to have so many good dealerships in this market.”

    TECH TRENDING: THE NEW FRONTIER OF SAFETY
    Lots of the new tech in cars is basically bells and whistles: gadgets, devices or applications that make driving more convenient, more comfortable and more fun. But technology has also greatly improved car safety, bringing us things like airbags, analog braking systems and back-up cameras. Hyundai Motor Manufacturing Alabama highlighted some of the latest and greatest safety features being built into Hyundai vehicles thanks to technology, and one— the Rear Occupant Alert (ROA)—is aimed specifically at preventing the tragic heatstroke deaths of children when they’re accidentally left in a hot car.

    Hyundai recently announced it will voluntarily make its ROA door-logic system standard on most of its new vehicles by 2022. It will also make its optional Ultrasonic Rear Occupant Alert, or a similar sensor-based system, available on more of its models in the future.

    Two Hyundai models are available today with door-logic ROA as standard equipment: the 2020 Santa Fe and Palisade. The Santa Fe is made at HMMA, and the 2020 Sonata (also manufactured at HMMA) will feature standard door-logic ROA. The 2019 Santa Fe has the Ultrasonic ROA feature available as an option.

    Scott Margason, Director, Product Planning, Hyundai Motor America, said this about the company’s continuing commitment to increase the safety of its vehicles: “Hyundai and its engineering team continue to make vehicles even safer with the addition of active standard safety features, prioritizing cutting-edge safety at the forefront of the driving experience,” he said. “With Hyundai SmartSense features like Forward Collision-Avoidance Assist, Driver Attention Warning, Blind-Spot Collision Warning, Lane Keeping Assist and more, our latest vehicles deliver a sophisticated network of tools to ensure greater peace of mind.”

    The 2020 Santa Fe will also include these safety features:
    • Newly developed Blind-View Monitor standard on Limited models
    • Blind Spot Collision-Avoidance Assist (BCA)
    • Rear Cross-Traffic Collision-Avoidance Assist (RCCA)
    TECHNICAL DIFFICULTIES
    For businesses related to car dealers, including car repair shops, technology is having an impact and in some cases, presenting challenges. “I’ve been told there is now more code in many cars than in a 747 jet,” said Traweek Dickson, CEO of Montgomery-based Joe Hudson Collision Center. “Cars are just computers on wheels now.” That means his company has to buy, maintain and teach staff to use a host of sophisticated (and expensive) tools. “There is a whole lot more equipment and training required to work on cars now,” he said. “Calibrating all their sensors, especially after an accident, can be quite the feat. And advances are moving so fast, we are constantly investing the time and money needed to ensure we keep up.”

    PICKING UP SPEED: LOCAL BIZ GROWS FAST
    In just 30 years, Montgomery-based Joe Hudson Collision Center has grown from one shop here in the capital city to 108 shops in 11 states. The Montgomery location alone employs close to 100 people. Traweek Dickson, the company’s CEO, bought into original owner Joe Hudson’s single Collision Center in 1989, and formed the company as it is today. While Hudson has been a close friend and valued partner for three decades and is still involved in the business, Dickson runs operations.

    Dickson explained how the company has built its success on a foundation of quality work and service; it’s quality sought after by customers, but more importantly, by car insurance companies. From its beginning, the company has made the insurance industry’s direct repair model (DRP) a priority. “That’s where insurance companies refer customers to shops they’d prefer they go to,” Dickson said. That preference is based on performance, and Joe Hudson Collision Center works hard to consistently perform to high standards. “We know how the insurance company wants the claim adjusted, and we also know how the car owner/customer wants the process to go and the repairs to be when done. We meet both needs well,” Dickson said.

    He corrected a common misconception when it comes to DRP. “Some folks think insurance companies refer to us because we give them a discount on the work, but that’s not true,” he said. “It is because we provide quality work and good service to the car owner. Insurance companies know that their ability to get customers to renew policies is heavily based on the experience they have when they have to get repairs, so they know it behooves them to send customers to a good shop."

    ALL TOGETHER
    In the last two decades, the car repair shop industry has seen major consolidation, changing from being predominantly “mom and pop” shops to large companies owning multiple locations, like Montgomery based Joe Hudson Collision Center. With its 108 stores, it is the fourth largest company of its kind in the country, but several of those ahead of it on that list own 1,000 stores.

    AUTO SERVICES WORKFORCE
    With its automotive and transportation programs, Trenholm State Community College is providing the workforce training needed for today’s careers in the automotive sector. Danny Perry, Dean of Workforce Development and Career and Technical Education, outlined some of the offerings and some thoughts on the future of this part of the job market.

    How are the job opportunities for students who complete Trenholm’s automotive and transportation programs? Job opportunities vary based on the area of training. Because of the need, 100 percent of our truck driving students are able to obtain employment shortly after completing the program. Despite the aforementioned data, the vast majority of our graduates from the other training programs are also able to obtain employment within three months following graduation, and many of them obtain employment prior to graduation.

    Why does Trenholm include these programs as part of its offerings and how do these offerings enhance Montgomery’s workforce? All of these programs are very important to the River Region to assist local companies in meeting their employment needs. Furthermore, they provide students the opportunities to obtain training for employment in high wage occupations. An example of this are the apprenticeship opportunities we have within our Automotive Service program. Through this apprenticeship, students obtain employment at local auto repair shops/dealerships wherein they are able to obtain training at Trenholm State Community College and apply those skills learned in the real-world environment. The students’ employer pays for their education while employed, which allows the students to obtain their education and graduate debt free while simultaneously earning a wage with their employer. This is a win-win for the students, Trenholm State and local employers.

    What programs and classes in automotive and transportation are currently offered by Trenholm?
    • Automotive Service
    • Diesel Mechanics
    • Automotive Collision Repair
    • Truck Driving
    How many students are in these programs annually?
    • Automotive Service - 100
    • Diesel Mechanics - 32
    • Automotive Collision Repair - 24
    • Truck Driving - 180
    Have you seen an increase or decrease in the demand for this segment of training? Demand for training within the noted programs has remained fairly neutral for the past two to three years, with the exception of truck driving, which has increased dramatically over this timeframe. Employment data* shows the following:
    • Automotive Service: Decrease of 6% (-51 jobs)
    • Diesel Mechanics: No change
    • Automotive Collision Repair: Decrease of 7% (-12 jobs)
    • Truck Driving: Increase of 13% (296 jobs)
    *Data based on period from 2015-2019 for the Montgomery Service Area
     
    Q&A
    How important is “customer experience” to the auto dealer industry today and how are you enhancing customer experience?
    “The 'customer experience' is more important now than it ever has been. Customers have more choices now than they have ever had before, and a dealer must make sure that they have a pleasurable buying experience from beginning to end. It starts well before a customer actually makes it to our dealerships. It starts the first moment a potential buyer starts looking for their next vehicle, and it’s up to the dealer to make sure they have access to the necessary information to make an informed decision. It’s also more important than ever to be as transparent as possible when providing this information and make the purchase process as easy and hassle-free as possible. Our industry is changing daily, and the dealerships that find ways to continue to improve a customer’s shopping experience will be the ones that win in the long run.” - Jason Wilson, General Manager, Capitol Chevrolet

    Is increased technology in cars making them harder to insure?
    “Increased technology in vehicles offers consumers numerous benefits, with safety topping the list. As a husband and father, I’m absolutely an advocate for the safety of my loved ones, and safer vehicles are certainly a priority for us. However, those features do come at a price. Increased features and tools increase the overall value and worth of the vehicle — affecting you when you purchase the vehicle, as well as when you insure it. While backup cameras, sensors and other tools affect repair and replacement costs of vehicles, they may also reduce the likelihood of being involved in an accident. Ultimately, the better your driving history, the better your rates will be.” - Judson Vaughan, Alfa Insurance Agent

    How important is “customer experience” to the auto dealer industry today and how are you enhancing customer experience?
    Comparatively, vehicles of all manufacturers are well built. In an era where up-front discounting and price transparency is the norm, only the customer experience differentiates dealerships. Customers want a quick, convenient and transparent experience when buying and servicing their automobile. Stivers prides itself by offering the lowest up-front price that is consistently displayed on our dealership website and the various inventory aggregators like Autotrader and CarGurus. We are capable of providing a virtual buying experience to include a virtual trade valuation that does not require the customer to physically bring the trade to the dealership. Stivers has built both an on-site five-bay Quick Lane tire and auto facility and a 10-bay off-site Quick Lane to provide a quick and convenient service experience. And, Stivers is launching a mobile service option for commercial and fleet customers. - Eddie Stivers, Owner/Dealer Principal, Stivers Ford Montgomery
     
    MGMCHAMBER #ATWORK
    “The Chamber is very important to our city because it builds relationships, hosts many networking events, and I think being a part of the Chamber increases our local visibility. Our long association with the Chamber also builds credibility for our business. I’ve always enjoyed my involvement with the Chamber, and I hope to see it continue to grow stronger and continue to build this city up.” - Ray Ingram, President of Jack Ingram Motors

    A KEY TO SUCCESS
     “A good customer experience is paramount. It is the key to success in our industry today. Seventy-five percent of the time, they make the decision to buy a certain car online, but they don’t buy it there. They come to us, and then they are active online again, leaving reviews and posting on social media about the purchase and process, either good or bad.” - Ray Ingram, President of Jack Ingram Motors

    LOCAL MATTERS
    “Every retailer wants to sell to the customers in their market because convenience will often win when they’re making decisions on buying the follow-up services.” - Mike Reinhardt, Vice President/General Manager at Reinhardt Motors, Inc.
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