“My focus is on three goals,” he tells Dealer magazine, “abiding by the new NADA facilities study to guide our position on this key matter; helping lawmakers and our members come to a meaningful compromise about CAFE, and planning for NADA’s future.”
Underriner will become NADA chairman at the NADA Convention and Exposition in February.
Bill, why does a dealer, with hands already full, take on NADA headship for a year?
I saw how the Montana Auto Dealers and NADA itself worked so hard for the dealer body and for my dealership. I felt I needed to give back. That’s why I decided to get personally involved.
I was elected in 1991 to the board of directors of the Montana Automobile Dealers Association, and in 1999 as its president. I then became its chair, and, in 2000, I ran for Montana’s representative on the NADA board. I have served three terms as NADA treasurer, and most recently was NADA’s vice chair for 2011.
My NADA 2012 vice chair is David Westcott, president of David Westcott Buick, GMC, and Suzuki of Burlington, NC, a dealer since 1981. Dave previously was North Carolina’s representative on the NADA board.
What nails will you drive this year?
There are three: One, our facility image study, the results of which will be announced at the NADA convention; two, fuel economy; and, three, long-term planning for NADA.
Mind if we address them in reverse order?
Sure. Stephen W. Wade, NADA chair for 2011 asked me to chair NADA’s Long-Term Planning Committee and asked me to look at three future-impacting issues for NADA. The first will be the future of the NADA convention. We’re surveying vendors and dealers, and others who hold like-kind conventions, to learn what we can do to make our convention more modern. We want the NADA convention of tomorrow to attract more people and to attract the next generation of people into our business.
The second aspect of NADA’s future is to attract younger dealers into the metro associations, state associations, and into NADA. NADA will benefit greatly if we can draw these tech-savvy people into our membership- and policy-setting groups and leverage their expertise to grow our businesses, associations and the entire auto industry.
The third part of the plan?
The final aspect of this long-term plan is focusing on how we use new technology, like the NADA smartphone app just released, for the advantage of our members. For example, how do we use technologies that can help us communicate better with NADA’s 16,000 dealership members in America? Not all members communicate the same way, either with us or among themselves. To help us, I have some of the best next-generation dealers on this task force. They are doing a great job investigating this all-important communication question. These tech-savvy dealers are
Brent David, a 24-year-old Audi dealer, from Miami, Prestige Imports, and April Ancira, a San Antonio, TX, dealer, Ancira Auto Group.
I’m curious about the future NADA convention vision. Will the convention remain a physical event or virtual expo and convention?
Dealers may see more of the convention in a virtual environment, but for the most part, the NADA convention will continue to provide a one-on-one experience for dealers to manufacturers, dealers to vendors, and dealers to workshops. This important aspect of the convention and exposition will not change.
We are looking as well at physical sites for the convention; many members prefer Las Vegas to other sites, but only a handful of cities can handle an event of the size of NADA. Too, only a few cities having these facilities are located where weather is not a significant factor. Another question is: Might the convention date change to a month other than late January or early February. That’s possible; we’re reviewing the NADA convention from various angles.
Let’s move on to the second nail you’re going to drive in 2012, CAFE.
We agree fuel economy standards should exist, but it is NADA’s position that having three parties setting these standards – California, NHTSA and the EPA – is counterproductive to everyone involved. In other words, there should be one standard.
We want to make sure that the car in 2025, for example, is a car that is affordable for the average American. With what we see today, to get to the current proposal of “54.5 mpg by 2025” will add nearly $3,000 to the cost of a vehicle, according to the Obama administration.
That’s a lot of money for the American public. When you think of what the pace of price increases of the automobile has been in the last 10 years — and now looking forward to the next 13 years — the automobile is going to become very, very expensive.
The other change we’re concerned about is, will the type of vehicle that gets this kind of mileage be the kind of automobile the customer wants? I know here in Montana, for instance, we sell about 60 percent trucks. It is going to take a lot of engineering to create a truck that gets 54.5 miles per gallon by 2025 and doesn’t cost a fortune.
This regulation gambles that millions of consumers will be able to afford thousands of dollars more for generally smaller, more expensive vehicles that may not meet their needs. This policy is contrary to what most consumers are actually buying, despite the wide availability of more fuel-efficient models and hybrids.
We need fuel economy policies that encourage the sales of fuel-efficient vehicles, instead of risky mandates that frustrate consumer demand and depress fleet turnover.
The number one question that must be asked is: How many people will no longer be able to afford a new vehicle if the government raises the price of a new car by about $3,000? We will analyze the rule with this principal question in mind. We urge Congress to do the same.
Is – will – NADA get the traction it wants in regard to CAFE?
We’re getting traction, though this does not mean my focus on CAFE will be any less. We have to keep working with the administration and different people within different agencies if we are to get a standard that is fair to all parties.
If we can’t get this agreement, I’m afraid of what will happen. If we can’t reach a fair agreement, I am concerned for how much cost will be added to CAFE-compliant vehicles. If this cost is too much, consumers will hang onto their current vehicles longer, which as they age their fuel economy decreases while their emissions tend to increase.
Who should this single agency be?
Prior to 2009, fuel economy was always regulated exclusively by the National Highway Traffic Safety Administration, under CAFE. If CAFE ends up meaning every state is allowed to set its own standards, complying is really going to complicate the standards and vehicle costs. The final CAFE number has to result in vehicles that are affordable and CAFE-compliant vehicles have to be what the consumer wants to buy.
Now an ugly nail… facilities improvements.
You’re absolutely right. We are very, very concerned about this at NADA, which is why it is my top priority. I will address this issue with every manufacturer requiring facility programs today.
NADA is releasing at the convention results of a comprehensive, independent study of this issue, encompassing conversations with dealers, customers, manufacturers, lawyers, accountants and other businesses like restaurants and hotels who have image programs.
We’re looking to learn the answer to this all-important question, “Does an image program sell X amount of dollars versus the millions of dollars you put into that new facility?”
A study like this has never been done before, and because NADA is at such an arm’s length from the study itself we don’t know what the findings will be. Whatever they are, we will take them to the market.
It would seem that any new facility upgrade – anything that is “new, improved and bigger” does attract new traffic, at least for a time.
That has been my personal experience. When we opened our new, fresh Honda store, we had a spike in business, which then fell back, though we are still selling more units than we did when the store was at the prior location.
However, it’s hard to see things from a level playing field today, given the economy, shortage of automobiles resulting from the tsunami and now with the Thailand situation, and with production of many imports off 50%.
Different location versus new face…how do you measure?
We’re hoping the findings of the study help clear this up for all parties. We’re spending billions of dollars as dealers to build facilities and we don’t really know what the outcomes of these investments are. Will the study give us the data to say confidently that new facilities do increase business – or they don’t? We trust the study will get to the bottom of this important question, one way or the other.
Allow me to pay devil’s advocate. Should the study findings validate manufacturers’ position will the dealer body then become excited about this investment?
I suppose that will depend on the manufacturer and its program and what is affordable for the dealer. I do know, though, that many dealers are not making money in their new car department. Because that is true, it can be a real stretch for these dealers to approach their banks in this environment and say, “I need another million dollars to put a new front on my building” when they don’t know if that investment will help them to sell one more car. Therefore, this facilities issue will remain a real stickler for many dealers.
On the other hand, suppose the study shows facilities don’t improve sales. Will the manufacturers soften or back down?
That’s a very good question. I really won’t know the answer until I sit with those manufacturers with the study. I’m certain some manufacturers will be reasonable and others will hold the hard line.
Where does inventory supply fit with NADA’s interests in 2012?
We’re very concerned about the inventory because of the health of the dealer, especially the smaller dealers in the rural areas who have struggled with product even before these shortages happened.
We’re concerned about all of our members being profitable, so our focus is on not only the new car department, but also the used car department, the service department, the body shop, and the parts department. Any time the supply chain is interrupted, we feel that we need to reach out to the dealers even more to help them figure out exactly what they can do to overcome those problems.
Well, we can’t manufacture cars ourselves, so while we can’t directly affect supply, we can help our members improve operations through their participation in 20 Groups and educational services, particularly NADA University. It is in these forums where dealers learn about tools for helping them beef up and streamline their various operations. The solutions are here; dealers have to reach out to NADA for that help.
Let’s switch to the personal side of Bill Underriner. How did you get started in the car business?
I grew up in Illinois, went away to college, and ended up working in a restaurant in St. Louis. After getting married, my father-in-law asked me to move up to Billings, Montana and work for him at his car dealership. My wife, Mary, and I agreed to give it five years. So, in about 1980 we moved north and I started a new career. By ’84 I was the sales manager. I worked up through GM and then was named dealer principal. I’ve owned stock in Underriner Motors since ’85, and took over operating ownership in 2001.
I have two sons. Blake works for American Honda and Kyle is at the University of Denver studying business. I’m a third-generation auto dealer here – through my wife’s family — and to have my boys in the business and come back and work with me, I can think of nothing better.
Have they talked to you about their plans?
Mary and I sat down with them a few years ago and we told them we’d love them to come back in the business, but first they had to work elsewhere for five years. I invited both boys to seek jobs in any industry they wanted. Both have been around the car business all their lives, so they have a good idea of what the life is like. Of course, the idea is for them to gain experience in the world and to learn what it is like to work for somebody other than their dad. That gives them ideas and perspectives they would not get working here right out of school.
What is the Billings market like?
We’re a 105,000-population market, mostly engaged in various services-type work for the oil refineries and two regional hospitals in our 500-mile radius market. As a dealership, we draw from northern Wyoming, eastern Montana, and northern Montana.
We sell about 1,700 vehicles a year, new and used, across all four franchises. We operate a stand-alone Honda store and under one roof Hyundai, Volvo and Buick. About 7% of our sales originate through the Internet department, which through our website helps pull traffic in from our wide market area. We are also very active in social media, employing website videos and monthly marketing communications through our service provider, Team Velocity.
Your resume reveals that you are quite active in serving others in your community. I’ll not go into that here, except to say the list is extensive.
We feel very strong about our community. Our community has done a lot for our dealership. For us to give back is a priority. Even Mary’s engaged, chairing a committee to build a new library.
Likewise, I’m very excited and I’m very humbled to have the opportunity to serve the members of NADA. This is a very important position, especially during these troubled times, for which strong leadership is needed, and I plan to give 110% of my time to these challenges as chairman of NADA.