HELPING RETAIN AND GROW MINORITY DEALERS

Minority dealers panel

February 10, 2008—Frustration was evident at the minority dealers’ breakfast Sunday as panelists discussed “How to Stop the Freefall of Minority Dealers Going Out of Business.”

“The state of affairs for minority dealers is extremely precarious,” said Desmond Roberts, who has three domestic stores and is chairman of the National Association of Minority Automotive Dealers (NAMAD). Most minority dealers are first-generation, are highly leveraged, and are “often required to turn a failing operation around” because of the points they are assigned, Roberts said.

Now that manufacturers are focusing on dealer consolidation, “a lot of the dealerships they want to get rid of are in the worst locations and are not as well financed,” said Gregory Jackson, head of the Prestige Automotive Group and past president of the GM Minority Dealers Association. “I don’t believe they’ve considered that they’re minority dealerships.”

The biggest challenge for minority dealers, said Roberts, is lack of capital. “Most lenders are asset based,” so when assets are already low, it’s harder to get the needed capital. “Manufacturers have to place more emphasis on strengthening their weakest link,” he said. “The weakest link of dealers is minority dealers.”

Ethnic minorities still make up less than 5 percent of the dealer body.

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