In today’s episode of Inside Automotive, host Jim Fitzpatrick welcomes four seasoned retail leaders: Chris Saraceno, VP and partner of Kelly Auto Group; John Roberts, vice president and GM of Roberts Motors Ford; Jim Henne, president of Performance Motors; and Joseph Robinson, general manager of Robinson Toyota for a dealer roundtable discussion.
Tariffs
The discussion briefly touches on tariffs and reveals a sense of cautious optimism among the panelists. While they acknowledge the immediate challenges these changes pose, the guests recognize the long-term benefits of reshoring production to the U.S., fostering greater independence and streamlining the supply chain. They agree that the current rough patch, though difficult, is a necessary step toward a stronger future. The group also reflects on the unpredictability of such decisions, with some expressing that more strategic planning and collaboration with international partners could have eased the process. Ultimately, they agree that, much like the uncertainty during the COVID-19 pandemic, the situation may resolve more smoothly than initially feared.
Electric vehicles
The dealers express skepticism about the current viability of electric vehicles, citing inadequate infrastructure, high price tags, and limited consumer demand, especially in rural markets. While plug-in hybrids are seen as a practical middle ground gaining traction, full EV adoption appears largely “force-fed” through aggressive incentives rather than driven by true market demand. A shared concern emerges around the competitive threat of Chinese automakers like BYD, which produce affordable, long-range EVs and rapidly expand their global footprint. The panel notes that the industry’s EV push and the use of tariffs reflects a broader strategy to shield U.S. manufacturers from being undercut by Chinese imports.
The future of artificial intelligence
The panel agrees that artificial intelligence is transforming dealership operations by enhancing efficiency and customer engagement. Some dealers now use AI to manage internet leads and service calls, while assisting with upsells, recalls, and scheduling.
Although the panel does not see AI replacing core staff, they agree it is likely to streamline BDC operations and reduce the need for larger teams. While some dealers are still in the early stages of adoption, others already use tools like ChatGPT for messaging and social media content, signaling a shift toward leaner, tech-enabled workflows.
Industry concerns
Concerns over future profitability loom large, particularly for Toyota dealers. Henne and Robinson express concern about the brand returning to a high-volume model with excessive inventory. Henne recalls that in 2019, average net-to-sales was just 1.2%, compared to today’s healthier 3.5% to 4%. He warns that rising supply could lead to steep margin compression, reducing the ability to reinvest in facilities, personnel, and customer experience.
Saraceno discusses the impact of stair-step incentive programs offered by OEMs. The panel criticizes these programs for creating pricing inconsistencies between dealers, which leads to customer confusion and erodes trust. They note that incentive eligibility often hinges on timing rather than transparent, consistent pricing strategies.
Roberts says his biggest concern is used car acquisition and the difficulty of sourcing quality pre-owned inventory. He relies heavily on expensive auction purchases due to a shortage of trade-ins and street buys. Although he maintains a 30-day supply, he says he would expand it if more inventory were available.
Saraceno emphasizes the importance of sourcing inventory through diverse channels, including auctions, service departments, and off-street purchases. Robinson adds that used vehicles support more than just retail sales. They also drive fixed ops and F&I, especially for dealers with reinsurance companies.
The panel agrees that maximizing vehicle turn, rather than focusing solely on front-end gross, is the key to profitability. Faster turns drive higher volume, which in turn boosts revenue across departments—from service to dealer fees to reinsurance returns.
“We don’t know what we don’t know. Our team should never see us sweating. We should be cheerleaders who say, ‘Listen, our best times are ahead of us. We take care of customers, we take care of our team, and we do the right thing. Good things will happen.’ I believe it's our job not to panic.”
“You’re in the now. We have to operate with what we know right now and take care of business right now. We’ll deal with whatever gets handed to us. The car business has always been legendary for that. We handle adversity very well.” – John Roberts
“We use AI on the variable and fixed side. Every lead that comes into our store is answered by conversational AI, and it schedules about 400 appointments a month. But, it’s not going to replace people–you need the people there.”– Jim Henne
“It's a long-term goal. A lot of times, to get to something long-term, it takes some sacrifice. I think we’re in the middle of that sacrifice time. But in a year from now, it may just be something that we talk and laugh about.” – Joseph Robinson
