At the NAMAD convention at the Fontainebleau Miami Beach Hotel in Miami Beach, Florida, CBT News’ Jim Fitzpatrick sat down with NAMAD President Perry Watson IV and Chairman Ray Freejay to discuss minority representation, rising capital demands, and emerging industry threats.
According to Watson, the size and buying power of multicultural consumers serve as a key business case for expanding minority representation in dealership ownership. He said minority consumers accounted for 33% of new-vehicle purchases in 2023, while multicultural spending has reached roughly $5.3 trillion. NAMAD, Watson said, continues to connect prospective dealers with OEMs and industry partners to create pathways into dealership ownership.
"There's $5.3 trillion in multicultural spend... it's an emerging market that cannot be ignored." – Perry Watson IV
Similarly, Freejay offered a firsthand perspective, marketing his 25th year as a dealer and crediting NAMAD with his first opportunity in the business. “I got my shot from NAMAD,” he said, adding that he took on the chairmanship to give back the same way. He said the organization’s intimate setting gives prospective and existing dealers access to OEM executives, dealer principals and vendors while fostering a culture of dealers helping dealers.
Capital remains a hurdle
During today’s conversation, Watson and Freejay agreed that capital remains one of the biggest barriers to ownership. Freejay said dealership valuations have risen dramatically since he entered the business, making it increasingly difficult for aspiring dealers to assemble the capital needed to compete. Watson added that the path can vary depending on the brand, market, ownership structure and level of participation, but said prospective dealers with roughly $1 million in capital have recently been able to enter the business.
Both executives also reflected on the lessons minority dealers learned during the 2008-09 recession. Freejay said many dealers lacked the generational wealth and access to capital needed to withstand a prolonged downturn. Today, he believes that dealers are more focused on building liquidity and preparing for the next cycle so they can preserve their businesses for future generations.
Shifting industry pressures
The discussion then shifted to the broader pressures facing franchised dealers, including Chinese automakers, direct-to-consumer sales models, EVs, tariffs and changing FTC pricing requirements. Freejay stressed that dealers must focus on the issues they can control while remaining educated about those they cannot. Watson urged dealers to become more involved in advocacy, saying they need to work with NAMAD, NADA, AIADA and their state associations to make their voices heard.
On Chinese automakers, Watson said security concerns must come first, while also questioning whether U.S. automakers and Chinese manufacturers would compete on a level playing field. Freejay took a measured approach, saying dealers should understand emerging opportunities before making judgments about them.
Freejay also discussed his approach to running a dealership in an industry that changes constantly. He said the pace of change has made experience less of a guarantee of success, requiring dealers to approach the business with a rookie mindset and continually educate themselves.
"If it was easy, anybody could do it. It's going to take some hustle. It's going to take some grit to become a dealer." – Ray Freejay
As his chairmanship winds down, Freejay said his biggest priority remains helping new dealers get into the business. He said he has helped five new dealers pursue dealership opportunities during his tenure and is working to help several more close their deals.
Ultimately, Watson closed with a simple message for NAMAD members, urging them to keep showing up, participate, get involved in legislation and regulation, and continue building the business case for inclusive economics. For both leaders, the goal extends beyond increasing the number of minority dealers today. It is about creating a stronger ownership pipeline that can sustain the next generation of automotive retailers.
