The number of franchised minority dealers increased by more than 100 for the second consecutive year in 2022, bringing the national total to 1,476 minority-owned storefronts. That data arrives courtesy of the National Association of Minority Automobile Dealers (NAMAD), an organization that has been at the forefront of promoting diversity in retail automotive spaces since its creation in 1980.
On this episode of Inside Automotive, host Shyann Malone is joined by Perry Watson IV, NAMAD president, and Damon Lester, NAMAD vice chairman, to discuss the progress minority-owned dealerships have made in 2023. Watson and Lester have spent years running their own dealerships and obtained a boots-on-the-ground perspective that few retailers can match. Furthermore, as leaders of NAMAD, the two are uniquely qualified to discuss the challenges their colleagues face in an industry still grappling with the effects of discrimination.
Key Takeaways
1. All manufacturers have seen increasing numbers of minority dealers, but Watson emphasizes that the growth has been especially significant at the top five automotive brands: Toyota, Stellantis, Ford, Nissan and General Motors.
2. The reason for this increase comes from a growing realization among manufacturers that minority dealers can provide unique opportunities to connect with often-overlooked communities in the U.S.
3. To further boost the numbers of minority dealers in the industry, Watson and Lester encourage automotive professionals to pursue training programs and connections with management teams from all corners of the car business.
4. As the industry continues to evolve, Watson foresees private equity and minority dealers leveraging unique payment structures in their businesses to serve a wider audience. Minority-owned dealerships are also likely to lead the charge in educating minority customers on the advantages of electric vehicles, which could have a considerable effect on pricing and adoption in the EV segment.
5. Minority dealers are facing similar business challenges to other retailers, such as unmitigated inflation, interest rate hikes and rising car prices. Manufacturers will need to work closely with their franchisees to develop lasting solutions for both the industry and its consumers.
"The sky's the limit for us, and I think as we're seeing the increased diversity within the community, within the buying power of the community, with people buying stores and buying cars, and the population becoming more diverse, you're seeing a plethora of those opportunities become more prevalent." — Damon Lester, NAMAD president
