The car business is changing fast. Margins are tighter. AI is reshaping how dealerships hire, sell, and service customers. New franchises are struggling to hold market share. But what separates the dealerships that win is not the technology they adopt or the franchise they carry. It is the standards they set.
On this episode of Training Camp, host Adam Marburger talks with Chris Saraceno, Vice President of Kelly Automotive Group and author of the bestselling book Theory of Five, about hiring for the long game, adopting AI without losing the human element, and why setting hard expectations from day one is the most important thing a leader can do.
Challenges dealers face today
Car dealers are navigating a difficult market. Saraceno says margin compression is hitting hard. Franchises that were profitable two years ago are feeling the squeeze. He says the trend is widespread, although some brands are feeling it more than others.
Rising floor plan costs are making it worse, he says. Dealers are paying to hold inventory that is not moving. Meanwhile, manufacturers keep pushing production. The math, Saraceno says, is not working in the dealer’s favor. Dealers need to stay in good standing with their brand partners, he says, but they cannot afford to absorb inventory they cannot sell.
One thing that has gotten easier for dealers over time is collections, Saraceno says. Before e-contracting, a deal could sit unfunded for days.
Saraceno recalled a lesson from his mentor, Robert Kelly, who passed away recently at 91. While running his first store in the early 1990s, Saraceno was celebrating his sales numbers when Kelly reminded him that collecting his money was as important, if not more important, than selling vehicles.
AI needs people
AI is no longer a future conversation for Kelly Automotive. Saraceno says the group is rolling it out across nearly every store, in both sales and fixed operations.
"Take AI seriously. It's not plug-and-play. I don't think it's going to be a plug-and-play for many, many years, just like a CRM is not."
Saraceno says AI is not there to replace people but to help them be more efficient. Someone still needs to manage the tools, review the output, and make decisions, he says. Dealers who think they can plug it in and walk away will get the same results as they did with an unmanaged CRM.
Saraceno recommends dealers stay in close contact with their AI vendor. Weekly check-ins, he says, are not excessive. The technology is evolving fast enough that what worked last month may need to be adjusted today.
Setting standards early
Standards start before day one, Saraceno says. He lays out expectations clearly in the interview. Come in early. Plan your day ahead of time. Know the product. Stay certified. A general manager once told him he almost talks candidates out of the business. Saraceno took it as a compliment.
He used to hand new hires a small card to keep in their pocket. It asked one question: Is what you are doing right now going to help you sell a car now or down the road? He would walk the floor and ask salespeople to pull it out. The point, he says, was not the card. It was the standard it represented.
His directness extends to promotions. When an F&I manager wanted to move into a GSM role, Saraceno told him he did not think he should. He put the expectations in writing and required a sit-down with the candidate and his wife before moving forward. It is better to know what the job demands before saying yes, he says.
Leading by example
Saraceno believes in leading by example. Each week, he checks his own ranking on the company’s internal training platform and works to stay in the top five. If he is doing the work, his team notices.
"The speed of the leaders is the speed of the pack."
Staying current on training is important to growing in the industry. Saraceno has seen many veteran salespeople get comfortable as they advance in the business and stop learning. A few years later, he says, they do not even understand something being discussed in a meeting. Saraceno says he does not want to be that person, and he does not want it to happen to his staff either.
“I’m never paranoid about somebody taking my job. I’m more paranoid about not knowing.”
As the car business changes, your standards should not. Saraceno’s advice: set your standards early, hold onto them, and never stop learning. Or as host Adam Marburger puts it, fights are not won in the ring. They are not won in the cage. They are won in training camp.
