The Loaded Sticker Price

When it comes to import cars, black dealers still find themselves stranded by the side of the road

Mercedes-Benz at the time, and the more than $150,000 he’d invested to purchase the assets and equipment to carry Toyota’s lineup at the location, ultimately both deals fell through.

"The Southern Pines location did not provide sufficient market potential to justify a sales outlet for Mercedes-Benz products," explains Donna Boland, public relations department manager for Mercedes-Benz of North America, based in Montvale, New Jersey. "Any reluctance to issue Mr. Lee a dealership agreement was because the market was too small to support a dealership at that time," she says.

Today the Japanese and German car makers deny that race played a role, although Lee doesn’t agree. "It wasn’t education, training or money; it was strictly color," claims Lee. In 1992, he testified about his dealings with Toyota during a congressional hearing convened by Michigan Reps. John Conyers and Barbara Rose Collins that brought national attention to imports and their allegedly discriminatory practices against minority auto dealers.

In fact, NAMAD presented documents at those hearings to show that between 1982 and 1992, 140 black auto dealers were denied dealerships. Of the 7,626 Asian car dealerships in the U.S. at that time, only 23 were owned by African Americans (11 of them Toyota dealerships). But the hearings were just the beginning of the outcry. In the early 1990s, groups such as NAMAD, the Rainbow/PUSH Coalition and the National Urban League demanded that imports diversify their dealer body.

The imports emerged from that tumultuous time "with the realization that diversity leads to profits," according to Randi Payton, publisher of African Americans on Wheels, a Washington, D.C.-based quarterly automotive magazine. "To have your company reflect your customer base makes g
ood business sense."

THE DIVERSITY MANTRA
Imports like BMW and Jaguar are now seeking to create their own dealer diversity initiatives. Last February, BMW announced its plan to appoint at least 10 African American dealers within the next 12 months. By this summer, the company expects to be just shy of its goal, with negotiations already under way with seven African American candidates and another three letters of intent in the pipeline. Eventually these dealerships will be added to the 341 it already has.

One of the more high-profile dealer selections is baseball great Hank Aaron, who, in spite of his lack of automotive training, so impressed BMW that plans are under way to build a brand-new dealership in southern Atlanta (see "Hank Aaron Goes to Bat for BMW," Newspoints, May 1999). "If it takes 15 months to reach our target instead of 12 months, then so be it," says Victor Doolan, president of BMW North America Inc. "What is important is that we have the right quality of candidates, and in time the quantity of diversity candidates [that] reflect the marketplace," he explains.

When seeking candidates for dealerships, manufacturers can either work closely with NAMAD and its pool of 500 qualified minority auto dealers or create their own

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